Newspaper article The Christian Science Monitor

Burma Capitalism Is Half-Baked but on the Rise Government Privatization Program Placates Dissidents by Setting Them Up in Business

Newspaper article The Christian Science Monitor

Burma Capitalism Is Half-Baked but on the Rise Government Privatization Program Placates Dissidents by Setting Them Up in Business

Article excerpt

WITH his air conditioning going full blast, U Kyaw Kyaw Aung scans Rangoon's urban horizon from his new Toyota Sprinter. "There's one," he says, pointing to a satellite dish barely visible from the road. "They're not legal, but I know they're there because I installed them."

Kyaw Kyaw Aung, who builds satellite dishes, defines Burma's (also called Myanmar) still-tiny but emerging business class. His gross income of $3,300 a month - more than 10 times what he earned as a technician for the United States Embassy - has made him one of the capital city's nouveau rich.

Kyaw Kyaw Aung's business, too, is a mark of the nascent middle class - consumers with the money to buy a channel to the outside world. He estimates that there are some 4,000 registered satellite dishes in Rangoon and 20,000 that are not registered.

"Anybody who has a back yard has a satellite dish," he says. "Nearly everybody can afford it - 50,000 kyat ($500) is nothing."

But the average civil servant in this southeast Asian country, earning about half that amount in a year, would surely disagree. For the 85 percent of the population eking out a life in the countryside, luxury is defined by a corrugated roof and running water, not access to Cable News Network.

Still, as the government follows communist Cuba and China by choosing a capitalist path and abandoning "the Burmese Road to Socialism," which impoverished the country for more than a quarter century, there are signs that the free market is beginning to create some prosperity. And the government, itself, is shrinking, pushing as many people as possible out of the socialist nest.

"They will have to fend for themselves, become entrepreneurs, join the private sector, do something," says David Abel, head of the National Planning Ministry. "After all," he chuckles, "it's a capitalist economy."

In 1988, when the government initially adopted limited market reforms, Abel says it controlled more than 95 percent of the country's gross domestic product. After privatizing farming and other industries, he says, the private sector today controls 76 percent of GDP. Ultimately, he predicts that only 5 percent of Burma's economy will be in the hands of the government. Pre-ordained winners

As yet, Burma has a half-baked capitalist economy, with the winners pre-ordained by the government. For example, it still gives government workers very inexpensive supplies of rice, gasoline, and other necessities, as it did during the socialist era; most of these supplies go to high-ranking military officers, who then sell their rations on the black market at an 800 percent markup.

What's different today is that not only government officials are getting wealthy, but private citizens are beginning to reap the benefits of the trade and limited capitalism. Generally, the new middle class is comprised of the English-speaking educated elite well-known to the government - either through family ties, or, surprisingly, through their opposition to the government.

Take U Set Aung, who set up a joint venture importing used Korean-made motorcycles. He sees two keys to doing business here, aside from some understanding of market economics and hard work: government connections and political neutrality. …

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