Economic slowdown prods Myanmar toward reform<\/p>\n
By Edward Tang<\/p>\n
YANGON: Naing, a street vendor, makes a living selling odds
\nand ends in the Myanmar capital. His "shop", a floor mat about
\n1.2 meter by 1.8 meter, is found on the pavement along Maha
\nBandoola Garden Street in the heart of Yangon.<\/p>\n
Hundreds of vendors have made this busy stretch of road their
\nbusiness address. Like Naing, they eke out a living selling
\nsimple items like pens, pencils, combs and toothbrushes.<\/p>\n
They earn an average of 1,000 kyat a day or about US$1.50
\n(S$2.75), hardly enough to cope with surging inflation of 40
\npercent in the city.<\/p>\n
Naing had heard vaguely that the military government has been
\nholding secret talks with opposition leader Aung San Suu Kyi, who
\nhas been under house arrest since September, to hammer out a
\npower-sharing deal.<\/p>\n
He said: "We don't know what is happening. Both sides have not
\ndisclosed details of the meetings. We hope it's for real this
\ntime because we don't want to be disappointed again."<\/p>\n
The talks are important for Naing and the bulk of the 52
\nmillion Myanmar population, many living below the poverty line --
\na reality which is not officially recognized.<\/p>\n
A breakthrough in the political stalemate will bring back much
\nneeded foreign investment and development aid to the country.<\/p>\n
A rapidly declining economy is believed to be main reason
\nbehind the move by the State Peace and Development Council (SPDC)
\n-- the name of the Myanmar government -- to open dialog with Ms
\nSuu Kyi, who leads the opposition party, National League for
\nDemocracy (NLD).<\/p>\n
Dominated by generals, the SPDC launched a major crackdown on
\nstudent dissidents in 1988 and seized power after canceling the
\nresults of a general election won by the NLD in 1990.<\/p>\n
More than 100 opposition politicians were thrown into prison,
\nand many are still languishing there despite recent releases. An
\ninternational economic embargo led mainly by Western nations
\nfailed to dislodge the SPDC from its hardline position.<\/p>\n
Following strong economic growth of around 8 percent in the
\nearly 1990s, the Myanmar economy has slowed down to 5 percent in
\nrecent years, according to official estimates.<\/p>\n
The real figure is believed to be lower but, in the absence of
\nreliable data, even international organizations like the Asian
\nDevelopment Bank (ADB) are hard-pressed to come up with accurate
\nassessments of just how bad the state of the economy is.<\/p>\n
The economic slowdown has been attributed to bad weather
\nconditions which have affected agricultural output, shortage of
\nforeign exchange to buy fertilizers and pesticides, and the 1997
\nregional financial crisis which halted foreign investments in the
\ncountry.<\/p>\n
Agriculture is the most important economic sector, accounting
\nfor almost half of the nation's gross domestic product and
\nproviding 60 percent of jobs in the country.<\/p>\n
Major exports such as beans and pulses, seafood and forest
\nproducts have dipped due to poor planning and drop in overseas
\ndemand.<\/p>\n
Tourism, a major revenue earner, is another casualty of the
\ncountry's political problems.<\/p>\n
Bodo Becker, general manager of the Singaporean-owned, five-
\nstar Sedona Hotel, told The Straits Times: "Each time the foreign
\nmedia reports about instability in the country, hotel occupancy
\ndrops."<\/p>\n
Hotels in Yangon are believed to be suffering from occupancy
\nrates of as low as 35 percent.<\/p>\n
The owner of a local travel agency said business had gone from
\n"bad to worse" in recent years. "It has not been easy. I have not
\nseen a good day in the last 12 years," he said.<\/p>\n
Tight government controls like the ban on Internet cafes and
\ncompulsory purchase of US$200 of foreign-exchange certificates
\nfor incoming tourists have made Cambodia, Laos and Vietnam more
\nattractive destinations, he said.<\/p>\n
Bearing the brunt of the economic pressure is the kyat. The
\nlocal currency has plunged to 650 units to the U.S. dollar from
\n350 kyat just six months ago. The current rate is more than 100
\ntimes the official exchange rate of 6 kyat to the U.S. dollar.<\/p>\n
The rapid decline is reportedly due to the injection of kyat
\nsupply into the financial system by the central bank and the drop
\nin trade with Thailand since the closure of border checkpoints
\nafter a tiff between the two neighbors in February. Border trade
\naccounts for 30 percent of Myanmar's total exports.<\/p>\n
The weakened kyat has led to soaring inflation in the city and
\nthe consumer price index in Yangon shot up to 49 percent,
\naccording to the ADB.<\/p>\n
The huge distortion between the official and black-market
\nrates poses a big headache for businessmen who have to source for
\nhard currency to settle transactions. It is also a major
\ndeterrent to foreign investors.<\/p>\n
The government knows that dismantling the two-tier exchange-
\nrate system would cause the collapse of the economy and give the
\nopposition fresh political ammunition. But to do nothing would be
\nlike sitting on a powder keg.<\/p>\n
A Yangon-based analyst said: "The SPDC has been in power for
\nover 12 years but it has not been able to drive the economy
\nforward despite opening its doors to foreigners."<\/p>\n
Hence, the move to initiate reconciliation talks with Suu Kyi.
