Economic Conditions and Civil Life

Southeast Asian Affairs, January 1, 2001 | Go to article overview
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Economic Conditions and Civil Life


Turning now to economic conditions within Myanmar in 2000, and how these affected civil life, both urban and rural, the country's economic position relative to its neighbours continued to weaken. Any economic gains achieved from so-called market reforms were not widely shared, tax revenue remained extremely low (only 3.5 per cent of gross domestic product [GDP] compared with a regional average of 15 per cent), and crony capitalism continued to make its mark. Ostentatious displays of wealth, marked in particular by luxury vehicles and grand new houses (such as in Shwe Taung Gyar and other wealthy enclaves of Yangon) have somehow become acceptable to a regime that should be fearful of the consequences of a shrinking middle class and increasing polarity between rich and poor. Although there is no visible grinding poverty, impoverishment is widespread, with at least one quarter of the population estimated to be living below minimum subsistence levels.25 The government claimed a high GDP growth for mid-2000 at 10.5 per cent year-on-year, but this figure cannot be verified.26 It is more likely to be around 4.5 per cent.27 The GDP for the fiscal year 1 April 1999 to 31 March 2000 is estimated to be US$6.2 billion, with per capita GDP at $124.00 (at the free market rate of K440 to the U.S. dollar --- a major difficulty here, discussed below in detail, is converting government figures in kyats to U.S. dollar equivalents, given the volatility of the kyat and the existence of more than one exchange rate.)28 However, an April 2000 substantial raise in civil service salaries (including those of school teachers) in the range of 350 - 400 per cent may affect the per capita indicator for the latter part of 2000, particularly when combined with the massive raises given to the Tatmadaw at the same time. The revised monthly salary scales of government employees range from K15,000 at the highest level (Grade 12) to K 3,000 (Grade 1).29 For the time being, this will help alleviate the impact of inflation, which the latest available Yangon consumer price index suggests is 18.4 per cent (1999 figure).30 Late 2000 also saw food prices for some staples (especially rice) come down, easing consumer costs considerably. On the other hand, those working for the private sector (especially foreign enterprises) usually have higher wages. For example, the public sector unskilled labour wage in 2000 was a maximum of K100 per day, but five times that in the private sector construction industry. There, skilled labour earned K1000 per day, the same wage that a senior Grade 12 civil servant would receive.

Despite some attempts to introduce free-enterprise economic opportunities, Myanmar's controlled economy continues to favour state economic enterprises (SEEs or SOEs). Some of these are industrial (1,600 factories employ about 2 per cent of the work-force). More significant is the government monopoly on all exports of rice, rubber, sugar, minerals, gems, marine, and forest products. This leaves only garments, pulses and beans available for private export contracts.31 Despite economic sanctions prohibiting new investment (but, ironically, not new trade) by the United States, Canada and the EU, Myanmar still managed to attract a cumulative total of 329 approved foreign direct investment (FDI) projects at a combined value of US$7.186 billion in the decade leading up to 2000. These ventures ranged from oil and gas (32 per cent of the approved projects), to hotels and tourism (14.7 per cent), mining (7.3 per cent), and transport and communications (3.8 per cent).32 Not all of these projects are working at anywhere near capacity, however. As any visitor to Yangon will testify, foreign tourists are few and the construction of hotels has come to a halt (throwing half a million construction labourers out of work). American and Franco-Belgium investment in the Yadana and Yetagun natural gas projects remains open to very serious criticism in the West, as does the Canadian-based Ivanhoe copper mining project.

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