Can Auug San Suu Kyi Save Burma’s Economy

12 Apr 2016

Can Auug San Suu Kyi Save Burma’s Economy

Winning an election was one thing. Now it’s time to make people’s lives better.

It has been a heady few weeks in Burma, with one announcement after another that many feared they would never live to hear. The broad contours of the first civilian-led government for over fifty years are now clear.

Htin Kyaw is the new president, although he is essentially a proxy for the widely beloved leader of the National League for Democracy (NLD), Aung San Suu Kyi, who was denied the top job by the provisions of the military-drafted 2008 constitution. Instead, a new position has been created for her, roughly equivalent to that of prime minister — and she will also be foreign minister. In other words, there’s no doubt as to who will really be running the government.

Suu Kyi’s top priority, she has said, will be to ramp up the peace process in order to end the civil conflicts that have ravaged the country since independence.

Not far behind, however, will come the economy.

Not far behind, however, will come the economy. In 1962, when the military seized power, Burma boasted one of the region’s strongest economies; today it is the second-poorest country in Asia. It was, above all, to reverse this dismal state of affairs that then-President Thein Sein launched his reform program in 2011. His efforts have yielded an impressive-looking average growth rate of 6.5 percent over the last years, but that was from a very low base. In fact, Burma’s economy, starved of investment for decades, is still in dire straits. GDP per head is at a very low $1,200 or so — a stark contrast with neighboring Thailand, where it’s about $6,000. About one-quarter of the population live in poverty; only about the same proportion have access to electricity; and the country has the worst road, rail, and port network in Southeast Asia.

Moving some of those statistics in the right direction will be a monumental task, as most Burmese are all too aware. Sensibly, the new NLD government is taking its cue from its predecessor, which concentrated efforts on rural development. For as the new minister of planning and finance, Kyaw Win, has argued, “seventy percent of the population live in rural areas. These people are poor, and do not have enough income. So they are our first priority.”

But Kyaw Win says that his economic policy will also focus on reducing income equality and boosting tax revenues, thus providing the government with the money to spend on the new schools and roads that Burma desperately needs. There is a lot of aid and development money coming into the country at the moment, particularly from Japan, which is investing heavily in new Special Economic Zones. That will continue. But the government knows that unless it can boost its own tax take, currently a paltry 5 percent of GDP, it has little chance of achieving anything.


Comments Comments(0)

Topclass Reporters