Burma’s failing socialism—1984
©Sjon Hauser – Burma’s failing socialism—1984 (Translated from Dutch)
Published in Dutch as: Birma’s mislukte socialisme, Intermediair, 14 September 1984.
In Burma’s capital Rangoon the Strand Hotel is what the Raffles is in Singapore—the entrance to the colorful colonial past. While the French Renaissance-style Raffles is surrounded by futuristic sky-scrapers and other achievements of the city state’s ‘economic miracle’, the eighty years old Strand looks modern midst the dilapidated buildings from the British colonial days—the outcome of a tragic stagnation. Once the bar in the Strand Hotel was one of the favorite places of Somerset Maugham, where he brooded over the plots of his short stories. At present, it is the only spot in town where larges bottles of Mandalay Beer are served. The label on the bottle learns me that the brewery was founded in 1886, the year that the third Anglo-Burmese War ended and the British accomplished complete colonization of Burma. Burma would remain an administrative province of British India until the 1930s.
The Strand is lacking the colonial grandness that made the Raffles a legend and one of the best hotels in the world. The Strand’s soberness is almost depressive. Sparrows flock in the bar, there are no ashtrays and the floor is littered with cigarette buds. At nine in the evening the terrace doors are closed and barricaded with worn out rattan chairs. The lights are switched off off, the hotel is closed.
■1. The atmosphere of decay in a living quarter in Rangoon (photograph: ABC). ■2. Ne Win, the architect of Burma’s ‘backwardness’ (photograph: ABC). ■3. A western luxury product, a refrigerator, was carried through the Moei River, the Thai-Burmese border, and arrived safely on the Burmese bank (photograph: Sjon Hauser).
In the darkness in front of the building, foreigners are approached by local men wearing their traditional longyis. They are not pushed to buy cigarettes, contrarily, the men are begging them to sell their foreign cigarettes. They were disappointed when I told them that I had already traded my box of 555. Western cigarettes and whiskey are obligate luggage for the Burma traveler. From the profit made on the black market, foreigners can finance much of their seven-days trip. All western products are welcome: ballpoints, T-shirts, malaria prophylaxis, jeans, dollars, etc. More than thirty per cent of the country’s import is illegal. The official import consists mainly of capital goods.
At 9 PM the poorly illuminated center of Rangoon is like a ghost town. Occasionally, a single car passes by—a rusted through Dodge truck or Japanese pick up. During the walk from the Strand to the YMCA, the sober lodging house where I stay, the pavements are full of tricky holes that demand my full attention.
To the visitor of the socialist republic, Burma’s economic backwardness is evident at first glance. In fact, it is one of the things that makes the country attractive to many travelers. The friendliness of the people—even the authorities and officials smile—is another plus. Visitors usually experience their trip as a success, and the country is later assessed in a positive way. Travel accounts and newspaper reports often bear headlines such as ‘Burma—the forgotten country’ or ‘Journey into the past’.
In the first half of the 1980s, the largest country of Southeast Asia received little serious attention in the western press. Burma’s many years of closed doors politics had resulted in a stagnation of information about the country. To learn more about Burma’s remarkable, in fact disastrous stagnation, the works of scholars have to be consulted, e.g. the studies of David Steinberg. Then, it will become clear that the roots of this backwardness go back to the British colonial days. (1, 2, 3)
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The Burman’s (4) world view was shattered when, in 1886, the British accommodated the throne of king Thibaw in a Calcutta museum, as Buddhism and nation were believed to be united in the person of a (usually despotic) monarch. The British transformed the country into an export colony. It became the world’s number one exporter of rice. To achieve their purpose, Indians were encouraged to settle in Burma. In particular, the Chettar caste from Madras invested large scale in the agricultural sector. Many rice paddies in the central plain of the Irrawaddy changed hands. The Indian agricultural credits resulted in one of the most serious land grabbing ever seen. (1: p. 122)
From 1913 to 1930, 4.5 million Indians settled in Burma, transforming Rangoon into an Indian city. Implementing a politics of ‘divide and rule’, the British mainly cooperated with the Indians. The latter were sought after as officials, while the ethnic minorities, such as the Karen, were favored as servants in the army.
