Friday, July 3, 2009

Junta Itself is Main ‘Sanction’ on Burma: Expert

The Irrawaddy News

The economic policies of Burma’s ruling junta have done far more damage to the country’s prospects for development than international sanctions, according to Sean Turnell, a specialist on the Burmese economy from Australia’s McQuarie University.

“Burma is not poor because of sanctions,” said Turnell, who produces Burma Economic Watch, a periodical that monitors economic developments in one of the world’s poorest countries. “The biggest sanction on Burma is the Burmese regime itself.”

Turnell told The Irrawaddy on Friday that the junta’s “willful mismanagement” of the economy, including its refusal to respect property rights, is the main obstacle to Burma’s economic development.

In a wide-ranging discussion on the current state of the Burmese economy, Turnell said that the regime has “deliberately suppressed the history of Burma’s economic success” during the parliamentary period (1948-62), when the newly independent nation made a remarkable recovery from the devastation wrought by the Second World War.

“Burma doesn’t need a foreign model of development,” he said. “It just needs to look at its own history.”

After more than four-and-a-half decades of military rule, however, Burma’s rulers have completely lost touch with economic reality, he said, making the country a “very, very high-risk environment” for potential foreign investors.

Burma has been subject to Western economic sanctions since the current regime seized power in a bloody coup in 1988. Since then, however, the junta has strengthened its economic ties with its neighbors, particularly China and Thailand.

Singapore has also played a key role in supporting the regime, providing the generals with an offshore shelter for revenues from Burma’s exports of gas and other natural resources, according to Turnell.

The generals are believed to have pocketed at least US $2.5 billion from the sale of natural gas to more developed countries in the region. None of this money has been used to alleviate poverty or build a stronger economy, said Turnell.

Burma has been designated one of the world’s least developed countries by the United Nations for more than 20 years. On a UN Web site, Burma is described as “a resource-rich country that suffers from government controls and abject rural poverty.”

“[T]he military regime took steps in the early 1990s to liberalize the economy after decades of failure under the ‘Burmese Way to Socialism,’ but those efforts have since stalled,” according to the UN Web site.

In the Human Development Index 2008 Update, Burma’s per capita GDP (US $881 in 2006) ranked 163th out of 178 countries in the world.

Although the junta’s official statistics claim that the Burmese economy is growing at around 10 percent annually, Turnell said that various indicators, including weak domestic energy consumption, suggest that the economy is actually contracting.

According to the Economist Intelligence Unit’s latest report on Burma, the country’s real GDP growth for 2009 is projected to be only one percent, “owing to a combination of domestic factors and the impact of the global downturn.”

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