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Wednesday, 8 April 2009

Myanmar's Economy

Myanmar suffered extensive damage in World War II, and some sectors of its economy have not yet fully recovered. About 70% of the population works in agriculture and forestry, and rice accounts for about half of the agricultural output. Other important crops are pulses, sesame, peanuts, and sugarcane. Myanmar also produces illegal opium in the northeast (bordering China, Laos, and Thailand), part of the “Golden Triangle”; heroin produced in the country's laboratories contributes to the black-market trade. Myanmar's forests, which are government-owned, are the source of teak and other hardwoods. Fishing is also important.

The country is rich in minerals. Petroleum is found east of the Ayeyarwady in the Dry Zone. Tin and tungsten are mined in E Myanmar; the Mawchi mines in Kayah State are also rich in tungsten. In Shan State, northwest of Lashio, are the Bawdwin mines, the source of lead, silver, and zinc. Coal, copper, natural gas, and iron deposits have also been found in Myanmar. Gems (notably rubies and sapphires) are found near Mogok. Since the 13th cent., Myanmar has exported jade from the Hunkawng valley in the north to China.

Aside from food processing, other manufacturing industries include wood and wood products, construction materials, pharmaceuticals, fertilizer, natural gas, and textiles and clothing. Exports include gas, wood products, pulses, fish, rice, clothing, jade, and gemstones. The chief imports are fabric, petroleum products, fertilizer, plastics, machinery, transportation equipment, construction materials, crude oil, food products, and edible oil. The country's chief trade partners are Thailand, China, Singapore, and India. Myanmar's developing economy, depressed by political turmoil, began to recover in the 1980s with increased private activity and foreign investment, but efforts to liberalize the economy stalled in the late 1990s.

Almost three quarters of Myanmar's population either grows or processes crops, with roughly only ten percent of of population working in the industrial sector. Myanmar is considered an agricultural country and before World War II, it had been the world's top exporter of rice. Since the population increased after the war, it decreased the amount of surplus rice on hand for export.

Although there aren't many visitors to Myanmar (in 1996, there were about 185,000), tourism is the leading resource of foreign exchange. The government had tried to improve the economy by pushing socialism and nationalizing most of the industries, but it was on the whole unsuccessful in its efforts.

In the early 90's, the government tried a different approach, accepting foreign investments, but again, it is not very successful. The most successful economy in Myanmar is the black market, which has little government interference.

Since the late 90's Myanmar's economy has worsened due to U.S. economic sanctions (due to a negative human rights record) and the widespread Asian economic problems. These issues decreased the amount of foreign investment and increased inflation even more.


Economy Today:

Today, Burma lacks adequate infrastructure. Goods travel primarily across the Burmese-Thai border, whence most illegal drugs are exported, and along the Ayeyarwady River. Railroads are old and rudimentary, with few repairs since their construction in the 1800s. Highways are normally unpaved, except in the major cities. Energy shortages are common throughout the country including in Yangon. Burma is also the world's second largest producer of opium, accounting for 8% of entire world production and is a major source of narcotics, including amphetamines. Other industries include agricultural goods, textiles, wood products, construction materials, gems, metals, oil and natural gas. The major agricultural product is rice which covers about 60% of the country’s total cultivated land area. Rice accounts for 97% of total food grain production by weight. Through collaboration with the International Rice Research Institute (IRRI), 52 modern rice varieties were released in Burma between 1966 and 1997, helping increase national rice production to 14 million tons in 1987 and to 19 million tons in 1996. By 1988, modern varieties were planted on half of the country’s ricelands, including 98 percent of the irrigated areas.

The lack of an educated workforce skilled in modern technology contributes to the growing problems of the Burmese economy.

Inflation is a serious problem for the Burmese economy. In April 2007, the National League for Democracy organized a two-day workshop on the economy. The workshop concluded that skyrocketing inflation was impeding economic growth. “Basic commodity prices have increased from 30 to 60 percent since the military regime promoted a salary increase for government workers in April 2006,” said Soe Win, the moderator of the workshop. “Inflation is also correlated with corruption.” Myint Thein, an NLD spokesperson, added: “Inflation is the critical source of the current economic crisis.”