The Buddhist Burmans, the ethnic majority group, were degraded to third-rate citizens. In the 1930s, a strong nationalist and anti-colonial movement was firmly rooted among these Burmans. In the nationalist activities an alliance of Buddhism and socialism was taken for granted, an ideological merger that would determine Burma’s political course as soon as the country achieved independence.
Under British rule, the once influential Buddhist Sangha (‘church’) was reduced to a powerless institution. However, it remained loyal to the population and central to the social and cultural life of the Burmans. Buddhism was pivotal to Burman identity and therefore its incorporation into anti-colonialism was self-evident. On the other hand, socialism was the more pragmatic ideology in the nationalist force against the British.
It has often been emphasized that the spirit of Buddhism is essentially socialist, because Buddhism teaches common action to pursuit social aims, and consequently should be opposed to capitalism. For others, this alliance is not self-evident, and many nationalists even rejected the affinity between Buddhism and Marxism, while in Thailand such a supposed affinity has never found clear ideological expression.
In Burma it was the product of Burman anti-colonialism (5) and turned out to be very durable. To date, government representatives use Buddhist terminology to express socialist ideas and to strengthen the credibility of worldly aims. The garbs of the Burmese monks are bright red, as if to symbolically express this alliance. And since the 1930s, Rangoon’s Shwe Dagon Pagoda, the foremost Buddhist sanctuary in the country, is a major center of political activism.
In World War II, Burma’s economy was shattered completely. Probably no other Asian country had suffered the ravages of war as intensely as Burma. It took the country fifteen post-war years to regain the prewar production level. During the war, the Burman nationalists had embraced the Japanese invaders, a tactical miscalculation that was despised by the ethnic minorities.
After the war, Great Britain hardly made efforts to retain the devastated colony under their rule. ‘When the British government learned from the resoluteness of the nationalists that their policy was not unacceptable, and that it was unlikely to be pushed through without jeopardizing her long-term interests, she resigned herself to the inevitable. In such a case no efforts were made to suppress the nationalist movement or to impose her will by military force…’ (6, p. 396-7).
Independence and Burmanization
At Burma’s independence in 1948, the British left a country with an amalgam of ethnic groups, most of whom were hostile or, at least, suspicious towards the Burman nationalists. Before independence, this ethnic hodgepodge of peoples seemed to be more or less united, much to the credit of the prestigious nationalists’ leader Aung San. However, in 1947, Aung Son and other nationalists were killed in a bomb-outrage. Due to illness, another nationalist, U Nu, had been absent at the meeting and survived the attack. U Nu was a Buddhist purist and he became a leading force in creating a Buddhist state dominated by the Burmans. During this process of ‘Burmanization’ there was a growing dissatisfaction among the ethnic minorities that comprise about forty per cent of the population. The Buddhist overtone in U Nu’s politics is quite remarkable. It was not exceptional when the leader retreated to a meditation center to achieve thin-khar-rupel-khanyan (a certain meditative stage), and instructed his subjects not to send for hem. ‘[Not] even if the whole country is enveloped in flames. If there are fires, you must put them out yourselves’ (5, p. 123).
For U Nu eliminating capitalism (which encourages selfishness) was above all a meritorious act in the Buddhist sense. U Nu’s socialist aims had little in common with a Marxist strategy focusing upon the proletariat, neither with a focus on peasants and farmers. The superiority of Buddhism was frequently expressed by U Nu: ‘It will be our duty to retort in no uncertain terms that the wisdom of knowledge that might be attributed to Karl Marx is less than one-tenth of a particle of dust that lies at the feet of our great Lord Buddha.’ (5, p. 125)
In 1960, much to the credit of U Nu, Buddhism was proclaimed Burma’s national religion. The social reforms during U Nu’s governments were relatively modest, and following a number of setbacks, a more liberal course was set about. It is difficult to assess the effects it had on economic recovery due to the exceptionally miserable situation at the end of Word War II.
Coup and militarization
Ethnic minorities had revolted against the Burman dominance as soon as the country gained independence. In 1960, the separatism of the Shan people seriously threatened the unity of the country. This threat is generally seen as the major reason of army leader Ne Win’s (bloodless) coup in March 1962.
