Myanmar’s Development Dilemma

As one of the last countries in Asia to open its doors, Myanmar — also known as Burma until 1989 — has the opportunity to draw on some of the lessons its neighbors have learned in their decades-long pursuit of rapid economic growth. Many in the region now lament the erosion of cultures and values and the high cost to their resource bases that has accompanied their embrace of unfettered free markets and extreme capitalism.

Examples abound from Japan, where the 2011 tsunami and nuclear disaster have prompted questions about its pursuit of prosperity, to Thailand, where the worst floods in living memory resulted from its focus on economic development at the expense of the environment. Throughout Asia, horrific air pollution has engulfed many cities following their blind embrace of cars and low-cost manufacturing, and obesity rates are exploding in countries from India to Malaysia as diets have changed.

Myanmar’s opening occurs at a critical time for thinking about routes to development. With the West’s reputation undermined by the global financial crisis and its aftermath, its recipe for consumption-led growth is being questioned. Many Asian countries are beginning to come to terms with the reality that they cannot simply “manufacture and export” their way out of poverty and ape an economic model that appears to have exhausted itself because it thrives on promoting relentless consumption by underpricing critical resources.

This offers Myanmar an opportunity to look for a more sustainable development model, one that can avoid the worst impacts of this aspect of global capitalism.

Multiculturalism is a striking feature of Myanmar, yet historically it has been at the core of its woes. Creating and maintaining multicultural harmony in a resource-rich country such as Myanmar has been a key to economic success. Doing so will not be easy. The rush for rapid economic growth can be exploited by some to reignite ethnic tensions, as countries like Sri Lanka, Indonesia and Timor have experienced in their post-colonial eras.

Access to resources is invariably at the center of ethnic conflicts in countries with weak institutions. In fact, Myanmar’s ethnic conflicts — which have persisted for decades — can be attributed principally to British colonial rule and its widespread use of a divide-and-conquer tactics to access these resources. After the British annexed Burma in 1885, making it a province of India the following year, they brought in Indians to staff the civil service. The favoritism of the Indian civil servants for their compatriots’ business interests, as well as their favoring of Chinese interests over Burmese ones, bred deap-seated resentment.

Attempts were made to reverse this by adopting the “Burmese Way to Socialism,” a blueprint for economic development drawn up in 1962. Whatever its other shortcomings, the plan sought to reduce foreign influence, encourage strong military power and promote the coexistence of the countries’ different ethnic groups.

But as we now know, it had other unintended consequences. Colonial rule fostered many grievances among the country’s different ethnic groups and led to more violent riots and ultimately military crackdown. This is why the recent news about a cease-fire between the Burmese Army and the insurgent armies of the Karen and Shan ethnic groups — together with the release of political prisoners — is a very significant step. The Burmese government should be congratulated these achievements.

Despite the ravages of the last 50 years, Myanmar’s culture remains steadfast. But for how much longer, now that political freedom is slowly being realized and the economy is opening up to the rest of the world?

The country must tread carefully so as not to get caught up in the euphoria of rapid economic growth that will undoubtedly hinge on cheaply exploiting its natural resources. This approach will likely be encouraged by those with little understanding of Myanmar’s history and complexities — and perhaps even no real long-term interest in the welfare of its people.

Asia’s Rice Basket

To an outsider, daily life in Myanmar might seem relatively slow and uncomplicated. Internet connections are weak and work only in a few locations. Shops don’t accept credit cards. While it can be refreshing not to see a single Starbucks, McDonalds, KFC or other international fast food outlet, Myanmar is not likely to stay that way.

Despite the rush of the United States and the United Kingdom to take credit for Myanmar’s current progress, much of it actually comes after decades of quiet diplomatic relations with many Asian countries. In 1997, Myanmar was admitted to the Association of Southeast Asian Nations (ASEAN), which has opposed the use of sanctions against Burma, making the regional grouping the true architect of the country’s current opening. Having achieved this, it is hoped that the ASEAN nations, more than any others, will not now seek to plunder Myanmar’s resources.

When it gained independence from Britain in 1948, Myanmar was one of the wealthiest Asian nations and a significant supplier of commodities. But in the following decades, because of its inability to address the many thorny issues arising from its colonial past, it went from being the region’s “rice basket” — when it was a net exporter of rice and other agricultural products — to being one of Asia’s poorest countries.

Now Myanmar has another chance. But with foreign investors eyeing the country’s rich resources — natural gas, oil, copper, silver, precious stones, hardwoods and fisheries — the challenge facing the country is to find a way to foster growth while avoiding the worst pitfalls of development. As many other nations in the region have found out, encouraging investment is important. But there is often a profound conflict between the short-term needs of investors and the long-term interests of the country and its people. This conflict is compounded in resource-rich countries like Myanmar.

This is the sustainable development challenge so many nations in Asia face — and few have found the right balance. But one thing is certain: blindly buying into the economic model of the West is not the answer. The government of Myanmar will need to be prepared to negotiate very strongly, even with its so-called friends, as it continues to open.

Ideally, Myanmar will manage to preserve its culture, heritage and resources while seizing the benefits of integrating its economy with the other vibrant nations of Southeast Asia. But will it be allowed to choose its own route to modernity? Or will it be swamped by extreme capitalism looking for yet another frontier to conquer by plundering its resources?