Oil in Myanmar:
1) Myanma Oil and Gas Enterprise (MOGE) is a national oil and gas company of Burma. The company is a sole operator of oil and gas exploration and production, as well as domestic gas transmission through a 1,200 miles (1,900 km) onshore pipeline grid.
2)The Yadana Project is a project to exploit the Yadana gas field in the Andaman Sea and to carry natural gas to Thailand through Myanmar.
3)Sino-Burma pipelines refers to planned oil and natural gas pipelines linking the Burma's deep-water port of Kyaukphyu (Sittwe) in the Bay of Bengal with Kunming in Yunnan province of China.


Gemstones:

Of the world's rubies, the finest are found in Myanmar (Burma). Burmese gems are prized for their hue and high degree of saturation. Thailand buys the majority of Myanmar's gems. Myanmar's "Valley of Rubies", the mountainous Mogok area, 200 km (125 miles) north of Mandalay, is noted for its rare pigeon's blood rubies and blue sapphires. Working conditions in the Mogok Valley are primitive and as such similar to mining conditions in other parts of the world.

The Union of Myanmar's rulers depend on sales of precious stones such as sapphires, pearls and jade to fund their regime. Rubies are the biggest earner; 90% of the world's rubies come from the country, whose red stones are prized for their purity and hue. Thailand buys the majority of the country's gems.

In 2007, following the crackdown on pro-democracy protests in Myanmar, human rights organizations, gem dealers, and US First Lady Laura Bush called for a boycott of a Myanmar gem auction held twice yearly, arguing that the sale of the stones profits the dictatorial regime in that country. Debbie Stothard of the Alternative ASEAN Network on Burma stated that mining operators used drugs on employees to improve productivity, with needles shared, raising the risk of HIV infection: "These rubies are red with the blood of young people." Brian Leber (41-year-old jeweler who founded The Jewellers' Burma Relief Project) stated that: "For the time being, Burmese gems should not be something to be proud of. They should be an object of revulsion. It's the only country where one obtains really top quality rubies, but I stopped dealing in them. I don't want to be part of a nation's misery. If someone asks for a ruby now I show them a nice pink sapphire."

Richard W. Hughes, author of Ruby and Sapphire, a Bangkok based gemologist who has made many trips to Burma makes the point that for every ruby sold through the junta, another gem that supports subsistence mining is smuggled over the Thai border.


Tourism:

Tourism in Burma (Myanmar) is a slowly developing sector. Although Burma possesses great tourist potential and attractions in many fields, much of the industry remains to be developed. Also, the number of visitors to Burma are comparatively small compared to her neighbours - even outpaced by Laos. This is primarily due to its current political situation.

Tourism in Burma has been developed mainly by the government, but many private enterprises do exist, catering to a wide range of tourists.

Since 1992, the government has encouraged tourism in the country. However, fewer than 750,000 tourists enter the country annually. Aung San Suu Kyi has requested that international tourists not visit Burma. The junta's forced labour programmes were focused around tourist destinations which have been heavily criticised for their human rights records.

Tourism has been promoted by advocacy groups as a method of providing economic benefit to Burmese civilians, and to avoid isolating the country from the rest of the world. Voices for Burma, a pro-democracy advocate group, states, "We believe that small-scale, responsible tourism can create more benefits than harm. So long as tourists are fully aware of the situation and take steps to maximise their positive impact and minimise the negatives, we feel their visit can be beneficial overall. Responsible tourists can help Burma primarily by bringing money to local communities and small businesses, and by raising awareness of the situation worldwide."

Regardless, a majority of advocacy groups discourage tourism. Any tourist visit will provide some income to the military junta. Even disregarding the obviously governmental fees, Burma’s Minister of Hotels and Tourism Maj-Gen Saw Lwin recently admitted that the government receives a significant percentage of the income of private sector tourism services. Not to mention the fact that only a very small minority of impoverished ordinary people in Burma ever see any money with any relation to tourism.

As for tourists wishing to see Burma’s problems for themselves in order to raise awareness, tourism offers very scant opportunities. Much of the country is completely off-limits to tourists, and the military very tightly controls interactions between foreigners and the people of Burma. They are not to discuss politics with foreigners, under penalty of imprisonment, and in 2001, the Myanmar Tourism Promotion Board issued an order for local officials to protect tourists and limit "unnecessary contact" between foreigners and ordinary Burmese people.

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