The purpose of the military intervention was to restore unity, but the new leader soon turned out to become a dictatorial strongman who does not refrain from violently suppressing any opposition. In particular student activism was brutally put down. And after failing to accomplish agreements with several minority groups, Ne Win retorted to military means. Civil war soon raged in large parts of the country.
In the past, Ne Win had been a brother in arms of the respected nationalist leader Aung San. However, unlike Aung San, the new strongman lacked any flexibility, while his personality has been characterized as xenophobic and paranoid. And unlike U Nu, Ne Win was not popular among the Burmans, who did not consider him a ‘good Buddhist’. U Nu’s pragmatic Buddhist-style socialism was substituted by Ne Win’s doctrinal socialism.
Industrialization got priority within the economic scheme. All major companies were nationalized, and the country was no more open to foreign investments for the subsequent fifteen years. The investments by the non-indigenous nationals were restricted, which resulted in the exodus of the Indians. The economy was not only ‘burmanized’, it was also ‘militarized’. Ne Win-loyal army men—who usually lacked experience in economic life—were placed in all top positions. The strong centralization of the new economic development discouraged the participation of the few talented.
In 1974, a more liberal course is set about to counter economic stagnation, but at present  Burma remains one of the least industrialized countries in Asia. Despite a fourteen-fold increase of government investments in industry, its output grew only slowly. Less than ten per cent of the gross national product came from industry—only in Bangladesh this rate was lower. In 1980, the production of electricity was 32 kWh per capita, a tenth of the production in Thailand (318 kWh), Burma’s predominantly agricultural neighbor. (7)
Burmese Socialist Program Party
Following the coup of 1962, the Burmese Socialist Program Party (BSPP) was founded. Initially this was a ‘cadre party’, but starting from 1963 it accepted applications for membership. In 1966, the party had only twenty members, but there were 99 634 candidate members and 167 447 sympathizers. The major ideological manifest of the party, the System of Correlation of Man and Environment: the Philosophy of the BSPP, was published in January 1963. ‘The socialist society based on justice, upon which we have set our hearts, is a prosperous and affluent society, free from exploitation or oppression of man by man, where there is no class antagonism that threatens human welfare, and where man’s physical well-being and spiritual happiness are assured.’ (1, p. 30)
In this new ideology a number of Buddhist and socialist views have been integrated.
A year after its publication, dissidents were persecuted, a strict censorship of the press was implemented and all political parties except the BSPP had been outlawed.
Because of Ne Wins ‘extremely neutral’ foreign policy, the internal developments in Burma were hardly followed by most foreign countries. Burma’s neutrality was above all the product of Ne Win’s xenophobia. Burmese diplomats rarely participated in international conferences, and in 1979, Burma even withdrew its membership from the Non-Aligned Movement.
Though few in dept studies have been possible under military rule, it is fair to conclude that Ne Win’s politics had been disastrous to the economy. Following the 1967 crisis in the agricultural sector, there are outbursts of strikes and unrest. In 1970, the country controlled only two percent of the world trade in rice, compared to 28 per cent in 1950. There were shortages of almost anything. Gradually, the rise of an extensive black market partly compensated for this. Most products in the black market were smuggled into Burma from Thailand. Various ethnic rebel armies, in particular the Karen’s, finance their struggle against Rangoon by controlling the illegal import of western consumption products.
Shan State and opium trafficking
On the other hand, in the northeastern Shan State, the rebel armies support themselves by smuggling opium and heroin to Thailand. Because of these drug links, the rebels in the Shan State have been in the limelight of the foreign media, which show more interest in the sensational aspects, such as the opium warlords, than in the roots of the problem. (8, p. 403)
In fact, the present anarchy in the Shan State, which borders the Golden Triangle, results from centuries of mutual mistrust between the Shan and their Burman neighbors. The opium trade is even directly linked to Ne Win’s Road to Socialism. ‘All businesses and banks (foreign and otherwise), shops, industries, factories, etc. were nationalized, and business and trade by individuals and private concerns came to a dead stop. Naturally, in such an economic vacuum there arose a black market economy which for opium traffickers was a boon as they, and only they, were equipped to exploit this sad situation.’ (8, p. 417)
To prevent public unrest, Ne Win is forced to tolerate the black market—as the black market supplies anything the state does not produce. Indirectly, this inevitable tolerance is supporting the ethnic rebellions.
