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NOMIC AND ENGINEER! DEVELOPMENT OF BURMA

PREPARED FOE TKl LENT OF THE UNION OF BURMA

VOLUME

AUGUST If53

KNAPPEN TiPPETTS ABBETT MCCARTHY _ ENGINEERS m ASSOCIATION WITH PIERCE itaJAGEMENT, INC. AND ROBERT R. NATHAN ASSOCIATES, INC, u ^^^^< ' o(t, fseco

ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA KNAPPEN - TIPPETTS - ABBETT - MCCARTHY

ENGINEERS

(KNAPPEN TIPPETTS ABBETT ENGINEERING CO.)

62 WEST 47TH STREET ERNEST F. TIPPETTS PLEASE REPLY TO NEW YORK 36, N .Y. ROBERT W. ABBETT SOUTH EAST ASIA OFFICE P.O. Box 1484 GERALD T. MCCARTHY PLAZA 7-8001 PRO ME COURT WILLIAM Z. LIDICKER RANC300N. BURMA JAMES H. STRATTON SOUTH 556 & 572

CABLE ADDRESS : "KNAPENG RANGOON" August 7th, 1953

THE HONORABLE U WIN, Minister for National Planning and Religious Affairs, Prome Court, Prome Road, RANGOON, BURMA.

DEAR SIR,

The Consultants take pleasure in transmitting to you the accompanying "Comprehensive Report on the Economic and Engineering Development of Burma."

It is the earnest hope of all who have contributed to the preparation of the Report that it will be a trustworthy guide to social and industrial progress that will endure and strengthen through the years to come.

The Consultants desire to express their thanks and apprecia¬ tion for the honor and opportunity afforded them to participate in the bold, creative, and historical measures being set in motion by the Union of Burma to secure for her people the full enjoyment of their rich resources.

Respectfully yours,

General Manager COMPREHENSIVE REPORT

ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA

PREPARED FOR THE GOVERNMENT OF THE UNION OF BURMA

VOLUME I

INTRODUCTION

ECONOMICS AND ADMINISTRATION AGRICULTURE AND IRRIGATION

TRANSPORTATION

AUGUST 1953

KNAPPEN TIPPETTS ABBETT McCARTHY ENGINEERS

IN ASSOCIATION WITH PIERCE MANAGEMENT, INC. AND ROBERT R. NATHAN ASSOCIATES, INC. PRINTED AND BOUND IN GREAT BRITAIN BY HAZELL, WATSON & VINEY, LTD. AYLESBURY & LONDON TABLE OF CONTENTS

Letter of Transmittal u Foreword viii

Page Page VOLUME I E. The Structure of the Revenue System 62 F. Banking Pohcy 67 PARTI G. Foreign Exchange and Foreign Trade Policy 72 INTRODUCTION H. Summary of Recommendations 74 CHAPTER I. RESOURCES FOR BURMA'S DEVELOPMENT CHAPTER V. ORGANIZATION FOR A. Introduction 3 COORDINATING THE PROGRAM B. Physical Geography 3 A. The Four Steps in Coordinating Economic Activity 76 C. Agriculture 5 B. Organization for Planning 77 D. Forests 8 C. Organization for Progranuning 78 E. Minerals II D. for Planning and Programming 78 F. Water Resources 11 E. Organization and Procedure for Imple¬ G. Transportation 14 mentation of Economic and Functional H. Capital Resources 15 Pohcies 80 I. Human Resources 15 F. Organization for Progress Reporting and Expediting 81 CHAPTER II. THE TASK AHEAD G. Economic and Social Board Staff 82 A. Economic Problem and Opportunity 19 H. Summary 82 B. Development Goals 20 C. Achieving Maximum Output 28 CHAPTER VI. ADMINISTERING THE DEVELOPMENT PROGRAM D. Criteria for the Selection of Projects 31 A. The Ministries 83 E. Reaching the Goal: Planning and Execution 34 B. The Development Corporations 84 C. Other Government Corporations and Boards 86 PARTn D. Problems of Planning, Reporting and Ex¬ ECONOMICS AND ADMINISTRATION pediting 86 E. Other General Problems 87 CHAPTER in. FINANCING THE PROGRAM F. The and Mixed Sectors of the A. The Nature of the Problem 39 Economy 89 B. Financing Foreign Exchange Payments 41 G. Summary of Recommendations 92 C. Financing Development Expenditures within Burma 49 CHAPTER VII. MANNING THE PROGRAM D. Conclusions 57 A. The Problem of Specialized Manpower 94 B. Meeting the Problem of Skill and Knowledge 99 CHAPTER IV. CENTRAL ECONOMIC POLICIES C. Meeting the General Problems of Increasing FOR THE PROGRAM Labor Productivity on the Job 107 A. Introduction 58 D. The Need for Able Management—A Special B. Improvement in Fiscal Information 58 Problem 111 C. Fiscal Pohcy: The Level of Current Expen- E. Possible Solutions to the Management ditures 61 Problem 115 D. Fiscal Pohcy: The Level of Taxation 62 F. Summary of Recommendations 120 VI ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA PART m Page Page CHAPTER XIV. OCEAN SHIPPING AGRICULTURE AND IRRIGATION A. Coastal Steamship Services in Prewar CHAPTER VIII. AGRICULTURE and Postwar Periods 350 A. Objectives 125 B. Investigation of Needs for Steamer B. Present Agricultural Development 125 Services 350 C. National Agricultural Programs 135 C. Union of Burma Shipping Board 351 D. Increase of Agricultural Production 151 D. Conclusion 351 E. Agricultural Aims and Suggested Goals 187 F. Conclusions and Recommendations 188 CHAPTER XV. PORTS AND WATERWAYS CONSERVANCY CHAPTER IX. IRRIGATION A. Introduction 352 A. Over-all Irrigation Program 195 B. Conservancy for Seaports 352 B. Specific Projects 210 C. Conservancy for Waterways 352 C. Estimate of Costs and Benefits 240 D. The Conservancy Problem 354 D. Recommendations 241 E. Conclusions 355

PART IV CHAPTER XVI. HIGHWAYS TRANSPORTATION A. Introduction 356 CHAPTER X. TRANSPORTATION SYSTEM B. Classification 357 A. Present Situation 251 C. Existing Highway System 361 B. Interrelations 251 D. Traffic 379 C. Operating Requirements 252 E. Comparisons with Other Highway Systems 394 D. Review of Recommendations 255 F. Design Requirements 402 G. Construction Methods 408 CHAPTER XI. BURMA RAILWAYS H. Construction and Material Costs 420 A. Introduction 256 I. Maintenance 425 B. History 256 J. Materials and Testing Laboratory, Shops 426 C. Existing System 257 K. Planning and Surveys 426 D. Current Operations 261 L. Highway Administration 427 E. Requirements for Further Improvement 267 M. Highway Financing 428 F. Conclusion 278 N. Highway Code 431 0. Commercial Transport 446 CHAPTER XII. SEAPORTS OF BURMA P. Transport Commission 446 A. Introduction 281 Q. Recommended Changes in Geometries and Location 447 B. Port of Rangoon 281 R. General Recommendations 456 C. Portof Akyab 319 D. Port of Bassein 324 E. Port of Moulmein 327 CHAPTER XVII. AIRWAYS F. Port of Tavoy 330 A. Introduction 465 G. Port of Mergui 332 B. International Service 466 C. Domestic Service 470 CHAPTER XIII. INLAND WATERWAYS D. Personnel 471 A. Introduction 336 E. Air Safety, Aircraft and Workshop 475 B. Existing FaciUties and Operations 336 F. Airports, Facilities and Terminals 478 C. Operation of Inland Water Transport 338 G. FUght Control and Signal Communi¬ D. New Industry Requirements 342 cation 482 E. Personnel Training Program 348 H. Accounting and Statistics 483 F. Conclusions 348 1. Future Developments 483 G. Estimated Required Expenditures 348 J. Conclusions and Recommendations 489 TABLE OF CONTENTS vu Page Page VOLUME II CHAPTER XXI. MINERAL INDUSTRIES PARTY A. General Geology 647 TELECOMMUNICATIONS B. Economic Geology 647 CHAPTER XVIII. TELECOMMUNICATIONS C. Established Mineral Production Operations 648 D. Field Examinations, Studies and Investiga¬ A. Introduction 495 tions 649 B. Historical 495 E. Future Mineral Development 652 C. The Insurrection 497 F. Conclusions and Recommendations 683 D. The Present Situation 497 E. Telecommunications Operations, Plans and Problems 500 CHAPTER XXII. MANUFACTURING A. Review of Existing National Industry 685 PART VI B. A Survey of Industrial Possibihties for Burma 685 POWER C. An Industrial Development Program for CHAPTER XIX. ELECTRIC POWER Burma 693 A. Early Hydroelectric Investigations 557 D. Recommendations 802 B. Prewar Power System 561 E. Implementation Procedure 804 C. Existing Power Development 561 D. Initial Diesel Plants at 36 Towns 561 E. Three Large Power Plants for Immediate CHAPTER XXIII. THE DEVELOPMENT OF Development 565 SMALL-SCALE INDUSTRY F. Mine Power Project 626 A. Importance of Small-scale Industry in the G. Other Hydroelectric Projects for Future Burmese Economy 808 Development 628 B. Policies for Development of Small-scale H. Proposed Expansion of Basic Transmission Industry 810 System 639 C. Implementation of Policies for Developmen t I. Diesel Plants for Outlying Towns 640 of Small-scale Industry 813 J. Large Hydroelectric Sites for Future Study 640 D. Summary of Recommendations 814 K. Stream Flow Measurement 640 L. Summary and Recommendations 640 CHAPTER XXIV. FORESTRY AND OTHER INDUSTRIES PARTVn A. Forestry 815 INDUSTRY B. Other Industries 818 CHAPTER XX. INTERRELATION OF INDUSTRIES A. Range of Industries 645 CHAPTER XXV. THE COORDINATED PLAN B. Common Economic Factors 645 A. Supporting Functions 822 FOREWORD

AUTHORITY of Burma, submitted a written PreHminary Report This Comprehensive Report is being submitted on January 31, 1952. Subsequently, a large number to the Government of the Union of Burma as of detailed reports on specific projects have been the concluding service in the fulfillment of the con¬ submitted. Many services have been rendered relative tract dated August 8, 1951, and terminating on to specific projects; continuous engineering, consult¬ August 8, 1953, between the Government of the ing, and economic advisory services have been Union of Burma and Knappen Tippetts Abbett rendered and on occasion purchasing services have Engineering Company of New York City. As been performed. A number of Burmese technicians provided in the contract, the Knappen Tippetts have assisted in the work, and have received training Abbett Engineering Company has associated itself in various engineering and economic fields and in with Pierce Management, Inc., of Scranton, Penn¬ office procedures. No preparation of appHcations sylvania, Coal and Metal Mining Engineers, and for financing has been requested. Robert R. Nathan Associates, Inc., Washington, In the foreword to the Preliminary Report it was D.C., Economists. The dollar costs under this observed that "because of the shortage of time and contract are being paid by the Technical Cooperation insufficient primary information, it has not been Administration of the United States. possible to achieve the degree of precision or balance Article I, Section C, subsection Ic of the contract in the proposed program which it is hoped will provides that "at the conclusion of the term of this characterize the Final Report . . . Likewise these contract, the Consulting Engineer will present a limitations have prevented the establishment of written report recommending a comprehensive, a final order of priorities for projects and final integrated program for the over-all development judgements concerning poUcies." This Compre¬ of the resources of Burma and governmental and hensive Report recommends a balanced program private measures in addition to those which may of public and private investment for the entire akeady have been taken, designed to place such economy, together with measures to train the program into operation . . ." The recommendations necessary skilled, professional, technical and man¬ shall be made "in the light of the desire of the agerial workers, indicates the feasibility of the Government to improve the productivity, production, program, recommends priorities and indicates the and standard of living of the people of Burma as measures necessary to carry it out. rapidly as possible and to achieve a diversified and balanced economy appropriate to the national ORGANIZATION and economic independence of Burma." This Report The following principals have visited Burma to is now presented in fulfilhnent of that requirement. initiate and supervise the survey, furnish consulting and advisory services during its course and assist SCOPE in the preparation of the Preliminary and Compre¬ The responsibilities of Knappen Tippetts Abbett hensive Reports: Engineering Company and its associates under the Ernest F. Tippetts, Partner, Knappen Tippetts contract fall into six categories: Abbett Engineering Company. 1. Surveys and Reports Robert W. Abbett, Partner, Knappen Tippetts a. PreUminary Survey and Report. Abbett Engineering Company. b. Project Surveys and Reports. Gerald T. McCarthy, Partner, Knappen Tippetts c. Comprehensive Report. Abbett Engineering Company. 2. Preparation of Applications for Financing. James H. Pierce, Chairman, Pierce Manage¬ 3. Services Relative to Specific Projects. ment, Inc. 4. Continuous Engineering, Consulting, and John S. Marshall, President, Pierce Manage¬ Economic Advisory Services. ment, Inc. 5. Purchasing Services. Robert R. Nathan, President, Robert R. Nathan 6. Training of Burmese technicians. Associates, Inc. Under category \a, Knappen Tippetts Abbett The General Manager of the survey is Homer B. Engineering Company, following a preliminary Pettit, and the Deputy General Manager and Chief survey of the resources and the national economy Engineer is John B. Alexander. FOREWORD IX The following have served in Burma as Consuhants: ACKNOWLEDGEMENTS Economic Geologist: Stuart St. Clair. Heartfelt appreciation is expressed to the Hon. Economist: Louis J. Walinsky. U Nu, Prime Minister of the Government of the Editorial: Donald P. Barnes. Union of Burma, whose effective consecration to pro¬ Hydroelectric Engineer: Frank P. Fifer. moting the welfare of Burma has been an inspiration Industrial Engineers: Donald F. Othmer, to the survey group and whose steady support of the Lawrence E. Peterson. aims of the survey has facilitated the work throughout Mining Engineer: Evan Bennett. the contract period. Gratitude is expressed also Transportation Engineer, Ports and Waterways: to all of the Ministers of the Government, whose Francis B. Wilby. unfailing courtesy and cooperation has opened the Transportation Engineer, Railways, Highways, resources of their agencies to the survey staff members Airways, and Communications: Ewart G. and greatly increased the effectiveness of their work. Plank. All of the Ministries and other agencies of the The following have been members of the field staff": Government of the Union of Burma from Vt'hom Frank D. Ahem, Construction Engineer. information and other help has been sought have Carleton W. Bacon, Communications Engineer. been extremely cooperative, as have the personnel Thomas H. Baker, Highway Engineer. of the Special Technical and Economic Mission B. A. Blanchard, Management Administrator. of the United States Technical Cooperation Adminis¬ Charles MacA. Carman, Industrial Engineer. tration in Rangoon, the personnel of the various J. B. Chadwell, Office Manager. missions of the United Nations and its affiliated Donald E. Cupp, Industrial Engineer. organizations, and a large number of other indi¬ E. W. Englebright, Railway Engineer. viduals and firms. Because of the many sources Everett E. Hagen, Industrial Economist. from which aid has been received, the absence from Sam Hancock, Mining Engineer. Burma as this Report is being prepared of some Pitt W. Hyde, Mining Engineer. persons who earher served as members of the field Joseph A. Jordan, General Civil Engineer. staff, and human error, it has been necessary to Kenneth A. Lambert, Mining Engineer. omit from acknowledgement the names of some Irving H. Licht, National Income Economist. from whom important aid was received. To all Homer E. Montgomery, Office Manager. of these as well as to the individuals hereinafter Howard S. Nelson, Agronomist. listed are extended the deepest appreciation of the Jack W. Ninneman, Aerial Survey Engineer. associated firms and their staffs. Henry R. Norman, Ports and Waterways Engineer. OFFICE OF THE PRIME MINISTER Arnold A. Olsen, Chief Driller. U Win Pe, Secretary. PhiHp A. Parry, Industrial Engineer. C. M. F. Peters, Mining Engineer. Economic and Social Board Ernest J. Petersen, Chief Draftsman. U Hla Maung, Executive Secretary. Arthur R. Reitter, Irrigation Engineer. U Ba Sein, Joint Secretary. Benjamin P. Robinson, General Civil Engineer. U Kyaw Sein, Statistician. Alfred A. Strauss, Industrial Engineer. Shigeharu Takahashi, Agricultural Economist. MINISTRY OF NATIONAL PLANNING William W. Tamplin, Economic Geologist. U Tin Pe, Secretary. George M. Tapley, Hydroelectric Engineer. J. S. Furnivall, Planning Adviser. Eugene P. Tubman, Construction Engineer. U , Executive Officer, Peter N. Vukasin, Economic Analyst. Burmese Economic Aid Committee. Paul A. White, Industrial Engineer. U Kyaw Khaing, Census Commissioner. Donald Wilhelm, Jr., Industrial Economist. R. C. Barber, Officer on Special Duty. Kenneth B. Wolfskill, Highway Engineer. Lt.-Col. Ba Han, Officer on Special Duty. George O. Zalkind, Ports and Waterways Engineer. Central Statistical and Economics Department The following members of the home office staffs U Tha Tun Oo, Deputy Director. have devoted a large part of their time to the survey U Thet Tun, Assistant Director (Economics). during the period of the contract: U Nyunt We, Assistant Director (Economics). Yolney A. Poulson, Project Engineer. Daw San Shin, Assistant Director (Statistics). A. J. Creshkofif, Project Economist. And the entire staff of the department. ^ ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA Economic Planning Commission U Thein, Conservator of Forests, Chindwin and U Tun Tin, Secretary. Northern Circles. U Aung Baw, Conservator of Forests, Hlaing Social Planning Commission and Utilization Circle. U Aung Min, Chairman. U Tun Ngwe, Conservator of Forests, Research U Ba Kin, Secretary. and Training Circle, Ahlone. U Ko Ko, Member. U Thein Han, Acting Conservator of Forests, Working Plans Circle. MINISTRY OF AGRICULTURE AND FORESTS Mr. C. Kwet Kaw, Conservator of Forests, U Chit Pe, Secretary. Timber Research and Agency , Ahlone. Agriculture Department U Aung Tin, Divisional Forest Officer, Delta U Khin, Director. Division. U Ba Tin (2), Deputy Director of Agriculture. U Saw Ohn Yin, Superintendent of Wood U Ba Thein, Economic Botanist. Working Shop. U Ohn Tin, Engineer. Mr. Thomas, Construction-in-charge, Saw Mill No. 3, Kemmendine. Agricultural and Water Resources Development Corporation Irrigation Department U Hpu, Chief Executive Officer. Mr. L. J. McLean, Chief Engineer. U Bi, Superintendent Engineer. Directorate of State Credit Mr. A. C. Munro, Personal Assistant to Chief U Hla Maung, Director. Engineer. Agricultural Department: District Agricultural U Maung Maung Lay, Works Officer. Officers Fisheries Bureau : U Khin, Senior D.D.A. U Ba Kyaw, Fisheries Officer. U San Pe, Asst. Econ. Botanist. U Aung Myint, Secretary, Cooperation. U Aung Khin, S.A.A. Magwe: U Ba Wan, D.D.A. State Tunber Board U Thant, A.D.A. U Hman, Chairman. U Khin Maung Tint, S.A.A. Mr. Tan Chein Hoe, General Manager. : U Shwe Tha Htwe, D.D.A. U Tin Gyi, Director of Marketing and Milling. U Ba Thein, A.D.A. U Aung Baw, Director of Extraction. U Po Htoo, A.D.A. U Tun Gyaw, Zone Manager. U Kyaw Sein, S.A.A. U Tha Htay, Manager, Saw Mill No. 2. U Shein Toe, Acting Manager, Ahlone. Toungoo: U Maung Gale, A.D.A. U Soe Maung, Chief Accounts Officer. Pyinmana: U Shein Maung, Dy. D.A. U Aung Tun, Statistical Officer. U Aung Khin, A.D.A. U Soe, S.A.A. MINISTRY OF COMMERCE U Hla Shein, S.A.A. U Ba San, Secretary, Myaungma U Hla Baw, A.D.A. U Than Nwe, Assistant Secretary. U Aye Thwin, S.A.A. State Agricultural Marketing Board Bassein: U Thein Maung, D.D.A. U Sein, A.D.A. U Thet Su, Chairman. U Aung Min, A.D.A. U Kyin Sein, General Manager. U Khing Maung (5), S.A.A. U Maung Maung, Chief Movement Officer. U Chit Tin, Executive Officer (Movement). Forest Department U Tin Chaing, Executive Officer (Direct Mr. C. Kyaw Khine, Conservator of Forests. Handling). U San, Conservator of Forests, Working Plans Mark Yain Kee, Chief Accounts Officer. Circle. U Thet Zin, Executive Officer, Akyab. Mr. Taw Kyi Saing, Conservator of Forests, U.E. Thein, Executive Officer, Bassein. Sittang Circle. U.E. Cho, Executive Officer, Mouhnein. FOREWORD XI MINISTRY OF COOPERATION AND COMMODITIES U Khin Maung Gyi, Deputy Controller. DISTRIBUTION U Maung Maung Hla, Economist. U Thein Maung, Assistant Secretary. Daw Tin Yi, Economist.

Cooperatives Department MINISTRY OF HOME AFFAIRS U Nyi Nyi, Registrar. U Khin Maung Pyu, Chief Secretary. Mr. W. J. Goddard, Joint Registrar. U San Nyunt, Assistant Registrar, Moulmein. MINISTRY OF HOUSING AND LABOR Qvil Supplies Management Board K. F. Ho, Secretary. U Sein, Chief Inspector of Factories. U Sein Maung, Assistant Controller. U Khint Maung, Director of Labor. U Ba Thi, Textiles Marketing. J. C. Koop, Statistical Officer. U Than Sein, Chief Accounts Officer. U Tha Din, Labor Officer, Moulmein. U Sein, Senior Accounts Officer. U Kyaw Sein, Director of National Housing MINISTRY OF DEMOCRATIZATION AND LOCAL Board. ADMINISTRATION U Tun Sein, Assistant Executive Officer. U Maung Kyi, Assistant Secretary. MINISTRY OF INDUSTRIES MINISTRY OF EDUCATION U Tun Thaung, Secretary. U Ba Kyaw, Secretary. E. R. Grey, Assistant Secretary. C. P. Michael, Assistant Secretary. Directorate of Industries Rangoon University U Saw Tun, Deputy Director. Dr. Htin Aung, Rector. Dr. Kyaw Htin, Industries Officer. U Ba Hli, Dean, College of Engineering. Saw Rally Bain, Assistant Superintendent, Murray D. Harwood, Visiting Professor, Cottage Industries. Sanitary Engineering. U Chit Hlaing, Supervisor, Weaving Loans, Daniel D. Streeter, Jr., Visiting Professor, Moulmein. Mechanical Engineering. Government Cotton Spinning and Weaving Factory U Tun Thin, Professor of Economics. U Kyaw Sein, General Manager. Mr. Saw Wilham Paw, Head of Commerce. C. C. Holmes, Former General Manager. U Ko Lay, Principal, Mandalay University. Charles N. Smith, Assistant Manager. MINISTRY OF FINANCE AND REVENUE Clayton A. Cook, Superintendent. U Kyaw Nyun, Secretary. U Ba Kin, Head Accountant. B. K. Bose, Additional Secretary. U Khin Maung, Technical Adviser. S. K. Burman, Ibcon Consultant. U Kyaw, Assistant Secretary. A. D. Patraval, Ibcon Consultant. Financial Commissioners Office Electricity Supply Board U Aung Soe, Financial Commissioner. U Thi, Secretary to Financial Commissioner. U Tun Ohn, Chief Administrative Officer. U Aye, Hydroelectric Survey Engineer. Income Tax Department U Kyi Khin, Assistant Hydroelectric Engineer. U Lu Gale, Commissioner of Income Tax. U Ko Ko Lay, Income Tax Officer. MINISTRY OF INFORMATION U Thant, Secretary. Customs House U Maung Maung Than, Deputy Secretary. U Ba San, Collector of Customs. U Saw Aung, Acting Deputy Superintendent, U Nyunt, Assistant Collector of Customs. Govt. Printing and Stationery Office. Mr. Morris, Customs Officer, Mergui. U Sa, Manager, Govt. Book Stores. U San Lwin, Auditor General. U Ba Khin, Accountant General. MINISTRY OF LAND NATIONALIZATION U Ba Htay, Secretary. Union Bank of Burma U Ohn Shwe, Deputy Secretary. U San Lin, General Manager. U Tin Tun, Deputy General Manager. Burma Survey Department Dr. Clay Anderson, Adviser. U Hla Khin Maung, Director. xu ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA Office of the Commissioner of Settlement and Land Superintending Engineers Records U Aung Tun, Mandalay. U Ba Htin, Acting Assistant Commissioner. U Maung Maung, Pegu. U Thaw, Superintendent, Land Records, U Hla Maung, Prome. Moulmein. U Kyaw Nyunt, . U On Nyun, Tenasserim. Land Nationalization Department U Tha Tin, Electrical and Mechanical Code. U. E. Maung, Chief Executive Officer. U Maung Gale, Maritime Circle. U Ohn Pe, Executive Officer. U We Lin, Executive Officer. Rehabilitation Centre, Aung San Village U Thant, Executive Officer. U Win Maung, Director of Training. U Tun Tin, Executive Officer. Thakin Tun Tin, Executive Officer. MINISTRY OF RELIEF AND RESETTLEMENT Mr. A. Barrow, Administrator of State Colonies. U Ba Win, Secretary. U Khin Maung, Assistant Secretary. MINISTRY OF Rapheal Peter Thaung, Secretary. MINISTRY OF U Kyaw Myint, Assistant Secretary. U Kin Maung, Secretary. U Kyaw Pe, Executive Engineer, Loikaw. U Nyun, Principal Works Offices. Sao Khun Mong, Superintending Mechanical MINISTRY OF MINES and Electrical Engineer. U Kyaw Thein, Secretary (also Director-General, U Thaung Pe, Resident, Shan States, Toungyi. Mineral Resources Development Corporation) Sao Tun E, Ex-Resident, Shan States, Toungyi. Mr. E. Harrison, Assistant Secretary. Mr. Anthony, Secretary to Resident, Shan Dr. A. N. Ghosh, Director, GUB Metal¬ States, Toungyi. lurgical Research. Sao Sai Long, Sawbwa, Kentung. U Pu, Mining Adviser. U Tun Pe, Executive Engineer, Loilem, Shan Dr. Ba Thi, Acting Director, Geological Depart¬ State. ment. U Po Ngwe, Executive Engineer, Western Shan U Min Din, Geologist. State. Kon Hock Chaw, Mining Engineer. Saw Htun Yin, Executive Engineer, Loilem Dr. Kyaw Myint, Geologist. District. U Ba Maung, Statistical Officer. Saw Mya Thi, Executive Engineer, District. MINISTRY OF PUBLIC WORKS AND Saw Tun Pe, Executive Engineer, Eastern Shan REHABILITATION State. U Saw Lwin, Secretary. MINISTRY OF SOCIAL SERVICES U Hone Wah, Assistant Secretary. G. S. Dillon, Secretary. Buildings and Roads Department U Ba Sein, Deputy Secretary. U Ba Maung Chain, Chief Engineer. Dr. S. Suvi. U Tha Dok, Acting Chief Engineer (March- Dr. Ahad. June, 1953). U Chit Thoung. U Kyi Mun, Personal Assistant to Chief MINISTRY OF TRANSPORT AND Engineer. COMMUNICATIONS Executive and District Engineers U Shwe Mra, Secretary. U Thet Tun, Mandalay. D. T. W. Bartlett, Deputy Secretary. U Ko Ko, Meiktila. Road Transport Department U Shwe Chan, . U San Ni, Chief Executive Officer. Lin Gyin Kho, Pegu. U San U, Superintendent of Motor Vehicles. G. N. Naidu, Prome. J. H. Martin, . Union of Burma Railways Board Mr. Gian Chand, Tharrawassy. E. Barnard, Chairman. Mr. P. H. McLean, Kyaukme. U Tun Thwin, General Manager. FOREWORD xm Union of Burma Railways Board—contd. H. N. Laval, Personal Assistant, Traffic. U Sett Kaing, Secretary to General Manager. U Myoe Thaw, Personal Assistant, Engineer. U Kyi Win, Chief Engineer. U Soe Thin, Assistant Engineer, Electrical. U Yone Mo, Chief Engineer (Mechanical). U Myint Aung, Assistant Engineer, Marine U Aye Maung I, Traffic Manager. Station. U Han Tin, Controller of Railway Accounts. U Tha Hla, Assistant Engineer, Transmitdng Saw McCarthy Gyaw, Statistical Officer. Station. U Shwe Thane, Deputy Chief Engineer (Per¬ D. S. McMahon, Assistant Engineer, Receiving manent Way). Station. U Hla, Deputy Chief Mechanical Engineer U Sein Ban, Superintendent, Telecommunica¬ (Locomotive). tions Stores. G. E. C. Peters, Deputy Traffic Manager H. Mainuddin, Superintendent, Central Tele¬ (Transportation). graph Office. U Thein Nyun, Deputy Controller of Railways A Aung Tah, Sub-Divisional Officer, Prome. Accounts. U Yoe Maung, Sub-Divisional Officer, Rangoon. Mr. Daniels, District Mechanical Engineer. U Tun Zan, Attached Officer, Wireless. Mr. Johnson, Locomotive Inspector. U Nyint We, Assistant Superintendent, Instru¬ Inland Water Transport Board ment Room. U Tsau Un Gyi, Chief Accounts Officer. U Kyaw Wan, Office Superintendent. Captain Kyaw Din, Traffic Superintendent. Union of Burma Airways Union of Burma Shipping Board U San Thein, Chairman. U Ba Chan, General Manager. U Taw, General Manager. O. W. Ah Hee, Chief Accountant. Commissioners of Port of Rangoon U Kyaw Tha, Chairman. Department of Civil Aviation U Aung Saw, Deputy Secretary. U Kyaw Tha, Director. Mr. Dass, Chief Accountant. U Kyaw Tun, Assistant Director. B. B. Crabbe, Chief Engineer. R. I. Warwick, Deputy Engineer. CIVIL ADMINISTRATION U Khin Maung Gyi, Executive Engineer. U Soe Tint, Commissioner, Arakan Division. Mr. W. H. M. Todd, Traffic Manager. H. Keeley, Former Commissioner, Arakan H. C. H. Berry, Master Attendant. Division. J. H. Kirkham, Harbor Master. W. J. Carrott, Commissioner, Sagaing Division. R. B. Alphonsi, Mechanical Chief Engineer. U Mo Myint, Commissioner, Tenasserim S. W. Spencer, Port Officer, Akyab. Division. Mr. Dunlop, Port Officer, Bassein. U Kyaw Zan, Deputy Commissioner, Akyab. Mr. D. S. Harding Raines, Port Officer, U Thaung Lwin, Deputy Commissioner, Moul¬ Moulmein. mein. Mercantile Marine Department U Maung Maung, Deputy Commissioner, Pegu. U Thaung, Deputy Commissioner, Tharra- J. C. Needham, Nautical Adviser and Principal waddy. Warden of the Oilfields. Officer. Dr. Tun Aung, Civil Surgeon, Moulmein. Mr. C. W. Hancock, Nautical Surveyor. Mr. W. W. Mortimer, Nautical Surveyor. AMERICAN EMBASSY TELECOMMUNICATIONS Mr. W. J. Sebald, Ambassador. U Ba Choe, Director. Mr. R. A. Acly, Counsellor. Mr. J. F. Evans, Deputy Director Mr. A. B. Franklin, 2nd Secretary. Mr. G. B. Forbes-Mitchell, Divisional Engineer, Mr. W. S. Anderson, Jr., Economic Counsellor. Wireless. Mr. J. H. Boulware, Agriculture Attache. U Maung Maung, Divisional Engineer, Tele¬ Mr. J. R. Ward, Labor Attache. communications, South Burma. Mr. A. E. Bergeson, 3rd Secretary. W. A. Raymond, Divisional Engineer, Rangoon Mr. James Boyce, Burma American Institute. Telephones. Mrs. Zelma Graham, U.S.I.S. U Kyaw Win, Divisional Engineer Wireless. Miss Caroline Knapp, U.S.I.S. XIV ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA UNITED NATIONS TECHNICAL ASSISTANCE CHAMBERS OF COMMERCE MISSIONS Mr. Chatterjee, Assistant Secretary, Bengalee Office of the UN Technical Assistance Board Chamber of Commerce. Mr. F. R. Scott, former Resident Repre¬ Dr. M. H. Paten, Acting Secretary, Bharat sentative. Chamber of Commerce. Mr. A. J. Wakefield, Resident Representative. Mr. Raman, Assistant Secretary, Burma Cham¬ Mr. J. P. B. Ross, former Acting Resident ber of Commerce. Representative. Mr. W. T. Williams, Assistant Secretary, Burma Mr. F. S. Smith, Assistant to Resident Repre¬ Chamber of Commerce. sentative. Mr. A. A. Khan, Assistant Secretary, Burma Indian Chamber of Commerce. Technical Assistance Administration Mr. M. Sulaiman, Assistant Secretary, Burma Mr. Y. L. Wong, Senior Technical Adviser to Indian Chamber of Commerce. the GUB on Cottage Industries. Mr. J. C. Dass, Acting Secretary, Burma Mr. A. S. Windett, Statistical Adviser to the Mariwari Chamber of Commerce. GUB. Mr. C. O. Mohamed, Assistant Secretary, Burma Mr. M. D. Lieberman, Census Adviser to the Mariwari Chamber of Commerce. GUB. Mr. M. A. Kadir, Permanent Secretary, Burma Mr. George T. Jackson, Expert on Public Mariwari Chamber of Commerce. Administration, Adviser to the GUB. U Thein Aung, Secretary, Rangoon Chamber of Mr. A. C. Marriott, Expert on Civil Supphes. Commerce. Social Services Mission to Burma Mr. Gulabchand Zaverchand, Upper Burma Dr. J. F. Bulsara, Head of Mission. Chamber of Commerce. Mr. Khoo Eo Khwet, President, Burma Chamber Internationa] Labor Office of Commerce. Mr. P. V. K. Ayyar, Head of Mission, Co¬ Mr. C. Su Bin, Secretary, Burma Chamber of operative Expert. Commerce. Mr. C. R. Crews, Cooperative Expert. Mr. Sheldon Ross, Manpower Survey Expert. OTHER ASSOCIATIONS Mr. J. I. Saks, Labor Expert. U Tin Hla, Secretary, Rice IndustriaUsts United Nations International Children's Emergency Association. Fund U Ba Yin, Chairman, Board of Rice Surveyors. Mr. John Barnabas, Chief of Mission. COMPANIES AND INDIVIDUALS Food and Agriculture Organization East Asiatic Company Dr. I. W. Kehon, Head of Mission. Mr. O. Terjellesen, General Manager. Mr. C. E. Olsen, Machinery and Engineering UNITED STATES TECHNICAL COOPERATION ADMINISTRATION Department. Mr. Abbot Low Moffat, Former Director ECA. Mr. J. S. Hummert, Mining Engineer. Dr. F. N. Trager, Former Director. Mr. K. Narasimbam, Textile Department. Dr. R. B. Finch, Acting Director. Rangoon Electric Tramway and Supply Company Dr. T. E. Posey, Economic Adviser. Mr. C. W. Johnson, Member, Board of Directors. Mr. G. F. Winfield, Program Officer. Mr. W. C. White, General Manager. Mr. R. K. Eyster, Executive Officer. Mr. C. H. Mellor, Chief Engineer. Mr. W. J. Green, Agricultural Officer. Mr. Eric Maw, Chief Engineer. Mr. Isom Deshotels, Acting Agricultural Officer. Dr. W. W. Burr, Agricultural Research Adviser. General Electric Company Ltd. Dr. E. V. Staker, Agricultural Chemist. Mr. C. S. Dickinson, General Manager. Dr. J. M. Deal, Entomologist. Mr. Horace Hartley, Engineering Department. Mr. R. R. Covell, Land Capability Specialist. Mr. G. L. Reed, Housing Consultant. Burma Corporation Mr. R. E. Paulson, Industry Officer. Mr. R. C. Leach, General Manager. Mr. Mark Cornell, Information Officer. Mr. E. H. Tregoning, General Manager, Opera¬ Dr. George Crowl, Geologist. tions, Namtu. FOREWORD XV Bunna Corporation—contd. U Ba Shein, Proprietor, Burma Hosiery Works. Mr. Derek Morris, Acting Mine Superintendent, U Maung Maung, Manager, Burma Hosiery Bawdwin. Works. Mr. R. O. Morris, Geologist, Bawdwin. U Aw, Managing Partner, Burma Textile and Burmah Oil Company Trading Corporation. Mr. R. S. Carey, General Manager. Mr. J. L. Doshi, Assistant Manager, Calcutta Mr. K. S. Laurie, Manager. Textile Company. U Myo Khin, Sales Manager. U Saing, Proprietor, Maha Bandoola Dyeing and Mr. R. A. Johnson, Assistant to General Printing Works. Manager. U Ba Toke, Office Manager, Maha Bandoola Dyeing and Printing Works. Steel Brothers U Tha Tun Assistant Manager, Peacock Mills. Mr. W. F. G. Salheld, General Manager. U Nyi Bu, Managing Partner, Peacock Mills. Mr. J. B. Dent, General Manager. Mr. Ahmed Ebrahim, Managing Director, Mr. A. J. Ferrier. Viohn Hosiery Works, Ltd. Mr. R. B. Groves. Mr. Mohammed Siddiq, Director, Viohn Hosiery Mr. W. Hutchinson. Works, Ltd. Mr. J. C. Purdie. U Maung Maung, Proprietor, Maung Maung Mr. G. F. Kinnear. and Sons. Individuals Mr. Ake Froander, General Manager, Burma Mr. R. M. Aldworth, Mine Operator, Taunggyi. Match Co. Ltd. Mr. Stewart Williams, Manager, Mackinnon Mr. Harold A. Womack, General Manager, Mackenzie and Company, Burma, Ltd. Burma Oxygen and Acetylene Co. Ltd. Capt. Henry, Marine Superintendent, Mackin¬ Mr. D. A. Carnegie, General Manager, Imperial non Mackenzie and Company, Burma, Ltd. Chemical Industries. Mr. E. F. Lidderdale, Manager, Coal and Coke Mr. J. E. Bagshawe, Sales Manager, Imperial Agency. Chemical Industries. Mr. Chagantal, Director, Zeyawaddy Sugar U Myint Thein, General Manager, A.A.M. Factory. Motiwalla Ltd. Mr. B. Meyer, B. Meyer & Co. Ltd. Mr. S. A. Motiwalla, Director, A.A.M. Moti¬ Mr. P. E. Isserlis, Manager, Bombay Burmah walla Ltd. Trading Company Ltd. U Khant, Factory Manager, A.A.M. Motiwalla Mr. Katar Singh, Moulmein. Ltd. Mr. M. S. Madha, Managing Partner, E. C. Mr. B. Ghosh, Managing Director, Plascol Madha Bros. Syndicate. U Saw Ohn Yin, Wood Working Shop, Ahlone, Mr. Priya R. Paul, Proprietor, Rexola Chemical Rangoon. Works. Mr. K. N. Khootgir, Proprietor, Burma Chemical U Than Shwe, Managing Partner, Rexola and Biological Agency. Chemical Works. Mr. Chan Kee In, Proprietor, Huey Tobacco U Win Tin, Assistant Manager, Snow White Company. Perfumery Co. Mr. L. C. Choh, Managing Director, Ludu Mr. Xavier, Factory Manager, Snow White Tobacco Company. Perfumery Co. Mr. L. C. Bin, Factory Manager, Ludu Tobacco Mr. Anthony, Assistant Office Manager, Snow Company. White Perfumery Co. Mr. Kay Lin, Office Manager, Ludu Tobacco Mr. H. M. Habeeb, Proprietor, United Chemical Company. Works. U Tin Myint, Director, Liberty Tobacco Com¬ Mr. S. M. Bashir, Managing Director, Bashir pany. Bros, and Co. Ltd. U Pa, Head Accountant, Liberty Tobacco Mr. S. M. Patail, Factory Manager, Bashir Bros. Company. and Co. Ltd. U Tun Yee, Manager, Sin Hna Kaung Cigar Mr. Kanhaijalal, General Manager, Burma Company. Rubber Industries. U Thein Lwin, Assistant Manager, Sin Hna Mr. G. F. Featherston, Secretary, Fairweather Kaung Cigar Company. Richards and Co. Ltd. xvi ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA Individuals—contd. Mr. M. B. Littiefield, Metallurgical Consultant, Mr. Quach Cheng Hoom, Proprietor Hock Lee New York City. Tyre Remould Work. Dr. Chung Yu Wang, ConsuUant, New York Mr. Akber Mustakhan, General Manager, Akber City. Mustakhan Co. AUis-Chalmers, Milwaukee, Wisconsin. Mr. Ong Htyan Hoke, Proprietor, National American Machine & Foundry Co., New York Rubber Works. City. Mr. Ong Htgin Shu, Manager, National Rubber Ralph E. Loper Co., Fall River, Massachusetts. Works. Kennedy-Van Saun Mfg. & Engnrng. Corpora¬ Mr. Samuel Young, Manager Rubber Estate. tion, New York City. U Sway Tin, Partner, U Po Nyein and Co. Custom Engineering Co., New York City. FOREIGN COMPANIES AND INDIVIDUALS Mr. George Mayurnik, Chemical Engineer, New Dr. Robert S. Aries and Associates, Consulting York City. Engineers and Economists, New York City. Parsons & Whittemore, Inc., New York City. Frazier-Simplex International Corporation, New H. W. Butterworth & Sons, Bethayres, Pennsyl¬ York City. vania. Barker, Smith and Company, New York City. Engelberg HuUer Co., Syracuse, N.Y. Mr. J. V. McCartney, Steel Engineer Consultant, Ferrostaal Overseas Corporation, New York Pittsburgh. City. Mr. Henry J. Gazon and Associates, New York Fuerst Bros., New York City. City. Hale and KuUgren, Inc., Akron, Ohio. The Tayler Corporation, New York City. Hoffman-La Roche, Inc., Nutley, New Jersey. Leshe Salt Co., Newark, California. Butler International Co., Kansas City, Missouri. Honolulu Iron Works, New York City. Mr. H. C. Hanson, Naval Architect, Seatde, James Mackie and Sons, Ltd., Belfast, Ireland. Washington. Cherry Burrell Corporation, U.S.A. International Harvester Corporation, Chicago, Nitro Atomizer Ltd., Denmark. Illinois. Majonnier Bros. Co., U.S.A. Le Tourneau-Westinghouse Co., Peoria, 111. Hume Industries, . Syncro Machinery Co., Perth Amboy, New M. P. Bhargava, Pulp and Paper Consultant, Jersey. Dhera Duce, Sudia. Treadwell Engineering Co., New York City. Mr. C. E. Lesher, Consulting Engineer, Pitts¬ Whitin Machine Works, WhitinsviUe, Massa¬ burgh, Pa. chusetts. Klockner-Humboldt-Duetz, Koln Kalk, Ger¬ U. B. Machinery Co., New York City. many. H. C. Whitlock Corporation, New York City. PART I

