lonely-planet-myanmar-burma-11-edition

318POLITICS, ECONOMICS & SANCTIONS ECONOMICSWhere ChinaMeets India –Burma and theNew Crossroadsof Asia is ThantMyint-U’s newbook, scheduledfor publicationin late 2011; it’sabout the historicand currentconnections betweenthe threecountries.Fiery Dragons:Banks, Moneylenders andMicrofinance inBurma by SeanTurnell explainshow Myanmarwent from oneof the richestcountries inSoutheast Asia toone of its poorestwithin the spaceof a century.one million refugees and internally displaced people, tens of thousandsof child soldiers, and the abundant use of forced labour’. In March 2010,the UN special rapporteur on Myanmar, Tomás Ojea Quintana, recommendedthat the UN consider establishing a Commission of Inquiry intowar crimes and crimes against humanity in the country.EconomicsYou needn’t spend much time in Myanmar to realise how profoundlydysfunctional its economy is. The country is rich in natural resources –including gas, oil, teak, and precious metals and gems – yet its people areamong the poorest in Asia, most struggling to get by on an income of lessthan $2 a day. Ask about the price of one of the clapped-out secondhandcars on the roads, or about the cost of real estate in Yangon, and you’ll beshocked by the sky-high figures, a reflection of ongoing inflation, whichhas seldom been under 25% per annum over the last decade.The Economist reported that K1.8 trillion, 23.7% of Myanmar’s 2011’sbudget, is earmarked for military spending, compared to 4.3% for educationand 1.3% for healthcare. When it comes to financing such expenditure,Sean Turnell, of Burma Economic Watch, notes that the government’sfavourite method has been to print money. Hence the inflation rates andthe lack of faith in the local currency that has created a black market forUS dollars.Deeper mining of Myanmar’s Alice in Wonderland d economics revealsthat thanks to its emergence as a major regional exporter of natural gas,the country has been running substantial trade surpluses since 2004; itsforeign-exchange reserves at 2010 were estimated to reach over $6 billion.As Myanmar specialist David Steinberg notes, the country’s economic crisisis ‘not with funding but with knowledge of economic affairs, prioritiesand distribution of the state’s considerable present and future resources’.Trading PartnersShunned by the West, Myanmar has wasted no time cutting trade dealswith its immediate neighbours, several of whom are themselves not shiningparagons of democracy. Despite Western sanctions against timberand jade, these materials are reportedly exported to China, Thailand andSingapore, then used to make furniture and jewellery for export.The flow of foreign investment isn’t likely to slow soon. India is spendingabout $100 million developing a port in Sittwe to access more fuel reservesin the Bay of Bengal, supposedly worth up to $4 billion a year. The Shwe gasreserves off the coast are projected to earn up to $24 billion over the next 20years. Thailand is spending $10 billion to develop a new seaport in Daweiand transport connections to it, while China will pay most of the costs of amassive highway from Kunming in China to a new seaport at Kyaukpyu,giving western China increased access to international trade routes.On occasion Asean (Association of Southeast Asian Nations) officialshave frowned over Myanmar’s behaviour – even expressing ‘revulsion’over the violent response to the September 2007 protests – but this hasseldom been followed with action. One-time adviser to George W Bushon Asia, Michael J Green likened Myanmar to a ‘crazy drunk’ on a blockof Asean homes: it would take their unified confrontation to get the bottleaway. At the time of research, Asean was considering whether to allowMyanmar to take on Asean’s chairmanship in 2014; the country skippedits turn in the lead role in 2006 because of international pressure over itspoor human-rights record.Tourism’s Economic ImpactWhile the government once hoped tourism would provide a steadysource of hard currency, it’s become clear as time has passed that the