On the other hand, a quarter of the national budget is required to finance the military force against the rebels. As just half of the country is effectively under control of the military rulers, many developments projects being jeopardized by the rebels. Transport, communication and commerce are hindered in the minority regions and collecting taxes is nearly impossible.
In 1964, the Military Council announced a number of measures that further eliminate the autonomy in the states predominantly inhabited by minorities. Due to Rangoon’s neutral foreign politics, the ethnic rebels were never large scale supported by foreign countries. In fact, only Burma’s illegal Communist Party (CPB), which mainly operates in the Shan state, received support from China. The CPT’s army and the Karen United Army are the most powerful opponents of the regime in Rangoon, and much of Burma’s 160 000 men strong army are involved in the suppression of the communist and Karen rebels.
As the Karen are notorious anti-communists, military cooperation with the CPB is excluded. However, they are united with other ethnic rebel groups in the National Democratic Front, but the various struggles are too dispersed to make effective coordination possible.
The vulnerability of the development projects in the periphery was brought to light with the kidnapping of a French couple employed in the construction of a cement factory in the Karen State. The Karen abductors demanded that France stopped its support to the Ne Win regime. Rangoon was far from happy with this exposure of the country’s divisiveness, and responded with a large offensive in Karen territory in which hundreds were killed and a number of Karen strongholds were captured—the latter no more than a temporary success, as in the rainy season army units in rebel territory cannot be supplied and are forced to retreat.
Though solving the minority problems is a prime condition for Burma’s development, Ne Win thus far gave it little thought. In 1971, however, he realized that even in Burma psychological rewards are inadequate to increase production rates. Therefore, a more liberal course has been introduced with some space for private initiatives. Also the emphasis on industrialization was shifted to agriculture and mining, and new development projects will be financed with the export surplus from these sectors. Since 1976, foreign investments are encouraged. In particular Japanese and German companies are contracted for such projects, and the Word Bank and Asian Development Bank are willing to supply credit in the improved economic climate.
The new economic course illustrates that the Party has opted for pragmatism, albeit a very late attempt to resuscitate the stagnant economy. This modest liberal policy is continued to date, and in 1971, the Party even fired two ministers who were denounced as being too doctrinal.
In the late 1970s, growth rate in a number of sectors was ‘spectacular’, and Burma’s accomplishments have been hailed by the World Bank. Good weather conditions in 1978 and 1979, in combination with the introduction of ‘High Yielding Varieties’ (HYVs), resulted in record rice harvests (not too surprising, as production during the previous years was extremely low). However, rice production per hectare remains lower than in Sri Lanka and Indonesia, and at present the expansion has come to an end, due to higher costs of fertilizers and other input and Rangoon’s paranoid reluctance to growing debts with foreign finance institutions. At present, the emphasis is on increasing store facilities for rice and the construction of new rice mills. The German-Thai company Berli Jucker was contracted to build and equip twenty warehouses for rice, each facility with a capacity of 5000 tons. Loans for this project were supplied by the World Bank.
Agricultural mechanization resulted in many failures, and more than ninety per cent of the land is presently ploughed by means of cattle. Due to the shortage of spare parts, many of the five thousand tractors in Burma break down permanently. They are often sold to the private sector, where they can be repaired, as to them spare parts from the black market are available.
Good irrigation of the land is required to increase the production rate of HYVs. But short term improvements of the poor irrigation system are out of question: ‘Private initiative in the construction and repair of small-scale irrigation systems has been effectively discouraged by the land tenure system, which gives title to the land to the state and prohibits its automatic inheritance. The lack of productive, longer range (not seasonal) agricultural credit closes the private improvement of irrigation as a major option.’ (1, p. 121).