INTRODUCTION

R.B.—I

CHAPTER I

RESOURCES FOR BURMA'S DEVELOPMENT

A. ENfTRODUCTION boundary hes in the Kachin and , and A fuU inventory and understanding of Burma's on the southeast the Shan and are available natural and human resources is an essential barriers to communication and trade. prerequisite to a plan of development which will yield These and related hills are oriented in north-south maximum results in minimum time. Burma is richly ranges and overlie much of the larger part of the endowed with natural resources. She is less fortunate country's area. The Arakan Yomas in the southwest with respect to the availability of modern machines isolate the Arakan coast from the rest of the country. and equipment. Although the level of human abihties The highland plateau of the Shan HiUs covers all of is generally high, there is a scarcity of technically east central Burma. Even the central plain of southern trained and experienced personnel. This chapter Burma is divided into two parts by the semi-isolated presents a summary description of these resources. Pegu Yomas. The rest of Burma consists of the valleys and deltas of the Irrawaddy, Sittang, and Salween B. PHYSICAL GEOGRAPHY rivers and of the Arakan and Tenasserim coastal strips. It is these lowland areas that contain and 1. LOCATION AND TOPOGRAPHY support the bulk of the population and that are The Union of Burma Hes between 93° and 103° economically the most significant. East longitude and 28° and 10° North latitude. Its The three main river systems, the Chindwin- boundaries encompass an area of 262,000 square Irrawaddy, the Sittang, and the Salween, flow in a miles. It has nearly double the land area of , is general southerly direction. The has somewhat larger than France, and approximately its source in extreme northeast Burma. Its southern equal in size to the State of Texas. and sometimes southwesterly course traverses the Roughly, Burma's boundaries form a diamond 500 length of the country. Its valley forms the cultural, nules across from east to west and 800 miles long historical, and economic heartland of Burma. As it from north to south with the long, narrow coastal emerges from the main southern valley of Burma strip known as Tenasserim extending from the south¬ between the Arakan and Pegu Yomas and approaches eastern side of the diamond some 500 miles farther the sea, the Irrawaddy branches into creeks and south into the Malayan Peninsula. rivulets to form the Delta, one of the great rice Pakistan and India he along the northwest side of granaries of the world, with an area of some 10,000 the diamond, China along the northeast side, and square miles. Indo-China and along the southeast; the The rises far to the northwest in the Tenasserim extends far down along the western Naga Hills, and joins the Irrawaddy from the v/est in boundary of Thailand. The Bay of Bengal and the central Burma at the town of . The water¬ Andaman Sea form the southwestern and southern shed of the Irrawaddy-Chindwin system constitutes boundaries. The length of the coastline from Pakistan about 55 % of the area of Burma. in the northwest to Thailand in the southeast is about The Sittang rises in central Burma and drains the 1,200 miles. area east of the Pegu Yomas. At the coastal plain it Burma's historical isolation from her neighbors is opens out into a wide estuary noted for its tidal bores, closely associated with geographical features. The and empties its waters into the Gulf of Martaban Indian subcontinent on the west and the Malayan between Rangoon and Moulmein. The fact that a peninsula on the east both extend to the south of large part of its 350-mile course is difficult to Burma, and the sea routes from the one to the other navigate hmits its commercial significance. have by-passed Burma. On land, mountain barriers Still farther east is the third main river of Burma, formed by the fingers of the Tibetan mountains cut the Salween. It has its source in Tibet and enters the Burma off from neighboring countries. On the north¬ sea near Moulmein. It is a swift river that flows along western side, the northern extension of the Arakan a deep winding gorge. Rapids and cascades confine its Yomas (hiUs) and the Naga, the Chin, and the use mostly to small craft operating within restricted Lushi Hills form the boundaries. The northeastern areas and to the floating of teak logs. ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA Three minor river systems are important. The About the beginning of November the monsoon Rangoon River provides Rangoon's gateway to the moves from southwest to northwest. This is the sea, and its tributaries link Rangoon to the Irra¬ movement of the lower air currents of the south¬ waddy system. The Kaladan-Lemro river system west monsoon from central Burma to southern forms a network in the fertile western coastal plain Burma followed by dry northwesterly land winds. of Burma, west of the Arakan Yomas, centering on The period continues until the southwest monsoon the seaport of Akyab. The , returns with its moisture from the ocean. although it flows throughout a considerable length of The temperatures in the Shan Plateau, the Arakan the Tenasserim littoral, is navigable for only short Yomas, and the northern hills are the lowest, remain¬ distances above its mouth at Mergui. ing between 70 and 80" in the summer. Over most of these tracts, frosts are common in December 2. CLIMATE and January. The Dry Zone, at the other extreme, Two thirds of the country is in the tropical and has an annual average temperature of about 90 . one third in the temperate zone. The main deter¬ Temperatures in the coastal plains and deltas fall minants of the country's climate other than location between these extremes with less seasonal fluctuation are the monsoon and the configuration of the land. than in the other two areas because of the influence Variations in the land surface from the sea coast to of the sea. Table I-l gives selected temperature the mountains bordering Tibet and the southern off¬ data from official records. shoots of these mountains cause different chmatic conditions in various sections of the country. TABLE I - 1 The seasons in Burma are: AVERAGE ANNUAL MAXIMUM AND MINIMUM TEMPERATURES FOR SELECTED TOWNS The monsoon Mid-May to Mid-October Average Annual (wet weather) Maximum CF.) Mmimum CF.) The post-monsoon Mid-October to Mid-November Myitkyina (Northern Burma) 92 50 (humid weather) Maymyo (Shan States) 84 39 The cold weather Mid-November to April Mandalay (Dry Zone) 102 59 The pre-monsoon April to Mid-May Akyab (Arakan Coast) 92 59 (hot weather) Tavoy (Tenasserim Coast) 97 53 Rangoon (Delta) 98 64 The monsoon winds which blow toward Burma, Bassein (Delta) 86 73 across the Bay of Bengal from a southwesterly direction, carry a considerable amount of humidity, 3. SOILS AND VEGETATION resulting in the wet weather from mid-May to mid- Most of the information available on soils comes October. When they meet the Arakan and Tenasserim from District Settlement Reports and is non¬ Yomas, these winds lose most of their moisture, technical. The deltaic soils are principally heavy and somewhat more than 200 inches of rain fall clays or clay loams overlying slaty blue clay. They per year in the Arakan and Tenasserim coastal have sufficient potash and are generally deficient regions. This factor produces the Dry Zone in in nitrogen and phosphates. Dry Zone soils are Central Burma, roughly indicated by areas 1 and 2 generally of a lighter texture. More detailed soil on the map, "Natural and Artificial Vegetation information is given in Chapter VIII, Agriculture. of Burma" (Plate 1). Here the rainfaU averages Along the river banks soils are generally sUt 25 to 50 inches per year, and its extreme irregularity deposits which are covered in many places with a causes frequent crop failures. In the delta plains of layer of sand. Exposed banks and islands are cropped the Irrawaddy and Sittang, annual rainfall is as during the dry season. Some of these lands whose regular as in the coastal strips along the Yomas, fertility is replenished occasionally by silt deposition but is lower. It averages a little more than 100 inches are usually rich and yield good crops. per year in the main delta region, and somewhat The map, "Natural and Artificial Vegetation less in the northern delta. The southwest monsoon of Burma" (Plate 1), indicates the natural and current, unable to climb the Shan Hills, changes its artificial vegetation of Burma. The coastal areas direction to southeast, following the river valleys and having more than 80 or 90 inches of rainfall a year giving up little moisture in Central Burma. were originally forested with hardwood, but most After leaving the central plain, the winds lose more of the accessible portions have been cleared for moisture, causing somewhat greater rainfall on the paddy. The hills remain forested. Shan Plateau, and another heavy precipitation zone In the delta, near the sea, mangroves thrive in in the hiUs and narrow valleys of Northern Burma. swamps along the coast and tidal creeks. On the MINISTRY OF NATIONAL PLANNINSJ NATURAL AND ARTIFICIAL |28-

RESOURCES FOR BURMA'S DEVELOPMENT land behind the mangrove swamps are forests Burma, Northern Burma, and the Shan and Kayah dominated by the kanazo tree. Large tracts of region. These divisions are indicated on Plate 2 and kanazo have been replaced by paddy-fields. Table 1-2, which present data on cultivated and Nearly all of the area in which the annual rain¬ cultivable land by districts. The large active and fall is more than 40 inches but less than 80 inches potential cultivation area in lower Burma testifies is still covered with monsoon forests. The Pegu to the primary importance of this region in the Yomas, the eastern slopes of the Arakan Yomas, agricultural economy. and the Kachin State, except for the northern end, belong to this region. This belt is one of Burma's TABLE 1-2 rich sources of forest wealth. Here are found teak, LAND USE IN BURMA (1936-40) padauk, in, ingyin and other valuable woods. The natural vegetation of the Dry Zone, with a Culth atcd and Culturahle but rainfall of less than 40 inches a year and extremes Fallon nut Cidti 'valid of temperature, is largely small trees and scrub. 1,000 Per 1,000 Per On the highlands of Burma, above 3,000" feet, acres cent ac res cent grass and mountain forests thrive. The flat rolling Lower Burma plains of the Shan Plateau have broad grasslands, Akyab b82 26 1432 43 Kyaukpyu 236 8 91 3 and the hilly regions of the northern and eastern Sandoway 121 4 44 2 hills have evergreen trees of the temperate region Prome 450 24 158 8 type. Tharrawaddy 704 39 377 21 1163 45 142 5 C. AGRICULTURE Pegu Insein 591 49 218 19 1. LAND RESOURCES Rangoon — — Maubin 672 64 233 22 The land resources of Burma are highly suitable Henzada 758 42 133 8 for richly productive agricultural activity. The Bassein 995 38 412 15 economy revolves largely around agriculture. Its 994 54 394 22 761 55 28 2 importance is reflected in the fact that roughly Hanthawaddy 931 76 64 6 two thirds of the working population are engaged Toungoo 591 14 160 4 in the cultivation of land. Thaton 829 27 1620 52 Moulmein (Amherst) 717 15 1147 24 The most important crop, from the standpoints Tavoy 190 5 874 25 of both domestic consumption and export, is rice. Mergui 194 3 1634 23 For many years Burma was the largest single exporter Salween (Papun) 28 2 14 1 of rice among all nations. If India was the jewel Central Burma of the British Empire, Burma was its rice bowl. 482 21 120 5 The diversity of soil and of chmate also favors Thayetmyo 325 11 304 10 Magwe 1127 48 208 8 the production of a relatively wide range of other Yamethin 637 24 769 30 agricultural products. At the present time, the most Meiktila 705 50 226 16 important farm products, next to rice, in approxi¬ Myingyan 1189 69 157 9 858 24 452 13 mate order of value of output, are groundnuts, Kyauksc 275 34 65 8 tobacco, sesamum, sugar cane, pulses, rubber, onions, Mandalay 280 21 123 9 cotton, millet, chUli, maize, potatoes and wheat. Sagaing 851 1-41 72 11 Monywa (Lower The prospects for expanding the production of these Chindwin) 914 3-43 39 15 commodities and others are favorable. Shwebo 1119 3-50 31 9

2. CLASSIFICATION INTO AGRICULTURAL REGIONS Norlhern Burma In analyzing the agricultural resources of Burma, Falam — — — Upper Chindwin 182 2 1916 22 there is significance in the distinction between lower Naga Hills — — — Burma and upper Burma, as indicated by the Katha — — — differences in soils and climate. The center of the Myitkyina 142 T 1612 17 Bhamo 47 T 808 31 transition zone between them lies approximately through the town of Thayetmyo, at 19 20' North Shan and Kayah States latitude. An important distinction is that, in paddy Northern Shan States Southern Shan States production, lower Burma is generally a surplus area, Eastern Shan States whereas upper Burma is generafly a deficit area. A more refined classification into four agricultural regions is useful; namely, Lower Burma. Central Source: Season and Crop Reports. ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA 3. LOWER BURMA divisions contain almost three fourths of the culti¬ a. Climate vated land of lower Burma. This whole area is a vast Lower Burma, encompassing 30% of the country's patchwork of paddies—the great rice bowl of Burma. total area, includes the Arakan, Irrawaddy, Pegu Also in the other fertile parts of lower Burma— and Tenasserim Divisions, comprising nineteen along the Sittang and on the coastal strips of the administrative districts. It extends from the fertile Arakan and Tenasserim Divisions—rice is the coastal strip of Arakan on the west, across the broad dominant crop. About 90% of the total cultivated valley and great delta of the Irrawaddy and the area of lower Burma is devoted to rice. Among valleys and deltas of the Sittang and Salween, to the the factors which make this whole region ideally long, narrow Tenasserim httoral in the southeast. suited for rice cultivation, the most important are This is a humid tropical region, with relatively the amount and regularity of rainfall. Most rice high temperature and a regular monsoon which varieties are water plants that require several inches provides average annual rainfalls ranging approxi¬ of standing water during most of the growing season. mately from 80 to 220 inches per year. Less than a This can be accomplished in lower Burma by building century ago most of the non-hill area in this expanse up small mud embankments, or kazins, to retain was a swampy and sparsely inhabited jungle. The the water during the long rainy season, from May trade opportunities provided by the opening of the to October, and to regulate its supply from field to Suez Canal transformed it into a rich and populous field—a technique commonly known as "wet" agricultural region. cultivation. d. Other Crops b. Land Classification As a whole. Lower Burma is a deficit area in Of the total land area of 52-6 million acres in other crops, which are imported from elsewhere Lower Burma, 22% was cultivated before the war. in Burma or from abroad. However, some other Another 21 % was officially classified as cultivable. types of cultivation are of considerable importance. This formal classification includes forests, swamps The banks and islands of the rivers, which are and other lands suitable for agriculture only after annually flooded and silted but exposed during draining, clearing and other improvement. Reserved summer, are used to grow maize, millet and beans. forests comprise another 18% of the total area. Close to large consuming centers, the silt-covered These are rich and accessible forest lands carefully lands are used for vegetable cultivation. Large maintained by the Forest Department for com¬ portions of this alluvial or "kaing" land experience mercial exploitation. Table 1-3 presents data from changes in surface, shape and size from year to year; Season and Crop Reports on land use in the divisions sometimes large areas are washed away and reappear of lower Burma for the five-year prewar period. elsewhere. Such changing land is called "mye-nu" as distinguished from "mye-yin" which is permanent TABLE 1-3 "kaing" land. To a small extent in lower Burma, primitive LAND USE, LOWER BURMA, 1935 36 to 1939-40 "taungya" cultivation is practiced by the hiU peoples. {thousands of acres) This type of cultivation consists of clearing patches Other Per cent of land by crude cutting, burning of vegetation, and Land Culti¬ of sowing varieties of rice or other grains which will Total Re¬ not vable Culti¬ Total grow under these conditions. When the fertiUty is Division Land served Avail¬ but not vated Land Area Forests able for Culti¬ Land Area exhausted in two or three years, the process is Agri¬ vated Culti¬ repeated elsewhere. Such burned-over patches can culture Land vated be seen here and there on the hillsides of the Arakan Pegu 12,832 3,652 3,631 1,119 4,430 34-5 Yomas and elsewhere in lower Burma, Fruit, pahns, Irrawaddy 8,701 1,745 1,575 1,200 4,181 481 and chiUies are also grown, and, in small quantities Arakan 11,065 462 6,170 3,181 1,252 11-3 a variety of other crops. It is worth noting that of the land brought under Total 52,574 9,494 20,470 10,789 11,821 22-5 cultivation in lower Burma, the percentages of abandoned and fallow land are low. Especially in the case of rice, annual cropping is general. With c. Rice proper rotation, if it were possible, the fertility of The lower Irrawaddy valley and delta he whoUy soU could be maintained. If the natural advantages within the Pegu and Irrawaddy Divisions, a circum¬ of lower Burma are efficiently harnessed by an stance which accounts for the fact that these two appropriate economic and social organization as RESOURCES FOR BURMA'S DEVELOPMENT well as by technology, the area could become one 4. CENTRAL BURMA of the most productive regions in the world. Central Burma, the Dry Zone, extends south e. Rubber from Shwebo to the Thayetmyo and Yamethin All of Burma's rubber comes from lower Burma. Districts. Between these, the other districts included Before the war, over 100,000 acres were devoted are Lower Chindwin, Mandalay, , Pakokku, to rubber cultivation. The largest plantations are Myingyan, Meiktila, Minbu, and Magwe. This located in the Mergui and Tavoy Districts of the region receives less than 40 inches of rainfaU per year. Tenasserim Division, although a few sizable estates However, the irregularity of precipitation rather are found in the laterite soils of the Southern Pegu than the quantity shapes the nature of the cultivation. Yomas and around Rangoon. Before the war there When the rains occur, they come in such downpours were some 3,700 small estates of less than 100 acres that most of the water is received in extremely brief each, most of which were owned and operated by intervals. If the rainfall was spread more evenly, Burmans. , „ ^_ , „. .. this would not be a "dry zone," and agriculture f. Forestry and Fishing would be much more productive. Lower Burma is also important for forestry and Dry land cultivation is widely practiced in this fishing products. The forests in the Pegu Yomas area, but "kaing" cultivation and irrigation also rank highest commercially. The southern portions exist. Although there are no extensive modern are evergreen forests, but the greater part of these projects, irrigation systems have existed since early hiUs is clothed with monsoon forests, including Burmese days. teak. The main wooded areas are in the Prome and Rice is an important crop even in the Dry Zone. Toungoo Districts of the Pegu Division, the per¬ Most of it is grown in irrigated tracts. Shwebo, centages of total area forested being 32 and 57 Mandalay, Kyaukse and Yamethin districts are respectively. The teak reserves are more valuable the centers of rice cultivation, but it is grown in here than elsewhere in Burma because of their some measure throughout the region. Groundnuts, accessibihty and theh proximity to the Port of pulses, sesamum, millet, and cotton are other Rangoon. The Arakan Yomas are covered with major crops, and maize, gram, fruits, vegetables jungle, which is pine or rhododendron on the ridges, and sugar cane are grown. Because of the uncertainty tropical evergreen forests on the western flanks, of rainfall, farmers try to insure themselves against teak on the eastern, and thick damp undergrowth crop failures by diversity of crops. in the valleys. The coastal strip, as in the Tenasserim, has thick tropical evergreen forests and jungle 5. NORTHERN BURMA covering the uncultivated areas. The Tenasserim Northern Burma includes the administrative dis¬ is too wet for teak, however, it contains vast reserves tricts of Upper Chindwin, Katha, Bhamo, Myitkyina, of other hardwoods, almost totally unexploited. the Naga Hills, and the Special Division of the Both in Arakan and in the Tenasserim, as well as Chins. The region is generally hilly and wooded in the central regions of lower Burma, there are and most of it is sparsely populated. The Special huge stands of which are an inexhaustible Division of the Chins, the northern part of Myitkyina, source of housing materials and cellulose for paper and the hilly portion of the Naga Hills district are making and other products. Section D contains clothed with dense hiU forests. Bhamo, Katha, Upper data on the forested areas and timber production Chindwin, and the remainder of Myitkyina, which for the various regions of Burma. also contain forested areas, belong to a wet zone Because of its large water surface and because that is similar in some respects to Lower Burma. it contains the entire coasthne of Burma, the pro¬ Over two thirds of the cultivated area is under duction of fish in lower Burma is far greater than rice. Most agricultural production is for local elsewhere in Burma, though smaU-scale fishing consumption, but in some parts of the broad northern occurs throughout the country in rivers and creeks valleys of the Irrawaddy and its tributaries surpluses and somewhat larger scale operations are carried of rice and sugar cane are produced. Most of the out in a few places, such as Inle near Taunggyi land cultivated or suitable for cultivation is in the in the Southern Shan States. Fish are the second most Myitkyina-Bhamo-Katha triangle. Sizable tracts exist important product of Arakan. A considerable elsewhere. The area extending northwest from fishing industry also exists in the southwest delta HomaUn up to and including the Hukawng Vafley, around Bassein. Fishing abounds along a large except for the highlands, though not now cultivated, part of the Tenasserim coast, and Tavoy and Mergui is topographically suited to agriculture. In the are especially famous in Burma for their salt fish unoccupied valleys of this region there are some and for ngapi and other forms of fish paste. 2,000,000 acres of weU-watered land. 8 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA 6. THE SHAN AND KAYAH REGION D. FORESTS The Shan and Kayah States represent a distinctive 1. PRODUCTS agricultural region. The grasslands are the most The forests of Burma constitute an extremely important part of the Shan Plateau. Wet cultivation valuable national asset. Timber, bamboo, and and taungya cultivation are practiced, the former thatch are the basic materials used for housing and in the valleys and on the plains and the latter on the other construction. Fkewood, charcoal, cane, bark hillsides. for tanning and medicinal uses, cutch, lac, and In the valleys and on the plains, rice and temperate thitsi (a gum used for lacquer work) are other major crops such as wheat, potatoes, and other vegetables products of the forests. Teak, other hardwoods, and fruits are grown. Tea is an important crop, cutch and lac are exported. Burma has been the mostly grown on the hills. Almost all of the garlic world's foremost exporter of teak, which is her and ginger of Burma, much used by the Burmese second most valuable postwar export; prewar it to flavor their curries, are produced in the Shan ranked fourth. States. This area is also the main source of supply of domestic animals—cattle, horses, sheep and 2. ACREAGE CLASSIFICATION goats—for other regions of Burma, especially draft Table 1-4 presents the forest acreage of Burma animals for Lower Burma. as currently classified by the Working Plans Circle Most of the hilly parts of the Shan and Kayah of the Office of the Conservator of Forests. Burma Region have valuable forests, which as yet are largely is divided into six forest circles, which again are untapped. In particular, the valleys in the southern subdivided into forest divisions. Data with respect portions of this region contain valuable teak forests. to the forests within each division are classified

TABLE 1-4* FORESTS OF BURMA (thousands of acres)

I I 3 4 5 6 7 Teak Other Hardwoods Reserved Total for Fuel Circle and for Local Reserved Division for B.R., Supply I WTB Unalloted Reserved Unclassed Reserved Unclassed Reserved Unclassed Etc.

Maritime Circle Arakan — — 215 855 56 67 124 462 855 Henzada 193 — — — 7(116) — 365 565 — Bassein — — 109 — 18 164 217 508 — Delta — — 706 — — — — 706 — Thaton 282 2,646 — (91) - (744) - (60) — — 282 2,646 Ataran 622 1,510 — (352) -(1,540) - (2) — 19 641 1,510 Thaungyin 329 64 116 — — — 82 526 64 Tavoy — — 2,098 — 43 55 — 2,197 —

Total 1,426 4,220 3,244 (443) 855 (2,254) 124 (178) 286 807 5,887 5,075

Hlaing Circle Thayetmyo 636 1,580 — (133) — — — — 636 1,580 Allanmyo 138 290 3 (94) — 19 — — 160 290 Prome 259 322 5 (149) — 66 (6) — — 330 322 Zigon 270 — 7 (104) — 14 — — 291 — Tharrawaddy 170 — — (34) — 51 — — 221 — Insein 237 — — (237) — 48 (6) 7 10 302 — RESOURCES FOR BURMA'S DEVELOPMENT TABLE 1-4* (contd.)

1 2 3 4 5 6 7 Reserved Teak Other Hardwoods Total Reserved for Fuel Circle and for Local Reserved Division for B.R., Supply l.W.T.B. Unalloted Unclassed Reserved Unclassed Reserved Unclassed Reserved Etc.

Sittang Circle Yamethin 426 70 - (149) 61 (8) 487 70 Pyiimiana 456 250 - (275) - (21) 13 469 250 North Toungoo 314 321 - (176) 1 (18) -(2) 11 326 321 South Toungoo 621 1,486 3 (64) — 55 (26) 6 685 1,486 North Pegu 512 39 3 (74) 30 (21) 4 549 39 South Pegu 528 - (302) 43 15 586

Total 2,857 2,166 6 (1,040) — 190 (94) 15(2) 34 3,102 2,166

Northern Circle Myitkyina 436 2,285 1 (46) 179 616 2,285 Bhamo 497 1,271 31 (202) 719 2 (46) 530. 1,990 West Katha 1,182 3,482 - (275) 1,182 3,482 East Katha 519 431 - (291) 151 (431) 19 (13) 27 565 582 Shwebo 815 1,926 143 (386) 44 (28) 1,002 1,926 Maymyo 499 659 40 (88) 69 (26) 50 658 659

Total 3,948 10,054 214 (1,242) 870 (431) 135 (159) 179 77 4,553 10,924

Chindwin Circle Upper Chindwin 877 996 17 (3) 21 915 996 Myittha 543 1,050 33 12 92 680 1,050 Lower Chindwin 457 72 128 893 585 965 Meiktila 255 58 (160) 230 (83) — 114 657 Yaw 647 1,058 38 (553) 78 (II) 763 1,058 Minbu 671 442 87 (625) 35 318 1,111 442

Total 3,450 3,618 361 (1,341) 893 355 (94) — 545 4,711 4,511

Shan States Mongmit 631 998 47 (148) — 29 707 998 N. Shan States 237 1,730 58 (126) — 5 (5) 300 1,730 S. Shan States 512 4,805 - (23) 15 473 1,000 4,805

Total 1,380 7,533 105 (297) — 20 (5) — 502 2,007 7,533

Unclassed Forests 41,896 not Assigned to Working Circles

* Figures in parentheses columns 3, 4, and 5 represent areas that overlap with those given in column 2 ; they are not, therefore, included in the total in column 7. t The Unclassed Grand Total equals Total Unclassed for Teak and other Hardwoods, and Unclassed Forests not Assigned to Working Circles. 10 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA into one or more of the following groupings, accord¬ Burma has a long history of careful protection ing to the main uses for which the forests are intended: and admirustration of its forests. A large forest Teak Selection Working Circle—primarily teak service is manned by experienced personnel. The forests. war and subsequent insurrections have seriously Commercial Supply Working Cfrc/e—primarily inhibited the work of the Forestry Department. other hardwood forests. The production of timber, likewise, has been Local Supply Working Circle—forests reserved drastically reduced. Because of the remoteness of for use of villages in the vicinity, and controlled forests and the need for long supply fines in back¬ to prevent destructive exploitation by villagers. woods areas, timber extraction is one of the industries Other Working Circle—forests reserved for fuel most affected by the prevalent sporadic fighting. for the railways and the Inland Water Transport Board for rafting poles and for other special purposes. TABLE 1-5 Unallotted—forests reserved for climatic reasons; commercially valuable but inaccessible forests re¬ PRODUCTION OF MAJOR MINERAL PRODUCTS served for future exploitation; remote forests about IN 1939* which httle is known; miscellaneous forests. {Allfigures are in thousands) The second and third and to a small extent the Location Mineral Quantity fourth working circles Usted above overlap with the Tenasserim Division first, i.e., some of the forest areas are assigned more Thaton Tin and Tungsten Concentrates 0-2 tons than one use. This is shown by the figures in paren¬ Amherst „ 0-1 tons Tavoy 6-7 tons theses in columns three, four, and five of Table 1-4 j> which represent areas that overlap with those given Mergui » 2-4 tons in the second column; they are not, therefore, Mandalay Division Yamethin 0-4 tons included in the total in column seven. » Forests falling under the Teak Selection and Kayah State „ 5-6 tons Commercial Supply Working Circles are further Arakan Division divided into reserved and unclassed forests as Kyaukpyu Petroleum IM gals. indicated in the table. The reserved forest areas Magwe Division Magwe » 246,706-5 gals. are more valuable in terms of such characteristics Pakokku „ 22,127-1 gals. as number of trees, quality of timber, and accessi¬ Minbu „ 2,818-2 gals. bility, and are generally intended as a perpetual Thayetmyo s» 1,996-4 gals. commercial source of supply. Like the forests falhng Sagaing Division under the other working circles, these are closely Upper Chindwin „ 2,0141 gals. administered by the Forest Department, and exploita¬ Total Petroleum 275,673-4 gals. tion is carefully regulated. The unclassed forests Northern Shan States Oref 486-9 tonsf are loosely administered, if at all. Some unclassed (Bawdwin Products) Zinc Concentrates 59-3 tons ,, Refined Lead 76-0 tons forests are not assigned to any of the working circles. ,, Copper Matte 7-9 tons A map showing the location of all reserved forests ,, Nickel Speiss 2-9 tons in Burma is included in Chapter XXII. ,, Antimonial Lead 1-2 tons Tin and Tungsten Concentrates 15-4 tons 3. WOOD PRODUCTION Total Concentrates and Refined Metals 1,431-1 tons Production of teak and collectively of aU woods (Exclusive of ore) other than teak (which are almost entirely hard¬ * Source: "Report on Mining and Mineral Production in Burma," woods) each averaged roughly half a miUion cubic 1939. The following approximate quantities of other minerals tons per year immediately before World War II. (except salt) were reported by the same source as produced in 1939: It is generally thought that with respect to teak Building stone and road 2,564,441 tons Quartz 100 tons metal Bismuth 8 cwts. this amount represents the maximum sustainable Salt 57,000 tons Jadeite 767 cwts. rate. In the case of other hardwoods, the supply Petrol from natural gas 36,005 tons Amber 6 cwts. is potentially much greater than half a miUion Iron ore (Flux for Bwdn. 26,259 tons Gold 1,206 ozs. smelter) Rubies 211,570 carats cubic tons annually. The limitations are markets Clay for pottery 16,343 tons Sapphires 10,532 carats and accessibihty of the forest areas. One of the Soap-sand 1,878 tons problems of accessibihty is that most other hard¬ Antimony 325 tons woods, unhke teak, do not float, and must be trans¬ ■f The ore is the source of all other Bawdwin products and is omitted from the total. ported overland or by bamboo rafting on the larger In calculating the totals, silver is converted to tons at the rate waterways. of 32 667 troy ounces per ton. 92 ^^^^^______94" REFERENCES PROVINCE TOWNS DIVISION DISTRICT

RESOURCES FOR BURMA'S DEVELOPMENT 11 E. MINERALS (2) The Delta 1. MINERAL DEPOSITS Tliis has a maximum width (east-west) of 200 miles The importance of Burma's mineral resources and a maximum length of 150 miles. The principal is indicated by the fact that, prior to World War II, water use is for agriculture and navigation. In the value of mineral exports including petroleum certain Rangoon areas clear potable water originates products was equal to about four fifths of the value in sand beds 280 feet below ground level and rises of rice exports and constituted over one third of to a depth of 30 feet. An artesian condition exists the total value of exports. north of Rangoon, at the Government Spinning The three principal regions of Burma which Mill. South of Henzada, the delta has several outlets include practically all the sources of economic to the sea through meandering channels. It is flat, mineral production, excepting petroleum, thus far poorly drained, and receives intense rainfall during known are: the Shan State and contingent areas the monsoon season. Many areas are subject to including the Kayah, Kentung and Wa States; inundation during the monsoon season, despite the Kachin State, including the Naga HiUs, North numerous protective levees, normally effective. Addi¬ Burma, and the Upper Chindwin country; and the tional physical data for the Irrawaddy River are given Tenasserim Division. in Table 1-6. Although there are many minerals in Burma, those TABLE 1-6 deposits which hitherto have proved of greatest THE IRRAWADDY RIVER economic value are tin, tungsten, lead-silver and Max. petroleum. Flood L)rain- Ammal Miles 1 lUUU A more detailed review of the mineral deposits Locality Flow age Output Upstream {thous. Area {thous. of Burma and a discussion of their potentiahties (sg. mi.) ac. ft.) may be found in Chapter XXI. c.f.s.) Mouth of China Bakir 2. PRODUCTION River 0 — 155,000 310,000 218 2,000 140,000 280,000 The data on 1939 production, presented in Confluence Chindwin and Table 1-5 and its footnotes, indicate the prewar Irrawaddy 559 — 117,870 260,000 pattern of mineral exploitation. Included are refer¬ Mandalay 670 — 48,160 140,000 Katha 890 — 32,400 119,000 ences to the products of the Burma Corporation Irrawaddy Confluence 1,160 — 17,900 90,000 smelter at Namtu (near Bawdwin), the only large metal refining operation in Burma prior to the war. All of the approximately 275-miUion-gallon pre¬ (3) The Central VaUey war annual production of petroleum was refined North of Henzada the Central Valley extends within Burma. 250 miles to Pakokku, varying in width from 60 miles Many important mineral deposits are now near its south end to 160 miles at Pakokku. The inaccessible because of insurgency. As a result, rainfaU varies from 90 inches per year near the present production is far below prewar production. south end to about 30 inches at Myingyan. Irrigation Petroleum production has been below the domestic is required as far south as Thayetmyo, water being requirement. obtained from numerous perennial flowing tributaries entering from the Arakan and Pegu mountains. F. WATER RESOURCES 1. RIVERS The principal streams in this group are listed in Table 1-7. The main river systems of Burma are shown on TABLE I 7 Plate 4. A description of these systems follows: CENTRAL IRRAWADDY TRIBUTARIES a. Irrawaddy River Annual (1) General Length Elevation Drainage Low Output River in at Source Area Flow {thous. The Irrawaddy rises at about 28° North latitude, Miles {sq. mi.) (c.f.s.) ac.ft.) in a major extension of the Himalaya Mountains, having permanent snow fields and peaks over 19,000 Matun 116 3,750 1,670 — 1,690 Man 78 4,250 717 20 725 feet above sea level. The river flows generally south¬ Mon 196 10,000 2,314 160 2,340 ward 1,300 miles to its mouth on the Bay of Bengal, Salin 94 8,500 1,350 20 — 16° North latitude. The total drainage area is 155,000 Yin — 2,000 2,410 — 1,540 square miles, including 15,000 square miles of delta Pin — 5,000 1,014 — — area. 12 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA (4) The Northern Basin in its southward flow. It has a vaUey length of The northern Irrawaddy basin, including the about 200 miles and a width of 40 to 50 miles. Chindwin, Mu, Shweli and Myitnge Rivers, contains The drainage area is 13,280 square miles and annual vast power and irrigation resources (see Chapters IX output 34,000,000 acre feet. Numerous large tri¬ and XIX). Commercial navigation exists on the butaries having good sustained flow enter the river main Irrawaddy River to Myitkyina and to Homahn from both east and west. Several have sufficient on the Chindwin. Irrigation is desirable over the output and head to be considered for irrigation and lower part of the northern basin and minor projects power. Among these are the Shwegyin and Kyaukkyi, have been developed in the Mandalay, Shwebo, discussed in existing reports as potential power Kyaukse and Sagaing Divisions (sec Chapter IX). streams in conjunction with diversion of water from the Yunzalin drainage. Installations up to b. Arakan Rivers 150,000 horsepower have been contemplated, to West of the Irrawaddy Valley lie the coastal supply power to Rangoon and other "central valley" mountains extending from low foothiUs near Bassein towns (see Chapter XIX). (lat. 16°) to the Indian Border (lat. 24 ). The foot¬ hills, termed the Arakan Yomas, increase steadily e. Bilin River toward the north culminating in 10,(X)0-foot Mount East of the Sittang and flowing parallel thereto Victoria (lat. 21 ). North of this peak there is a is the Bilin River, 935 square miles drainage area continuous range of mountains, 8,000 to 9,000 feet and 5,000,000 acre feet annual runoff". Its source in height, terminating in the rugged Chin Hills. is at elev. 4,500 feet, and its outlet is the Gulf of The coastal mountains are heavily watered. Proceed¬ Martaban. The valley length is about 100 miles ing from the southern extremity, the principal and maximum width 20 miles. Flow is well sustained rivers on the west slope discharging directly into in the rainy season with over 150 inches of annual the Bay of Bengal are indicated in Table I 8. rainfaU. The river is a possible source of power, although somewhat remote from load centers. TABLE I 8 f. ARAKAN RIVERS Farther east is the Salween River, which crosses Annual the China-Burma boundary at River Mile 760 Length Elevation Drainage Output River in Miles at Source Area {thous. and stream bed elev. 2,000+ft. Thence it flows in {sg. mi.) ac. ft.) a southerly direction discharging into the Gulf of Martaban at Moulmein. The river has an average Lemro 168 5,500 3,910 20,300 Kaladan 404 8,000 8,730 43,600 gradient of 2-6 feet per mile without notable falls. Mayu 96 2,000 1,975 9,200 Throughout most of its length in Burma the river flows in a major canyon, and numerous large c. Pegu River tributaries enter by steep channels or sizable cas¬ East of the Irrawaddy Central Valley, separating cades. Consequentiy, the power potentialities on it from the Sittang River, lie the Pegu Yomas, a the tributaries are very large, but located far from range of low mountains about 150 miles in length. Out of the southern portion and discharging into TABLE 1-9 the Rangoon River, flows the Pegu River. The total MAJOR TRIBUTARIES OF SALWEEN RIVER length of the river is 166 miles and its elevation at Drainage Annual the source is about 2,700 feet. The drainage area River Area Output is 2,065 square miles and average annual output {sg. mi.) {thous. ac. ft.) 6,500,000 acre feet. In view of its proximity to the Western Tributaries Rangoon market, high annual runoff, and adequate Donthami 1,090 5,200 Yunzahn storage possibilities the Pegu has promise as a 1,130 6.000 Nam Pawn 7,290 16,300 source of hydroelectric power which can be scheduled Nam Teng 5,880 14,100 for early development (see Chapter XIX). Nam Pang 4,890 12,500 d. Sittang River Eastern Tributaries Ataran 2,200 The Sittang River originates near Yamethin 11,700 Gyaing 3,680 19,400 (lat. 20 15'), at elev. 1,500 feet, and discharges into Nam Hsim 1,980 4,400 the Gulf of Martaban (lat. 17° 15') about 60 miles Nam Hka 3,980 8,900 east of Rangoon. The river parallels the Irrawaddy RESOURCES FOR BURMA'S DEVELOPMENT 13 existing markets. The downstream 70 miles of the The monthly distribution of rainfaU throughout Salween is located in an aUuvial plain where the average year is shown for selected stations in meanderings and alternate channels exist. The Table 1-11. river is navigable in this lower reach, and is said to be passable part of the year for smaU boats proceed¬ 3. RUNOFF ing downstream from the China border to the sea Estimated runoff factors vary from 20% in the (see Table I 9). dry belt to 75 % in the Kachin States. The estimated factors are based on recorded discharge and rain¬ g. Tenasserim Rivers faU for the Rangoon Water Supply Reservoir at In the panhandle south of Moulmein are the Great Gyobbyu, and for the Bawgata hydroelectric project Tenasserim and a number of small rivers where navi¬ where stream-flow measurements were made in gation will be the principal use. However, there are 1947 48. Based upon available rainfall and dis¬ power sites suitable for local supply, where 200- to charge records, the runoff factor for the Pegu water¬ 250-inch rainfall occurs annually (see Table I 10). shed above Pegu Town varied from 49-5% to 70-6% for the period 1946-52, with an average of 60-7%. TABLE I - 10 The runoff factor for the Saingdin Drainage Area TENASSERIM RIVERS has been computed to be 557% for 1952. More Drainage Annual detailed runoff data are given in Chapter IX. River Area Output {sq. mi.) {thous. ac.ft.) 4. IRRIGATION Lenya 1,230 6,900 A detailed description of the over-all irrigation Great Tenasserim 6,840 41,600 program and specific projects may be found in Tavoy 1,110 6,900 Chapter IX.

2. PRECIPITATION 5. NAVIGATION The average annual precipitation for all parts Seasonal navigation is developed on the Irrawaddy of Burma, obtained from long-term records of the as far north as Myitkyina and on the Chindwin to Ministry of Agriculture and Forests, is shown on Homahn. Navigation extends 70 miles up the Plate 4. The rainfall varies from 200 inches or more Salween. A complete system of channels connects on the Arakan and Tenasserim coasts to a low of all tidal rivers of the Irrawaddy Delta so that barge 30 inches on the area near and Myingyan. At movement of rice to the deep water ports is customary. the sources of the Yunzalin River (elev. 8,500 ft.) the Numerous tidal estuaries and rivers on the Arakan average rainfall is 224 inches, and in North Burma it and Tenasserim coasts are suitable for navigation. averages 160 inches near the Irrawaddy and Chindwin The Sittang River entrance is made troublesome by sources. a bore; however, this area is by-passed by the

TABLE I- 11 MONTHLY AND ANNUAL MEAN RAINFALL AT SELECTED STATIONS

District Jan. Feb. March April May June July Aug. Sept. Oct. Nov. Dec. Year

Rangoon 0-2 0-2 0-3 1-6 12-0 180 21-4 19-9 15-3 6-9 2-8 0-4 99-0 Mergui 0-9 2-0 3-1 5-3 16-9 29-4 31-6 29-2 26-4 12-1 3-7 0-7 161-3 Akyab 0-1 0-2 0-5 2-1 14-0 46-9 54-8 45-2 22-6 10-9 5-5 0-8 203-6 Myitkyina 0-4 0-9 0-9 2-0 6-0 15-1 19-2 15-5 9-7 6-8 1-2 0-4 78-1

Toungoo 0-1 0-3 0-2 1-9 7-7 14-1 17-6 19-1 12-1 7-4 1-8 0-5 82-9 Tharrawaddy 0-1 0-3 0-2 0-8 8-8 16-5 2M 19-9 12-8 5-6 2-0 0-4 88-5 Prome 00 0-1 0-1 0-8 5-5 8-8 9-0 9-0 7-2 4-5 1-7 0-2 46-9 Meiktila 0-1 0-1 0-2 0-8 5-2 4-9 3-4 4-7 6-3 5-5 1-9 0-4 33-5

Maymyo 0-1 0-2 0-5 2-1 9-7 8-9 6-3 9-3 10-2 7-6 3-3 0-6 58-8 Lashio 0-3 0-3 0-6 2-2 6-9 9-8 12-0 12-7 7-8 5-7 2-8 0-9 62-0 Thayetmyo 0-0 0-0 0-1 0-7 5-3 7-9 8-0 8-5 7-8 4-9 2-3 0-0 45-5 14 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA Pegu-Sittang Canal bringing small boats from the presently in operation. Rehabihtation is planned to a Sittang into the Rangoon River. A detailed descrip¬ total of about 1,900 route miles by 1954. Existing tion of the navigability of the river systems of Burma fines and those to be rehabilitated are shown on the is contained in Chapter XIII. map, Plate 2 of Chapter XI. The main lines extend 161 miles up the Irrawaddy G. TRANSPORTATION VaUey from Rangoon to Prome and 385 miles up 1. WATERWAYS the Sittang and Samon vaUeys from Rangoon to Mandalay. From Mandalay, one branch continues The Irrawaddy system constitutes the country's northward to Myitkyina and another extends 176 chief means of inland waterways transport. The miles northeast to Lashio in the Northern Shan main river is navigable for 900 miles throughout the States. year, and for 105 additional miles during seven There are three junction points for branch fines months of each year. Its great tributary in the north¬ on the main Rangoon-Mandalay hne. At Thazi, west, the Chindwin, is navigable for 400 miles. In below Mandalay, branch lines run northwest to the south, the delta formed by the mouths of the Myingyan on the Irrawaddy River and east to Irrawaddy is a vast maze of minor rivers and streams. Shwenyaung in the Southern Shan States, 20 miles These form 1,500 miles of commercially navigable short of Taunggyi. Farther south at Pyinmana, a waterways throughout the year. Another 300 miles branch hne originally extended northwest to Kyauk- are added by the connected Rangoon River and its padaung, but it wUl not be rehabUitated for traffic tributaries. These, plus innumerable other httie until 1954. streams used by smaU craft, form a network which Pegu is the initial point for a branch hne running provides the primary and in many places the only southeast to Martaban on the Salween River across channel for travel and trade—short and long distance from Moulmein. From Moulmein an isolated —throughout the region. branch carries little traffic a hundred mdes south The Kaladan-Lemro rivers and their tributaries down the Tenasserim coast to Ye. in northwestern Arakan constitute a separate and From Letpadan, about midway on the Rangoon- important system of inland waterways—commercially Prome hne, a branch extends westward to Henzada navigable for 350 miles, and more on tide. Including on the Irrawaddy. Traffic is ferried across the river smaller streams usable by country boats, this is whence forks go north to Kyangin on the Irrawaddy virtually the only method of transport in the area. and south to the seaport town of Bassein. Other The Sittang is not navigable at its mouth, and the short branches complete the system. Salween for only 55 miles from its mouth. The Great Tenasserim and Tavoy rivers hkewise have 3. HIGHWAYS limited navigation possibihties. These waterways There are about 6,000 miles of highways and main and various minor coastal streams in the Tenasserim roads. These are indicated on the map, Plate A of are significant only for local traffic. Chapter XVI. Nearly two thirds of these roads Both large and smaU waterways in Burma are are tarred or metaled, and are motorable in all affected by tides for considerable distances inland. seasons ; the rest only in good weather. Among Even commercial transportation can be significantly the main national highways motorable in aU seasons extended when it is timed with high tides. Also, a are the Rangoon-Mandalay-Lashio-Bhamo (a fah- marked seasonal expansion of navigable waterways weather road extends to Myitkyina), Rangoon- occurs during the five to seven months of high water Prome-Mandalay, the Mouhnein-Mergui (between during and after the rains. Amherst and Ye the road is fair weather only), There are only a few scheduled carriers in the the Sagaing-Shwebo-Monywa-Sagaing (a fair-weather coastal waters. The Government is developing a extension exists from Shwebo to Kalewa-Tamu), scheduled coastal service. One ship now operates and the Meitktila-Taunggyi-Kentung (an all-weather between Rangoon and Arakan ports. When other road continues to the Thailand border). ships which are on order are received, the service wiU be extended to the Tenasserim. 4. AIRWAYS There are at present 32 airfields in addition to 2 RAILWAYS the new Mingaladon airport. These are of varying Prior to World War II, there were 2,060 route lengths and surfaces. Some of them are serviceable miles of government-owned railway of excellent only in the rainless months. All scheduled domestic standards. Owing to destruction by the Japanese service is by the government-owned Union of Burma and insurgent operations, only some 1,500 miles are Airways. AU services radiate from Rangoon, RESOURCES FOR BURMA'S DEVELOPMENT 15 departing from and returning to Rangoon on the as weU, much of the equipment and facihties was same day. UBA maintains daily services from obsolete. Transport, crude material extraction, large Rangoon to Bassein, Myaungmya, Mouhnein,Thaton industry, and the impoverished agricultural sector and Mandalay. It provides weekly or semi-weekly stood in need of technological improvement in services between Rangoon and Lashio, Magwe, varying degrees. Lanywa, Meiktila, Pakokku, , Kentung, Shwebo, Loikaw, Myitkyina, Tavoy and Mergui. 2. WAR DAMAGE This modest capital structure was largely 5. INTERNATIONAL TRANSPORT demoHshed by the war. Industrial facilities were Because Burma is hemmed in on the east, north, razed, oil wells plugged and mines flooded. Irriga¬ and west by mountain barriers, land traffic to or tion systems, forests, and agricuUural lands deterior¬ from bordering countries is negUgible. Three moun¬ ated for lack of upkeep. The transport system, which tain roads represent the only land communications bound the country together effectively before the of any consequence: the road to ThaUand through war, suffered extensive damage. Telecommunica¬ Kentung; the Burma Road through the Northern tions facihties were almost completely destroyed. Shan States leading to Yunnan; and the war-buUt Ledo Road winding through the northern hills 3. RECONSTRUCTION into Assam. Most international traffic is carried Since the war reconstruction has just begun to by sea and by air, and mainly under foreign flags. out-pace the ravages of postwar civU insurrection. The Union of Burma Airways has flights to Calcutta, Most of the rehabihtation, however, has taken Penang and Singapore. Many international airfines the form of makeshift reconditioning of old instaUa- operate from Rangoon. Several sea-going ships are tions along old lines. A few of the more modern on order for inaugurating a governmental shipping prewar enterprises are now being rejuvenated on service to India. an up-to-date basis—a Burmah Oil Company refinery, the Bawdwin mines and smelter, and the H. CAPITAL RESOURCES cement plant at Thayetmyo. In addition, several new Centuries of productive effort in Burma have investment projects have been undertaken by the added large amounts of man-made capital to her Government. The Mingaladon Airport is a first- natural resources; yet she is still markedly deficient class aerodrome, and a modern State Cotton Spin¬ in modern productive equipment. ning and Weaving Factory has been constructed and placed in operation. I. PREWAR CAPITAL For the most part, however, the capital resources Comprehensive data on prewar capital do not of Burma are inferior to those of prewar both in exist. However, its general nature and the role it quantity and quahty; meanwhile, technological played are well known. The clearing of forests and advance elsewhere in the world has widened the gap jungle and construction of embankments, canals, and between Burma and the more highly industriaUzed irrigation ditches constituted capital improvements countries. The value in 1952 of aU capital improve¬ in the land which accounted for much of its value. ments and equipment in Burma may be estimated at Together with agricultural equipment and hvestock between K10,000 and Kl5,000 milUons. The rate and with the buildings on agricultural lands, these at which this store of productive equipment is improvements formed a greater stock of capital increased, and the quahty of the new capital, wiU than existed in any other single group of economic in large part determine the success of the development activities. Considerable capital value resulted also program. from the work which had been done in opening up I. HUMAN RESOURCES forests for timber extraction and developing mines Of aU the economic resources of any country, and weUs. The development and improvement of by far the most important are the skiU, energy, roads, ports and waterways, and raihoads represented organization, and morale of the people. Where the a sizable investment, and served the needs of the inhabitants have been able and wilfing to apply prewar economy. Rice and timber mills, three oU themselves skiUfuUy, much has been achieved even refineries, a cement plant, and a large smelter were with meager resources. Where the people have been the only large-scale processing facilities, but small- untrained or without initiative, great physical scale and cottage industries, together with wholesale resources have not prevented national poverty. and retail trade and a variety of service estabhsh- Any summary of the economic potentiahties of ments had built up a large stock of capital, though Burma must therefore appraise the country's human much of it was crude and outmoded. In other sectors resources. 16 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA 1. SIZE capital equipment initially replace rather than The latest over-all data on the Burmese labor augment existing methods and productive capacity, force are those of the 1931 census; the 1941 census and consequentiy their introduction is far easier results, except for some summary information, to realize than in an economy where introduction were lost during the war. The first stage of a new of the new involves painful displacement of the census, whose three stages will require at least three old. Too rapid an increase in population will, years, has just been completed and some preliminary however, counteract the expansion of production results are available. However, it is only a partial and prevent the rise of the standard of living which tabulation limited primarily to the accessible large is the basic purpose of the development program. towns, and its results should not be taken as repre¬ sentative for the country as a whole. 2. LOCATION The results of earlier censuses indicate that in the Plate 3 shows the population of Burma by dis¬ past about 45 % of the total population were in the tricts and the density of population in each district working group. In 1941, the total population of in 1941. The horse-shoe of hills and mountains Burma was 16-8 million, the increase over 1931 separating Burma from her neighbors is very sparsely due to births and deaths being estimated at about inhabited, the densities ranging from around 50 14%, or f3% per year. At this rate of increase down to 9 persons per square mile. The bulk of the the 1953 population would be 19-7 mUhon. However, population is located between the Arakan Yomas net emigration, probably fewer births due to dis¬ and Chin Hills on the west and the Shan HiUs on turbed conditions, and higher death rates due to the east, from Rangoon north to Shwebo. There war and insurrection, suggest a figure of about is a high concentration of population in the agri¬ 19 million. At this level of population, the earlier cultural heartland—in the delta and north along 45% worker-population ratio, which probably has the Irrawaddy to the latitude of Mandalay and not changed radically, indicates a present labor small concentrations around Akyab and Moulmein. force of about 8-5 million workers. Densities in the main delta districts varied in 1941 The population wiU probably increase more from about 40 to 260 persons per square mile. rapidly in the future than before the war because They were similarly high in a few districts around of a lowering of the death rate, especially the infant Mandalay and in Akyab District. They are no doubt mortality rate, which will accompany improve¬ higher now. ments in preventive and remedial health services. Within this region and even more so in the rest A decline in the birth rate may also occur, but not of Burma, the population is overwhelmingly rural, until a later period. The percentage of the population scattered in small villages interspersed with towns which is in the labor force wiU be influenced down¬ of a few thousand inhabitants each. In 1931, 87% wards because a rapidly increasing population of aU towns and village tracts in Burma had popula¬ implies a greater proportion of younger non-workers, tions of less than 1,000 and accounted for over two periods of education and training for children wiU fifths of the total population; 97% had populations be longer, and perhaps a decreasing death rate wiU of less than 2,000 and accounted for about three have a greater immediate effect on the very young fourths of the total population. Since then, there and the very old than upon persons of working has been a migration into the larger towns due age. The size of the labor force may be expected largely to the quest for security from insurgency to increase at about the same rate as in the past, and dacoity. to about 9-3 miUion workers in 1960. Results of the 1953 census operations can be Burma is sparsely populated relative to its natural compared to those of 1941 only for 28 larger district endowments and in comparison with neighboring headquarters towns of which about the 14 largest countries. The average density of population per are the most populous towns in Burma. These data square mile in 1941 was 72, one of the lowest densities as well as the 1931 figures are shown in Table 1-12. in Southeast Asia. As the economy emerges from The total increase in population of these 28 towns its present under-developed status, larger and larger between 1931 and 1953 was 61%; between 1941 proportions of labor wiU be drawn from the relatively and 1953, they showed an increase of 37%; from unproductive bearer-type occupations into more 1931 to 1941 their increase was 18%. Immigration remunerative industrial and mechanized work. By into towns for security purposes has been of some this process an expanding consumer market based significance. Since these 28 towns are district head¬ on expanding consumer income rather than on quarters, as well as being among the largest in expanding population is created. In such an expand¬ Burma, they are the most secure. For this reason ing economy, new methods of production and new they have no doubt experienced the largest increases.

RESOURCES FOR BURMA'S DEVELOPMENT 17 The total increase from 1931 to 1953 for 49 other of unmarried persons in this group, their numbers towns for which a comparison could be made, and wiU not increase as rapidly as the national average which were smaller on the average, was 53%; but may tend to remain constant. About a quarter the increase for the rest of the country was probably of a miUion Chinese represent the only other large between 25% and 30%. Except for Rangoon, the non-indigenous race. There are some indications large percentage changes in town populations that immigration of Chinese has accelerated in the indicated apply to small numerical bases, and the postwar period. There is a very high concentration movement of rural population to those towns is of non-Burman races in towns. This increases their not as large as the percentage differences might proportion to Burmans in the towns and decreases lead one to believe. Thus, the total increase in popula¬ the proportion in the countryside. Many of the tion from 1941 to 1953 in the 28 towns is only some non-indigenous population have become or are 450,000, of which almost one half is attributable becoming citizens; the number of non-nationals to Rangoon; the increase in the population of the is much lower than of non-Burman races. rest of Burma was probably in excess of 1,500,000. For various reasons, the percentage of foreigners who are in the labor force is greater than the per¬ 3. RACE centage of native people. However, it is highly There are probably considerably less than a unhkely that the total number of workers of all miUion Indians and Pakistanis in Burma now— non-indigenous races is more than 750,000. Occupa- perhaps as few as three quarters of a million. In tionaUy, indigenous races have retained dominance view of immigration policies and of the large number in the traditional types of work. They virtually monopolize agriculture and constitute over two TABLE 1-12 thirds of the craftsmen. Under colonial rule they POPULATIONS OF 28 LARGER DISTRICT HEAD¬ lagged in the tasks of modern industry and modern government. Nevertheless, before the war they QUARTERS TOWNS, 1931, 1941, 1953* constituted at least one half of each of the major Percent Percent groups of workers other than agriculturists and Increase I lie re use Towns 1931 1941 1953 craftsmen: unskiUed and semi-skUled laborers, traders 1931 to 1941 to 1941 1953 and shop assistants, clerical workers, and the mihtary and police estabhshments. However, individual 1. Rangoon 398,967 500,800 711,520 25-5 42-1 occupations such as that of sweepers were dominated 2. Mandalay 147,932 163,243 182,367 10-4 11-7 by foreigners. While Burmans did not participate 3. Moulmeki 65,506 71,181 101,720 8-7 39-6 A. Bassein 45,662 50,277 77,382 10-1 53-9 proportionately to their numbers in some of the 5. Akyab 38,094 48,492 41,589 27-3 -14-2 more stimulating and rewarding occupations of 6. Tavoy 29,018 32,964 40,066 13-6 21-5 a modern economy, the same is true for some of 7. Henzada 28,542 31,114 60,666 9-0 950 8. Prome 28,295 31,144 36,762 10-1 18-0 the least pleasant and least remunerative occupations. 9. Insein 20,487 27,491 28,672 34-2 4-3 The most serious experience handicap is that top 10. Myingyan 25,457 26,895 36,439 5-6 35-5 managerial-administrative posts in industry and 11. Pegu 21,712 26,234 45,941 20-8 75-1 12. Toungoo 23,223 25,960 31,180 11-8 20-1 trade before the war were reserved almost completely 13. Pakokku 23,115 23,558 29,824 1-9 26-6 for foreigners; few Burmans gained the opportunity 14. Mergui 20,405 23,074 33,587 13-1 45-6 to exercise those talents which are so indispensable 15. Thaton 16,851 18,820 37,981 11-7 101-8 16. Pyapon 12,338 15,501 19,180 25-6 23-7 to economic progress, and whose cultivation is an 17. Sagaing 14,127 13,631 15,382 -3-5 12-8 important challenge facing Burma in her develop¬ 18. Shwebo 11,286 13,590 17,827 20-4 31-2 ment program. 19. Monywa 10,800 13,414 26,279 24-2 95-9 20. Meiktila 9,195 12,321 19,474 34-0 58-5 21. Thayetmyo 9,279 11,847 11,679 27-7 -1-4 4. SKILLS 22. Yamethin 9,291 10,126 11,167 9-0 10-3 It is difficult to describe the skiUs of Burma's 23. Myaungmya 7,773 10,066 24,252 29-5 140-9 24. Maubin 8,897 9,637 23,442 8-3 143-2 inhabitants in quantitative terms. A rather indirect 25. Magwe 8,209 9,353 V,??9 13-9 30-7 clue is provided by an analysis of the labor force 26. Tharawaddy 7,131 8,326 7,637 16-8 -8-3 according to the types of industries in which work 27. Kyaukse 7,353 8,117 8,668 10-4 6-8 28. Minbu 6,005 6,404 9,093 6-6 42-0 is performed. This information is obtained by the census on a countryside basis, and the Labor Directorate is developing a monthly tabulation of the number of workers in selected industries. *According to the complete data of the 1931 census, the first 14 towns were the largest towns in Burma at that time. The others Since because of depression, war, and insurrection ranked from 16th to 68th in size. there has been relatively little "upgrading" of R.3.—2 18 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA Burmese industry, the over-aU results of the 1931 sometimes requiring a high order of skill, are not census are informative. These show that 70% of the highly productive. labor force was employed in agriculture and related work, 10% each in the classifications of "industry" 5. WOMEN and "trade," and the remainder scattered in the The industrial potential of women workers as a minerals, petroleum, transport, professional, public group constitutes a particularly under-developed administration, and domestic service sectors of national resource. In 1931, about one half of the the economy. In "industry," most workers were population was female, and about one third of the occupied in home and small-scale production women were in the labor force. Since these pro¬ of textiles, mats and various handicraft pro¬ portions have probably not changed radically, ducts which do not constitute industrial pro¬ the present number of female workers may be duction in the usual sense of the word. Trade estimated at about three miUion. According to the in foodstuffs dominated the trade sector, a large 1931 census, which is probably stiU representative, part of which was of the rcr'l-side stall and about two thirds of the female workers were in hawking variety. agriculture where they constituted a fourth of the The latest tabulations of the Directorate of Labor, total workers. Most of the rest were in trade and January to June 1951, which are incomplete, apply industry. Because of the large number of women to about 700 larger estabhshments in industry, engaged in all sorts of petty trading, especiaUy mining, petroleum, transport, finance and motion foodstuffs, they constituted half of the total workers pictures. About 55,000 permanent workers are in trade. In industry also, they formed half of the accounted for and these are highly concentrated total by virtue of their near monopoly of spinning in transport and aUied work (50%) and in the rice- and weaving. This latter is by far the main "indus¬ milhng, petroleimi and saw-miUing industries (30%). trial" occupation of women, followed by work in the Temporary workers were even more concentrated food and tobacco industries and in the making of in these few industries. lacquer, baskets and other light hand products. These data are evidence of the weU-known fact Because they work in industries of relatively low that Burma has been primarUy a land of farmers, productivity, because within these industries they small traders and craftsmen. Only a moderately occupy the more poorly paid jobs, and because developed transportation system and a few organized much of their work is seasonal, contribution of industries for processing raw materials exist. These women to the national output and their share of sectors employ relatively old and non-complex total income is considerably less than in proportion techniques and equipment. The same is true for to the number participating. There is a large potential the traditional sectors of the economy such as for increasing national output by utilizing woman- agriculture, where present techniques, although power more effectively. CHAPTER II THE TASK AHEAD

A. ECONOMIC PROBLEM AND OPPORTUNITY minerals and timber. These were important contribu¬ Burma has won her crown of independence; tions. However, the British administration was iU- she is striving to adorn it with the jewels of expanded suited to full economic development. Profits were in output and improved levels of living and welfare. large part paid out in dividends or invested abroad, Her determined effort is part of a tremendous not ploughed back into the Burmese economy, except upsurge in the Far East which has been rising for in the industries producing directly for export. Capital several generations and reached a crest in World formation under western auspices has in any case War II. Asian peoples without political independence existed for only four generations, a far shorter are striving to achieve it; all are seeking economic period than that during which capital formation has independence and security as well. In some cases, been proceeding in western Europe. the obstacles to pohtical independence and Most top managers for foreign productive enter¬ sovereignty are weU-nigh insuperable. In others, the prises in Burma were brought in from Europe. In difficulties encountered in the attempt to achieve second-level management and technical functions, economic well-being and security are equally difficult Indians and Chinese from seacoast trading centers to surmount. In both respects, Burma is exceedingly were given experience; Burmans almost none. Indian fortunate. Her pohtical sovereignty is well-established cooUes willing and eager to work for wages too low to and unquestioned. Her magnificent resources offer support the Burmese standard of hving rushed into her a unique opportunity to achieve, along with Burma. Their availabihty lessened the incentive to economic independence, levels of living and welfare introduce technically advanced methods. In agri¬ hitherto unknown in Southeast Asia. culture, recognizing a great need, the Government The problems which confront Burma in exploiting encouraged cooperative societies, and when, mis¬ her potentiahties cannot be overlooked. The heritage managed through inexperience, they failed, the of the past weighs heavily. Government assumed the liabilities of the central cooperative banks. But pohtical principles of laissez 1. THE PROBLEM faire prevented the Government from going further Throughout her history, Burma's geographic to establish an adequate credit system, or from position isolated her from the changing modes and setting up the organization necessary to inculcate advancing techniques elsewhere. Like her neighbors, improved methods of cultivation in Burma's basic she was half-way round the world from the ferment industry. of technological advance brewing in western lands. In Thus Burmans entered independence with age-old addition, her mountain-locked land frontier and her technologies in most industries, and with truly withdrawn ocean boundary cut her off from the main modern technology in very few; without technical or streams of commerce among her neighbors and managerial "know-how" or attitudes; and above aU between them and the rest of the world. In these lacking the concept and practice of continuous circumstances, semi-feudal organization persisted technological advance. This concept, rather than late in her history; the full territorial organization merely mechanization or the accumulation of physical which is a requisite of government and society for capital is the basis of the high and advancing living advance in productive technology developed only standards in the industriaUzed countries of the world. recently. Nature was kind and bountiful, so that the World War II brought large-scale destruction and wherewithal of Uving could be lifted rather than ruin to much of Burma's productive plant, and wrested from the soil. Needs for shelter and clothing prevented necessary maintenance of that capital were few and easily satisfied with but a modicum of which was not damaged or destroyed. With independ¬ work. These factors tended to lessen rather than ence came the wholesale evacuation of virtually the stimulate the urge for technological advance. entire managerial, technical, and administrative The British colonial administration brought law and population. And when, despite this serious loss, Burma order; developed transport and communications; and made a substantial economic recovery in the early encouraged investment and increased output in the postwar years, civil insurrection Uquidated these gains extractive industries, notably in rice, oil, metaUic and laid the economy prostrate. 19 20 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA The destruction of capital in war and insurrection years at least, in the existence of a highly advantageous has been discussed in Cliapter I. Output experienced world market price for her chief export crop, rice. In comparable disruption. The output of the entire combination, these factors provide Burma with an economy in 1949 50 was 41 % below that before the opportunity given perhaps to no other sizable war. In the basic rice industry, acreage was down by undeveloped country in our time. WiU Burma, this one fourth, production by one third, and exports by golden land, take fuU advantage of this golden almost two thirds. Timber exports were only 8 % of opportunity? The chief objective of the plan for prewar; metals and ores 5 %; and exports of oil, which economic development presented in this Report is to before the war were one fourth of total exports in assist Burma to make the very most of it. value, had ceased. Further to add to the problem, Wherein exactly lies this opportunity? Certainly it known reserves of metallic minerals and oil have been does not lie in the opportunity to produce more and depleted to such an extent that extraction at the pre¬ more "things" merely for the sake of producing war rate will no longer be economic unless new them. The objective of the economic development plan deposits are discovered (see Chapter XXI). The fact must be to enable the Burmese people to live longer, that Burma, in spite of these repeated blows, has been healthier, happier lives; to provide more of the good able to rally as she has, increasing the total output of things of life—cultural and spiritual, as weU as goods and services by one third in three short years material—for themselves and their children; and to from 1949-50 to 1952-53, is the strongest possible insure that these benefits will be lasting, and available indication of her ability to meet the chaUenge of the in increasing measure, for their children's children. future. How can this be achieved? How can the cultivator be In spite of this remarkable gain, production, income assured of a more certain tenure on his land; easier and levels of living in Burma today are far below the credit; cheap fertilizer and improved seeds; healthier prewar level. The total output of goods and services in and more productive hvestock; greater output and Burma in 1952-53 wiU be approximately K4,297 income; better school and health facihties for his milUon or 20 % less than the K5,338 miUion of 1938-39 children; sanitary water and electric power in his (both measured in 1950-51 prices). Moreover, home; better roads and transport facihties to take him because of population growth during the period, to the vUlage or the market place; sufficient income to output per capita today compares far less favorably buy the many things he needs? How can the worker in with prewar than does total output. In 1952-53, the town be assured of a better and more productive output per capita will be approximately one third job; better pay; more sanitary and safer work below that of 1938 39. These figures are reflected in the surroundings; better housing; improved opportunities current levels of living of the Burmese people—in the for health, recreation and leisure? How can there be food they eat, in the clothes they wear, in their housing assured to every individual the economic freedom that in their educational and medical services, in every makes reality of his equal right and opportunity to aspect of everyday hfe. This is the situation which contribute his creative talents to the advancement of Burma's plan for economic development must over¬ mankind in full and equal competition with his feUow come. man? The development plan must provide answers to 2. THE OPPORTUNITY these questions. It must make possible these improved If the problems which face Burma are great, her levels of living, and welfare, and human aspiration for opportunities for overcoming them are even greater. all the people of Burma. In order that the improve¬ Her natural resources (described in Chapter I) are ments it seeks to effect shaU be of a lasting character, enviably abundant. Fertile lands, rich mines and it must seek also to effect a balanced development— forests, excellent ports and waterways, water re¬ in which every productive sector (agriculture, forestry, sources ample for irrigation and electric power—all mining, industry and trade) and every geographic these in abundance in relation to the population they region will participate and share. must support—can contribute richly to Burma's future. Burma's workers have demonstrated that they B. DEVELOPMENT GOALS have the intelligence and the aptitude to learn the The Government of the Union of Burma has skills and the techniques necessary to efficient accepted specific goals for the development of Burma's production. Burma's financial situation is sound. productive resources during the remainder of the While her capital equipment is seriously deficient, she present decade. Such goals are necessary if the largest has and wiU continue to have the means to buy the possible contributions are to be made to the weU-being improved equipment she needs. In this respect she is of the Burmese people in the years immediately uniquely favored, and wiU continue to be for some ahead. With such goals set, the means for their 300 I-

Szoo — I 00 lO 0> b. O z uUJ 100 UJ Q.

0 •- 1938-39 1946-47 1947-48 1948-49 1949-50 1950-51 1951-52 FISCAL YEARS

LEGEND

VALUE MINISTRY OF NATIONAL PLANNING GROSS DOMESTtC PHYSICAL OUTPUT PRODUCT VALUE AND PHYSICAL OUTPUT KNAPPEN TIPPETTS ABBETT ENGINEERING CO. NEW YORK RANGOON OR BY ^^^ DATE PLATE CK.BYe^-^ JUNE 53 NO. 22 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA fulfillment can be elaborated, the appropriate policies wiU permit the development program to continue at a formulated, and the activities necessary to assure high rate in spite of the necessity for a large defense their fulfillment instituted. program. Because of it, the considerable increase in In 1951 a comprehensive evaluation was made of defense expenditures does not require any major the resources and productive potentials of Burma. change in the goal for the development program. The outgrowth of that early examination and review However, balancing these several factors, and espec¬ was the Preliminary Report submitted early in 1952, iaUy because of the delay in attaining internal security, in which it was recommended that Burma should it seems prudent to defer slightly the target date for strive for a level of total production of some K7,000 reaching the prewar level of output. The fiscal year miUion (in 1950-51 prices) by 1959. This was an 1959 60, rather than the calendar year 1959, is there¬ ambitious goal, almost 90% above the 1950-51 level, fore used as the target date in this Report. but it was also believed to be feasible. It was based While the goal is expressed in material terms, there in part on a judgement that K7,500 million of is full appreciation of the cultural, spiritual and moral development expenditures necessary to achieve the objectives associated with the basic wants and needs goal could be financed and disbursed by 1959. During of the people. The first expression of the development the eighteen months intervening since submission of goal is in terms of physical production, measured for the Preliminary Report, the feasibility of this goal simplicity's sake in money terms, but the basic has been given further and thorough study. Three objective relates to the education and health, the developments during that period have altered the security of shelter and clothing, and the fulfillment of economic basis underlying the original estimates of other wants generally comprehended in the ex¬ feasibihty. pression "standard of living." As physical wants are (1) The original estimate was based on the assump¬ satisfied, opportunities for creative self expression will tion that insurgency and internal disorder would be multiply, Burmese culture, letters and science wiU add substantiaUy eliminated by the end of 1953. While the their contribution to the progress of civilization, the restoration of internal security and order have people of Burma wiU enjoy a more satisfying and more progressed greatly during 1952 and 1953, they are not abundant life. at the stage assumed in the original estimates. (2) To accelerate pacification and to meet the ]. THE GOAL IN TERMS OF OUTPUT AND CONSUMPTION KMT menace, defense expenditures have been more than doubled (from 1951-52 to 1952-53), and The major goal for the increase in the total output constitute not far from half of total budget expendi¬ of goods and services in Burma is accomparued by tures for both current and capital purposes. These other goals relating to per capita output and to total defense expenditures may remain at a high level for a and per capita consumption. These are shown by number of years. In the presence of civil disorder, Table II-l, in relation to comparable figures for they are among the most productive expenditures 1938-39 and recent years. which the country could make; but the necessity of TABLE II - 1 devoting large numbers of men and large amounts of material resources to defense diminishes the size SELECTED GOALS AND COMPARISONS of the developmental program which the country {1950-51 prices) can support. 1938-391950-511951-521952 5i| 1959-60 (3) On the other hand, a study of the prospective I world supply of and demand for rice gives promise of Gross Domestic Product higher prices and larger earnings from rice exports— Total (million K) 5,337 3,710 3,927 4,295 7,000 available to finance the development program—than Per Capita 326 201 210 226 i 340 had originally been estimated. Prices have already Consumer Purchases faUen somewhat from their record level of late 1952 Total (million K) 3,382 2,693 2,745 2,964 4,663 and early 1953 and some further faU may occur during Per Capita 206 146 147 156 224 coming years, but a continuation of prices much higher in relation to import prices than was true Achievement of the total production goal of K7,000 before the war and considerably higher than was miUion by 1959-60 wiU require an increase of 88 % assumed in making the original estimate, seems over the level of 1950-51 and of 63% over the assured. estimated 1952-53 level. It wiU represent an increase of This favorable development wiU considerably 31% over prewar. increase the annual rate of capital plus defense Achievement of the per capita output goal of expenditures which the economy can support, and K340 in 1959-60 will require an increase of 69 % over FALL AND RECOVERY IN LIVING STANDARDS 300-1 ConsumDtion Per Capita

224

2 00-

I CO¬

OT o a: a. m 1938-39 1950-51 1951-52 1952-53 1959-60 Estimated GOAL 400-1 o (J) Output Per Capita 340

V) 300- < >

200-

100

1938-39 1950-51 1951-52 1952-53 1959-60 Eslimoted GOAL

MINISTRY OF NATIONAL PLANNING

FALL AND RECOVERY IN LIVING STANDARDS

KNAPPEN TIPPETTS ABBETT ENGINEERING CO NEW YORK RANGOON DR BY. E.J.P. DATE PLATE O CK BY. I.L. JULY. 53. NO. £

23 24 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA 1950-51 and of 50% over estimated per capita output services such as education and health instead of being this year. It wiU represent, however, only a 4% left to the individual. If so, private expenditures for increase over prewar per capita output. consumption may be less than shown in Table II-l, Achievement of the total consumption goal of social services to consimiers having replaced them. K4,663 mUhon by 1959-60 will require an increase of (e) In interpreting the 1959-60 consumption goal, 74 % over 1950-51 and of 58 % over that estunated for less than 10% above the prewar figure, it must be 1952-53. It vidll represent an increase of almost 38% remembered that this is an average increase, and that over prewar. averages conceal a number of internal differences. Achievement of the per capita consumption goal Because of new progressive tax measures and because of K224 by 1959-60 will require an increase of 54% of new social services provided without charge to the over 1950-51 and of 44% over that estimated for mass of the people by the Government, the distribu¬ 1952-53. It wiU represent an increase of about 8-5% tion of income and of economic benefits wiU be more over prewar. equal than before the war. If these pohcies are Afewobservations wUl make clearer the significance effectively carried out, classes and individuals who of these goals: had far larger than average incomes before the war (a) It wiU be noted that the planned increase in wUl not enjoy the increases shown; lower income total output and in total consumption above the classes will enjoy a somewhat larger percentage prewar level are considerably greater than are the increase. planned increases in per capita output and con¬ There are hmits, however, to the benefits which can sumption. This is because Burma's population has be achieved through such redistribution of income. grown considerably since before the War, and wUl The degree to which redistribution of income can continue to grow. Hence Burma must increase output advantageously be effected is hmited. The prospect of and consumption commensurately with population increasing one's income is a powerful incentive to growth just to maintain per capita output and investment and to efficient production, and if pro¬ consumption. Per capita output and consumption gressive taxation is so heavy that it makes it difficult can increase only to the degree that increase in for the owner of an enterprise to increase his income total output and in consumption exceed population after taxes, or if other measures reduce too greatly growth. his incentives, private investment wiU dwindle, (b) Though the goals set seem extremely ambitious production will be less efficient, prices will be higher, in relation to the levels of recent years, they are more and the mass of the people wiU suffer. modest when compared with Burma's achievement However, the most absolute hmitation on the prewar. redistribution of income as a method of raising the (c) The remarkable increase in output achieved standard of living is that it cannot bring about an since 1950-51 testifies to the resifiency of the economy, increase sufficient to make a significant contribution and is strong evidence that the goals can be achieved. to hving levels in general. If the entire income of the (d) In 1959-60, with output per capita only 4% weaUhy in Burma were taken in taxes and distributed above prewar, consumption per capita will be above in government services or in cash among the nineteen prewar by 8-5%. This is because a larger share of nulhon people of Burma, the increase in income per income will go to consumers in Burma and a larger person would be very smaU. The wealthy are few and share of output wiU therefore be purchased by the poor are many. Burma simply does not produce consumers. Before the war, a considerable per¬ enough goods to yield a high income. Maximum centage of income flowed to foreign firms as profits, production of which Burma is capable whh present as is evidenced by the fact that in addition to the methods of production cannot yield a high level of large sums invested abroad annually, primarily by hving, no matter how equitably the income from it is foreign firms operating in Burma, a significant share distributed. The benefits from optimum distribution of of the gross national income (in 1938-39, 6%) was income will be small compared to those from a paid as dividends or interest to foreign owners of comprehensive development program. companies operating in Burma. With the nationaliza¬ tion of many large enterprises, it is estimated that a 2. THE PROGRAM FOR ATTAINING THE GOALS smaller share of the nation's income wiU be retained Why were these goals selected? Why is per capita as profits and a larger share will flow to consumers. output just above the prewar level deemed feasible It may be that the social welfare program wiU have by 1959-60, rather than 1964-65? Or why not achieve proceeded far enough in 1959-60 so that a heavier it by 1956-57? The answer is that attaining the share of income than now estimated is taken by the necessary productive capacity wiU involve large Government in taxes and used to provide social developmental projects. These projects will involve MARKED SHIFT FROM PREWAR TO POSTWAR.

PROVISIONAL PLANNED '338-39 1950-51 1951-52 1952-53 1953-54 -I 100

80

if If 60

40 U o

UJ 0.

- 20

-L -I 0 ''**° 3.710 4,116 4,650 5,200 GROSS OUTPUT IN MILLIONS OF KYATS

Income paid to owners abroad (Negligible in postwar years) Export proceeds invested or deposited abroad. Capital formation in Burmo (Governmental and private) MINISTRY OF NATIONAL PLANNING Current Government expenditures.

Consumer expenditures. HOW BURMA USED ITS GROSS INCOME KNAPPEN TIPPETTS ABBETT ENGINEERING CO. NEW YORK RANGOON DR.BY £.J.p DATE PLATE CK.BY f.L. JULY '63. NO. 25 26 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA heavy purchases of materials and equipment abroad, will stimulate investment in a great variety of fields employment of large amounts of labor and natural and projects. As national income rises and security resources at home, and great managerial and technical improves, individuals will also increase their expen¬ abihty. It is beheved feasible to carry out the necessary ditures for housing and for related improved living expenditures by the end of this decade, but impossible facilities. Improvement in transport and communica¬ to do so in a shorter period. The program set forth is tion facUities, included among the key projects, wiU not an easy one, but it is believed to be a possible one. permit and stimulate many new productive ventures. The availabihty of the necessary foreign exchange and Development of hydroelectric and other power the necessary quantity of domestic resources is sources wiU foster the development of new cottage discussed in Chapter III. The availability of managerial industries and manufacturing industries. In these and and technical skills is discussed in Chapter VII. many similar ways, the key programs recommended These developmental expenditures wUl include here will evoke and be complemented by a great primarily expenditures for addition to the nation's variety of capital expenditures by individuals, firms stock of physical capital; its buildings, equipment, and the Government. tools, and man-made improvements in natural The projects and efforts involved in the entire resources. They wiU also include expenditures for development program may be classed for convenience research and for education and training in skiUs and into four groups: productive projects planned by the techniques—especially for expanded professional, central Government (but not necessarily executed in technical and vocational education and for a greatly every case by the Government); other productive enlarged agricultural extension program. Other projects; and social projects—houses, schools, health chapters of this Report stress the importance of these and medical facilities, water supply systems and other activities. It would be a serious error to plan a community facihties—which may likewise be sub¬ development program primarily in terms of added divided into those centrally planned and others. The capital, without adequate provision for these corollary individual projects discussed in this Report belong actions which provide the technical, scientific, and with the first group. Most of the expenditures for educational climate without which an industrial these planned productive projects will be govern¬ society cannot successfully flourish. To economize on mental; some will no doubt be private. The variety of expenditures such as those for agricultural extension other projects referred to will be planned by the or for vocational and technical education in order to person or persons concerned, but will be unplanned free more funds for capital development projects in the sense that they wiU not be individuaUy identified would be pya-wise and kyat-fooUsh. in a central master plan. They will be typicaUy smaUer The development program recommended in this than the planned projects, but in the aggregate they Report includes both specific projects and a broad wiU provide a large share of the increase in the program in all sectors of the economic system. During country's productive capacity and output. A develop¬ the period of its development program Burma must ment program which ignored them, or faded to improve and augment its capital equipment and its estabhsh conditions favorable to their execution, methods in many fields. Key projects in the fields of would be incomplete and unbalanced. transport, communications, power, irrigation, mining, Social capital projects wiU also be both planned and industry, fishing and forestry are discussed in this unplanned. The Government's housing program wiH report. Those recommended wiU cost a total of about provide only a small fraction of the needs of Burma's K3,000 miUion (see Chapter XXV). growing population for replacements of and additions No one should suppose, however, that these planned to present housing. Unplanned private construction productive projects can or should constitute the whole (controlled in the main however by the community of Burma's development program. Partly as a result planning of individual conomunities) wUl provide of the key projects, partly as a result of the steady much the greater share of the nation's new housing. improvement in security and order, and partly as a In the other fields of social capital, planned govern¬ result of the stimulus provided by a general rise in mental ventures wiU predominate. national income and in the market for products of all The Government's plans for the economic develop¬ kinds, individuals and firms will also carry out on ment of Burma must take into account not only its their own irutiative from month to month and year own planned expenditures for productive and social to year many, many projects of repair, rehabilita¬ caphal, but also the prospective expenditures of tion and expansion of both old and new productive individuals and firms which Government pohcies will ventures in almost every field of production, trade and do much to stimulate or retard. The amount of services. The rise in income wiU create increased capital formation by Government which will be purchases and demands for new types of goods which necessary to reach a given goal for the nation can be THE TASK AHEAD 27 estimated only if the private capital formation which housing from decreasing, and is not included in the will aid that goal is taken into account. The total estimate of the required increase in the nation's amount of resources which the people and Govern¬ capital. The program also does not include expen¬ ment of the country in combination will be wiUing ditures for buddings and capital equipment for the and able to divert from current use for developmental nation's defense forces, except to the extent that they purposes is hmited, and the capacity of the country to will later be useful for civihan purposes. support any one of the four groups of developmental The estimate of K7,500 mUlion assumes that the expenditures must be gauged in the light of its total program recommended wiU be completed by 1959-60. developmental program. No one class of projects can This assumption is one determinant of the size of the be taken as an absolute requirement, before which the program. If Burma were to decide to spread the other categories must give way. Each class of projects program recommended here over a longer period of must be considered in relation to the others, and total years—completing it by say 1961-62—the same developmental expenditures must be considered in investment would not yield the same standard of relation to total national income, to uses of income hving. By 1961-62 a larger amount of developmental for current purposes, and to the nation's foreign expenditure will be needed—for in the intervening two exchange resources. years the population wiU have increased by more than Burma's capital needs are reduced by the fact that 500,000 persons, and added capital and added her rich agricultural, mining, and timber resources productive opportunities will be required. wiU yield returns with relatively smaU capital invest¬ A corollary of this fact is that, having attained the ment; a country with poorer resources would have to goal by 1959-60, Burma wiU not remain there by employ a greater quantity of capital to gain a given standing stiU. She must add capital and new productive return. Her capital needs are also lessened by the jobs year by year at a rate equal to the population absence of population pressure; an over-populated increase, merely to keep the standard of living from country requires far more social capital relative to its faUing. To continue to raise the standard of hving she total production and income. On the other hand, must provide capital and improve methods to continue Burma requhes large expenditures for transport and to increase the productivity of workers in existing communication facUities to bind together the long jobs at the same time that she provides the capital and country cut by ranges of hills. One aspect is of especial opportunity for added jobs. Burma's development importance: in agriculture and some other fields it is program, like that of every progressive country, must possible to rehabilitate the productive equipment and be a perpetual one. Only the first and most difficult restore prewar productive capacity with far less step wiU be completed by 1960. investment than would be necessary if the land were The total program for 1953-54 to 1959-60 is being opened up or the productive capacity being presented in Table II-2, broken down into three created for the first time. major fields of investment. In view of these various considerations, it is estimated that total development expenditures required TABLE II - 2 to carry the economic system forward from its DEVELOPMENT PROGRAM EXPENDITURES position at the beginning of 1952 to an output of 1953 54 to 1959-60 K7,000 million by 1959 60 wiU be K7,500 milhon. Of {millions of kyats) this amount, expenditures totaling about K900 Planned productive projects 3,000 milhon have been carried out in 1952 and thus far in Unplanned productive projects 2,950 1953. Expenditures of about K6,600 million remain to Social capital 650 be carried out during the seven fiscal years 1953-54 through 1959 60, K940 mUhon per year, or about one Total 6,600 sixth of the prospective gross national income during the period, a feasible level, as indicated in Chapter III. Planned projects should not be regarded as neces¬ This program includes only the net increase required sarily governmental projects. In the field of trans¬ in the nation's physical capital. Total capital forma¬ portation, communication, power, irrigation and tion wUl have to be greater to offset the depreciation mining, the Government itself will no doubt carry out, of existing capital through wear and tear and to either alone or possibly in joint ventures, all of the obsolescence which goes on year by year. For example, larger and therefore planned projects. In other fields, since bamboo and thatch houses have a hfe of only however, and especially in manufacturing, the Govern¬ three to five years, new housing construction equal to ment may choose in a number of cases to encourage one third to one fifth of the total number of such and aid private ventures rather than to enter them houses is needed simply to keep the nation's supply of itself. The tabulation therefore does not give an 28 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA indication of the precise division between govern¬ expanding employment and production have brought mental and private expenditures. an increase of one third in the nation's output and This, and the precise allocation of governmental income. But the country is not yet fully secure; in expenditures between productive and social capital many areas production is still hampered. For the wiU be decided by the Government on grounds which immediate future, completing the fuU restoration of are in part neither engineering nor economic in security and providing the capital needed for imme¬ nature. However, the indicated division of the total diate renewed employment will continue to be the program between broad fields suggests the general most important single step in raising the level of nature of the aggregate program which will be found welfare in Burma. advantageous. A second source of unemployment and under¬ The plan for economic development must include employment has been the fact that in the crippled not only a plan for the total amount of developmental economy, aggregate income was too low to stimulate expenditures but an effective allocation of those enough purchasing by consumers to keep available expenditures between governmental and private, workers busy. Throughout Burma, cottage industries between planned and unplanned, between productive have been partially idle because people did not have and social, between industries, within the planned area enough income to buy their products. The remedy for between individual projects, and between successive this situation is the development expenditures them¬ time periods. The principles on which such an alloca¬ selves and the continued reclamation of agricultural tion should be made are clear, though their applica¬ lands. As development expenditures and exports rise, tion is complex. They are discussed in the succeeding the resulting injection of added income into the paragraphs. economy wUl stimulate activity.

C. ACHIEVING MAXIMUM OUTPUT: GENERAL 2. INCREASING PRODUCTIVITY CONSIDERATION The second way in which income and living No nation, except as it receives grants from other standards in Burma can be increased is by increasing nations, can regularly consume more than it produces, the productivity of production. If through the for the goods wiU not be made available. On the other introduction of better methods into a factory, one hand, if production increases, with economic policies hundred workers can turn out more goods than before, so managed that all goods find a market, income will they can be paid higher wages, or the products can be increase commensurately and hving standards can sold at a lower price, thus benefiting others. If, rise. Because of these facts, Burma's standard of through the introduction of improved seeds or living wiU depend on Burma's total production. The improved farming methods, cultivators can obtain development program is aimed at increasing Burma's increased yields, they will obtain higher incomes and productive capacity in the maximum possible degree. live better. If a new industry is more productive than existing ones, it wiU produce products at lower cost or 1. RESTORATION OF NORMAL EMPLOYMENT yield higher incomes. These are merely simple exam¬ The first of the two ways in which this can be done, ples of a general truth. In each case, better methods and the most important immediate task of the develop¬ are the key to greater productivity and higher living ment program, is to restore to normal employment standards. In Burma, except in the exploitation of those persons now unemployed and the much larger mineral resources, methods have improved httle number now underemployed. When a man who has during the past century. The key effort of Burma's been involuntarily idle or partially idle is again able to development program must be to increase produc¬ resume productive work in agriculture, mining, tivity. industry or trade, he earns additional income at the Productivity may be increased in three ways. One, same time that he increases the nation's production. the most obvious, is to take up the slack in existing As a result of his added expenditures, the market for idle productive capacity by raising farm prices. (For goods is expanded. Production, demand, and living example, a rise of 5 % in the incomes of two thirds of standards rise hand in hand. the people should, in itself support an increase of Two conditions in Burma other than destruction of production of 10% by the remaining one third of the productive equipment have been obstacles to restora¬ population.) Another method is to introduce new tion of the normal level of employment. One is civil industries which can produce goods in Burma more disorder. The Government has been acting vigorously cheaply than they can be imported, or in the case of and effectively to restore order. Since 1949, as the export products, at low enough cost to compete in Government has freed for productive uses areas of the world market. The third is improvement in the country which were in the hands of insurgents. methods of production in existing industries. THE TASK AHEAD 29 It is a common misconception, held in Burma as rate at which Burmans can gain technical and man¬ elsewhere, that the introduction of almost any new agerial training and experience. As income in Burma industry to manufacture within the country a com¬ rises, the domestic market will increase and more modity previously imported makes the commodity industries wiU become economic; but this is a gradual available to the people more cheaply and benefits the process. Except graduaUy and in the long run, new country. This is erroneous. If a commodity is industries can employ only a very smaU fraction of imported, labor and natural resources must be Burma's workers, can produce only a very small share devoted to producing exports in order to pay for it. If of the goods Burma needs, and therefore can contri¬ it is produced within Burma, labor and natural bute only a small amount to raising living standards. resources are stiU required; they must be devoted to Introduction of new industries must proceed, but it is the production of the commodity itself If the cost of not the major road to raising living standards. The production at home is greater than the overseas cost major emphasis must be on the improvement of plus the cost of transportation to Burma, production methods in the types of production which now employ at home burdens the economy and lowers the standard the great majority of Burma's workers. Of these the of hving. Only if the cost of production at home is major one is agriculture. lower is there a benefit. The introduction of new methods must not be The contrary impression is inherited, in Burma as thought of as a process of taking care of the matter elsewhere, from a period when ill-informed rulers once-and-for-all-time by the introduction of "modern" tried to insulate their countries from the world. In methods. "Modern" methods cannot be introduced at Burma, as in western Europe, several centuries ago, one sweep; in many industries they will not be kings were mercantihsts. The germ of truth in the efficient until the literacy of the population and the idea that production of as many things as possible level of its technical training have been raised and the within the country is an advantage, lies in the idea country has gained experience in a new set of auxUiary that it will save foreign exchange. This is an advantage or service industries. Further, "modern" methods do only to the extent that the product can be made more not remain modern. The best industrial machines wiU cheaply locally, but saving foreign exchange is be outmoded in twenty years; the best present strains commonly done at the expense of living standards. of seed and the best agricultural methods wUl gradually The experience of other countries indicates the be replaced by better ones. Burma must not adopt wisdom of exporting one's speciaUies and depending methods that are now the most efficient, and then on other countries for other products. The eight stagnate. She must adopt practices and attitudes and countries in the world with the highest living standards methods of training which will induce her producers are the United States, Australia, Canada, Denmark, to be forever dissatisfied with "the best" and to seek New Zealand, Sweden, Switzerland and the United continuing improvements in materials, methods and Kingdom. Every one of the eight except the United products. States is notable for its dependence on imports for a There is no known limit to possible improvement large share of its needs. The United States, because of in materials, methods and products. Improvements in the enormous variety of climate and resources within methods go on year by year. The improvements in its borders, produces aU but a smaU percentage of the methods are not aU spectacular; many of them are commodities it needs. But if the United States were small. The important fact is that they continue. The divided into eight countries, each with a population standard of living increases as a result, year by year slightly greater than that of Burma, the foreign trade and decade by decade. Each generation is better off of each with the others would be exceedingly great. than the one before. Every man can look forward to Like the other countries mentioned, each area of the the prospect that his children will live better than he United States has achieved a high standard of living did, and his grandchildren better than his children. by depending on other areas for the commodities for This must come about in Burma also. Burma must whose production it is not best suited. become a progressive nation, so that her people not For Burma, introduction of new industries, only live better in 1960, but look forward to continued especiaUy some manufacturing industries, wiU contri¬ improvement, without limit. bute to a rise in living standards. Industries introduced Initial improvements during the remainder of this should be those for which Burma offers not merely decade should be many and varied, pervading ahnost the necessary raw materials but over-all productive every industry. In agricuhure, they must include some advantages, and also a large enough domestic market large projects and large changes. Of these the main to make the industry economic; plus the very few in¬ ones are large irrigation projects and steps toward dustries which can compete in the world market. The mechanization. But the program must not be confined rate of their introduction should be limited by the to these. The revolution in agricultural methods 30 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA which is needed in Burma must stress such steps as in one field may involve expenditure for capital the introduction of improved varieties of plants, the equipment; in another, expenditure for training adoption of seed selection practices, the use of in new methods. In most, it wiU require both. commercial fertihzers, better preparation of seed beds, There must be no more hesitation to spend money green manuring and the use of available compost to create human abUities than to invest it in tractors materials where appropriate, the liming of highly acid or dams. soils, the use of improved implements, better crop Though increasing productivity is the only road to rotation, better soil conservation, more eflficient continuing increase in hving standards, it will not storage practices, a many-sided program of disease, invariably be welcomed. An age-old fear has haunted insect and rodent control, and countless other fairly the worker who has seen improvements in methods simple steps. Creating the human organization increase output; namely, that less labor will be needed, necessary to bring about such changes by practical and that he will become unemployed. If this were guidance and demonstration in every village in Burma truly the typical result of improvements in methods, must be an integral part of Burma's development unemployment should be widespread in aU econom¬ program. ically progressive countries. In western Europe, In other industries also, both large and smaU workers in some industries turn out five or ten times changes in methods must take place. To cite a few as much product as did their predecessors a century pertinent examples: in fishing, it may be possible to earlier. The result has been not that four fifths or nine achieve considerable increase in productivity through tenths of the labor force is unemployed, but that the development of a deep-sea fishing industry; in salt hving standards have risen by five or ten times. making, increases in productivity may require the Workers not only can produce five to ten times as construction of salterns to replace the primitive much; they also have enough income to buy five to ten methods of evaporation now used. Advances in times as much. weaving may involve not merely the introduction of Yet for individual workers technological unemploy¬ modern factories, but also a large number of smaU ment may exist. And in a partially stagnant economy, improvements in small-scale production methods. when new investment does not keep pace with the Improvements in construction may involve standardi¬ savings available for investment, technological un¬ zing millwork such as window frames and doors into a employment may develop for many workers and few standard shapes and sizes, and investing in the worker groups. necessary machinery to produce these standard items The significant point for Burma is that the develop¬ on an assembly-line basis. ment program, if carried forward at an appropriate The installation of improved telecommunications pace, wiU eliminate any real possibihty of a lack of equipment will increase not only the productivity of demand for the services of workers because of persons employed in telecommunications, but of those technical progress. It is unhkely, in Burma, that the in every industry in Burma who need to communicate demand for goods will increase less rapidly than wiU locally or between cities by telephone or telegraph. productive capacity. But if at times this should be the Improvement in the organization of postal service can case in certain industries, so that unemployment similarly increase the productivity of everyone in develops, then more workers can be used on develop¬ Burma who uses the mails. Improvement in the road ment projects. None need ever be idle for long periods system and in railways and river transport will have a for lack of demand for their services. similar effect. The time lost by delay in a telephone There may nevertheless be problems of adjustment call or delivery of a letter, or by delay in the transport for individual workers who must shift from one of goods, reduces productivity and reduces the income occupation to a new one. The Government should in which an industry can pay to its workers just as such cases take steps to aid the transfer of workers surely as does an ineihcient method in a factory or on to a new occupation, and may properly grant them a farm. financial aid during the process. Other forms of aid or In trade and in the services, productivity may unemployment compensation may be devised to increase not only through improvements in transport insure the individual worker against the hazards of and communication but also through simple devices temporary dislocations until he can adjust himsehto a such as the adoption of more systematic stock new situation. There need be no threat of hardship to records so that less labor is involved in handling the individual worker if adequate social planning stocks and more efficient service to the consumer is accompanies the technological changes. An advance assured. Among these and aU other improvements in which will raise the standard of living of workers in productivity, some require much additional capital, general should not be barred by temporary incon¬ some httle, and a few none. Increase in productivity venience to the few. THE TASK AHEAD 31 D. CRITERIA FOR THE SELECTION OF short-run expenses involved in training such workers, PROJECTS technicians, and managers to original investment, Certain well-defined criteria are tests of whether a rather than to current operating costs. However, project will be advantageous to Burma. They have the more technical and complex the production been applied in formulating the development program. process in a given industry, so that a large number of In this section, they are listed and discussed briefly, experts with a high degree of professional and scienti¬ and the technical and economic interrelations between fic education and experience is necessary for efficient them are then discussed at greater length. production, the more difficult the problem becomes. Burma's own supply of technicians trained in indus¬ 1. THE CRITERIA trial sciences is extremely small; with even the most Within the limits of Burmese labor supply, natural intense efforts, which should be and are being resources, and present productive facihties, the exerted, it cannot be increased rapidly. The need following factors have been considered in selecting for such technicians during the next generation will projects: be much greater than Burma can meet; this must (a) Suitability of climate, soil, and natural be one factor determining the order of priority resources. of the steps in her continuing development. Similar (b) Adequacy of market. considerations apply to management. The manage¬ (c) Adequacy or potential adequacy of transport. ment of a modern productive enterprise is a complex (d) ObtainabUity of power. and exacting job, demanding years of experience (e) Obtainabihty of skiQed labor, technicians and and a combination of talents possessed by only a managers. few men. Without top quahty management, the (/) Obtainabihty of complementary facilities to best designed venture may fail. The availabihty of service complex and technical processes. management is as necessary as the availability of (g) Economic feasibility of foreign material or raw materials or transport or power. equipment purchases. Many modern manufacturing industries depend A few examples of the effects of these criteria not only on technical skiffs within themselves, but may be presented. The more favorable the country's upon service or auxiliary functions by other complex natural resources for any given industry, the better industries which have grown up to serve an industrial its prospects. Because Burma's climate is so varied, network over generations. For any technologically most types of agricultural production can yield high complex industry, an important question therefore income in some locahty in Burma, if the proper is the avaUabiUty or possibility of introducing the methods of production are used. Manufacturing or necessary auxiliary industries. processing industries for which good raw materials The peculiarly fortunate world situation in which are available at low cost, for example pulp and paper Burma finds herself at the time of her great develop¬ manufacture, wUl yield greater income per person mental effort makes unnecessary any Spartan engaged than ones for which materials cost is high. abstention from foreign purchases. Burma's present Other things being equal, low transport and power and prospective foreign exchange position is strong, costs, made possible by favorable transport routes or as Chapter III makes clear. There wiU be no need power sources, have much the same effect as low raw during the coming decade for her to avoid any materials costs. The existence of a market in Burma project because of the foreign materials required, or nearby may be of crucial importance even if some nor to introduce any new industry solely because factors relating to production in a given industry are it wiU reduce imports. No industry need be intro¬ less favorable in Burma than elsewhere. duced unless it will be sufficiently efficient to help An otherwise advantageous new industry, or raise the standard of living. It wiU be desirable when use of new methods in an old industry, may suffer purchasing materials or equipment abroad to give a temporary disadvantage in Burma because skilled preference to purchases from non-dollar areas, but and technical labor of the types required are not even this need not be a rigid requirement, as Chapter available. In general, this factor should not be given III indicates. great weight, since labor can be trained, and indeed The selection of projects must of course be based must be trained, in new skills if new types of industry on an engineering and economic study of aU of the are ever to be introduced. If an industry, once other criteria. No one factor or its absence is deter¬ estabUshed, wiU be advantageous, temporary ineffi¬ mining; the degree to which every factor is present ciency while the necessary skills are being acquired, and the effect of all in combination must be con¬ or rather while skill is steadily increasing, is a price sidered. While the criteria are simple, their quantita¬ well worth paying. It would be proper to charge tive evaluation and joint application is often complex. 32 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA 2. TECHNICAL COMPLEMENTARITY but because cheap power is pecuharly important Moreover, no one project can be properly in furnishing opportunity and stimulus for the evaluated in isolation. The development program is creation of new efficient industries and for reduc¬ greater than the sum of its parts. The contribution tion in costs and increase in income in many of which a given project can make to the standard of the country's existing basic industries. Conversely, hving in Burma depends not solely upon that project power developments are feasible because new power- considered by itself, but upon its relationship to using industries wUl provide enough demand for the program as a whole. Many advantageous pro¬ power to make power projects economic. Power jects must be complemented by other projects. Many projects and the industries using them interlock; projects which would be wasteful if constructed each is advantageous because of the other. The alone are essential and advantageous if other pro¬ planned amount and nature of expenditures on jects which will provide materials, market, power power development, like those on transport and or transport are also developed. For example, the communication, are those needed to create facihties Myingyan refinery project would not be efficient of the right nature and amount to serve the expanding without both the zinc mines and the Kalewa coal economy. development. Such technical complementarity is especially rele¬ 3. BALANCED ECONOMIC DEVELOPMENT vant with respect to transport, communication and The need for economic complementarity, which power. The country's means of transport are its is as essential as technical complementarity, may be veins and arteries, through which its life blood stated summarily as foUows. Burma's growing labor ffows. The desirability of expenditures on river, force wiU require increasing employment oppor¬ raU, road, and air transport is not to be tested merely tunities. Some of these will be provided in agri¬ by the net income, if any, earned by each system, cultural expansion; some must be provided in new nor by the income which each wiU pay out to workers industries, which in any event are deshable in them¬ and to the State, but by the contribution of the selves. Some will also be provided in the construction integrated transport system to moving the country's activity of the development program itself. To commodities efficiently, expeditiously and economic¬ furnish a growing market for new industries, per ally to their destinations, and thus reducing the capita income must increase throughout the economy. costs of production and the costs of goods to con¬ This increase can be brought about only by increasing sumers. The port of Rangoon, for example, and the productivity in existing industries. Doing so wiU country's other ports must be equipped with added release some workers from existing industries. facihties by certain dates if the country's foreign New industries and construction must absorb trade is to be carried on. It happens that the port them. Thus the introduction of new industries and of Rangoon is a highly profitable venture (though the improvement of productivity in existing industries of inadequate capacity), but investment in new must proceed hand in hand. facilities would be needed and desirable if it were not. The Burmese economy is an expanding one. The It may be possible by the end of the decade to population is increasing at a rate between 1-2% and establish the operations of the Burma Railways 1-5% per year, probably at about 1-3%. The labor on a profitable basis ; but even if not, the railways force is growing at roughly the same rate. Hence are indispensable to the economic hfe of the country, the basic need for expanding employment oppor¬ and their equipment must be rehabilitated, modern¬ tunities. Agriculture, the dominant industry, wiU ized and augmented. The investment recommended itself provide some of these opportunities, for unused in each transport mode during the next seven years agricuhural land of good quahty is available for is the amount thought necessary to provide efficient exploitation. But some of the best opportunities wtU and economical transport for the amount and types be outside of agriculture; if the standard of hving of production which are anticipated, with due regard in the expanding economy is to rise, and to rise for the distances and directions over which they at the fastest possible rate, some of the new employ¬ must be moved. ment opportuiuties must be in manufacturing indus¬ The same is true of communications; postal tries which are economic for Burma, but which have communication and telecommunications must be not yet been developed in Burma. and have been planned in a similar integrated In Burma, as in any country, most manufacturing way, for similar reasons. In a comparable fashion, or processing wiU be for the domestic market, since power development is justified, not alone by the natural resource advantages which wiU enable new income created in the power industry, which yields industries to compete advantageously in the world a fairly small return on a large capital investment. market are limited. But there are only a hmited THE TASK AHEAD 33 number of manufactured products which Burma can example agriculture, creates problems and oppor¬ produce efficiently and for which sufficient demand tunities of its own. As the efficiency of agricultural exists in Burma at present. People with low per production increases, each person engaged in agri¬ capita income, as in Burma, spend almost all of it on culture will be able to cultivate a larger area of land basic food, clothing, shelter and the simple necessities and there will be a continuing surplus of workers on of hfe. A few of these necessities are industrial the agricultural land now cultivated. Even while products, and out of the remaining fraction of their there is good agricultural land not yet cultivated, not income they also buy a few minor luxuries. The all of these surplus workers should remain in agricul¬ consumers' market for industrial products wiU be ture, and when the good quality land has been hmited for some time to these few expenditures by the occupied, all of them must find productive employ¬ masses, plus expenditures by the well-to-do. Since the ment elsewhere. There must be a constant new demand hght consumers' goods industries will be small in for workers elsewhere. This increasing demand for scope and volume, they, in turn, will comprise a smaU workers can be created by a steady expansion of market for heavy or basic industries manufacturing industrial production and of the trades and services producers' goods—machinery parts and equipment, which are a part of urban life. basic raw materials, and others. Hence, for maximum prosperity and social stability, Hence only a fairly small number of new industries the expansion of new industries and services and the wiU be efficient in Burma at present. Unless an increase of productivity in agriculture and other increasing domestic market is created, both for con¬ existing occupations must proceed hand in hand. This sumers' and producers' goods, the process of indus¬ is the law of balanced economic development. And trialization must grind to a halt. this is one reason why the present Report recommends The introduction of this limited number of indus¬ both the introduction of new industrial ventures and a tries will itself raise the average level of income, and so program of improvement in methods of production in increase the domestic market. But the extent to which agriculture and other existing industries. industry can feed on itself in this way is limited. The However, it should not be supposed that if increase development in Burma of an increasing market for in productivity in existing industries and the intro¬ industrial products therefore depends on an increase duction of new industries are not perfectly synchro¬ in per capita income throughout the entire economy. nized from year to year, there is no escape from For this increase, agriculture offers the dominant increasing underemployment, and some degree of opportunity. Income in agriculture is now low, but the stagnation. Synchronization may often be imperfect. potential exists to increase it substantially. A funda¬ This is merely the problem of technological unemploy¬ mentally important step in the industrialization of ment, whose remedy has been discussed. The con¬ Burma must therefore be a comprehensive, well struction activity of the development program itself is organized and determined program to achieve a a balancing factor. If increase in the labor force or in continuing increase in productivity and in the its productivity makes workers available at a more standard of living of Burma's agriculturists. rapid rate than that at which they are being absorbed Such a program is discussed in detail in Chapter in new industries, they wiU be available for work in VIII, Agriculture. Its results will be to create a the development program, and the pace of that steadily increasing margin of income above the program can be stepped up. Only if the problems of subsistence level and a gradual expansion of expendi¬ administration and management are not solved will tures not only for a greater quantity and improved the development program be unable to employ variety of food, shelter and clothing, but also for a productively aU available labor and prevent under¬ greater variety and quantity of other products and employment. On the other hand if the demands services. Thus it will make possible and indeed of new industries for workers exceed the number require the expansion of manufacturing industry and of workers available, the shortage must cause re¬ of trades and services. trenchment either of the development program or Improvement in productivity in other occupations elsewhere. throughout the economy—cottage industries, mineral and timber extraction, trade and transport, govern¬ 4. THE SOCIAL SERVICES ment, and all other—can make a contribution similar The discussion of balanced economic development in nature but more limited in quantitative importance, thus far has dealt only with the question of economic in correspondence with the lesser importance of these complementarity between introduction of new indus¬ other occupations in the economy. tries and increase in productivity in old. Proper Increase in productivity in existing industries, for balance in economic development requires allowance E.E.D.B.—3 34 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA for an additional factor, namely the place of expen¬ E. REACHEVG THE GOAL: PLANNING AND ditures for social welfare services. The activities EXECUTION which have been discussed so far in this chapter are This chapter has presented a goal for Burma's those whose value is measured in the market place. development, and has indicated the basis on which Social welfare activities, even though their benefits a plan to reach that goal has been evolved. The cannot be evaluated in financial terms, are an equally plan is presented in this Report. Its presentation is important part of a balanced development program. only a small step in Burma's development program. Burma has great need for more and better schools, The Government, which has already accepted the specifically for vocational and technical training, basic principles of the plan, must now evaluate and more generally for the broader education of her it in its full form, prepare its own program for action, people. She has need for an expanding program of and adapt its economic pohcies where necessary to pubhc health activities and of medical care, to care for the program. The job of execution will then he the bodies of her people even while she cares for their ahead. minds and spirits. She has need for better housing. The plan presented here embraces the entire Better health, education and housing increase the economy, even though it does not present specific productivity of the labor force. Purely from an projects in all sectors. The Government's planning economic viewpoint, a development program without must be similarly comprehensive. Good planning these components would be warped and incomplete. will provide for the balanced use of resources, Their value is of course humanitarian, not merely through unplanned as well as planned activity, and economic, but this does not reaUy distinguish them will seek to enhst the full participation of the entire from other phases of the development program, for nation—government agencies, cultivators, workers, the ultimate purpose of the entire program is to en¬ traders and industriahsts alike, both at the center hance human welfare by raising hving standards. and throughout the country. There must be a real The essential difference is that the humanitarian effect educational effort to acquaint all concerned with the of the social welfare services is dhect, of other phases basic aims, objectives and features of the plan, and of the program, indirect. to enhst the cooperation of all concerned in both Social welfare expenditures must be large enough to the development and execution of the plan. Good permit education, medical and health care, and hous¬ planning must also provide for programming and ing to make their proper contribution to human re-programming from year to year as the past welfare, but not so large that they choke off other progress in various sectors requires. phases of development. In evaluating their proper Effective execution of the plan will depend in magnitude, it should be recogruzed that when the large measure on the kind of widespread cooperation development program has gathered real momentum, indicated above. It wiU also depend on effective shortages of labor and materials will appear. Labor organization and administration within Govern¬ shortages should be balanced as far as possible by ment, in the ministries and departments, within the progressive mechanization. Thereafter the social Development Corporation, within pubhc corpora¬ weffare programs wiU compete for materials, men and tions, and throughout the private sectors of the money with other programs. At this point, the faster economy as well. It wUl depend in large measure on the construction of schools and hospitals, and the how successfully Burma solves the problems of larger the program to staff them, the slower must be technical skills and management, especially in the the pace of programs to improve agriculture, to early phases of the plan. It wiU depend in serious introduce new industries, to develop mines, to build measure on the determination, the vigor, and even roads and ports and power plants. the daring displayed by those entrusted with The slower the rate of improvement in these responsibUity for carrying out the plan. productive fields, the lower the rate of increase in per Carefulness in planning is not inconsistent with capita income. On the other hand, the faster the daring in execution. Every important consideration improvement in productive methods, the higher the should be taken into account in arriving at a decision level of income later, and the greater the expenditures to incorporate a given feature in a plan of action. which can later be afforded for health, education and Once the plan is formed, the time for action has housing, among other programs. The balance be¬ arrived. Decisions need to be made. ResponsibiUty tween social welfare programs and other programs is for making decisions must be accepted and dis¬ therefore a balance between immediate social welfare charged. Action must not be unduly deferred by and future social welfare. Neither the claims of the those responsible because they are fearful of making future nor of the present should be neglected. A mistakes. Mistakes will undoubtedly be made in reasonable balance must be struck. executing the program. However, they will not bulk THE TASK AHEAD 35 large in the total picture. By far the most serious too much to expect that the people of Burma will be mistake of aU would be the mistake of doing nothing able to produce within a few years, on the average, to avoid all possibUity of mistake. shghtly more per capita than they did a generation On the basis of the discussion above, it will be ago and to go on thereafter to an ever-increasing plain that at least three and perhaps four problems standard of Uving. The basic potentiahties are here. exist which comprise key bottlenecks to the develop¬ The great advances which have been made elsewhere ment program. These must be overcome if the in modern technology and in putting machinery to program is to succeed. The first of these is the question work for the benefit of mankind are available. Burma of internal security. While a great deal of progress has the opportunity to telescope within a limited has been made since the prehminary report was sub¬ number of years the process of increasing producti¬ mitted toward improving security conditions, a good vity which took generations for other nations to deal yet remains to be done. Continued rapid pro¬ achieve. gress in security throughout the country and achieve¬ Too much emphasis cannot be placed on the fact ment of a reasonably complete state of internal that material and financial resources alone do not security within another year will be necessary if the guarantee economic progress. Some countries which economic development program is to proceed at the have been endowed richly with natural resources pace required. The second key bottieneck is that suffer low productivity and low standards of living. which arises from the acute shortage of skiUed Fertile land, favorable clknate, ample rainfaU, rich technicians and experienced managers and admini¬ mineral resources and abundant forests do not strators. Indeed, it would not be overstating the case necessarily mean high productivity. On the other to say that the success of the development program hand, there are nations whose people have learned hinges more on this than on any other single factor. how to organize their economic activity and how to The third bottleneck is that which arises in the exploit their limited resources for their economic well- organization and administration within Government being. There is no reason why Burma, with its itself, where estabhshed modes and procedures are in limited population in relation to its geographic area tune with the more leisurely pace of another day, and its natural resources, should not in time enjoy one having developed in response to a relatively static of the highest standards of living among the nations. rather than a dynamic way of life in Burma. Organi¬ The task is now one of organizing and mobilizing zation, admirustration, and personnel in the govern¬ the resources of the country so that its fuUest poten¬ ment ministries, agencies, departments and boards tialities can be realized. The task can be done provided must be brought into step with the dynamic require¬ the wUl exists—the wiU to understand as weU as to do. ments of the development program. Finally, determi¬ Among the leaders of Burma, both inside and outside nation, vigor, and daring must be displayed by those the Government, there is manifestation of such a wiU. charged with responsibihty for the execution of the The chapters which follow discuss various aspects development program. There has been no oppor¬ of the tasks referred to in this chapter. Chapter III tunity to evaluate as yet the degree to which these discusses the financial feasibility of the plan recom¬ quahties wiU be forthcoming. It is to be hoped that mended. Chapter IV considers the central economic they wiU be present, for it is clear that the program policies necessary to carry it out. Chapter V then wUl falter without them. discusses the necessary organization of the Burmese Given the abundant resources which nature has Government for planning and programming; Chapter bestowed on Burma, the exceptionally strong financial VI, organization of execution, and Chapter VII the position of the Government both in relation to key problem of manpower and management. Parts internal cash balances and external assets in the form III to VII then present sectors of the plan, and of foreign exchange, and the will of the people Chapter XXV summarizes in time schedule the full guided by intelhgent and strong leadership, it is not program for the planned sector of the economy.

PART II

ECONOMICS AND ADMINISTRATION

CHAPTER III

FINANCING THE PROGRAM

A. THE NATURE OF THE PROBLEM money is the convenient common denominator for Table II-2 of Chapter II indicated the capital totaling the needs of all the different projects, the expenditures recommended for Burma's development, value of resources needed, and other factors. and their distribution among broad fields. The The question of obtaining foreign currencies for present chapter discusses the problem of financing purchase abroad, on the other hand, is essentially a them or, what is equivalent, the problem of allocating financial one. Burma need not concern herself with a large enough share of Burma's productive resources the underlying economic question whether her to the program to carry it through to completion. purchases (small in the total world picture) will The analysis is based on two assumptions con¬ contribute to scarcities and inflation in the supplying cerning world conditions and conditions in Burma countries. The only questions which need concern her during the remainder of the decade: are whether she has or can command enough foreign (1) That there will be no general war. currency to purchase what she needs, and whether (2) That there wiU be continued rapid improvement she can find suppliers who will deliver the goods. in security within Burma. The magnitude of each of these two problems wiU No rigid assumption is made concerning world depend on the share of the expenditures which consist economic conditions. Continued world prosperity is of purchases abroad, the time distribution of the not a necessary condition for the successful prosecu¬ expenditures over the seven-year period remaining, tion of Burma's development program. The depres¬ and the share of the program which the Government sion of the 1930s reduced the prices of Burma's undertakes as compared with the share which is left imports as weU as of her exports, and improved her to private investors. balance of trade. It is difficult to say what the net effect of a world depression during the 1950s might 2. WHY ONE THIRD EXPENDITURES ABROAD ? be. Certainly it is not necessary to conclude that it The share of a country's expenditures for economic would prevent the successful execution of the development which must consist of purchases abroad program. The other two assumed conditions are, depends on the resources and industries of the however, necessary bases for the successful execution country. In the United States or in the Soviet Union of the program, and its financing is therefore analyzed most of the materials and equipment for develop¬ on the supposition that these conditions wiU prevaU. mental projects could be produced within the country. In developing oil fields in desert areas of the Middle 1. FINANCING EXPENDITURES AT HOME East, on the other hand, a very large portion of the AND ABROAD expenditures were in other countries; only a small About one third of the development program amount of local labor, and food and simple equip¬ expenditures wiU be made abroad, for the purchase of ment for the construction crews could be furnished capital equipment and materials, and about two within the country. thhds in Burma, for the purchase of indigenous Burma has ample resources of timber and un- materials and products and the employment of labor. specialized labor, can now produce budding materials The problem of financing the purchases abroad such as lumber products, cement, hme and low differs in nature from that of financing the domestic quality brick, and will be able fairly quickly to expenditures. The purely financial aspect of the improve the quality of her brick, and to create added domestic problem is simple. The necessary kyats can productive capacity for brick, lumber products, lime always be obtained by the Government without and tile. It would be much more costly to import difficulty. If, however, labor and indigenous materials these commodities than to make them domestically. are scarce, purchasing the materials and employing She wiU find it necessary to continue to import many labor on new projects will cause inflation. The other materials and almost all industrial equipment question, therefore, is one of whether enough produc¬ and heavy metal products. tive resources, especially labor, will be available. The Experience in other countries suggests that in question is expressed in monetary terms only because Burma's circumstances, taking the developmental 39 40 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA program as a whole, at least one third of the develop¬ distribution of the program wiU not materially alter mental expenditures wiU be for materials and the problem of financing foreign exchange expendi¬ equipment purchased abroad, and not more than tures (expenditures in foreign currencies). Because of two thirds for labor in Burma and for materials and increase in her exports, Burma will earn more foreign equipment which can be produced in Burma. If exchange annually during the later years of the defense expenditures for "caphal" items, including decade than during the years immediately ahead. munitions, are included in the calculation, the pro¬ However, Burma should have sufficient foreign portion abroad wUl be greater, for munitions are exchange during the next several years to finance necessarily purchased almost entirely abroad. The purchases abroad for the development program, even percentage of purchases abroad shown by the final if expenditures for the program should rise at the estimates is 34-6% excluding defense purchases and maximum rate which seems possible. If their rise is 36-9% including them. slower, the foreign exchange earnings will of course The ratio of expenditures abroad to those at home accumulate and be available at a later date. will vary from industry to industry, and even more In one way, however, the rate at which the program from project to project. For some construction gets under way will affect the foreign exchange projects which consist largely of earthwork con¬ problem to an important degree. The more rapidly struction or of timber structures, and for other complete civil order is restored, and rice, mineral and projects which use a relatively large amount of con¬ timber production and exports increase, the larger struction labor on the site in comparison whh the wffl be Burma's foreign exchange earnings. The value of equipment, much more than two thirds of progress of restoration of civil order is therefore of the expenditures will be made at home. At the other first importance as a determinant of Burma's foreign extreme, expendhures for expansion of the river and exchange position. harbor flotillas wiU be met almost wholly abroad, and Rapid progress is even more important to make those for other projects involving the installation of possible completion of the necessary expenditures heavy metal equipment will be met largely abroad. within Burma. If a disproportionately large share of The proportion of about one third abroad to two the program remains for the last years of the decade, thirds at home is an average of expenditures for the the share of the nation's labor and resources required entire program. to carry it out during those years may be too great to This proportion is neither precise nor inflexible. It be achieved. The more quickly expenditures on the wiU vary to some extent depending on the projects program reach a high rate, the lower wiU be the selected and on the materials selected for a given amount which must be completed in any one year project. While in the main the selection of projects and the easier the problem. and materials must be determined by other criteria, There is sufficient slack in the economy now to there will be some freedom to choose between pro¬ permit a rapid rise in development expenditures. To jects or different materials requiring or permitting some extent, the rate of rise in total expenditures wUl different proportions of foreign to domestic capital depend upon the degree to which the Government purchases. For example, either teak beams fabricated creates an environment favorable to private invest¬ in Burma or steel spans prefabricated abroad can be ment, a problem discussed in the last section of used for small bridges. Such choices will, however, be Chapter VI. To an even greater extent, it wiU depend fairly hmited. They are one way of conserving labor upon the effectiveness with which the problems of in Burma, if it is scarce, by spending more money administering the Government's share of the program abroad, or of conserving foreign exchange, if it is are met. The major administrative problems wUl be scarce, by using more labor in Burma. setting up the necessary organization for effective management, obtaining the necessary managerial 3. THE TIME SCHEDULE OF DEVELOPMENT talent, technical skills, and speciahzed labor, and EXPENDITURES breaking some materials bottlenecks. While in theory The financing problem wiU also be affected by the the program might rise so rapidly that a peak rate timing of development expenditures. If the program might tax the economy's resources in the near future, gets under way slowly, a correspondingly larger the problems of administration are such that there is effort must be crowded into the last years of the no hkelihood of this occurrence. decade to complete the program within the time Table III-l indicates a plausible schedule for the planned; if a fairly high level of expendhures is entire program—public and private, planned and attained soon, the program can be spread more unplanned, productive and social—during the years evenly over the remaining years. 1953-54 to 1959-60. This schedule of expenditures is Except in one respect, noted below, the time used as the basis for the discussion of financial FINANCING THE PROGRAM 41 requirements which foUows. The schedule of planned decline gradually thereafter. Estimates of the amount projects presented in Part VIII fits appropriately into of capital formation needed to offset depreciation are this more comprehensive program. The comprehen¬ based on estimates of depreciation during past years sive schedule should be regarded as a minimum on aU capital plant and equipment of the economy.* target, not an ideal pattern. If development expendi¬ tures lag significantly behind it, there is danger that 4. GOVERNMENT VERSUS PRIVATE DEVELOPMENT the program will not be completed. If they exceed it EXPENDITURES in the years immediately ahead, the prospects for The third factor which affects the problem of successful completion of the program are corres¬ financing the program is the division of the program pondingly enhanced. between government expenditures and private expen¬ ditures. All investment in the economy must be TABLE III - I matched by saving. The greater the share of the invest¬ ^ELOPMENT PROGRAM EXPENDITURES ment which the Government undertakes, the greater Year Expenditures the share of current saving which it must in one way {millions of kyats) or another siphon off to its use. This division of Jan.-Sept., 1952 415 investment between government and private will be 1952-53 (est.) 485 important so far as financing within the country is Programmed : 1953-54 655 concerned. It will not however affect Burma's ability 1954-55 830 to meet her foreign exchange needs ; as is shown 1955-56 950 below, Burma wiU be able to meet them regardless 1956-57 1,015 of the degree to which private investors from abroad 1957-58 1,030 invest in Burma. Discussion of the division of invest¬ 1958-59 1,050 1959-60 1,070 ment between government and private is there¬ fore deferred to Section C, dealing with financing Total, 1952 to 1959-60 7,500 expenditures within Burma.

The development program includes all capital B. FINANCING FOREIGN EXCHANGE PAYMENTS expenditures for net additions to the country's pro¬ The financing of purchases of capital equipment ductive and social capital. It does not include either and materials abroad during 1953-60 can be accom- capital projects for defense purposes or capital phshed from earnings from exports during the period, formation to make good the depreciation of existing from use of foreign exchange previously accumulated capital which goes on year after year. Table III-2 in excess of the minimum needed as reserves, and adds estimates of these elements, and divides the from the flow of foreign capital to Burma. All three expenditures between those at home and those are available to Burma. She has accumulated foreign abroad. There is of course no sure basis for forecasting exchange reserves in excess of her requirements and defense capital expenditures. They are assumed to international lending agencies very probably would reach a level of K120 mUhon in 1953-54 and to consider favorably loan applications for certain types of projects. Financing from the proceeds of her TABLE III - 2 exports must, however, be her main reliance. GROSS CAPITAL EXPENDITURES, 1953-54 TO 1959-60, INCLUDING DEFENSE, DIVIDED 1. FOREIGN EXCHANGE NEEDS BETWEEN AT HOME AND ABROAD The purchase of capital equipment and materials Per cent will of course be only one of the purposes for which Year Total Abroad At Home Abroad foreign exchange will be needed. By far the largest {millions of kyats) requirement will be for imports for current consump¬ Jan.-Sept., 1952 625 120 505 20 tion or fabrication. Foreign currencies will also be 1952-53 (est.) 835 200 635 24 needed to pay ocean freight and marine insurance Programmed: and for the expenses of Burma's diplomatic estab¬ 1953-54 1,035 442 593 43 lishments abroad, travel abroad by residents of Burma, 1954-55 1,190 503 687 42 remittances by individuals in Burma to relatives 1955-56 1,315 531 784 40 abroad, dividend payments to stockholders abroad, 1956-57 1,385 527 858 38 *It is estimated that in 1953-54 K25 million and in each subsequent 1957-58 1,405 500 905 36 year of the decade K50 million of normal depreciation will be made 1958-59 1,430 454 976 32 good by the development program expenditures themselves, since to some extent in creating new capacity they will replace existing obsolete equipment. DEPOSITS ABROAD ARE ACCUMULATING RAPIDLY

1200

I 100

1000

900

W 800 - < >■ ^ 700 - U. ^ 600 V) z O 500

S 400

300

NOT 200 AVAILABLE

100 -

J LJ LJ L 0 M J s D M J S 0 M J S 0 M J S D M J

MINISTRY OF NATIONAL PLANNING

FOREIGN EXCHANGE RESERVES, 1948-1953

KNAPPEN TIPPETTS ABBETT ENGINEERING CO. NEW YORK RANGOON DR. BY ^,7./? DATE PLATE | CK. BY ^i*./-. . JUNE 53 NO. I 42 FINANCING THE PROGRAM 43 and for various other uses. If imports are left un¬ enterprises in Burma. In 1938-39 these payments were restricted, the magnhude of imports for consumer estimated at K85 million. If they had increased in goods, of raw materials for fabrication, and of freight the same ratio as prices they would now be K400 and insurance on both, will depend primarily on the miUion or more per year. In fact in no postwar year level of output and income in Burma. So also will have they exceeded K13 million. As noted in Chapter other minor foreign exchange expenditures. Past II, the decline results in part from transfer of owner¬ relationships between output and imports provide a ship, in part from partial paralysis of export industries. basis for estimates of future trends. Table III-3 It greatly influences present and prospective foreign presents estimates of total foreign exchange payments exchange payments. during the remainder of the decade, together with It should be emphasized that the general trend of data for recent years. Column 2 indicates the value foreign exchange expenditures shown in Table III-3 of output in each year which is assumed in making is more indicative of probable developments than estimates. The data present what is thought to be are the figures for any one year. Large orders for the most probable course of output and of foreign capital equipment placed in any one year cause actual exchange expenditures if the development program expenditures to swell in that year, and variation in proceeds as planned. the granting of import licenses may cause large TABLE III - 3 swings in the year-to-year totals for imports. Even the figure for 1952-53 may differ greatly from the ACTUAL AND ANTICIPATED FOREIGN estimate, depending on the degree to which large EXCHANGE EXPENDITURES capital purchases abroad being arranged as this is {millions of kyats) written are consummated and paid for by September 1 2 3 4 5 30. The table shows the trend which may be antici¬ Other pated, but obviously does not allow for such variation. Imports Imports of Total Gross {including The table assumes unrestricted imports of consumer Productive Foreign Year Domestic Military) and Social Exchange goods from non-dollar areas. Product" a/td Net Capital'' Payments' The table indicates that by 1959-60 the foreign Non-trade Payments'' exchange needs of Burma may increase to more than double the 1951-52 level and to about 90% above {1938-39 14 29 299" 328 the present (1952-53) level. How wiU Burma be able 194&-47 2,928 81 640* 721 1947-48 3,506 122 875" 997 to meet these needs? Actuals 1948-49 3,224 51 507^^ 558 1949-50 3,033 72 523« 595 2. FOREIGN EXCHANGE EARNINGS 1950-51 3,710 74 750- 824 1951-52 4,116 135 731' 866 Many small countries and some large countries Estimate 1952-53 4,650 135 830 965 during the past generation have been chronicaUy f1953-54 5,200 362 980 1,342 short of foreign exchange with which to purchase 1954-55 5,550 430 1,075 1,505 1955-56 5,950 464 1,160 1,624 required goods from abroad. This problem has been Forecast \ 1956-57 6,300 467 1,230 1,697 especially acute in recent years, because of needs for 1957-58 6,600 447 1,300 1,747 foreign goods arising out of wartime destruction and 1958-59 6,800 407 1,355 1,762 large-scale rehabUitation efforts. Foreign exchange shortage is normally made more acute by a develop¬ " "Gross domestic product" is the value of the nation's production. ment or rehabihtation program. Such a program The figures for 1951-52 and subsequent years reflect not only increase directly creates a need for capital equipment and in output but also increase in the value of rice exported because of the rise in world rice prices. A gradual fall in rice prices from 1953 materials from abroad, and at the same time, by to 1960 is assumed. If rice prices had remained at the 1951 level raising the level of economic activity and income, it throughout the decade, the approximate value of the nation's output increases the demand for imports for current use. for each year in millions of Icyats would be: 1951-52, 4,070; 52-53, 4,500; 53-54, 5,000; 54-55, 5,400; 55-56, 5,800; 56-57, 6,200; 57-58, Burma has shared the fear of other small countries 6,500; 58-59, 6,750; 59-60, 7,000. of such a foreign exchange shortage. This fear was ' Division of payments between components in past years is estimated. no doubt accentuated by the drain on her foreign ' Net of non-trade receipts. exchange reserves in 1946-47 and 1947-48 and by * Of this total, K85 million consisted of income payments abroad. Postwar income payments abroad have varied between K6 and K13 the financial crisis of 1948-49. million per year. But in Burma's case this fear is unnecessary. One Payments for imports included in these figures differ considerably of the most important economic facts concerning from the value of imports received during the year. Burma is that the prospects for Burma to meet all One type of payment which has decreased greatly of her foreign exchange needs out of the proceeds since before the war is that to foreign owners of from her exports are favorable. A sizable excess of 4000i-

i RICE DOMINATES THE POSTWAR PICTURE; VOLUME STILL LOW

5000 z o

Q 2000 - z < o X I-

lOOO

50O-

1938-39 1946-47 1947-4 8 1948-49 1949-50 1950-51 1951-5 2 LEGEND FISCAL YEARS

OIL MINISTRY OF NATIONAL PLANNING I ORES MAJOR EXPORTS TIMBER BY VOLUME

RICE KNAPPEN TIPPETTS ABBETT ENGINEERING CO. NEW YORK RANGOON On.%^.£.^/^ DATE PLATE O SOURCE: QUARTERLY BULLETIN OF STATISTICS CK.BY. J)./^. MAY 63 NO. C. 44 FINANCING THE PROGRAM 45 foreign exchange receipts over foreign exchange pay¬ Two offsetting influences distinguish export pros¬ ments has occurred in 1951, 1952 and 1953, in spite pects of the 1950s from the 1930s. On the one hand, of relaxed restrictions on imports in the latter two destruction and insecurhy caused by the war and years, and has resulted in a continuing increase in insurrection have brought a very sharp drop in the foreign exchange reserves (see Plate 1). Imports have production of rice, minerals and timber, which made been low because of the low level of national income. up most of Burma's exports (see Plate 2). Rice exports Expenditures for imports and other foreign exchange during the remainder of the 1950s wiU be smaller payments will increase steadily as income and output than before the war not only because production wUl rise, and as annual development program expenditures be smaller, at least until the end of the decade, but rise, but a careful analysis of Burma's prospective also because the increased population will consume foreign exchange earnings indicates that earnings are more. Because of the depletion of reserves of minerals very likely to increase at least commensurately with at Bawdwin and Mawchi and the time required to payments. The excess of receipts is likely to continue explore or develop other prospective mineral sites, even when consumer imports have risen further and production and exports of minerals wiU also be below when developmental expenditures are at their peak. the prewar level. Exports of petroleum and products In the light of Burma's prewar record, this con¬ will be small or nil. Increased security could permit clusion is not surprising. Though many Burmans do exploitation and export of timber and timber products not realize it, even during the depression years of the considerably above the present level, but hardly above 1930s Burma's exports earned foreign exchange far the prewar level. in excess of the amount required to pay for imports, But the reduction in the physical volume of exports plus shipping and insurance costs, plus substantial has been compensated by favorable price trends. dividends to foreign owners of Burmese enterprises, The relationship between the prospective world plus aU her other foreign financing needs. Large price level of rice and the price of import goods is amounts of excess foreign exchange earnings were the most important single determinant of Burma's invested abroad annuaUy. These amounts would have foreign exchange situation. While the prices of goods been more than suflRcient to finance every year the imported by Burma have risen on the average to annual foreign exchange requirements for a develop¬ between four and five times their level in 1938-39, ment program as large as that now recommended export prices for rice, the major export, now average for Burma. Put another way, if Burma's prewar about ten times the prewar level. The probability is volume of exports and imports were re-established, strong that the terms of trade will continue to be the financing would be available for bringing in the favorable throughout the decade, though not in the productive equipment required for the proposed same degree. development program, even if price relationships Factors influencing the price of rice have been were no more favorable than those which prevailed reviewed and the opinions of world food experts prewar. While data for "invisible" payments—freight, have been checked. It is generally agreed that the insurance, remittances to relatives—are not available prospects for the price of rice over the next few years for prewar years, data for exports and imports are are highly favorable. It is most unlikely that a full available. Table III 4 shows the excess of exports decline to the prewar relationship to industrial prices over imports for five-year periods from 1901 02 to or non-food raw materials prices will occur during 1940-41. Hardly another small country in the world the next five to eight years. has a similar record: 3. PROSPECTIVE RICE EXPORTS TABr.E III 4 Table III 5A and III 5B {see next page) present BURMA'S FOREIGN TRADE BALANCE 1901 1941 alternative forecasts of Burma's earnings from the {millions of kyats, and percentages) present to 1960 from rice exports, together with factors Excess Per cent entering into the estimates. These are "intermediate" Year Exports Imports of Excess of and "low" estimates; higher estimates which were also Exports Exports prepared are not presented. In order to estimate 1901-1906 210-6 145-1 65-5 45 foreign exchange earnings with due conservatism, the 1906-1911 304-8 184-0 120-8 66 intermediate estimate assumes paddy acreage by 1911-1916 356-8 211-8 145-0 68 1916-1921 457-6 282-3 175-3 62 1959-60 no higher and yield per acre a htde lower than 1921-1926 660-2 365-7 294-5 81 the targets set for 1956-57 in the Agricultural Five- 1926-1931 661-2 362-6 298-6 82 year Plan. The low estimate assumes lower acreages 1931 1936 485-6 201-3 284-3 141 and yields. Both also assume a decline in the average price received for rice exports below the present 46 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA goverrunent-to-government prices of £60 per long ton about 8 % below the present govemment-to-govern- (which in turn is below the present private market ment price, or to £55; the low estimate a fall of about price). The intermediate estimate assumes a fall to 16°/to £50.

