söndag 11 maj 2008


An economics journalist, Samuel Brittain, once attempted to explain the curious fact that some of the best developed countries in the world, such as Japan, were poorly endowed with natural resources, whereas many richly endowed countries were characterised by large numbers of extremely poor people.

In his view, the reason was that natural resources create rent and the powerful try to get their hands on it, hold on to it and use it for their own benefit. I think the term is kleptocracy. This seems to be the case in Burma. It is rich in natural resources.

On the other hand, the Burmese government cannot be altogether blamed for not wanting to let the west in. No doubt there are all sorts of factions in corporate America who would like to get their hands on the goodies, so say nothing of outfits like Bechtel and Halliburton, and well-funded evangelical Christians who must be itching to try to convert the poor benighted Buddhists to their scripture-based religion.

"Burma is a resource-rich country with a strong agricultural base. It also has vast timber, natural gas, and fishery reserves and is a leading source of gems and jade. Tourist potential remains undeveloped because of weak infrastructure and Burma's international image, which has been damaged by the junta's human rights abuses and oppression of the democratic opposition. Due to Burma's poor human rights record, the U.S. imposed a range of trade sanctions, including bans on the importation of Burmese products into the U.S. and the export of financial services from the U.S. to Burma. In response to the September 2007 crackdown, President Bush announced on September 25, 2007 that the United States would tighten existing economic sanctions on the regime leaders and their supporters. On October 19, 2007, President Bush expanded sanctions to include individuals responsible for human rights abuses and public corruption, as well as individuals and entities who provided material or financial support to designated individuals or the Burmese military government. Australia, Canada, and the EU also have imposed additional economic sanctions on the Burmese regime in response to the crackdown.

"The regime's mismanagement of the economy has created a downward economic spiral. The state remains heavily involved in most parts of the economy, infrastructure has deteriorated, and no rule of law exists. The majority of Burmese citizens subsist on an average annual income of less than $200 per capita. Inflation, caused primarily by public sector deficit spending and the eroding value of the local currency (the kyat), have reduced living standards. The Asian Development Bank estimated in December 2006 that inflation in Burma could reach 30% in 2006-2007, in contrast with official estimates of 10%.

"The military's commercial arms play a major role in the economy. The limited moves to a market economy have been accompanied by a significant rise in crony capitalism. A handful of companies loyal to the regime has benefited from policies that promote monopoly and privilege. State-controlled activity predominates in energy, heavy industry, and the rice trade. Agriculture, light industry, trade, and transport dominate the private sector.

"Burma remains a primarily agricultural economy with 50% of GDP derived from agriculture, livestock and fisheries, and forestry. Manufacturing/industry constitutes only 15% of recorded economic activity, and state industries continue to play a large role in that sector. Trade and services constitute 35% of GDP.

"Foreign investment has declined precipitously since 1999 due to the increasingly unfriendly business environment and political pressure from Western consumers and shareholders. The government conserves foreign exchange by limiting imports and promoting exports. Published estimates of Burma's foreign trade (particularly on the import side) are greatly understated because of the large volume of off-book, black-market, illicit, and unrecorded border trade.

"In the near term, growth will continue to be constrained by government mismanagement and minimal investment. A number of other countries, including member states of the European Union, Canada, and Australia have joined the United States in applying some form of sanctions against the regime.

"Government economic statistics are unavailable and unreliable. According to official figures, GDP growth has been over 10% annually since FY 1999-2000. However, the rate is likely much smaller; the IMF estimates that the growth rate in 2007 was 5.5%. Burma's limited economic growth results largely from its natural gas exports, which account for over half of Burma's export receipts and foreign direct investment. Natural gas exports will increase significantly once production begins from the offshore Shwe and Shwephyu Fields, estimated to hold 5.7-10 trillion cubic feet of natural gas. In 2005-2006, the oil and gas sector accounted for $69 million in foreign direct investment. Corporations based in China, India, South Korea, Thailand, and Malaysia have interests in the exploration and development of several offshore blocks.

"Burma remains the world's second-largest producer of illicit opium--although it amounts to only 12% of the world's total. Annual production of opium is now estimated to be less than 15% of mid-1990 peak levels. Burma is also a primary source of amphetamine-type stimulants in Asia. Although the Burmese Government has expanded its counternarcotics measures in recent years, production and trafficking of narcotics and failure to adequately prosecute those involved remains a major problem in Burma."

Source - Background notes: Burma
Under Secretary for Public Diplomacy and Public Affairs > Bureau of Public Affairs > Bureau of Public Affairs: Electronic Information and Publications Office > Background Notes

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