Troubling Travels: Funding Myanmar's Junta

By Zhou, Peter | Harvard International Review, Winter 2005 | Go to article overview

Troubling Travels: Funding Myanmar's Junta


Zhou, Peter, Harvard International Review


Ever since General Ne Win's coup d'etat in 1962, Myanmar's military junta, the State Peace and Development Council (SPDC), has maintained an iron-fisted political doctrine while sending mixed signals about its economic agenda.

Although initially opposed to capitalism, Myanmar dismantled its socialist economy with the Foreign Investment Law of 1989. Tourism became the leading beneficiary of deregulation, reaching a high of 287,394 foreign arrivals in 1998 to 1999. Behind the facade of a booming tourism industry, however, measures taken by the SPDC in the name of improving tourism have resulted in countless human rights violations. Tourism provides Myanmar's junta with an economic backbone to support oppression and resist political reform; thus, if Myanmar is to make progress towards democracy, international sanctions will need to apply not only to corporations and business capital, but to the Burmese tourism industry as well.

Shortly after the passing of the Foreign Investment Law, the military junta held a parliamentary election in 1990 that gave opposition leader Daw Aung San Suu Kyi's National League for Democracy (NLD) 82 percent of the seats. The junta, however, never allowed the elected parliament to convene. This affront to popular sovereignty led the United States, Japan, and the European Union to impose economic sanctions on Myanmar. In order to recover lost governmental revenue, the SPDC focused on expanding its tourism industry. However, there has not been much attention to the costs of expanding the tourism industry, nor to the direction of funds generated by the newly developing tourism industry, which are undoubtedly merited.

Because of its lack of monetary stability, Myanmar relies on tourism for foreign exchange. Although the official exchange rate for Myanmar's currency is about 6 kyats to US$1, the actual rate of exchange can reach 1000 kyats to US$1. The high unofficial exchange rate coupled with steep inflation makes attracting foreign currency a top priority for the government. Each visitor to Myanmar must exchange US$300 for Foreign Exchange Certificates--a special monetary unit accepted by most hotels. Additionally, Myanmar's government profits from foreign investments in state-run hotels by exchanging state protection and infrastructure for foreign capital.

In 2003 alone, tourism generated over US$116 million in investments and revenues for the economy. Despite declining foreign investment in other fields, the hotel industry has attracted investments totaling over US$1.06 billion since 1988. For a regime that spends over 50 percent of its income on the military, tourism income perpetuates its illegitimate military rule. The US$300 minimum spent by every tourist in Myanmar is enough to equip a Burmese soldier for a year.

To attract more visitors, SPDC re-development campaigns build up tourist destinations at the cost of human rights. …

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