\nSpearheaded by Lt. Gen. Khin Nyunt, the powerful military
\nintelligence chief who holds the appointment of Secretary 1 in
\nthe SPDC, the talks, which began in October, have been shrouded
\nin secrecy.<\/p>\n
Both sides have pledged not to divulge details of the dialog
\nand to cease attacking each other publicly, fueling speculation
\nthat the talks have reached a substantive stage.<\/p>\n
According to a source, the key issues to be discussed include
\nthe formation of a coalition government, fresh elections and
\namnesty for the SPDC.<\/p>\n
One speculation is that the SPDC would retain command over the
\ndefense, interior and foreign ministries but relinquish control
\nof economic portfolios to the NLD.<\/p>\n
The government would also release more political prisoners and
\nset a date for a general election, which could be as soon as two
\nyears from now.<\/p>\n
In return, the NLD would agree to forgo their 1990 election
\nvictory and cooperate in drafting a new constitution that
\nprotects the interests of the military.<\/p>\n
Significantly, Suu Kyi has refused to meet foreign
\ndiplomats,including the British ambassador, a strong supporter of
\nthe opposition leader, since the talks began.<\/p>\n
But the vow of silence was broken last week by Foreign
\nMinister Win Aung amid rumors that the talks have been stalled
\nbecause some generals were concerned that their interests would
\nbe hurt by the political rapprochement with the NLD.<\/p>\n
"The process is not stalled. We are not doing it for the media
\nnor is it a public relations stunt," the minister told a press
\nconference after an informal meeting of ASEAN foreign ministers
\nin the Myanmar capital.<\/p>\n
"This is for the sake of the people of Myanmar -- 52 million
\npeople. We don't play games. If we played games, we might have
\nplayed a long time ago," he added.<\/p>\n
But he said no time frame has been set.<\/p>\n
"There is no set time for the dialog or peace process in
\nNorthern Ireland or Sri Lanka or in the Middle East," he
\ncommented.<\/p>\n
"This is not a process where you can start a countdown. It is
\na process that is timeless."<\/p>\n
His remarks failed to lift the veil of secrecy covering the
\ntalks, except that they confirm the dialog has indeed entered a
\n"complex and delicate" stage.<\/p>\n
But the process was not "irreversible", said an Asian
\ndiplomat. "It is at a very sensitive stage. A lot of vested
\ninterests could be hurt," he said.<\/p>\n
It is believed that UN Special Envoy Razali Ismail, who played
\na role in getting the two sides to talk, has been barred from
\nYangon, sparking fears that the dialog was unraveling.<\/p>\n
Asked for his comments, Win Aung replied: "He will be invited
\nto visit at an appropriate time."<\/p>\n
On the whole, the SPDC has already reaped early rewards from
\nits political initiative. The Japanese government last month
\nannounced a US$29-million aid package to Myanmar to build a
\nhydroelectric dam -- a move aimed at encouraging the SPDC to keep
\nthe dialog alive.<\/p>\n
But dangling the carrot at this sensitive stage is seen as
\npremature and may even undermine Suu Kyi's bargaining position.<\/p>\n
In recent weeks, analysts have tempered their expectations of
\nthe talks.<\/p>\n
As one former Myanmar ambassador, who was dismissed in 1988
\nfor supporting the democracy movement, said: "I don't expect any
\npositive results. This government cannot be trusted."<\/p>\n
Despite the massive economic problems it faces, the SPDC was
\nnot in a hurry to give up power, he said.<\/p>\n
"Don't forget they are soldiers. They are used to giving, not
\ntaking, orders," he said.<\/p>\n
The writer is the Thailand Correspondent of The Straits Times.
\nHe was in Myanmar recently to cover an informal meeting of ASEAN
\nforeign ministers.<\/p>\n
-- The Straits Times\/Asia News Network<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/economic-slowdown-prods-myanmar-toward-reform-1447893297", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }