Burma & Globalization
Globalization presents a challenge to the regime, but also for the rest of Burma.
by Aung Thu Nyein
THE IRRAWADDY: Vol. 8 No.4-5, April-May 2000Just about every day we hear something about globalization. Some scholars from the pro-globalist school claim that globalization could drag down the Burmese military junta. It was the power to break through countries’ geographical barriers and chronological histories. Surin Pitsuwan, Thailand’s foreign affairs minister, has compared globalization to a tsunami, a violent and destructive tidal wave. This process can bring unprecedented opportunities to developing countries, but it can also be like skiing dangerously down a lethal path. And world-wide trends, like globalization, can change a country in the way that the wave of de-colonization after World War II, assisted Burma’s independence.
However, while globalization could drag down the junta, the globalization process is not free of sins which could bring negative and anti-people consequences along with freedom to Burma. Today, in the age of globalization, barriers between countries are evaporating due to the advance of information technology via computer networks which can bring ungovernablity and freedom to your doors. This knowledge can empower people and embolden them to fight for freedom from oppression. Activists can organize meetings through Internet pages and even form virtual alliances to engage oppression. Daily hundreds of new webpages are emerging and expanding trans-border networks for safeguarding common human interests. This process assists the emergence of a “global civil society”. Without a doubt; Burma cannot stand alone against this powerful global wave even with its only strength—military might. Change is a must.
The global mass media purports that “free markets” are knitting together the peoples of the world into a seamless quilt and bringing prosperity. Globalization is chained to free trade ideas, liberal democracy and tremendous technological revelations which the media use to induce the belief that globalization is a progressive rationale. The people of Burma, who have endured isolation and a planned economy, believe that things will steadily get better and that they will be able to adjust to changes, whatever the pain, under an elected democratic government and free market economy. Many Burmese opposition members from democratic and ethnic camps foresee, accept and promulgate a free market without questioning its possible negative social impacts.
Burma under the military regime has failed to take the positive opportunities from globalization, remaining terrified of the process, and choosing to block it. But Burma is ready to embrace all the miserable vulnerabilities that go along with globalization.
At the same time, the military camp also claims that they are practicing market economy and paving the way to democracy. But the realities of Burma’s economic failure—distorted markets and widening social inequality—are easily blamed on the junta because of their mismanagement and corruption. This drains precious resources through defense spending, cronyism and ad hocism in policy formation. Of course, Burma must resolve its political impasse first and honor the right of people’s participation in policy formulation.
Despite relentless blockades and the military’s isolation of Burma from international intervention, Burma is not free from globalization. Burma is a member of Asean, part of AFTA (Agreement of Asean Free Trade Area), and also a member of the WTO. While it is part of the group of late comers to global economic competition, Burma has committed to eradicate all import duties by 2015. But while they desire FDI, foreign currency, the glittering attraction of the market, a variety of cheap beer, cigarette advertisements, twinkling disco bars, supermarkets, it comes with low-paid workers in sweatshop garment factories.
Meanwhile, Burma intentionally delays the “Asean Information Infrastructure Plan” which would foster IT development among network users from Asean countries and make IT part of school curricula. The Internet server in Burma, owned by the Ministry of Post and Telecommunications, is set to provide for about 1,000 e-mail users. Access to the World Wide Web remains restricted to a few officials. Pat James, who was running the private service provider, the Eagle Group, which was shut down in recent crack down measures, said: “We were treated like common criminals.” Eagle had thousands of dollars of equipment confiscated by authorities. The free flow of information is a threatening complication of the Internet for the Burmese military, which like all communications is severely restricted. But unlike Burma, fellow Asian countries are expanding their IT capabilities.
Burma has opened its door, while the global market is still a lawless jungle. Military authorities have relaxed foreign investment laws to woo FDI and offered comparatively greater incentives. The Burmese military junta announced its new investment law in 1988. In investment, Burma has allowed 100 percent foreign equity, while other countries have limited such equity to prevent complete foreign ownership. Newly emerged markets such as Vietnam and Cambodia have never offered 100% equity ownership.
Foreigners can’t buy land in Burma though land can be leased for up to 30 years for long-term investment. National entrepreneurs, who can use fallow and cultivate in wasteland, are allowed to lease up to 40,000 acres. Those who can invest for cultivation of more than 5,000 acres are offered secured privileges, governmental long-term loans, import-export licenses, and infrastructure aid to develop that area. About 30 entrepreneurs have started cultivation projects, particularly for wet land cultivation, palm oil plantations, and oil seed plantations. The Committee Representing the People’s Parliament has alleged that this policy seems to be encouraging the emergence of a new feudal class while uprooting grassroots peasants from their land.
Burma is also privatizing most of its dwindling state projects. The pain of privatization has been quite intense in some other countries. This stems from downsizing jobs and mass unemployment, higher servicing expenses, especially on education and social sectors. This kind of pain in Burma was negligible until now. In many countries in Asia and Latin America, the privatization of agriculture has resulted in the dislodging of peasants from their land, leading to destitution. Burma’s agribusiness has been poorly industrialized until present though it is a major sector of the economy. Only a few investors have shown interest in Burma’s agribusiness. One explanation is that the regime offered large concessions of land to a few privileged businessmen. Singaporean-owned Myanmar Chor International Paddy Planting and Rice Mills Ltd. has 100% equity investment, which will surely worsen the plight of Burmese peasants.
In recent years, we have seen the explosive growth of financial speculation and the resulting busted bubbles of the Tiger economies. Globalization of capital markets and the sudden shift of investments from the real economy to the casino economy have shown the states’ weakened ability to control national economies and to protect their people’s jobs. However, the economy has been weakened not by speculative money but by itself, with over-production of circulating money, budget and trade deficits, mismanagement and uncontrollable high inflation.
Burma is stuck on the road of growth. Its economy is plagued by annually high budget deficits, trade deficits, soaring inflation, scanty investments and low production. Perhaps the Burmese junta is dreaming of the age of “Golden Myanmar”. The golden days of Burma are just a myth and, ironically, Burma hasn’t faced up to the reality of the lack of human and intellectual capital. This factor is exacerbated by the closing of all universities and institutes since 1996. The government’s existing development projects and investments are just urban-based, exclusive in nature, and marked by out-dated technology. These projects are therefore unable to alleviate widespread poverty. At the same time, international sanctions and embargoes on loans and assistance for humanitarian needs add to Burma’s economic vulnerability.
Few Burmese are trained for international business. Only a few professional and experienced people remain from the era of the 1950s. People have only random knowledge of the Internet, and most have never heard of genetically modified foods and e-commerce, touted as the instruments for economic success in this century. Economic efficiency, public transparency, good governance and the rule of law, which are considerable factors in a successful economy, are still out of the question in Burma. Burma under the military regime has failed to take the positive opportunities from globalization, remaining terrified of the process, and choosing to block it. But Burma is ready to embrace all the miserable vulnerabilities that go along with globalization.
Burma is an underdeveloped and backward economy and its path to prosperity is filled with many pains.
Globalization has increased migration and will continue to do so in the years ahead, as world migration tops 120 million, according to the ILO. The flow of goods and capital between rich and poor countries will not be large enough to offset the needs for employment in poorer countries. That scenario has driven people from developing countries to industrialized countries, which pay comparatively higher wages. Undoubtedly, Burma has been a major regional labor supplier due to civil war, poverty, and unemployment forcing Burmese people to neighboring countries. There are Burmese migrant workers in Japan, Thailand, South Korea and Malaysia.
The price of initial growth for the “Asian economic miracle”was not cheap. In some cases, environmental degradation resulted, rendering that growth unsustainable. Burma follows the same model: get rich quick at the expenses of nature. Most of Burma’s frontier forests are almost depleted, fish stocks devastated by drift nets, and species and mineral resources depleted over 10 years of unmanaged economy. Globalization is eating up more and more resources rather than preserving Burma’s environmental wealth. Burma will be ready to sell resources at any expense in the transition and reconstruction era, while the multi-national companies are waiting to exploit a new area. Burma will not be in a bargaining position because of its major weakness—an urgent need to end poverty.
Globalization provides competitive advantages that are based on flexible labor policies and lax environmental regulations. The trend toward less unionization is evident at the age of globalization, shown by a steady decline in union membership since the 1950s throughout the world. Burmese workers and employees have long survived with harsh regulations and without union rights under the junta, which may be favorable for global corporations by providing low-paid and compliant Burmese workers.
Critics of globalization claim that wealth and natural resources are increasingly being drained from developing countries to developed countries. Inequality is growing in the age of globalization. A smaller number of large corporations own more of the world’s productive resources while millions of people are unable to sustain their survival. Imagine where a newly liberated Burma would be, if globalization can liberate Burma from the yoke of militarism.
This will not happen overnight. A newly liberated or dispute-settled Burma would have no alternatives but to seek aid, bilateral grants and loans to reconstruct its weak infrastructure and bankrupt economy. The alleviation of widespread poverty will also be an urgent issue for Burma’s transition. Many of us have a gut feeling that international loans must inevitably be accepted together with the structural adjustment conditions of the IMF and World Bank, which other countries have bitterly suffered. In order to meet these conditions, unemployment will increase as governmental structures are downsized and over-extended military and social subsidies are cut. Social disruption that might be caused by economic restructuring prescribed by the IMF and World Bank is likely to shake more people loose from their communities and will surely encourage them to look abroad for work again. The economic blueprint initiated maybe from the industrialist countries or local neo-liberals or the old school developmentalists. Whether this will lead Burma to miracle or decay, it is too early to tell. The “stateless” corporations of this age of globalization at times destroy national economies—one after another.
Burma is an underdeveloped and backward economy and its path to prosperity is filled with many pains: the pain of development and modernization pains, reverse transformation pains, the pains of transition to market economy, pains of structural readjustment, pains of globalization, pains of general crisis of global capitalism, pains of domestic capitalism, pains of exchange rate fluctuations, the pain of economic unknown, etc. etc. Ah! So much pain. Can Burma endure all these pains?
It may appear pessimistic, but in reality, Burma is facing tremendous challenges. Globalization could save Burma by freeing it from the military, but globalization will appear again as a fundamental challenge for future Burma. ?
Aung Thu Nyein is the General-Secretary of the All Burma Students’ Democratic Front.