TABLE III - 5A RICE OUTPUT, HOME USE, EXPORTS AND PROCEEDS {Intermediate estimates)

Sown A vailable Available Fiscal Year Export Paddy Paddy Value of Income to Acreage for Export, for Export, Year Output Exports Price per Exports in Private Paddy 1,000 Tons 1,000 Tons 1,000 Tons Ton 1,000 Tons 1,000 Tons Fiscal Year Sector 1,000 Acres of Paddy of Rice of Rice in Kyats K Millions K Millions

1950-51 9,467 4,979 3,347 1,632 1,142 l,320t 563 745 415 1951-52 9,698 5,250 3,395 1,855 1,299 i.iiot 720 787 436 1952-53 10,331 5,740 3,451 2,289 1,602 1,350+ 840 1,134 609 1953-54 10,781 5,950 3,502 2,448 1,714 1,886§ 785 1,482 600 1954-55 11,198 6,180 3,556 2,624 1,837 1,806 800 1,445 643 1955-56 11,615 6,470 3,607 2,863 2,004 1,962 787 1,544 701 1956-57 11,979 6,730 3,659 3,071 2,150 2,114 773 1,634 752 1957-58 12,292 6,960 3,711 3,249 2,274 2,243 760 1,705 796 1958-59 12,604 7,200 3,764 3,436 2,405 2,372 747 1,772 841

* Seed at 46 pounds per acre, annual per capita disappearance 125 kg. rice. t Based on actuals. % Estimate on basis of first three quarters. § Includes excess carryover of 198,000 tons.

TABLE III - 5B RICE OUTPUT, HOME USE, EXPORTS AND PROCEEDS {Low estimates)

Sown Available Available Paddy Paddv Fiscal Year Export Value of Acreage for Export, for Export, Output Home Use* Exports Price per Exports in Year 1,000 Tons Paddy 1 000 Tont I 000 Tons 1,000 Tons 1,000 Tons Ton Fiscal Year 1,000 Acres of Paddy of Rice of Rice in Kyats K Millions

1950-51 9,467 4,979 3,347 1,632 1,142 l,320t 563 745 1951-52 9,698 5,250 3,395 1,855 1,299 i,iiot 720 787 1952-53 10,331 5,740 3,451 2,189 1,602 1,300+ 827 1,075 1953-54 10,300 5,870 3,493 2,377 1,664 1,898§ 800 1,511 1954-55 10,600 6,040 3,544 2,496 1,747 1,726 773 1,334 1955-56 10,900 6,270 3,592 2,678 1,873 1,870 747 1,397 1956-57 11,200 6,500 3,643 2,857 2,000 1,969 720 1,418 1957-58 11,500 6,670 3,695 2,975 2,083 2,062 693 1,429 1958-59 11,800 6,900 3,747 3,153 2,207 2,176 667 1,451

* Seed at 46 pounds per acre, annual per capita disappearance 125 kg. rice. t Based on actuals. t Estimate on basis of first three quarters. § Includes excess carryover of 248,000 tons. VALUE OF EXPORTS AND IMPORTS BY COMMODITY

1100

1000

OTHER

OIL

METAL TIMBER CAR GOODS ^

RICE CONSUMER GOODS EXPORTS EXPORTS IMPORTS IMPORTS 1938-39 1951-52

MINISTRY OF NATIONAL PLANNING VALUE OF EXPORTS AND IMPORTS BY COMMODITY

KNAPPEN TIPPETTS ABBETT ENGINEERING CO. NEW YORK RANGOON DR. BY S;//^ DATE PLATE CK. BY J^.A. ■ JULY 53 NO. 47 48 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA 4. THE FAVORABLE BALANCE BETWEEN EARNINGS If the low receipts estimates of Table III-5B are AND EXPENDITURES substituted for the intermediate estimates, the fore¬ Table III-6 combines the data of Tables I1I-4 and cast still shows a balance of foreign exchange earnings III 5A with estimates of receipts from exports other over receipts of more than K 1,100 mUlion over the than rice. These estimates too are conservative; they seven-year period. The price of rice would have to assume that even by 1959-60 the physical volume of faU to £45 by 1959 60, or to fall abruptly below £55 other exports will still be much below that before in the near future and continue down thereafter, to the war. These exports will include metallic minerals, create a deficit of foreign exchange for unrestricted teak and other timber, a variety of agricultural imports. What is the probability that such a faU or products, rubber and miscellaneous other com¬ a greater fall will occur? modities. Total receipts in 1959-60 only 75% above Should generally depressed conditions emerge in prewar are assumed. Plate 3, Value of Exports and the world economy, or should peace and conditions Imports by Commodity, compares the prewar and favorable to maximum rice production occur in all postwar exports and imports of major commodity major rice producing countries, rice prices might faU groups. more than other prices but hardly to prewar relations. TABLE III - 6 If rice were to sell at £50 per ton by the end of the PROSPECTIVE FOREIGN EXCHANGE EARNINGS decade and other prices remain stable, then almost AND EXPENDITURES one third of the present advantageous level of rice {millions of kyats) prices relative to other prices will have been elimin¬ ated. If the price of rice drops to £45 per ton and Receipts : other prices remain stable, then almost half of the Intermediate Estimates Pavments* Excess relative price advantage which rice^enjoys over other Fi.'ical {Table products today in relation to prewar levels will have Total of Year From From 111 3) Receipts Receipts been eliminated. In face of all the influences which can Rice Other from Exports Exports be evaluated, this would appear to be very unlikely. Exports Far more likely is the probability that future declines in the price of rice will be partially offset by lesser Actual (Table III 5A) declines in other prices. 1938 39 218 267 485 328 157 The analysis thus far has treated the forward 1950 51 7451- 242t 991 824 167 period to 1959-60 as a whole, and has contemplated 1951 52 787t 280t 1,025 866 159 continuous trends throughout it.This does notexclude Estimated the possibility of a drop in price within any year of 1952 53 1,134 260 1,394 965 429 this period more substantial than those indicated. Forecasts However, it is believed that any such sharper drop, 1953 54 1,482 300 1,782 1,342 440 relative to other prices, would probably result from a 1954-55 1,445 320 1,765 1,505 260 temporary combination of circumstances which 1955 56 1,544 340 1,884 1,624 260 1956 57 1,634 370 2,004 1,697 307 would not invalidate the analysis for the longer 1957 58 1,705 400 2,105 1,747 358 period.* 1958 59 1,772 435 2,207 1,762 445 5. PRESENT FOREIGN EXCHANGE RESERVES The future, however, cannot be foreseen clearly, * Net of non-Uade receipts. t These data are customs data for value of exports. Unreconciled and a greater fall in foreign exchange receipts relative discrepancies exist between them and total receipts from exports to payment is possible. If it should occur, Burma sho-wn in the adjacent column. would have to rely on one of three other procedures The table shows receipts during 1953 54 to 1959 60 to finance imports for economic development. K2,540 million in excess of expenditures. That is, it * Subsequent to the completion of the mimeographed edition of shows proceeds from exports during the seven years this report, Burma has concluded long-term agreements with Ceylon and Japan at price schedules below those indicated above. The new sufficient to finance unrestricted imports for current price schedules, if applied to all rice sales and extended throughout purposes, plus all purchases abroad for the develop¬ the period 1953 54 to 1959-60, would reduce substantially the ment program, with a surplus in addition to the sizable addition to foreign exchange predicated. However, the basic conclusion, namely, that Burma will probably be able to finance her present large foreign exchange reserves of K2,540 development program entirely from present foreign exchange miUion. availabilities, plus earnings during the period, would remain un¬ As in the case of Table III 3, the general trend of affected. This would also be true even if average prices for the entire period were some 10°o below those of the Ceylon agreement. the figures is much more significant than those for This would not preclude prices more than 10% below the Ceylon any given year, which are subject to fluctuation. schedule in any given year of the period. FINANCING THE PROGRAM 49 One of these is use of some of her present foreign consumer preferences for the United States product. exchange "reserves," i.e., present deposits and invest¬ There will remain some consumer items and some ments abroad. items of capital equipment with respect to which an At the end of June, 1953, these totaled over advantage in price, performance, or speed of delivery Kl,200 miUion. Of this amount, less than one third justifies procurement from dollar areas. is needed as statutory reserves of the Union Bank Burma's direct dollar earnings will probably not of Burma (which could of course be reduced by be great enough to meet her requirements for con¬ statute). Becauss an adequate reserve should be held sumer goods and capital equipment from the United to meet seasonal swings in foreign exchange pay¬ States and other dollar areas. Wherever and whenever ments, the minimum reserves held should perhaps be opportunities present themselves for exports for larger, or half of the present total. Even so, K600 dollars, advantage should be taken of such oppor¬ miUion of present deposits and investments abroad tunities. As a contributor of important quantities of could safely be used to finance imports if desired. commodities to other sterling area countries, Burma will very probably be able to obtain from the sterhng 6. CURTAILMENT OF IMPORTS area doUar pool the moderate amount of doUars The second additional available procedure is needed to supplement these sources. WhUe the amount restriction of imports. The estimates presented above required will be of considerable importance to Burma, assumed completely unrestricted imports from non¬ it will not bulk large in relation to the sterling area dollar areas. It would not require severe restrictions to dollar pool as a whole. Burma can therefore expect divert, say, KlOO milhon per year, during the last to finance without difficulty her reasonable needs for years of this decade from other imports to imports doUars as well as non-dollar imports. for the development program. The prospective availability of ample amounts of foreign exchange, of course, has important implica¬ 7. INTERNATIONAL LOANS tions with respect to foreign exchange and foreign Finally, Burma could request loans from abroad. trade policy. These are discussed in Chapter IV. It seems very probable that such loans could be obtained for resource development which directly or C. FINANCING DEVELOPMENT EXPENDITURES indirectly would increase the country's capacity to WITHIN BURMA export and thus to repay loans. It is a truism that when an economic system is In view of the very favorable earnings prospects operating at capacity, the amount of investment and the availabUity of these supplementary proce¬ (capital formation) undertaken must be matched by dures, it is hardly conceivable that Burma will not an equal rate of saving. Yearly capital formation have adequate foreign exchange to finance the full in excess of the year's savings will cause scarcities development program which has been recommended. and inflation. This statement requires only the She should proceed with her development program qualification that if capacity is expanding, this whh no hesitation whatsoever on this score. expansion creates room for a shght excess of invest¬ ment. 8. DOLLAR IMPORTS On the other hand, if production in the country is The discussion above has applied only to imports below capacity—if there is underemployment and from non-doUar sources. Though Burma will prob¬ slack—then it is highly desirable that capital forma¬ ably earn ample sterling and other non-dollar foreign tion should exceed saving in order that the excess exchange in relation to her maximum requirements, of expenditures for capital formation may create new the same wUl not be true of United States dollars. jobs, increase employment and incomes, and pump The United States is herself a rice exporter, and for new money into circulation. the present she has advantageous alternative sources These economic axioms apply in Burma as else¬ of supply for most other materials which Burma where. However, these generalizations do not provide exports. Burma's earnings of dollars will be derived a guide to the amount of development expenditures mainly from fairly smaU sales of some minerals, and within Burma which the country can successfully perhaps from the sale of rice to United States forces finance. It is necessary to answer such questions as: in the Pacific or to countries in the Pacific area How much saving by firms and individuals can be which have dollars avadable for payment. On the anticipated? How much saving can the Government other hand, Burma's imports of United States do? Exactly what is meant by "government saving"? products for consumption are not large. Indeed for If capital formation in excess of saving is anticipated, most items other sources of supply can be substituted how large an amount, in the present slack state of without hardship, even though there may be the economy, is desirable? E.E.D.B.—4 50 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA These questions are considered in this section. in the preceding figures. Capital formation by the The conclusion is reached that the contemplated Government for these two purposes will total almost programs of private investment and of government K1,000 milhon during the seven-year period, bringing investment are both feasible. Whether present revenue the estimated Government total to K4,620 miUion. measures and related policies are adequate to finance Private capital formation to make good depreciation the Government's program, or on the contrary new is much larger than that by government, both measures are needed, is uncertain. The relationship because the existing amount of private capital is of government revenues to expenditures and the trend larger and because houses constructed of bamboo in the money supply must be watched from year to and thatch must be completely replaced every three year to decide whether and when new measures may to five years. Private capital formation to offset be needed. depreciation is estimated at Kl,655 milUon for the seven-year period, and total private capital formation 1. GOVERNMENT AND PRIVATE INVESTMENT at K4,605 million. It wiU be convenient to consider separately the These estimates are used as the basis for the dis¬ financing of government and private investment, and, cussion which follows. The pattern which the capital as the first step, to estimate the amount of each. Ojf expenditures may take over the seven-year period is total capital expenditures of K6,600 milhon antici¬ indicated in Table III-7. pated during the remairung seven years of the development program, planned projects recommended TABLE III - 7 in this Report wiU requke a httle more than K3,000 milhon. It is reasonable to suppose that the Govern¬ GOVERNMENT AND PRIVATE CAPITAL ment itseff wiU execute almost all of these. Some, FORMATION, 1953 54 to 1959 60 however, in industry and possibly in mining may be {millions of kyats) joint ventures. Capital expenditures by the Govern¬ - ment on presently planned projects during the years 1 2 3 4 5 6 8 Government Private 1953-54 to 1956-57 are therefore assumed to be Capital Capital moderately below the total expenditures for planned Gross Formation Formation projects in these years programmed in Part VIII. Dom¬ Per Per Year Pro¬ cent cent estic Pro¬ On the other hand, it is assumed that with continuing ductive Col. Col. Pro¬ ductive planning, a number of additional projects will be and 4 to 2 6 to 2 duct and Net Gross Defen¬ planned before the end of the decade. Government Social sive— —Net expenditures on planned projects during 1957-58 to Gross 1959-60 are therefore assumed to be somewhat above the totals now programmed for planned projects Jan.-Sept. during those years. 1952 4,121 150 230 255 385 5-6 9-3 1952-53 4,650 220 375 265 460 81 9-9 In addition to the planned productive projects, (est.) the Government wiU build houses, schools, health facilities, and other social capital, and government Programmed: 1953-54 5,200 390 565 265 470 10-9 9-0 buildings of various types for administrative purposes. 1954-55 5,550 550 695 280 495 12-5 8-9 It is reasonable to estimate this construction at a 1955-56 5,950 605 745 345 570 12-5 96 rate rising throughout the seven years but averaging 1956-57 6,300 605 740 410 645 10-7 10-2 1957 58 6,600 540 670 490 735 10-2 111 about KlOO million per year or K700 milhon in aU. 1958-59 6,800 490 615 560 815 91 12-0 Total capital expenditures by the Government may 1959 60 7,000 470 590 600 865 8-4 12-4 be estimated at K3,650 miUion. Private net capital formation, the balance of the development program, Total, 1953-54 will be considerably less than that by Government, or K2,950 miUion. These are "net" figures, that is, figures for the 2. FINANCING PRIVATE CAPITAL FORMATION necessary increase above the present amount of These estimates, of course, include both expendi¬ productive and social capital. In addition, some tures within Burma and purchases of materials and capital must be built every year to replace the equipment abroad. If foreign firms invest in Burma depreciation of existing capital which goes on year and bring capital in from abroad, no saving within by year. Also, Government must construct a con¬ Burma is needed to finance this capital. However, if siderable number of buddings and buy considerable private firms within Burma invest, they must surren¬ capital equipment for the defense forces, not included der funds here in Burma to the foreign exchange FINANCING THE PROGRAM 51 authorities to obtain the foreign currency needed for the nation's output. Private activity in that >ear purchases abroad. Hence total private capital forma¬ included a number of industries since wholly or tion, i.e., the expenditures both abroad and in Burma, partly nationaUzed (rice exporting, teak extraction, may have to be financed out of savings within mining, Irrawaddy flotilla), and the profitable mineral Burma. extraction industries will be operating at much lower Government expenditures for productive capital levels of activity in 1959 60 than before the war, reach a peak in 1956-57, mainly because of the so that private saving cannot be expected to equal urgency of key power and transport projects. (See the prewar percentage of the value of the nation's Parts IV and VI, and also Part VIII, which sum¬ output, 14-2%; but that it will reach 8-6% or more marize expenditures on planned projects.) Private seems reasonably certain. The prospects are good, capital formation is expected to be stimulated by not only that private saving wiU readily finance all these key pubhc projects and to rise rapidly during of the private capital formation anticipated, but that 1955-60. if private caphal formation does not exceed this Private saving within Burma wiU almost certainly be amount there will be savings looking for outlets and ample to finance the total shown. The financing of that available for the purchase of government bonds. share which makes good each year's depreciation raises httle question, since it will be covered by the 3. FINANCING GOVERNMENT CAPITAL provisions for depreciation normaUy made by business FORMATION firms, plus the arrangements for regular replacement Column 4 of Table III-7 indicated anticipated of short-lived housing customarily made by the expenditures for government capital formation year inhabitants. For many individuals and firms in the by year, including not only those within the develop¬ Burmese economy, these arrangements are not form¬ ment program but also those for defense capital alized, but the provisions do exist, and in a period and those needed to offset each year's depreciation. of rising income they are easy to make. Hence Table III-8 indicates the probable division of this attention can be concentrated on the financing of total between expenditures abroad and those within the net private additions to capital. Burma. Private net capital formation is estimated to rise TABLE III - 8 from K265 milhon in the current year, 1952-53, to K600 mUhon in 1959-60. In 1952-53, it constitutes GROSS GOVERNMENT CAPITAL FORMATION, 5-7% of the value of the nation's output; in 1959-60, INCLUDING DEFENSE, AT HOME AND ABROAD this percentage will have risen to 8-6% of the much {millions of kyats) larger national output of that year. Year Total Abroad At Home The private capital formation in 1952-53 was Jan. Sept., 1952 230 40 190 financed wholly from current private saving, except 1952-53 (est.) 375 150 225 for some agricultural improvements financed by Programmed: goverrmient loans to cultivators. Loans and advances 1953-54 565 303 262 by commercial banks diminished during the year. 1954-55 695 356 339 This indicates that the saving by individuals and 1955-56 745 360 385 firms during the year was sufficient not only to 1956-57 740 352 388 finance the capital formation which occurred (other 1957-58 670 312 358 than the agricultural improvements mentioned), but 1958-59 615 267 348 also to make loan repayments to the banks. 1959-60 590 259 331 If private savings rise during the remainder of the decade from 5-7% to 8-6% of the value of the Total, 1953-54 nation's output, they wiU be sufficient to finance all of the private capital formation which is anticipated. They wiU almost certainly rise by at least this The preceding section has indicated that ample amount. During the six years intervening the nation's foreign exchange wUl be available to finance both output (and income) wiU increase by more than one private and government expenditures abroad. The third, and per capita income wiU increase by approx¬ remaining question concerning the financing of the imately 25 %. With such a rise in per capita income entire development program is whether any new the percentage of income saved by individuals and measures must be adopted to finance without firms always rises fahly sharply. In 1938-39, with economic strain the domestic expenditures by per capita income slightly below that anticipated in the Government, or whether present measures and 1959-60, private saving totaled 14-2' % of the value of economic policies are adequate. 52 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA The expenditures within Burma must be financed within Burma for other purposes. The budget for out of current government receipts by drawing on 1952 53 showed total "current expenditures" of accumulated cash balances, or by creating new approximately K655 miUion. Of this total however money. about K30 million are actually capital expenditures a. The Government's Budget for the rehabilitation of buildings destroyed or The primary source of funds must of course be damaged in war or insurrection. Only K625 miUion government revenues (though as wUl be noted below are true "current expenditures." To these must be this is by no means the only important source). added expenditures included in the capital budget Government revenues do more than merely provide which are not for physical capital formation. They income for the Government. The taxes paid by include part of the loan to the Burma Railways (to individuals and firms curtail their purchases of goods cover its operating deficit for the year, the remaining and services. In the main, therefore, government part being for capital formation), and loans to spending of its revenues merely replaces private agriculturists, cooperative societies and others. spending. But, unfortunately so far as their use in These loans total about K50 milhon, bringing total financing government expenditures within Burma is non-capital-formation expenditures to K675 mUhon. concerned, a large part of the present revenues of Of these, about KlOO mUhon are abroad (the largest the Union Government are not paid by the people single category being defense purchases abroad) and or firms of Burma and do not curtail private spend- K575 miUion in Burma. ings within Burma. By far the largest single source This figure is K105 million in excess of revenues of budget revenues since the war is the taxes or from within Burma. The contrast between this fact contributions paid by the State Agricultural Market¬ and the over-all budget data, which include revenues ing Board from its net income or "profits" on rice and expenditures both at home and abroad, is exports. This revenue is derived from foreign buyers striking. Though there is a budget surplus of K180 of rice. It is in fact received in foreign currencies milhon over current expenditures, there is a deficit of —checks or drafts on foreign banks—and not in kyats. It is converted into kyats by selling it to the BUDGET ESTIMATES, 1952 53, SELECTED DATA Union Bank of Burma, which holds the deposits {millions of kyats) abroad and creates new deposits, exactly as it would if it bought government bonds. This revenue does Revenues (current Revenues from within Burma 470 not in the least reduce private spending in Burma or plus capital) 835-0 free labor or other resources in Burma for employ¬ Current expendi¬ Non-capital expen¬ ment by the Government. To the extent that with¬ tures 654-9 ditures within drawal of funds from private spending may be Burma 575 necessary to prevent inflation, such revenues must be Surplus available Surplus available disregarded for financing expenditures within Burma. for capital ex¬ for government However withdrawals in addition to those accom¬ penditures 180-1 capital formation plished by the present structure of the Government's in Burma 105 domestic revenues are not inescapable, as developed further in paragraph e. K105 milhon of revenues within Burma below non¬ The importance of this fact may be seen by con¬ capital expenditures within Burma. The reason for sidering the 1952-53 budget. (The original budget this discrepancy is that the budget estimates include a estimates, presented to Parhament in August, 1952, huge surplus of estimated revenues abroad over are used.) The budget estimated total receipts of K835 estimated expenditures abroad. Such amounts are not milhon—K699-4 million of "revenue receipts" and relevant to an analysis of financing within Burma. K135-5 million of "capital receipts." But of the total, The table, it should be noted, is based on the K364-6 miUion consisted of revenues from SAMB—a original budget estimates. An estimate may be "rehabihtation contribution" of K250 milUon, export hazarded that current budget expenditures within duties of K14-6 milhon, and a "capital contribution" Burma during 1952-53 will total some K40 to K50 of KlOO miUion. Only the remaining K470-4 miUion mUlion less than the budgeted amount, whUe revenues was from within Burma.* wiU approximate the total indicated, so that the actual To determine the amount of government revenues deficit is K40 milhon less than indicated in the table. available for capital formation within Burma, this Estimates may be made of the corresponding sum must be set against the Government's expenditure surpluses or deficits of domestic receipts compared to *There are other minor sums derived from abroad, but these are domestic non-capital-formation expenditures, during so small that they may be disregarded. the period 1953-54 to 1959-60. To do so, receipt's and FINANCING THE PROGRAM 53 expenditures must be forecast. As national income it is estimated that those m 1953-54 wiU not reach rises, revenues wUl rise significantly even without the higher level which will presumably be budgeted for change in present revenue laws. (A new schedule of that year, but that they will reach this level in subse¬ tariff rates will take effect on October 1, 1953, whh quent years. termination of the preferential agreements now in Table III 9 presents the estimates. The decline in effect. The estimates below assume that the new rates non-capital-formation expenditures in the years wUl yield the same total revenue as the former ones.) following 1954-55 reflects the anticipated decline in In forecasting expenditures, account must be taken the operating deficit of the Burma Railways from of the fact that a number of types of current expendi¬ between K20 and K30 million this year to a "black tures for education, health, other social services, and ink" budget by the end of the decade. general administration are being expanded fairly Table III 9 indicates that not until 1955-56 will rapidly. Such other expenditures as those for technical the domestic revenues and expenditures provided in education and training, research and extension work the budget yield a surplus for capital formation must expand if the development program is to be expenditures whhin Burma. These estimates, how¬ carried out effectively. Because of these expanding ever, give by no means a complete indication of the programs, current budget expenditures will rise funds available. It was suggested above that there are steadily year by year unless they are firmly controhed, important sources of funds outside the budget. and in fact may over a period of several years threaten These must also be considered. the success of the development program. Current expenditures (at home and abroad) budgeted for b. Sources of Funds outside the Budget: State 1952-53 are K650 million. In the estimates below, it Enterprises and Minor Funds is assumed that those budgeted for 1953-54 wiU total As the functions of the Union Government have K700 miUion, and that they will be held at this level expanded and diversified in recent years, an in¬ in subsequent years. This is not merely a forecast of creasing number of government activities are carried present trends. Such a forecast would present increas¬ on by State enterprises whose receipts and expendi¬ ing figures in subsequent years. The figure is held at tures are reflected in the budget only insofar as they K700 miUion because it is believed that the Govern¬ suffer losses which must be met by appropriations ment must hold it at approximately this level if enough from the budget, or as they obtain an appropriation resources are to be available for the development of capital or make a repayment of capital. Among program. these are the Inland V^ater Transport Board, Burma It was noted that current expenditures in 1952 53 Railways, the Board of Commissioners of the Port of will probably not reach the budgeted level. Similarly, Rangoon, and the Union of Burma Airways. There

T/^BLE III - 9 T.\BLE III - 10 BUDGET SURPLUSES AVAILABLE FOR EXPEN¬ NET NON-BUDGET RECEIPTS DITURES IN BURMA FOR CAPITAL FORMATION {millions of kyats) 1952-53 to 1959 60 Year Amount {millions of kyats) 1952-53 100 1953 54 105 1 1954-55 110 Expenditures 1955 56 115 Revenues witnin Murma A vailable for 1956 57 120 from within Other than Expenditures Year Burma for Capital in Burma 1957-58 125 {Current plus Formation for Capital 1958-59 130 Capital) {In Current Formation 1959-60 140 and Capital Budgets) are many others. The losses of those boards consist¬ ently incurring losses, notably Burma Railways, are 1952- -53 470 525 55 reflected in the budget. The net profits of the enter¬ 1953- -54 530 540 10 prises earning profits are not. Those profits, plus the 1954-55 580 585 5 share of their gross receipts allocated to depreciation 50 1955- -56 630 580 and certain other reserve accounts, are available for 1956--57 670 575 95 1957-58 705 570 135 capital expenditures. So also are the net deposits by 1958--59 735 570 165 the public in various government court, civil and savings funds. These are minor in amount. Offsetting these non-budget receipts in part are disbursements 54 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA of funds not reflected in the budget, such as the net TABLE III- 11 loans of the State Agricultural Credit Bank created DOMESTIC RECEIPTS AND DISBURSEMENTS, in 1953. 1952-53 to 1959 60, ALL UNION GOVERNMENT While the net receipts from this group of sources AGENCIES, CONSOLIDATED can be estimated only very roughly, it will clearly rise {millions of kyats) through the period of the development program. Table III - 10 (see p. 53) shows the estimated receipts. 1 2 3 4 5 6 Consolidated Consolidated Domestic c. Private Saving as a Source of Funds Domestic Disbursements Receipts Excess of Including A third prospective source of funds is private Non¬ Disburse¬ Year Loaits from capital Capital ments saving. It was suggested above that private saving Current Forma¬ Forma¬ Total may rise more rapidly than private capital formation. Private tion tion If it does, the firms whose savings exceed their Income* capital needs may come into the market for govern¬ 1952-53 630 525 225 750 120 ment securities; or, as has happened in 1952-53, they 1953-54 635-685 540 262 808 123-173 may use excess funds to retire loans from commercial 1954-55 690 740 585 339 924 184-234 banks, while the banks in turn purchase goverrmient 1955-56 745-795 580 385 965 170-220 1956-57 790-840 575 388 963 123-173 securities. In either case, the funds wiU be available 1957-58 830 880 570 358 928 48- 98 for goverimaent expenditures.* 1958-59 865-915 570 348 918 3- 53 The estimates of capital receipts above include a nominal estimate of KIO miUion per year from this * The lower figure in this column is from column 2 of Table III - 9 source. As national income rises, the amount avail¬ and Table III - 10. This figure (for each year) includes KIO million able annually may be considerably greater. In calcu¬ of receipts from the sale of securities to persons or firms who purchase lating the prospective financial position, from zero out of current income ; the higher figure includes K60 milUon. to K50 million per year may be allowed from this securities in considerable amounts. (Their purchases source. will automaticaUy create new deposits.) Further, under d. Government Receipts and Disbursements: present statutes and with present reserves, the Union Consolidated Estimate Bank of Burma possesses the authority to create new deposits or issue new currency vastly in excess of A consohdation of the estimates presented in the foreseeable requirements, and if deshed, by statutory preceding sections wUl indicate the relationship change the authority could be made limitless, f between prospective domestic receipts and disburse¬ Actually, no deposit creation would be required for ments of the Government and all of its agencies. some time; the accumulated cash balance of the Table III-l 1 presents the data. The term domestic Union Government in the bank totaled K511 miUion receipts as used here includes both budget receipts at mid-1952. Only a fraction of this amount is needed from within Burma and the gross income (net profits as minimum reserve. plus accruals in depreciation reserves) from within The creation of new deposits would not necessarily Burma of aU agencies operating outside the budget. requhe securities purchases from the Govermnent The term domestic disbursements includes both the either by the Union Bank or by the commercial banks disbursements within Burma recorded in the budget of the country. It was noted earher in this chapter that accounts and the capital expenditures of the agencies the State Agricultural Marketing Board converts its outside the budget. Such a consolidated picture foreign revenues into kyats by selhng them to the presents information conceriung the impact of the Union Bank, which creates new deposits in return. development program on the economy which cannot Such deposit creation is the source of the Govern¬ be gleaned from the Government's budget data. ment's present cash balance. Any excess of SAMB The excess of disbursements would have to be revenues in near-future years over the foreign financed from accumulated cash balances or from new money (i.e., new deposits) created for the purpose. t Present law requires the Bank to hold foreign exchange equal to From a purely financial viewpoint, there would be 25% of its deposits plus currency outstanding, or, in other terms, permits creation of deposits or issue of new currency equal to four no difficulty in obtaining these funds. The commercial times the foreign exchange holdings. At the end of April, 1953, banks will probably be in the market for government foreign exchange holdings of the Bank totaled Kl,041 million. This would permit deposits or currency totaling K4,164 million; the * Or private savers may hold funds idle, and the banks may offset actual amount at that date, on the basis of a preliminary estimate, this by the purchase of government securities. The effect on the was about Kl,120 million. The theoretically permissible increase of money supply will be different from that if bank loans are retired, more than K3,000 million is vastly in excess of any conceivable but the effect on funds available for investmeiit will be the same. increase which will be desirable or which will be undertaken. FINANCING THE PROGRAM 55 exchange needs of the Government will result in exchange transactions will be an important influence, additional deposit creation. The amount of this will offsetting in part the excess of govermnent domestic probably be sufficient to finance the excess of domestic disbursements over receipts. disbursements over domestic receipts shown in Table When an individual or firm makes a payment III-l I. If however this should not be the case, abroad for imports, ocean freight, marine insurance securities issues to the Bank could be used. or other remittances abroad—he surrenders funds to his bank in order to purchase the necessary foreign e. Effects on the Money Supply exchange. This decreases the total money supply in The question to which these estimates lead is not Burma. On the other hand when he receives a payment therefore whether the money can be obtained. The in a foreign currency, he sells the foreign draft to his answer to that question is obvious. The pertinent bank, which creates a new deposit in exchange; this question is whether the prospective excess of govern¬ increases the total money supply. This "monetiza- ment domestic disbursements over receipts indicated tion" of foreign exchange is a normal part of banking in Table III-l 1 is healthy, or whether it is excessive. In operations. When SAMB is the exporter, it receives the latter case, if domestic disbursements progress as the new money (from the Union Bank) and may hold indicated, measures should be taken by the Govern¬ part of it idle, but its payments to firms or individuals ment to increase its domestic revenues. for rice purchased for export increase the money It has akeady been noted that in the conditions of supply in private hands. slack and underemployment which now prevail in the If the total income of firms and individuals from Burmese economy, government expenditures within exports exceeds private payments abroad for imports, Burma on capital projects in excess of current the money supply in the hands of firms and indivi¬ government savings—or, in other words, total duals is increased; if the payments abroad exceed domestic disbursements by the Government in excess receipts, the money supply is decreased. of its total domestic receipts—are highly desirable. Preliminary data suggest that during 1952 53 They create jobs and increase the level of income, and receipts from exports by firms and individuals and in the process inject into the economy the increase in from rice sales to SAMB exceeded their payments money supply needed to provide working capital for abroad by KUO mUhon. This increase, combined the increased production which is stimulated by the with an excess of government domestic disbursements increased spending. Of course there is a limit to the over receipts of K120 milUon, offset in part by a rate at which new orders for materials should be K30 miUion contraction of bank credit, increased the placed, but this is a question of bottlenecks in the money supply in private hands by K200 miUion. production of specific materials (such as construction (These are estimates based on lune months' data, and materials) and in the avaUabihty of skilled workers of may be inexact. The increase in money supply in specific types, and not a question of the total rate private hands wiU however obviously be between of spending. The advisabUity of a given total rate of K160 and K220 miUion.) The excess of receipts from spending wUl be tested by the presence or absence of sales for export was due in large part to unusuaUy general scarcities, scarcities of most types of goods and large purchases of rice by SAMB. Since rice and of most kinds of labor, when the economic system paddy stocks in private hands are now probably approaches capacity. One convenient way to test this down to a minimum, SAMB purchases in 1953-54 is to ask whether government programs whl sttU be may be below those in 1952-53 in spite of a larger increasing the total money supply in private hands crop. Other exports wiU probably rise, and in subse¬ when the economic system is operating at capacity, quent years both other exports and rice sales for and whether in the interval before capacity operation export wiU rise. At the same time, however, with is reached government disbursements will have increasing incomes the people will spend increasing contributed so much new money that its presence in amounts for imports; and as private capital formation the hands of the public wiU in itself stimulate excessive increases they will also spend increasing amounts spending and create scarcities and inflationary abroad for the purchase of capital equipment and pressure. materials. It seems probable that purchases of These pressures, however, may be mitigated by two foreign exchange in 1953-54 to pay for imports wiU other factors: the loan policies of commercial banks, almost equal receipts by individuals and firms from and import-export operations. The former will exports, and that in subsequent years they wiU probably be a fairly passive factor in the circum¬ exceed receipts, thus causing a shrinkage in the stances facing Burma, but the balance between money supply which wiU offset in part the effect of receipts and payments of firms and individuals in government expenditures. importing and exporting and in related foreign Table III-12 (see next page) presents estimates of 56 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA TABLE 111-12 1952-53 is equal to 16-3% of the value of the nation's CHANGES IN THE PRIVATELY HELD MONEY output. The table indicates a minimum increase in SUPPLY DUE TO FOREIGN EXCHANGE TRANS¬ this percentage to 19-5% in 1955-56 and a maximum ACTIONS increase to 22-2% in 1956-57. What can be said of {millions of kyats) the effect of these ratios? Per capita income will rise rapidly during the next Private several years. As it does, people will find it desirable Private Imports Receipts and possible to keep more money on hand, and an Imports E.xccis of of Total from increased ratio of the money supply in private hands of Receipt', Consumer Foreign Exports Capital {Increasing to the value of output is necessary to meet this desire. Year Goods and Exchange plus Rice Equip¬ Money Materials Payments Said to It is not possible at this time to forecast with confi¬ ment Supply) and Non- S.4MB dence how great the increase should be. An increase Trade and Payments Materials in the ratio to 19-5% by 1955-56 would probably merely provide a desirable stimulus to output, 1952 53 671 104 775 885 -f 110 whereas an increase to 22-2 % by the foUowing year might cause excessive spending and inflationary 1953-54 770 139 909 900 9 pressures. 1954-55 865 147 1,012 970 42 1955 56 955 171 1,126 1,040 86 These facts lead to a very important conclusion. 1956-57 1,025 175 1,200 1,125 - 75 An excessive increase in money supply could be 1957-58 1,095 188 1,283 1,205 78 prevented by increasing revenue rates so that a 1958-59 1,165 187 1,352 1,280 72 1959 60 1,210 186 1,396 1,365 - 31 larger share of expenditures is covered by revenues; it might be prevented by allowing slight price rises in domestic goods to stimulate imports. If the increases prospective foreign exchange transactions of the in per capita income find their outlet in increased private sector of the economy. imports there wiU be little or no inflationary pressure. Finally, Table III-l3 presents estimates of the The tax increase may or may not be necessary. If the change in the privately held money supply due to the forecasts presented in this chapter are valid, and if combination of government and import-export tran¬ non-capital expenditures are held within the limits sactions, together with related data. The table ignores indicated, it is entirely possible that Burma can carry the effects of commercial bank loan contraction or out her entire development program without any expansion, since they are apt to be small. increase in her present tax rates. But it is only possible, The money supply in the hands of the public in not certain. Revenues imposed by the present tax