In the light of the large-scale land grabbing in the most fertile lowlands during the colonial rule, it is understandable that land ownership has been a major concern of all post-war governments. U Nu once made proposals to the landlords to dispose all their land, as such meritorious acts would favor them to enter Nirvana. In 1952, a new Ministry of Land Nationalization was created, but its implementation failed due to internal chaos. In 1965, the military rulers officially abolished the remnants of large land ownership.
Teak and Oil Exploitation
Because of the government’s failure to supply agricultural credits sufficiently, farmers are forced to deal with private money lenders. Since most farmers lack any land as collaterals, they have to pay very high interest rates for these illegal, private loans.
The trade in rice has been completely nationalized by the military government, and the latter settles the price the farmer receives for his product and how much the consumer will have to pay. In the past, farmers responded favorably by increasing the production when the price for rice was raised. Nevertheless, the military keep it low, fearing that a higher price will encourage inflation and that the wages in the towns have to be raised. Due to the low price, investments in agriculture further fell off.
During Ne Win’s liberal course, the exploitation of the forests increased steadily. Still eighty per cent of the country’s teak reserves remain, and the export of the valuable timber has gradually replaced the export of rice. According to official reports, the exploitation of teak is balanced by a high rate of reforestation. Further expansion, however, is thwarted by the ethnic minorities, as major teak reserves are in the peripheries controlled by them. In particular Karen territory abounds in teak. Western consumption goods smuggled into Burma are often exchanged for teak, and along the border with Thailand the Karen operate many saw-mills.
The output of the mining industry has increased considerably, but for a number of products the price in the world market has dropped over the past few years. Oil exploitation has remained deficient. Queues of vehicles waiting at petrol stations are a common sight in Burma.
The increase of the number of Mazda and Toyota pick-up trucks has been one of the most visible changes in the country over the past few years. Many of them have been imported more or less legally, often by Burmese sailors, and are known as ‘sailor cars’. Oil shortages resulted in soaring black market benzine prices. The official benzine price in Rangoon is 3.5 kyat per gallon, in the black market 20 kyat is paid, and in Mandalay, 700 kilometer to the north, 40 kyat.
Due to fuel shortages many factories are forced to work far below capacity. The Sedaw Gyi-dam project near Mandalay is three years behind schedule, mainly due to shortages of fuel and cement. Burma has been on the brink of importing oil from Indonesia, which would have been a moral defeat for the government, as the country had always been self-sufficient in energy.
In 1982, extensive gas fields have been discovered in the Gulf of Martaban. The exploitation will be partly financed by the government, but large foreign loans are also required. Given the government’s reservations with regard to foreign credit, authorities will implement the scheme extremely carefully, and long delays are to be expected.
January 3rd, 1974, Burma’s new constitution was effectuated. The Revolutionary Council was dissolved and the BSPP, a cadre party, was transformed into a People’s Party. While Burma is on the course of a careful liberal development—a fresh approach compared to the previous years—the other major problem, the country’s national divisiveness, is treated in a less subtle way. In the ambitiously conceived new constitution little is left of the partial autonomy of the minorities in their seven states, as David Steinberg put it: ‘Rarely had a country made such an extensive and expensive effort in relation to national income to mobilize mass support for a political ideology that simply confirmed and perpetuated the single dominant military and political force in power.’ (1, p. 65). Nevertheless, in a few states, a considerable percentage of the voters was not in support of the new constitution. In the Kachin State only 69 per cent was in support of it, in the Kayah State 71 per cent, and in the Shan State no more than 66 per cent—a obvious expression of dissatisfaction with Burman dominance among the ethnic minorities.
The new constitution above all emphasizes the unity of the country. Before the coup, states had their own budget and were allowed to generate income by themselves. What’s more, they were entitled to be independently represented in the two houses of the legislature. These rights are lost in the new constitution, as the new National Assembly (Pyithu Hluttaw) consists of only one house in which minorities can only be represented by members of the BSPP—consequently, minorities will be strongly under-represented.
On the other hand, the village-tract people’s councils in the new constitution will positively contribute to stimulating development processes. However, due to Burman domination of all state organs, tensions between the Burmans and the ethnic minorities will be roused.
The constitution’s negative impact on minority problems could become a major factor in future developments. Ethnic resistance has been growing since the new constitution took effect, one of the highlights being the occupation by the Karen of the large town of Thaton, only one hundred kilometers from Rangoon. In 1979, the struggle between the communists and the army escalated to reach its zenith—killing 4500.
Josef Silverstein stresses the importance of finding a solution for the minority problems: ‘Until a new leadership emerges that is capable of convincing the minorities that it is sincere in wishing to find a solution through mutual consultation, the problem will persist, warfare will continue, economic and social development will not take place in the vast minority areas, and the social distance between the Burmans and the minorities will widen rather than close.’ (10, p. 198)
Also many Burmans are dissatisfied with Ne Win. In 1974, following the funeral of U Thant, the Burman secretary-general of the United Nations, Rangoon was the scene of mass demonstrations that turned violent. According to official statements 13 persons were killed during the unrest and 3000, including 350 monks, were arrested, but rumors that more than a thousand persons have perished persist to date. It is believed that many of victims ended up in a mass-grave in the rural settings close to Rangoon’s Mingaladon Airport.
In May 1980, Ne Win in person led the purgation of the Buddhist Sangha, which in Burma’s past, was traditionally a monarch’s prerogative. Is Ne Win intended to found a new dynasty and was it not just coincidence that in 1977 the strongman remarried a granddaughter of King Thibaw, Burma’s last monarch?
Three years ago, the veteran politician, handed over the presidency to the younger general San Yu, but as the chairman of the BSPP, Ne Win still is the undisputed leader. His xenophobic spirit still roams the moss- and algae-clad, dilapidated government buildings in the capital. What may happen, when the architect of Burma’s backwardness will die, is difficult to predict.
A true liberal course and a accelerated development of the country’s rich sources will be unlikely. Brigade-general Tin Oo, often hailed as ‘very progressive’, generally seen as Ne Win’s heir, and two years ago considered the ‘smiling survivor’ in the Far Eastern Economic Review, has been accused of corruption and has to serve a five times life imprisonment term.
Steinberg fears that disappointing results of the liberal course over the past decade may eventually result in its replacement by a less open and more doctrinal policy.
Foreign visitors are allowed to stay in Burma for a week, and not one day longer, so they have little time to explore the ‘mysterious country’. When Ne Win was asked why tourism is not promoted by extending the duration of stay to a fortnight, he answered that one better not receives visitors when cleaning the house.
Indeed, since independence, Burma is involved in a uninterrupted clean up. During the hurried trip from golden pagodas to ancient ruins foreigners will hardly be aware of this. And when leaving the country from Rangoon’s airport, they will neither realize taking off above a recent mass grave. Typical for the authority’s attitude toward foreigners is the warning printed on the boarding pass one gets handed at the airport. It reads: DON’T MISS YOUR FLIGHT.
1. David I. Steinberg. Burma’s Road Toward Development. Growth and Ideology under Military Rule. Westview Press, 1981, 233 pp.
2. David I. Steinberg. Economic growth with equity? The Burmese experience. Contemporary Southeast Asia, 4 (Sept. 1982): 124-152.
3. David I. Steinberg. Burma’s third Four-Year Plan: half-way to socialism and industrialization? Contemporary Southeast Asia, 5 (June 1983): 1-26.
4. The Burmans are the Union of Burma’s largest ethnic group, mainly concentrated in the central plains. A Burmese is a national of Burma and can belong to any of the many ethnic groups in the country, such as Burman, Shan, Chin, Karen, Arakanese, Mon, etc.
5. Trevor Ling. Buddhism, Imperialism and War. Burma and Thailand in Modern History. George Allan & Unwin, London, 1979, 163 pp.
6. Jan Pluvier, South-East Asia from Colonialism to Independence. Oxford Univ. Press, 1974, 571 pp.
7. Hai Hill. Industrialization in Burma in historical perspective. Journal of Southeast Asian Studies, 15 (March 1984): 134-149.
8. Bertil Lintner, The Shans and the Shan State of Burma. Contemporary Southeast Asia, 5 (March 1984): 403-450.
9. Far Eastern Economic Review, 17 May 1984: 77-84.
10. Josef Silverstein, Burma, Military Rule and Politics of Stagnation. Cornell University Press, London, 1977, 224 pp.