TABLE III- 13 TREND IN THE MONEY SUPPLY IN THE HANDS OF THE PUBLIC {millions of kyats)

Change Due to Change Total Money Supply in Hands Government Due to of the Public Per cent of Domestic Foreign Total Change Gross Money Supply Year Transactions Exchange during the Domestic of Gross {from Transactions Year End of Year ^^erage during Product Domestic Table 111 11) {from Year Product Table III-l2)

1952 53 120 4-110 200* 859 759 4,650 16-3

1953 54 123 173 - 9 114-164 973-1,023 916- 941 5,200 17-6-18-1 1954-55 184-234 - 42 142 192 1,115 1,215 1,044 1,119 5,550 18-8 20-2 1955-56 170 220 - 86 84-134 1,199 1,349 1,157-1,282 5,950 19-5-21-6 1956-57 123-173 75 48- 98 1,247 1,447 1,223-1,398 6,300 19-4-22-2 1957 58 48- 98 78 ( 30) (-^-20) 1,217 1,467 1,232-1,457 6,600 18-7-22-1 1958 59 3- 53 - 72 (-69) (-19) 1,148 1,448 1,183-1,458 6,800 17-4-21-4

*Net decrease in commercial bank credit of K30 million is reflected in this figure. FINANCING THE PROGRAM i/ system may prove not to be adequate, and to carry as the development program progresses. In these out the program without inflation it may be necessary circumstances, what is their usefulness? for the Government to prepare in a year or two to (1) In general, they indicate the feasibility of stiffen its tax structure, presumably by raising the allocating to the development program enough rates of some existing tax measures. resources to carry it out. With regard to foreign The indicated decline in the money supply in the exchange, they indicate that in spite of any probable hands of the public in the last years of the decade, as future development, it wiU be possible to finance all now projected, reflects a failure of capital formation foreign purchases necessary to carry out the develop¬ expenditures within Burma in those years as pro¬ ment program. With regard to domestic expenditures, jected to equal total government plus private saving they indicate that the program is neither markedly too within Burma during those years. This, if it occurred, large nor markedly below the economic capacity of would be deflationary. However, the precise trend of the country. No radical discrepancy exists between events five or six years in the future is so uncertain the magnitude of the program and the magnitude that it would be absurd to assume that the precise of the resources which wUl be available under present turn of developments now projected for that period measures. New revenue measures or other fiscal has significance for future policy. If, for example, measures may or may not be necessary to obtain government projects are not executed as rapidly as sufficient reserves to finance the program. If they are, now programmed, the pattern of expenditures from only moderate changes in present measures will be year to year will change even if the total for the necessary. seven-year period should not. (2) The forecasts indicate that for the immediate future the problem is one of organizing with maxi¬ D. CONCLUSIONS mum speed the administration and management of What is the significance of these forecasts? sound development projects. There need be no The first fact which must be noted in assessing financial limitations on immediate expansion of the their significance is the margin of uncertainty in development program. them. They assume certain things about the future (3) The forecasts indicate the nature of the condi¬ and forecast others. They assume that the development tions and trends which must be watched. A develop¬ program wUl be carried out as scheduled. They also ment program as comprehensive as the one on which assume that current government expenditures will be Burma is now entering requires equally comprehen¬ held to K700 milhon per year. They forecast the sive planning of economic policies. If such compre¬ amount by which government revenues will increase hensive pohcy planning is to be performed intelli¬ under present revenue laws. They forecast also the gently, it must be based on analysis not merely of the value of exports, the value of imports and other Government's budget but of the factors which are foreign exchange payments, and the level of saving by discussed in the present chapter. firms and individuals as income rises. While future trends are not fully certain, they are The actual magnitude of all the data which are sufficiently clear to indicate the policy measures which assumed or forecast may differ appreciably from the must be taken now and those which must be planned estimates presented. As a consequence, the conclu¬ for adoption if necessary. Chapter IV deals specificaUy sions drawn may require considerable modification with these questions of central economic pohcy. CHAPTER IV

CENTRAL ECONOMIC POLICIES FOR THE PROGRAM

A. INTRODUCTION in the country or divert them to expenditures abroad. The successful implementation of the development The Government's revenue, expenditure, and banking plan win not depend wholly upon sound design of pohcies must be altered to accomphsh this effect. individual projects and programs and effective Pohcies concerning foreign exchange and foreign arrangements for their execution and operation. trade which wiU be advantageous can be stated at It will depend in considerable measure also on the this time, subject of course to modification if major formulation and execution of appropriate economic unforeseen changes occur. The precise development pohcies to facilitate the balanced expansion of of domestic conditions is sufficiently uncertain, economic activity. This chapter examines major policy however, that the situation must be reviewed from issues in the fields of fiscal, banking and foreign year to year, and policies modified if developing exchange and foreign trade pohcy. conditions warrant. Anti-deflationary policies should On the assumptions of no general world war, con¬ be vigorously prosecuted now. The timing of appro¬ tinued rapid improvement in civil order within priate changes wUl depend in some degree upon Burma, and effective prosecution of the develop¬ price trends in Burma and abroad, but mainly on ment program, the preceding chapter arrives at the year-to-year trends in governmental expenditures following economic forecasts: (developmental and other), private capital expendi¬ (1) Production in Burma wUl increase rapidly tures, and the country's productive capacity. throughout the remainder of this decade—more This chapter discusses appropriate policies and the rapidly during the first half of the period than principles which must govern policy. FoUowing a thereafter. section outhning the improvement in information (2) Burma's exports, especially of rice, will increase which is needed for effective policy control, succeed¬ rapidly. Their value wUl probably be adequate to ing sections discuss fiscal, tax, banking and foreign finance aU imports and other expenditures abroad, exchange and foreign trade pohcies. even if restrictions on imports from non-dollar B. IMPROVEMENT IN FISCAL INFORMATION areas are completely removed. (3) During the next one or two years there wiU con¬ The annual budget document of the Union Gover- tinue to be slack and underemployment in the country ment presents a (stiff somewhat imperfect) classifica¬ in spite of increasing output. At some time thereafter, tion of budget expenditures into current and capital however, as output approaches the economy's capa¬ and a corresponding division of receipts. Appended city, the economy wUl probably become tight. Ways and Means Accounts trace in varying detaU This third development merits further description. the sources and uses of aU funds handled by govern¬ As security conditions continue to improve, additional ment agencies. Supplementary tables detaU the workers wiU be able to return to cultivation and activities of important agencies. If the govern¬ other viUage pursuits. This together with an expan¬ ments of the world were hsted according to the sion of governmental and private investment wiU degree of information conveyed in theh annual graduaUy absorb underemployed workers. Shortages budgets, Burma would certainly rank in the top of some types of labor and of some materials wUl thhd of the hst. However, if Burma is to manage appear. If administrative problems and problems effectively as comprehensive a development program of technical and skiUed personnel can be overcome, as she is now undertaking, she needs still better total developmental expenditures wiU reach a level fiscal information to guide her pohcies. which will bring fahly general tightness of supply 1. A BUDGET INCLUDING ALL AGENCIES AND of labor and of commodities. The process if it occurs FUNDS whl be gradual, with specific shortages and bottle¬ What is needed is not merely more or more- necks emerging in growing numbers. As shortages detailed information of the sort now presented, but a become common in many sectors of the economy, broader budget concept. Chapter III has noted progress in solving particular problems wiU no longer that with the expansion and diversification in recent be enough. The problem of general shortages must be years of the functions of the Union Government, met by measures which will curtail total expenditures an increasing number of state enterprises and other 58 CENTRAL ECONOMIC POLICIES FOR THE PROGRAM 59 government agencies operate outside the framework of payments abroad from other expenditures. Even of the main budget accounts. As a resuh, the informa¬ within the main budget accounts, not all expenditures tion conveyed in the budget concerning the effects abroad are separated from total expenditures; of goverimaent financial operations upon the only sterhng expenditures are distinguished, other economic system is increasingly inadequate. expendhures abroad being indistinguishable from For analysis of the effects of its operations in disbursements within Burma. For agencies which stimulating or restraining incomes and expenditures operate outside the framework of the budget, no in the economy as a whole, the Government must separation whatever between domestic and foreign have an annual record which includes every govern¬ transactions is made. Officials endeavoring to judge ment agency, and which shows on the one hand the nature of the Government's foreign exchange total receipts from the pubhc by the treasury plus expenditures, and hence their probable magnitude in aU government agencies in combination, and on the future, are forced to resort to estimates and pieces the other hand the capital disbursements of aU of information obtained from individual agencies. the government agencies. Receipts in these inclusive Present budget practice with regard to foreign accounts must include any revenues of enterprises exchange expenditures presumably derives from a aUocated to reserve accounts as well as net profits, so time before the war when aU foreign expenditures that the total net inflow of cash from the pubhc to the were made in sterhng, and a record of sterling enterprises is recorded. AU cash receipts of mis¬ expendhures or an estunate of them for the coming cellaneous "funds" or accounts wiU be included. year was in fact a record or estimate of all foreign Transfers of funds from the general government exchange disbursements. In present circumstances account to state boards or corporations, which the practice has httle usefulness. The Ministry of are not disbursed to the public, whl be stricken Finance, recognizing the obsolete nature of present from the record of disbursements. They are red procedure, is arranging to obtain in future years herrings; they appear to be disbursements of funds, from aU agencies whose records appear in the main but are not. budget accounts a separation of foreign exchange Such a record of cash flows between the pubhc and other expenditures. This wiU, however, not and all government agencies taken as a group, permit analysis of other agencies. divided between expenditures and receipts at home Estimates of past and prospective government and those abroad and classified to permit analysis financial operations which are incorporated in the of their nature and their probable trend, is known tables of Chapter III are based upon a painstaking in modern fiscal accounting as a "cash consohdated attempt to estimate data of the sort which would budget." To guide her economic pohcies, Burma appear in a cash consolidated budget. Some of the must develop such a set of accounts. estimates are undoubtedly in error because of While the present Ways and Means Accounts in inabihty to obtain accurate information; further¬ principle deal with aU receipts and disbursements more, it would not be feasible for the Government of money by all agencies, in fact the data presented annually to go through this item-by-item process of are inadequate for analysis. In many cases a budgeted obtaining information or estimates for this specific transfer of funds from the general government purpose. For the annual budgeting required, im¬ account to a state enterprise or corporation is treated proved procedures must be established. as a cash outflow, without analysis of whether it will in fact be disbursed. For some agencies only capital 3. PROMPT BANKING REPORTING transfers—loans or repayments—between the treasury Budget information, to be most useful, must be and the agency are specificaUy recorded; cash receipts available much more promptiy than has been the case or disbursements from or to the pubhc are lumped in recent years. Even though the budget accounts are in a catch-all account, "other deposits." For some on a cash basis, so that accounts are presumably agencies, only the unanalyzed record of cash receipts closed by each disbursing or receiving officer or disbursements is recorded, without indication promptly at the end of each fiscal year, the delay in whether receipts are net profits or unspent aUoca- assembhng the information is such that it has not tions to reserve accounts, and whether disburse¬ been possible in recent years for the budget presented ments are losses or disbursements for the purchase to Parliament each autumn to show the record or construction of capital facilities. of receipts and disbursements for the year which ended ten months earlier. The most recent informa¬ 2. FOREIGN EXCHANGE TRANSACTIONS tion presented is that for the year which ended Further, the usefulness of the present budget for twenty-two months before the presentation of the fiscal analysis is limited by the incomplete separation budget document. The delay, originally caused by 60 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA disturbance to normal procedures arising from war budget estimate for each project for the coming year and insurrection, has persisted. The usefulness of the is at the same time the forecast of the amount of budget as an indication either of the financial position expenditure for which financing must be provided, of the Government or of trends in receipts or expen- and the legal ceiling on the amount which the agency dhure items is thereby greatly impaired. may spend for the purpose. As in the case of foreign exchange transactions, the So ingrained is this procedure in Burma (and in a officials of the Ministry of Finance and Revenue number of other countries) that some Burmese and the Auditor-General are aware of the unsatis¬ officials with whom the matter has been discussed factory nature of this delay in accounting, and are have found it difficult to visuaUze clearly that any striving to obtain agency records for more recent other mode of presentation is possible. Actually a periods. Unpubhshed accounts now available show change would be simple to make, and would improve a reasonably complete record of budget receipts and greatly the usefulness of the budget. The reason why disbursements for the year which ended ten months the amount set as the legally permissible expenditure ago; h is to be hoped that by next year the records is often a bad estimate of the amount which whl wiU be in such shape that it will be feasible to pubhsh actually be spent is this: in the annual budget document accounts for a period When a new program of any size is initiated, it is one year closer to the date of presentation than is literally impossible to estimate accurately how fast now the case. it can be implemented. If it is a capital project requiring complex engineering design, neither the 4. EXPENDITURE ESTIMATES AND EXPENDITURE time when the design can be obtained, nor the time AUTHORIZATIONS required to obtain tenders for construction and to Quite apart from the deficiency in scope and lack award a contract, nor the time for construction can of timeliness of the budget accounts, they suffer from be accurately estimated. The time required for receipt inaccurate estimating of each coming year's expendi¬ of equipment or materials obtainable only from tures. abroad is subject to variations beyond the control of However ideal conceptually the budgeting frame¬ the procuring agency. Whether a given step in the work might be, budget estimates for each coming procedure is completed and the next one begun two year wiU not be an efficient guide to action unless months before or one week after the end of the they are roughly accurate. An exaggerated estimate coming fiscal year cannot possibly be foretold, but of total budget expenditures for a coming year, for may make a difference of one hundred per cent or example by estimating expenditures which in fact one thousand per cent in the amount which can can be accomplished only over two or three years, efficiently be expended during the year. If the project distorts the entire analysis of budget requirements is one requiring only simple engineering work, some and of the economic effects of the expenditure pro¬ but by no means all of the uncertainties of timing grams. Within the total decided on as feasible, are eliminated. Even if it merely requires rapid excessive estimates by one agency, if incorporated at expansion of a staff of specialized workers, a wide face value, force unnecessary cuts in the funds allo¬ range of uncertainty in the speed with which this can cated elsewhere, may retard other programs, or may be done is inevitable. cause improper and harmful revenue action to meet In these circumstances, if the maximum possible an expenditure total which wiU in fact not occur. progress is desirable, it is necessary and proper that The narrower the margin becomes between produc¬ the agency shall request, the government budget tion and capacity in the economy, the more important reflect, and Parliament grant, not merely the wUl be the margin of inaccuracy in budgeting. amount of funds which is the best single guess con¬ In recent years, budgeting by the Union Govern¬ cerning the amount which wiU be spent, but the much ment has contained large errors of estimate. This is larger amount which it may be possible to spend not due merely to careless or reckless budgeting by efficiently. If because of budget procedures this large the officials concerned. In part the errors are inevit¬ amount then serves as the estimate of actual expendi¬ able in a period of changing and especially of rapidly tures, and if there is a number of such expanding expanding programs of expenditure because estimates programs in the budget, the budget estimate of total of rates of increase in connection with such changes expenditures whl necessarily be considerably in excess are subject to large margins of error. of the total which expenditures wiU actually reach. But in part the errors are due to the method of The remedy is not to reduce each estimate to the presenting the budgeting estimates: to the fact that level of the single best guess of actual expenditures. the forecasts of expenditures for each project serve The result of this procedure would be that many as the legal authorization for the expenditure. The projects will be held below the rate of progress which. CENTRAL ECONOMIC POLICIES FOR THE PROGRAM 61 as the facts later show, they could have attained. the expansion of government activity in general but The possibility of a supplementary appropriation at especially from the expansion of government pro¬ the spring session of Parliament is not a solution grams for social welfare. to this problem, for if only a " most probable" Expenditures for capital formation by their nature estimate is presented, programs which develop favor¬ terminate when the project is completed; but a current ably may be legally handicapped in making desirable program, once enlarged, requires increased expendi¬ expenditures and entering into contractual obliga¬ tures in every subsequent year. Further, smaU initial tions for the balance of the year, long before the expenditure on a new current program may commit spring session of Parliament meets. the Government to increasing expenditures in sub¬ The most effective remedy for this situation is one sequent years to develop the program to its fuU scale. which has been regarded as a starthng departure Thus the current expenditure budget may develop a from estabhshed practice by some persons in Burma momentum of its own if the future consequences are with whom it has been discussed, but which in reality not fully analyzed when small-scale initiation of new is quite simple. The budget estimates for the coming programs is undertaken. year for each expanding program should be presented The current expenditure sector of the Union Gov¬ in two columns. One would present the expenditure ernment budget has acquired such momentum that authorization, the other the expenditure estimate. The its size in future years, unless controlled with a view expenditure authorization would set the legal ceiling to the later expenditures involved in programs intro¬ to the expenditure. The expenditure estimate would duced in any year, may threaten the successful present the best single estimate of the probable execution of the development program. expenditure during the year. The sum of the expendi¬ The social welfare programs, justifiable though ture estimates would be the total for which financing each is in its own right, call for thorough appraisal is planned. The total of expenditure authorizations for because of the tendency of each to expand in this a number of new projects or expanding programs way. Health, housing, labor and other welfare pro¬ might be greatly in excess of the total of the expendi¬ grams, in addition to having their own immediate ture estimates. Though for any one project the merits and justifications, contribute to other develop¬ expenditure estimate, like any forecast in the circum¬ mental programs but also compete for finance and stances, may be considerably in error, the total of manpower with them. Healthier and better educated ten such expenditure estimates is almost certain to workers are more productive workers. Too great be far closer to the later actuals than the total of expenditure on a large supply of complex machinery ten estimates under the present method, or the total at the expense of schools and hospitals may mean of ten expenditure authorizations. that healthy and trained people wiU not be avaUable A capital budget whose expenditure authorization to run the machines. However, if the welfare pro¬ properly totaled K500 million might conceivably have grams are expanded to a size which forces curtailment expenditure estimates totahng only K350 miUion. of expenditures for the more direct increase in the The latter total could be expected to be a far better nation's productivity, they may, paradoxically, de¬ estimate of total budget expenditures; yet if any one press the nation's standard of living by preventing of the authorizations were reduced, it might retard a the execution of other programs which would raise program which could otherwise go ahead rapidly. h. Better housing for one worker may mean poorer Until some change is adopted which accomphshes equipment for another; shorter hours for one may the effect of the proposal above (which is the method mean higher cost of products bought for the other, of budget presentation used by the Government of and so on. This element of choice and balance must the United States), it wih be necessary for the always be present in decisions concerning welfare Ministry of National Planning and the Economic and programs if the nation's long-run welfare is to be Social Board, if they are to plan effectively, to dis¬ most effectively advanced. regard the estimate of expenditures formaUy presented The balance between current and capital expendi¬ in the annual budget, and to make their own more tures, and among specific programs within the current reahstic estimates of expendhures during the year. and caphal budgets, must be decided only after complete examination of each. It would be foohsh C. FISCAL POLICY: THE LEVEL OF CURRENT to propose any specific ceding as the absolute limit EXPENDITURES beyond which current expenditures must not go, and The rise in defense expenditures in recent years to which they may safely expand. Yet it is obvious has overshadowed other budget trends, but non- from the analysis presented in Chapter III that if defense expenditures for current purposes have also the development program is to be carried out fully, been increasing steadily. Their rise has resulted from current expenditures will need to be restrained, or 62 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA alternatively, revenue rates must be sharply increased effectiveness of the agricultural extension service. in future years to finance the added expenditures. This need is discussed at more length in Chapter VIII, It is therefore suggested that to establish a point of Agriculture. These current items should receive high departure for budget control, K450 mUlion per year, priority not merely in the current budget, but also or about K50 milhon above the budgeted 1952-53 priority above all but the most urgent capital items. total, should be regarded as a ceding during the To curtail these programs in order to finance capital period of the development program for current projects might indeed be to gain the appearance of expenditures other than for defense, and that any technological progress and lose the substance. advance of budgeted expenditures beyond this amount Capital projects as well as current programs require should occasion increasingly rigorous examination advance programming. A smaU initial expenditure of them. It is believed that non-defense current for, say, a hydroelectric project may commit the expenditures wiU not reach this level in 1953-54 even Government to rapidly increasing sums during the though it may be budgeted, but if not they may reach three ensuing years. However, capital projects are or exceed it in the following year. apt to be thought of as units and the advance pro¬ The momentum of programs under way wUl be a gramming done as a matter of course, whereas with major obstacle in budget control, if budget evaluation respect to current programs it may be overlooked. looks only one year in the future. In receiving each request for funds for any new project or any increase D. FISCAL POLICY: THE LEVEL OF TAXATION in expenditures, the Ministry of Finance and Revenue Tax rates should not now be increased. The pos¬ should require the submitting agency to supply an sible desirability of increasing revenue rates at some accompanying esthnate of the required expenditures time in the future should not lead to tax increases for the ensuing three years. This should be the initial now, when the economy needs stimulus rather than step in projecting the entire current expenditure restraint. section of the budget three years in advance. In It is highly desirable, however, to establish a analyzing new programs, it should be remembered commission now to study the problem of the nature however that a new program may merit an increase, of tax increases when and if such increases become even at the cost of reducing an existing one. Not aU necessary. When, at a future date, developmental of the savings which may seem necessary should be in new programs. expenditures do reach the level at which further increases will run into limitation of labor force and In holding down current budget expenditures, it productive capacity, choice must then be made must not be overlooked that some programs which between limiting these expenditures or increasing tax appear in the current rather than developmental rates so as to reduce private spending. Pohcy decisions budget are in fact among the most vital to the success to increase taxes must be predicated on full under¬ of economic development. Among these are pro¬ standing of the economic impacts and incidence of grams for technical education, mass adult education, different types of taxes. Both incentives and restraints education in skiUs, and "extension" work. The can result from changes in tax rates. It is not too Government Technical Institute, the Artisan Training early to begin to prepare a tax program which wUl Center, the Rehabilitation , the technical be avadable for implementation as changes in fiscal coUeges of the University of Rangoon, programs for impacts are needed. training abroad, and new training programs now Sale of govermnent securities to the pubhc should being planned, are examples. Among such vital expenditures are also salary increases to attract the be considered as a supplement rather than as an best skilled and administrative workers ; and pro¬ alternative to additional taxation. Though every grams to propagate improved methods in agriculture. effort to seU such securities should be made, their It is believed that the rejection in recent years of availability is not apt to reduce private expenditures proposals for pay increase for workers with selected greatly and is therefore not apt to be an effective skills in Government, and for administrators at the substitute for a tax increase as a means of reducing higher levels, will retard the development program. excessive spending. It is believed also that the refusal in recent years to grant budget funds for pay increases and for expan¬ E. THE STRUCTURE OF THE REVENUE SYSTEM sion of staff" in the extension service of the Depart¬ 1. TAX POLICY VERSUS FISCAL POLICY ment of Agriculture is a grave economic error. Very The foregoing section relating to fiscal pohcy has few other developmental expenditures of equal size treated the problem of when to increase or to decrease will bring as large results in increasing the nation's the total tax burden. Quite apart from this question, standard of living as expenditures to increase the there exists the question of the nature of the taxes CENTRAL ECONOMIC POLICIES FOR THE PROGRAM 63 which make up that burden. Is the best combination The major source of revenue at present is profit of taxes, and the best schedule for each tax, being from state enterprises, predominantly profit from the used to obtain the necessary total revenue? This State Agricultural Marketing Board on exports of question wiU become more important at the stage of rice. Together with land revenue, this made up almost execution of the economic development program when 48% of total receipts in 1951-52. Commodity taxes resources are more fully used and the Government —customs, excises, excise duties, and sales tax— needs to gain the maximum resuhs from its tax system. yielded an added 31 %. "Excise duties" is a term The three most important characteristics of the tax apphed to all excises other than those on alcohohc system will be its equity, the degree to which it beverages and dangerous drugs. Minor indirect taxes brings in added revenue as national income rises and yielded 3 %. In descending order of importance, these more revenue is needed for the expanding develop¬ are state lottery, betting taxes, stamp taxes, entertain¬ ment program, and the degree to which it stimulates ment tax, business premises tax, hotel and restaurant or impairs the incentive to produce. tax, motor vehicle taxes and document registration fees. Taxes on corporate and individual incomes 2. THE REVENUE SYSTEM, PREWAR AND POSTWAR produced between 5% and 6% of total receipts. Table IV-1 presents revenue data for 1938-39 and Various non-tax revenues make up the remaining 1951-52. The 1951-52 data, except for the profits of 12-4%. Chief among them are interest receipts on state enterprises, are revised budget estimates. They government loans, the gross revenues of the posts are beheved to be approximately the actual receipts. and telegraphs department and import hcense fees. It is important to note that the 1951-52 data include Interest receipts are mainly an intra-governmental not merely budget receipts (both current and capital) transfer, two thirds of the total consisting of interest but in addition total estimated profits of state enter¬ on the loan to Burma Railways. prises. Whereas those profits are estimated at K370 Two major changes in the tax system occurred mUhon, only K210 miUion appeared in the budget during 1952 and 1953. One was abohtion in 1952 as revenues, the remainder being retained by the of the turnover tax and substitution of a selective agencies earning them. The data presented are thus single-point sales tax collectible at import or point more comprehensive in concept than budget revenue of production, with schedules of 5%, 10%, and 15% data and give a more accurate picture of the economic respectively on three schedules of covered goods. impact of revenues. This change improves the equity of the tax as between different traders by eliminating the previous large- TABLE IV - 1 scale evasion, and also improves its equity as between GOVERNMENTAL RECEIPTS, CLASSIFIED BY different classes of buyers by introducing progressivity TYPE, AND INCLUDING ESTIMATED NET of rates. Basic "cost-of-living" goods are exempted INCOME OF GOVERNMENTAL ENTERPRISES altogether. Luxury goods bear the highest rates. The other major change, which wiU be effective Millions of Kyats Per cent of Total on October 1, 1953, is abohtion of preferential Type of tariff rates. This may not result in major change Revenue 1951-52 1951-52 1938-39 1938-39 {Rev. Est.) {Rev. Est.) in the total burden of customs duties. FoUowing notification in March, 1953, that preferential tariff Land Revenue 54-2 21-5 33-0 2-6 agreements with Britain, India and Pakistan would Profits of State be terminated effective on September 30, 1953, Enterprises (est.) — 370-0 — 45-6 Customs 36-4 193-0 22-2 23-8 the Government has been considering the tariff Excises and Excise rates to be adopted effective on October 1. The Duties 23-0 34-8 14-0 4-3 degree of preference which has been granted and the Sales Tax . 23-0 2-8 Taxes on Income 191 44-5 11-6 5-5 importance of the decision being made are demon¬ Other Taxes 5-7 24-1 3-4 3-0 strated by a study of customs revenues for a recent Forest Revenue 14-3 13-0 8-7 1-6 three months' period, December, 1952, to February, Other Revenue 11-6 88-1* 7-1 10-8 1953. The results are tabulated overleaf Total 164-3 812-0 100-0 100-0 They indicate that revenues would have been increased by 42% if the present standard rates had Gross Domestic been paid on the same imports, and decreased by 31 % if the present preferential rates applying to the largest quantity of imports had been paid. The actual *Excludes non-cash transfer of K30 miUion from the Inter¬ national Monetary Fund, matched by an equal non-cash payment imposition of the rates indicated would of course to the Fund, the two together canceling out. not have produced these precise results, since the 64 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA pattern of imports would have shifted, but the regarded as a tax burden; the remainder of its calculations show the importance of the decisions profits should be regarded as a windfaU gain at being made. Adoption of rates at intermediate foreign expense (though they are at the expense of levels might of course leave the average burden of cultivators or landowners in the sense that control customs at aporoximately the present level. of the price of paddy prevents the windfall from being passed on to them). {Per cent Change (A' million) from Actual On this basis about K250 miUion of the 1951-52 Revenue) profits of SAMB should be regarded as a tax burden. Actual customs revenue 41-6 Remaining profits may be regarded as windfall gain. Estimated revenue at pre¬ Table IV-2 indicates the composition or character vailing standard rates 59-3 ^42 of tax burden in 1938-39 and 1951-52 by showing Estimated revenue if all the percentage which each type of revenue bore in rates were reduced to the each of the two years to the gross income of Burma. level of the preferential The gross domestic income was Kl,460 milhon in rate applying to the 1938-39 and K4,116 million in 1951 2. largest quantity of im¬ The data indicate that even on the adjusted basis ports 28-6 -31 the total tax burden in 1951-52 was about the same Less important tax changes were simplifications as in 1938-39. The greater postwar burden of of the hotel and restaurant tax and abolition of the customs, and of land revenue plus rice exports business premises tax, which had been adopted profits as against prewar land revenue alone, is in 1949 as an emergency revenue measure. offset only in part by the reduced burden of internal commodity taxes, income tax, and forest revenue. 3. THE REVENUE BURDEN, PREWAR AND POSTWAR Miscellaneous revenue is also up sharply. The ratio Total governmental receipts in 1951-52 were of government receipts to the country's gross income a considerably larger percentage of gross domestic will probably not decline as income rises. Land product than in 1938-39. Profits from rice exports revenue is now only partially collected; its burden, are properly to be regarded as in large part wind¬ though it will remain small, wUl increase as civil fall gains at the expense of foreign buyers, resulting order is fully restored. When security permits from the inflated world price of rice, which had risen revival of forest extraction, forest revenue wiU also to more than ten times the 1938-39 level, or more rise sharply. The decline in income tax revenue than twice the rise in the price level within Burma. as a percentage of aggregate income has occurred If paddy prices had been permitted to rise in the in spite of a stiff increase in income tax rate since same ratio as the average of other prices, they would prewar. It is probable both that enforcement is now be at say K450 per 100 baskets instead of K300. less effective now and that it can be improved. The profit margin on exports obtained by SAMB Income tax liability should rise relatively to national by holding paddy prices below this figure may be income as national income rises. As rice production and exports rise, rice exports profits allocable as TABLE IV - 2 part of the tax burden will probably be an appreci¬ ably higher percentage of national income than RATIO OF E.A.CH TYPE OF REVENUE TO GROSS prewar, when output, income, and tax enforcement DOMESTIC INCOME 1938-39 and 1951-52 have become more normal. This is as it should 1938-39 1951 52 be if the revenue system is to contribute appro¬ Land Revenue 3-7 -5 priately to the financing of the development program. Profits of all State Enterprises (est.) Total 0 9-0 4. EQUITY: PROGRESSIVENESS OF THE TAX SYSTEM ■'' Share regarded as tax burden (250) 0 6-0 The revenue system cannot yield the necessary Customs 2-5 4-6 amount of total revenue without imposing burdens Excises and Excise Duties 1-6 -8 on all of the people. It is important that in doing Sales Tax 0 -6 Taxes on Income 1-3 1-0 so it bear most heavily on those most able to pay, Other Taxes -4 -6 i.e., that it be "progressive." The present system Forest Revenue 1 -0 -3 has a progressive nature, because of the income tax Other Revenue -8 2-1 and the selective nature of commodity taxes, which Total Revenue, Adjusted* 11-3 16-5 cause them to bear most heavily on goods purchased *For'1951 52 includes only K250 million of SAMB profits, the by higher income groups. share regarded as part of the tax burden. Three postwar tax changes have tended to affect CENTRAL ECONOMIC POLICIES FOR THE PROGRAM 65 this progressivity, namely, the substhution of rice primarily on two considerations: abihty to pay, export profits for land revenue as the dominant whh goods used mainly by higher income groups revenue source, together whh the imposition of legal being dutiable at a higher rate; and admitting hmitation on the rates for agricultural land; the without heavy duty those items which enter into the reduction in importance of excises and excise duties cost of producing goods within Burma. (Other on widely used commodities and substitution of the principles are of course applicable in specific cases.) graduated sales tax; and a sharp (and probably The sales tax schedules are presumably based on excessive) increase in the progressivity of income the same principles, as are also decisions concerning tax rates. the severity of license restrictions. Yet differentiations The influence of present paddy policy and rent in sales rates between various goods are in a number restriction on the progressivity of the revenue system of cases directly inconsistent with those in the is mixed. In combination, their inffuence on the net customs schedules, tending to reverse and narrow income of cultivators and farm laborers, considered the margin which the customs schedules establish, as groups, is about the same as the effect of prewar rather than reinforcing them. Again, in the cases land rental and land revenue rates. While price of some goods taxed by customs and sales tax at control has reduced the return to the paddy grower, low rates, because regarded as non-luxury items, relative to other prices, a very large percentage import license restrictions so hold down the supply reduction in rental costs brought about by rent as to boost the domestic price sharply, thus being restriction has reduced his expenses. The income of the equivalent of high protective customs or sales landowners has been reduced by rent restrictions to a tax rates. However, the benefit accrues to the fraction in typical cases one sixth to one tenth— importer and not to the Government. Some excise of its prewar purchasing power. Urban purchasers duties on alcohohc beverages are heavier than the of rice benefit from the low rice price. Since before import duties on competing hquors. These various the war cultivators and agricultural laborers had anomalies should be investigated and corrected in the lowest income of the three groups and most order that the indirect taxes as a group wiU impose landowners the highest, these changes reduce income a relative burden on various groups which is the differences between landowners and the other two planned and equitable result of those taxes as a groups but increase the difference between rural group. workers and cultivators on the one hand and urban These comments present major examples rather workers on the other. than an exhaustive list of matters of equity which In the interest of equity between individuals and should be considered. The tax structure has been between groups, certain changes should be made in changed rapidly during postwar years. Various the tax laws. One example of such a change in the inconsistencies and inequities are bound to arise income tax is the substitution (if administrable) during such a period of change. A comprehensive of allowances for wife (or husband), children and study to eliminate them is advisable. other dependents, in place of the present K3,500 minimum income rule.* Another example is change 5. RESPONSE OF REVENUE TO INCREASE IN in the taxation of dividends. Company profits are OUTPUT AND INCOME subject to the company income tax; dividends are It has been noted that governmental revenues thereupon exempt from the personal income tax. must be increased as the development program They might better be taxed as personal income, gathers fuU speed. The greater the extent to which the with credit for tax paid by the company. This change revenue system automatically yields such an increase would be feasible, however, only if the progressive- as output and income rise the less is the need for ness of the upper-bracket individual income tax changes in revenues rates. In principle, Burma's rates is reduced. These rates are discussed below in revenue system scores well in this respect. Aggregate relation to the incentive to produce. revenues from within Burma will probably rise In the interest of equity between groups as well as somewhat faster than national income, as output of a rational tax structure, reconciUation of the increases. As noted above, land revenue wiU increase present schedules of customs, sales, and excise taxes, markedly as security improves. Forest revenue and of licensing provisions should be undertaken. will increase with forest output, which is now very Present customs schedules are presumably based low. Revenue from customs, excises, excise duties *Though the tax schedule provides for taxation of all income above and sales tax will very probably increase by a slightly K600 per year, a separate provision designed to prevent hardship to greater percentage than national income. Purchases low income individuals provides that no tax shall be paid unless the income is in excess of K3,50O. The tax is identical regardless of of consumer goods will probably rise at least number of dependents. as rapidly as national income, and in addition there

R.B. 66 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA may be some tendency with increasing per capita be siphoned off" as promptly as possible to have the income to shift to the consumption of the less maximum benefit in providing resources for a essential items bearing higher rates of customs or governmental development program. Further, it is sales tax. Finally, income tax liabilities will relatively more enforceable. However, in fairness undoubtedly increase considerably more sharply to those who are effectively taxed under this system, than does national income. As national income greater enforcement must be assured with respect rises, the incomes of many individuals will rise, to others who are not subject to the advance pay¬ making them liable to higher rates of tax. Further, ment provision. as national income rises many companies now making small profits wiU make increased profits and be 6. THE TAX SYSTEM AND INCENTIVE TO PRODUCE liable to correspondingly increased income tax. The third important characteristic of a revenue Whether these increased tax liabilities will be system, in addition to equity and increase in revenue converted into increased revenues will however as income rises, is avoidance of interference with the depend on the effectiveness of tax administration. incentive to produce. Burma's present income tax It is clear that there is considerable evasion of income is not weU designed in this respect. Various changes tax at present. To obtain maximum increased revenue are needed. as income rises, definite steps to improve income One of these is related to the business profits tax administration are desirable. There is no evidence tax. By this tax, which was introduced as an of laxness on the part of present enforcement staff. emergency revenue-raising measure, every individual, But the job of enforcement requires a larger and firm or company pays a tax of 16|% of income better equipped and trained staff. The Report of the arising as business profits, in addition to the other Income Tax Administration Advisory Committee taxes on company or individual income. This provi¬ presents sound recommendations for enlargement sion is not in lieu of an allowance for earned income, of the income tax enforcement staff", provision of i.e., income from personal services, for there is a sep¬ vastly improved equipment and improvement in arate allowance for that. It is an additional feature training procedures. These recommendations should which sets profits off" in contra-distinction to income be adopted in full. They can and probably will result from rents, interest on capital owned, and similar in increased tax yields far in excess of their cost. matters so that the man who uses his own funds in a In addition, it is recommended that the services productive venture retains one sixth less of the income of one or more tax enforcement experts be obtained from them than the man who acts as a money¬ for a limited period. The problems of income tax lender or purchases property and rents its use to enforcement in Burma and other undeveloped someone else. The law could hardly be more countries are more acute than those of countries effectively devised to discourage productive ventures with more elaborate accounting and other records, in favor of money-lending or landlordism. It should but they are of the same nature. It should be possible be repealed. If it is felt necessary to avoid a resulting to obtain the services of one or more experts who loss of revenue, the rates of the individual or cor¬ are experienced in the methods which tax evaders porate income tax or of other taxes should be raised have used in countries which have had high individual in compensation, thus leaving the total tax burden and corporate income tax rates for many years and no greater, but ehminating the bias in favor of the with the requirements and procedures which have rentier. been devised to checkmate them. Such experts A second change desirable to increase incentive is should be able to make valuable suggestions to to provide for the carry-forward of business losses Burma's income tax enforcement staff. in any year to any of the ensuing three or more One feature of Burma's income tax which has years. By this provision, an individual, firm or met with some objection from taxpayers should by company which sustains a loss in one year may sub¬ aU means be retained in the interest of maximizing tract it from a profit in an ensuing year (within revenue as income rises, namely, the advance pay¬ the term of years specified) in calculating its taxable ment provision. Its abohtion would in effect mean profit for each year. For example, under present forgiveness of a large part of one year's taxes, in law a company which sustains a loss of K 10,000 that from the date of its abolition, taxes would forever in one year and gains a profit of Kl0,000 in the next after be due one year later than otherwise. The year must pay K5,000 tax on the profit, thus paying advance payment provision is a valuable aid in K5,000 in income tax even though its net income obtaining complete payment under any system of combined is zero and, in fact, on an after-tax basis, h stiff income taxation. It is especiaUy desirable when suffers a loss. If carry-forward of loss were permitted, income is rising, for the increasing income should the company might subtract the K10,000 loss from CENTRAL ECONOMIC POLICIES FOR THE PROGRAM 67 the Kl0,000 profit and pay no tax. Such a provision, total revenues, if the need for more revenue develops, which permits a company or individual or firm and (2) improving the internal structure of the tax to pay tax on its true net income over a period of system, the various rate schedules and the relationship years, rather than on each year's record separately, of various taxes to each other. It is recommended that is especially valuable for new businesses, since an intensive and comprehensive analysis of both losses are often to be expected during the first years questions be undertaken. After proper tax principles of a business venture, and the right to set them off" have been formulated, specific tax measures should be against possible later profits wiU be one of the spelled out. Top technical assistance should be determinants in deciding inhially whether to under¬ secured for the study. take the venture. A third desirable change is reduction in the pro- F. BANKLNG POLICY gressiveness of the upper brackets of the income tax 1. IMPORTANCE OF THE COMMERCIAL on individuals. BANKING SYSTEM Any new employment-creating venture involves Credit expansion in Burma through the monetiza- risks; if the tax schedule provides a scale of rates tion of foreign exchange or through the sale of govern¬ which rises too sharply, the increase in income which ment or government-guaranteed securities to the may be retained if increased income is earned is not Union Bank of Burma will be regulated, not by worth the additional risk, and the venture is dis¬ banking policies, but by decisions concerning fiscal couraged. policy. Banking policies as such wiU, however, limit This feature of a progressive income tax must the third source of credit expansion, that by com¬ always be balanced against the prime advantage mercial banks. and reason for progressivity, namely heavier taxation The consolidated balance sheet below indicates where there is greater ability to pay, for the sake selected assets and liabilities, on December 26, 1952, of equity. The balance of rates which is held to of the 23 commercial banks then in operation in place no intolerable bar in the way of incentive, Burma. while yet yielding equity, must be decided by each TABLE IV - 3 society in the hght of hs own standards of income CONSOLIDATED BALANCE SHEETS, COMMER¬ and reasonable goals of personal attainment and its CIAL BANKS, DECEMBER 26, 1952, SELECTED own need for productive enterprise. ITEMS The present ordinary plus super-tax rates on {kyats) individuals or unincorporated firms in Burma rise so sharply that they seriously reduce incentive. Liabilities Deposits—Total 29,25,81,717 Modification of them may increase rather than Demand—Total 24,36,63,677 reduce tax revenue. Yields in the upper brackets Inter-bank 2,30,51,122 of the income tax are in any case rather smaU, Other 22,06,12,555 because of the relatively few individuals who have Time Total 4,89,18,040 sufficient income to be liable to the upper-bracket Inter-bank 28,644 rates; and modification which increased the incentive Other 4,88,89,396 to increase income might enlarge aggregate yields Assets or at worst leave them unchanged. Cash—Total 85,88,471 Most persons in upper income brackets un¬ Notes 85,59,665 doubtedly avoid the heavy upper-bracket tax rates Coins 28,806 by incorporating their businesses and receiving their Balance with Union Bank income in the form of dividends, which are not subject Head Office 6,80,21,957 to the individual income tax. Only if the upper-bracket Branches and Treasury Agencies 26,60,026 rates are rendered much less progressive should the Advances 14,62,96,175 present treatment of dividends be altered. The two Bills 45,15,714 changes in combination would improve the equity of Investments—Total 3,60,54,874 the tax system without unduly impairing its effect Government and government-guaranteed on incentives. securities 2,51,78,098 Other 1,08,76,776 7. RE-APPRAISAL OF THE TAX STRUCTURE The various suggestions made above for study of the Their deposits constituted 35% of the money in tax system relate to two different purposes: (1) Deter¬ circulation. Of their cash and earning assets 57-7% mination of the most desirable method of increasing consisted of loans and advances, practicaUy all 68 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA payable on demand; only 9-5% consisted of govern¬ There is some evidence that the February, 1952, ment securities, and only 4-1% of other securities. peak would have been higher if the banks had had The bulk of their loans and advances relate to import greater financial resources. The central banking or export trade and are typicaUy secured either by legislation in effect at the time made it impossible for foreign trade documents or by stocks of goods which the Union Bank to extend credit to the commercial are under lock and under guard in warehouses owned banks. In June, 1953, bids and advances outstanding or controlled by the banks. were only Kl million above the 1952 low level; it may Since the date of this balance sheet, one added bank fall much below it during the autumn months, because has been chartered. Of the 24 banks in existence at the of the increased amount of money injected into end of June, 1953, 13 are branches of foreign banks; circulation during the year by government disburse¬ only 6 smaU ones are owned by Burmese nationals. ments and SAMB rice purchases. Thirty-one banking offices are maintained by these banks; 22 are in Rangoon, 5 in other seaboard towns 2. CENTRAL BANK CREDIT CONTROL (Moulmein, Akyab and Tavoy) and 4 inland (in The changes illustrate the large credit swings which Mandalay, Maymyo and Taunggyi). might occur in the future, if not regulated. It is In any country, the part which commercial banks important that the expansion or contraction of can properly play in financing economic development commercial bank credit be regulated, so that it wiU is limited by the fact that they cannot appropriately reinforce rather than counteract governmental pohcies purchase either shares or industrial bonds and that designed to coordinate economic activity of the their lending resources are of necessity hmited. country during the development program. Because of the location, ownership and interest of the Under the 1952 Act, the Union Bank of Burma has commercial banks of Burma, and because of the adequate power both to regulate and to assist the absence of developed credit institutions in the country commercial banks of the country. Its power of control in general, the present commercial banks of Burma over foreign exchange transactions, and the power will play an even smaller part during the coming granted in the 1952 Act to fix the share of the assets decade in financing the country's economic develop¬ of a Burmese branch of a foreign bank which must be ment than may be the case in some other undeveloped employed in Burma, give the Union Bank as effective countries, and would be the case in more developed control over a branch as over an indigenous bank. The countries. high level of competence of Union Bank management Yet credit creation by the commercial banks can be to date suggests that credit regulation wiU be effec¬ large enough so that its regulation wUl be of import¬ tively carried out. ance. Table IV-4 indicates the advances and bills For the control of credit expansion, the funda¬ discounted by commercial banks at the annual high mental regulatory power can best be exercised by and low points since January, 1948. During the five- varying from time to time the reserve which scheduled year period, the peak amount of loans and advances banks must keep on deposit in the Union Bank. At the increased by 160%. present time, the requirement is set at 8% of the TABLE IV - 4 demand deposits habilities plus 3% of the time COMMERCIAL BANK BILLS AND ADVANCES, deposits of each scheduled bank. These low reserve ANNUAL HIGH AND LOW POINTS, FEBRUARY requirements make it possible for the commercial 1948 to JUNE 1953 banks to extend additional loans at their discretion. {millions of kyats) This is the appropriate policy for a period of economic Advances plus End of Bills Discounted slackness. Unfortunately, the Union Bank can only February, 1948 81-3 set the stage for such credit expansion; its action may November, 1948 51-1 be completely ineffective in terms of precipitating January, 1949 86-9 credit expansion. November, 1949 44-5 On the other hand, Union Bank restriction on April, 1950 117-6 commercial bank credit can be an absolute bar to October, 1950 88-1 undue expansion. At a later date, if tightness appears February, 1951 179-9 in the economy, it wUl be appropriate to increase September, 1951 135-8 reserve requirements. A moderate increase can retard February, 1952 203-3 the rate of increase by commercial banks in their loans October, 1952 130-1 January, 1953 211-1 and advances; a greater increase in reserve require¬ June, 1953 130-2* ments can completely check loan expansion, or even *Most recent date available. Probably not the seasonal low, in the extreme case force reduction in the volume of which usually occurs later in the year. loans outstanding. CENTRAL ECONOMIC POLICIES FOR THE PROGRAM 69 Loan expansion results in corresponding increase in financing of exports and imports, their business has the money supply in circulation; restriction of it, by consisted mainly in lending to the large foreign-owned restricting private business expenditures, can check companies engaged in the extraction of minerals or timber the demand for labor and commodities and so prevent and in the 1920s in lending to the Chettyars. The Chettyars, scarcities and inflationary pressures. Stated in another in turn, using primarily their own capital but also some way, preventing loan expansion by commercial banks borrowed funds, financed agriculture, but not adequately. In considerable parts the business of the commercial would limit private investment expenditures to the banks has resembled a large-scale pawnshop business, sums which can be obtained from current saving plus in which they made loans against the physical possession advances, if any, from governmental development of actual stocks, keeping the stocks under lock and key corporations. By thus restricting the funds available until the loans were repaid. Making crop or consumption for private investment, it would permit the execution loans to Burmese agriculturists or loans for current of a larger pubhc development program. This would purposes to small indigenous industry would have not impose a severe restriction on private investment, required close supervision in the field and a knowledge of for there is evidence that the firms of Burma save a Burmese practices and enterprises which the banks were considerable portion of their current income. These unable to acquire, or felt it unprofitable to acquire. With savings woidd be available for investment. Of course very few exceptions, notably Dawson's bank, the large western-type banks had no desire to enter this loan even this moderate degree of restriction may be market. undesirable. Commercial bank credit expansion, by The absence of commercial banks in most of the facUitating an increased rate of private investment, smaUer cities and towns of Burma has undoubtedly a wiU reduce the volume which the government must number of other causes: lack of capital among Burmese undertake to reach a given total goal. This may be nationals and lack of the experience necessary to operate the deshable pohcy. The appropriate agencies wiU a commercial bank successfully; the great profitability of have to formulate, in the light of circumstances and using one's capital for personal lending, as in sabape loans; prospects at the time, projections of the appropriate the hmited volume of potential banking business in smaller volume of governmental and private investment towns; lack of pubhc acquaintance with commercial respectively, and to recommend budget and banking banking facilities and their advantages, as a result of which banking would perhaps not quickly have been policies consistent with this program. Through its profitable even in communities whose volume of business relationship with the Ministry of Finance and Revenue might seem on the surface to justify the establishment and its representation on the Economic and Social of a commercial bank. Board, the Uiuon Bank will share in such a decision. The scarcity of capital in the viUages at reasonable In the past, funds to handle seasonal needs for loan rates has created a vicious circle which has made it increased credit have been provided in part by Burma extremely difficult to improve agricultural practices, even branches of foreign banks by drawing on their home if the necessary knowledge and incentive existed, and offices. Seasonal flexibihty of the money supply is extremely difficult for an enterprising individual to chmb important, as Table rV-4 indicates, and inflow of the ladder from agricultural worker to renter to land¬ funds from abroad to meet seasonal needs should be owner. So rapidly does a debt increase, once usurious encouraged. To permit it without permitting other interest rates begin to be compounded, that one mishap such as the death of a yoke of oxen may start a landowner credit expansion, if the occasion should arise, will on an almost certain road to the loss of his land. require skillful regulation. Some flexibility in foreign The absence of credit facihties and available capital has exchange rates, rather than direct quantitative hampered the growth of indigenous industry and trade, control of the import of funds, may be desirable. The both by preventing the increased use of a system of checks rigid relationship to the pound sterhng which has and other credit instruments and, more important, by prevaUed in the past may not be desirable when depriving local businesses access to credit in necessary foreign exchange regulation becomes a necessary part amounts and at reasonable interest rates. Because agri¬ of domestic credit control. culture dominates the economy of Burma, it is obvious The foUowing paragraphs present the background that conditions in the agricultural loan market determine significance, and desirable sources of action relating the conditions in the market for loans to indigenous traders and smaU industry as well. Adequate organized to the provision of adequate loan facilities in villages sources of long-term or short-term capital loans for trade and rural communities. and small industry do not exist. The same exorbitant interest rates have interposed an often insuperable barrier 3. VILLAGE FINANCE to entry into operation or the expansion of a trading The fact that the branches of large foreign banks in enterprise or a small industrial venture, even though the Rangoon are commonly known as " exchange banks " is enterprise was sound under conditions of reasonable testimony to the extent to which they have concentrated loan rates. Even the sabape loans have their counterpart on the financing of foreign trade. In addition to the in trade loans to cottage industries. For example, it ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA

TABLE IV - 5 GOVERNMENT LOANS TO SMALL-SCALE INDUSTRY (kyats)

1947 48 1948 49 1949 50 1950 51 1951 52 1952 53 1953-54

Loans to Weavers Loans Budget Estimates 6,00,000 6,00,000 5,00,000 5,00,000 5,00,000 7,50,000 7,50,000 Actuals 1,96,074 1,16,324 2,85,112 5,01,424 4,11,846 3,00,0001 Repayments Budget Estimates 5,99,000 5,91,000 1,00,000 4,00,000 3,00,000 4,00,000 5,00,000 Actuals 3,12,044 58,246 52,509 1,00,569 2,19,230* 3,00,000t

Industrial Loans Loans Budget Estimates 5,00,000 4,99,500 2,50,000 2,50,000 3,00,000 13,00,000 10,00,000 Actuals 1,30,154 80,650 25,705 51,372 82,434* 5,00,000t Repayments Budget Estimates nil 30,000 1,00,000 1,00,310 1,00,000 1,61,000 5,00,000 Actuals 6,963 6,476 16,825 35,049 33,361 60,000t

*May be somewhat modified by supplementary figures. tRevised estimates, not actuals. appears common for merchants to make short-term loans Superintendent of Cottage Industries, and industrial loans to weavers in return for pledges to seU all output to the are administered by the Board of State Aid to Industries, lender at prices so much below current market prices both of which agencies fall under the Directorate of that the gain is equivalent to an interest rate of 400-600% Industries. (Loans to non-agricultural cooperative societies per annum. are administered by the Cooperative Societies Department The Government has endeavored to alleviate somewhat and are mostly channeled through district cooperative the shortage of capital not only by the loans to agricul¬ societies; their distribution is a matter of cooperative turists discussed in Chapter VIII but also by loans to organization and is not considered in this chapter.) Actual small-scale industry. Government loans to small-scale loan operations follow a complex procedure in which final industry in recent years are shown in Table IV-5. action is taken within the channels of ordinary civil Additional loans are made to non-agricultural coopera¬ administration. tive societies, but these are primarily to consumer co¬ The problem of which the separate pieces have been operatives and to cooperatives concerned with marketing discussed in preceding paragraphs is not four problems, and basic processing of agricultural products. In total, one in agriculture, one in industry, one in trade and one in they were about equal to industrial loans for the period personal finance. It is rather one problem, the problem of 1947^8 to 1950-51; thereafter they were radically in¬ village finance. Personal loans, for example, cannot be creased. In 1952-53, the revised budget allocation for such separated from production loans in agriculture or industry loans was K7-5 million. Preliminary figures indicate that or trade. The process of living until harvest, or until about Kl milhon was issued to smah-scale industrial goods are sold, is a part of the process of production. cooperatives. Denying credit for prudent personal loans would merely Even if the total allocations of all types of loans to drive the borrowers to usurious sources which would smaU-scale industry in 1952-53 materialize into actual create a heavy drain on family income and might threaten loans, they would represent only a few kyats per worker the soundness of production loans. per year. Budget allocations, however, are not all being Legal prohibition of usurious interest rates will not converted into actual loans. This is shown by the figures alone meet the problem; the high rates result from in Table IV-5. Only 30% of government allocations shortage of capital. As long as the shortage exists, there materialized into loans over the five-year period, 1947-48 will still not be enough funds available to meet aU needs. to 1951 52, for which data on actual loans made are Lower interest rates will of course result in larger available. The rate for loans to non-agricultural coopera¬ demands for loans. Indigenous enterprises can be fur¬ tive societies was even lower up to 1951-52, in which year nished adequate finance only if enough capital can be large loans, only a small amount of which probably went supplied to meet all prudent demands for loans which wih to small-scale industry, raised the five-year ratio of appear when money is available at the lower rates. actuals to allotments to 65%. As the development program progresses the level of Loans to weavers are administered by the Office of the economic activity will increase and a larger share of it CENTRAL ECONOMIC POLICIES FOR THE PROGRAM 71 win become industrial or commercial. It will be imperative other local borrowers on a cooperative basis, receiving the that commercial banking expand in scope, to play its full necessary funds from the Bank; but is it not intended that part in the development. However, it would be undesir¬ the Bank shall administer direct loans to non-cultivators able to establish commercial banks in interior towns before where cooperatives do not exist. Indeed, where the loans business activity and methods justify them. Failure of are disbursed by special officials, as for example by the banks because of premature establishment would retard supervisors of loans to weavers, there is little point in the further development of banking. On the other hand, interposing the Bank into the mechanism. the development of banking will expedite economic It is desirable that over-all credit policy continue lo be development. If private capital does not come forward to formulated at the top levels of administration generally establish commercial banks when and where their need is responsible for fostering small-scale industry. But individ¬ manifest, the Government should carefully consider the ual loan transactions should be made in the local commu¬ problem involved in the establishment by it of commer¬ nity through personal contact. A system which requires cial banks in one or more centers. correspondence and the filling in of long forms will Commercial banks will not however fully solve the never reach the small commercially unsophisticated problem of village finance, since by their nature they can producer. Moreover, experience in other countries shows operate efficiently only in the larger towns. that personal contact offers a valuable opportunity for The State Agricultural Bank which has been recently counseling the borrower concerning the operation of estabhshed by the Government can solve a large part of his enterprise. However, a loan office cannot be established this problem. The program calls for establishment in each in every community where credit is needed. The operation village of a locally managed village bank to make crop of a small-loan system is costly. For example, the super¬ loans on the signature of three cultivators, to provide the visors of loans to weavers, on the average, handle less financial basis for multi-purpose cooperatives, and in than K20,000 of loans each annually. The best solution other ways to promote village welfare. The village banks to this problem is three-fold: (1) The Directorate of would be supervised by branches of the State Agricultural Industry should send out mobile units in areas, not served Bank located in the districts, which would provide funds by multi-purpose village cooperatives, in which the and which would directly administer intermediate term anticipated volume of business is sufficient to justify loans and loans to cooperatives. During 1953, branches the expense. (2) Isolated cases should be handled by the have been estabhshed in four districts and about fifty regular officials of the civil administration who now handle village banks have been organized. With the experience direct agricultural loans. In these cases the branch of the gained this year the Government can gradually extend the State Agricultural Bank could administer the loans in the banks' operation to other areas. same sense as it administers direct loans to cultivators. If these banks are to contribute most effectively to (3) Loans to non-cultivators should be made by multi¬ raising the standards of village production and living, purpose village cooperatives, as soon as village banks can each village bank must develop as the heart of a multi¬ be developed on a sound basis. purpose village cooperative movement, in which villagers Another basic feature of the loan system should be actively participate and whose purposes as an accumulator that it in fact deals in loans, not subsidies, i.e., it must and distributor of savings they understand. If the village insure that loans are repaid. As indicated in Table IV-5, banks operate simply as government loan agencies, they repayments in the five years 1947-48 to 1951-52 have been may serve a useful purpose in financing production, but only between a fourth and a half of the volume of loans. they will not serve with full effectiveness in integrating and The rate of interest charged should be very low. As part of energizing village life and their "easy money" aspect may the over-all program of reducing interest rates in Burma, lead to the same mismanagement which brought disaster this will not subsidize one sector of enterprise as against to the prewar cooperative banking system. Consequently, another, but will serve to stimulate activity throughout the system of village banks should be extended only as the economy. However, the repayment provisions must be cooperative society members and administrative officials strictly enforced, otherwise, in effect, the defaulters are can be trained in the responsibilities involved in operating being subsidized. Indiscriminate subsidization resulting them, even if this precaution involves delay in the expan¬ from lax repayment provisions is economically capricious sion of the system. and is more apt to be harmful than to be beneficial. It Until the time when banks are established throughout undermines public morale and morality. The decentralized the country facilities for issuing direct government loans local and personal loan system recommended above will continue to be necessary. Present plans for the State would facilitate debt collection and thereby tend to avoid Agricultural Bank provide for loans to village cooperatives these evils. by the Bank from its own funds, where cooperatives are While the State Agricultural Bank and the direct loan organized; and for administration by the bank of direct program can be expected to meet much of the need for loans to cultivators from government funds, where production credh, facilities for small single-signature cooperatives do not exist. This administration will consist consumer loans wih also be required. Existing pawnshops only of disbursement of funds to local civil administrative operate at high interest rates and often do not have officials, who will make individual loans and collect adequate facilities for storing pawned articles. A mission repayments. Where multi-purpose village cooperatives has returned from Indonesia where it studied the system of exist, they may extend loans to smaU-scale industry and state pawnshops which has proved so successful in meeting 72 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA small loan requirements. A state pawnshop has sub- (b) There is no reason why Burma should construct sequentiy been opened in Insein and personnel are being a productive enterprise in Burma in order to save trained for a second shop to be opened in Rangoon in foreign exchange. Some countries must estabhsh 1953-54. Additional pawnshops are planned in subsequent uneconomic enterprises at home because they cannot years as personnel are trained. One important develop¬ afford to buy abroad. Burma need not produce any ment is that borrowers will share in the profits of the item at home which she can more advantageously buy pawnshop. The government program for opening pawn¬ shops can probably be accelerated if the experience of the abroad. Unless non-economic considerations require Insein pawnshops proves to be successful. So far it appears production in Burma even at the cost of an economic that the scheme is progressing favorably. loss, Burma can select for execution in Burma only These programs for increasing the amount of credit those projects which will raise her standard of living. available at reasonable rates cannot be considered to be a (c) Since domestic resources are much more apt to complete remedy for the financing problems of cultivators become scarce than is foreign exchange, in her and small industries. Many cultivators and operators of advance planning Burma should plan to purchase as smah industries appear to have encountered financial large a share of the materials for her development difficulties because of an inadequate understanding of the program abroad as is economic. role of credit in production and the need for accumulating (d) If bottlenecks and scarcities appear in Burma, savings. Current savings are often spent without sufficient regard for future financing requirements. An unexpected the Government should encourage the residents of mishap or sickness usually causes serious financial the country to spend abroad rather than here, by difficulties. At present, however, there are no facilities minimizing the restrictions on obtaining foreign for saving in the village other than investment in gold and exchange. One way to do so would be to liberalize jewelry. The savings departments of commercial banks are the rules concerning remittances abroad. Raising the available in only very hmited areas and even the facihties share of income which may be remitted abroad for postal savings are limited to the township head¬ monthly, and the absolute hmit on such remittances, quarters. Gold and jewelry have the benefit of prestige as and relaxing foreign exchange regulations concerning weU as being easily hidden and being safe from deterior¬ expenditures during travel abroad are examples of ation. To substitute the idea that a paper document in desirable changes. The principle that it is good, not one's possession or in the safekeeping of a bank or bad, for Burma to have her residents exchange kyats cooperative is more desirable will take a long time. Yet a country as urgently in need of capital for development as for foreign currency should become a principle of Burma must utihze every possible avenue for increasing action. the country's domestic savings and every means for This does not carry any imphcation concerning the channeUng these savings into productive channels. For export of capital. The quantities involved may be too this reason educational campaigns should be instituted and large even for sizable annual net receipts of foreign administrative improvements sought after to popularize exchange to cover. Permission to export capital, if it is the increased use of savings departments of commercial to be granted, should initiaUy be granted on a re¬ and village banks, of postal savings banks and similar stricted and experimental basis and in successive institutions, and the use of cooperative societies for the steps, until by trial and error the amount of capital purpose of saving as well as a place to obtain loans. State which may wish to fly is roughly determined. pawnshops, too, should be so managed as to develop into institutions for the safekeeping of valuables and later as A possible corrective to an excess of domestic savings institutions rather than mere loan offices. spending is a slight increase in domestic prices, which of itself will cause some shift to increased imports, G. FOREIGN EXCHANGE AND FOREIGN TRADE as has been suggested in Chapter III. However, the POLICY degree to which this shift would occur can easily be 1. FOREIGN EXCHANGE CONTROLS, exaggerated, and it would be dangerous to assume GENERAL CONSIDERATION that a shght price rise wUl bring on automatic correc¬ The basis for Burma's policy concerning foreign tive action. exchange controls should be the fact that foreign (e) The desirability of freeing foreign exchange exchange will probably be plentiful even at the height expenditures does not imply the desirabihty of of the development program. The imphcations are reducing the cost of foreign goods through tariff" far-reaching. reduction. What wiU be wanted, if resources in Burma (a) Whereas continued watch should be kept on become scarce, will not be the maximum physical foreign exchange trends, there is no reason to plan volume of imports but the maximum expendhure for now for periodic tightening or loosening of foreign them, to drain as much purchasing power as possible exchange and foreign trade restrictions. Instead stable from the Burmese economy. Expenditure may be pohcies may be planned with the expectation that maximized by high rather than low tariffs. Con¬ they will be appropriate throughout the decade. siderations such as this, plus the question whether the CENTRAL ECONOMIC POLICIES FOR THE PROGRAM 73 tune has arrived to siphon income away from Burma, and dependable so that trade and production can plus considerations of the effects on the cost of hving adjust to it and be conducted efficiently. Import and the cost of production in Burma, should govern hcensing can never be as dependable as a tariff changes in tariff rates at any given time. schedule or an announced subsidy schedule. Even though Burma's prospective foreign exchange earnings continue to be plentiful, foreign exchange 4. BURMANIZATION OF FOREIGN TRADE should not be wasted. Foreign exchange is not The question of use of a licensing system to foster sterile; it can be invested abroad to earn income the wider participation of Burmese nationals in the which wiU raise the future hving standards of the import trading business is more complex. A subsidy country. system is iU adapted to the purpose, and a tariff" is of no use whatever, since it gives no advantage to 2. FOREIGN TRADE POLICY indigenous firms. An import hcensing system, with a It does not necessarily foUow from the prospective generous share of import hcenses available only to ample supply of foreign exchange that Burma should Burmese nationals, was adopted by the Government. free aU imports from controls. Import restriction is It is of course true that an import hcensing system urged for two reasons not connected with foreign is subject to great abuse. The granting of hcenses saving; to protect infant industries in Burma and to without investigation to whoUy unqualified persons foster the Burmanization of import trade. provided only that they were Burmese nationals, when hcensing was first undertaken, the open sale of 3. INFANT INDUSTRIES these licenses to foreign trading firms, the accompany¬ Temporary protection is clearly desirable for ing favoritism and sometimes corruption, the main¬ industries which cannot otherwise gain a foothold and tenance of exorbitant profit margins on scarce which when they have gained a foothold wiU be able commodities—these things are commonly acknow¬ to produce as efficiently as abroad. However, there ledged. are alternative methods of granting protection. The These may be said to be imperfections of a system use of a protective tariff is normally more advan¬ in its infancy, which have since been corrected. By tageous than a hcensing system. With a tariff" in effect, the present time, the majority of imports are under both traders and domestic producers know that no "Open General License," which permits import added supply can be brought into Burma at a cost without hcense. Although the hcensing process has below the export country's price plus freight and not functioned as smoothly and flexibly as is desirable, other costs, plus the tariff". They also know that an licenses for the import of many other goods are unlimited amount can be brought in at that price. generally granted rather freely, so that exorbitant Consequently, the domestic price will be stable, at or profit margins are far less common. Procedures for near the cost level. the investigation of applicants for hcenses have been Both the infant industry and the consumer are estabhshed. Favoritism, corruption, and the sale of protected from fluctuations, whereas under a licensing hcenses have been greatly reduced. system the price may vary depending on the accuracy Certain difficulties remain. The evils referred to with which the hcensing authorities estimate the above still prevail, though in smaUer degree. It appropriate amount of imports to be authorized. remains true that future import of every commodity is Limitation of imports by license provides a windfall subject to the discretion of the licensing officials. gain to the lucky recipients of hcenses; a protective Abuse of personal discretion is stiU possible. No tariff obtains this increment for the Government. importer has assurances that imports can be con¬ Finally under a licensing system there is always the tinued without interruption. There are often delays, possibihty of dehberate abuse of personal discretion even when hcenses are finally obtained. When hcenses by hcensing authorities; use of a protective tariff" are obtained, they lapse if not used within a specified eliminates this risk. For these reasons, it is recom¬ time. Hence there are gluts of goods under license at mended that tariff protection be adopted rather than some times and shortages at others, with resulting dhect quantitative restriction of imports, where price ffuctuation. There is always the danger that protection of infant Burmese industries is deemed continued artificial protection wiU promote in¬ deshable. efficiency. Such conditions are in some degree In some cases, a temporary subsidy to the domestic inherent in any licensing system and provide powerful industry might be preferable to restriction of imports arguments for the elimination of the system when it is by either quota or tariff". Whatever method is deter¬ no longer seriously needed. Under a free import mined upon, an essential requhement for effective arrangement, prices of imports would be more stimulus of new industry is that the pohcy be known stable and on the average lower. The cost of living 74 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA as a whole would be reduced somewhat, though this foreign sources and outlets, and to improve their eff"ect would probably not be great. There would be no trading methods. The commercial staffs in embassies incentives to hoard supplies and httle opportunity for and consulates in countries with which Burma speculative gains. conducts most of her trade should be strengthened. Elimination of the present uncertainty concerning It may be necessary to employ indigenous experts in future imports would stimulate economic develop¬ these countries. It would be desirable for the Govern¬ ment. An enterprise using imported materials is ment to bring to Burma a top-grade foreign trade dependent upon an uninterrupted supply. Any basis technician who would give direct advice to Burmese for skepticism on this matter causes hesitation in the traders and also make concrete proposals to the estabUshment of new ventures. Government on techniques and measures designed to Another advantage of freeing trade which is of facilitate the Burmanization of trade without protect¬ peculiar importance to Burma at the present stage in ing inefficiency. A careful study by an expert in the her development is the freeing of administrative field of foreign trade is needed as a prerequisite to the officials needed in the administration of licensing formulation of an efficient program. procedures. Any means by which Burma can econo¬ In any case, Burmanization should be administered mize on administrative talent will be to her advantage and with full reahzation that the costs, in broad terms, for it is her scarcest resource. must be evaluated against the advantages. In spite of these difficulties, the continuation of import licensing may be desired because of its one H. SUMMARY OF RECOMMENDATIONS important advantage. The system has been responsible (1) The Government should prepare, as a partner for establishment in the import trading business of a to the present budget, a "cash consolidated budget" number of Burmese-owned firms which would treating all government agencies as one group and probably not otherwise have gained entry. The showing their combined receipts from and payments degree of protection furnished by the license quotas to the public, classified between receipts or disburse¬ stiff in force is perhaps necessary to protect Burmese ments within Burma and those abroad, and classified firms until they gain further experience, and is also by type of receipt or disbursement (current or probably fostering continued growth in the number of capital). Such a consohdated budget is a basic Burmese nationals who are traders and also the necessity for inteUigent control of fiscal pohcy. volume of their business. (2) Budget reporting must be speeded up, so that The facts are uncertain. It is recommended that an the records for a fiscal year are avaUable before the inquiry should be undertaken to ascertain how many budget for the second foUowing year is prepared. recipients of licenses have actually established contacts (3) Expenditure authorizations should be separated with foreign suppliers, and how many merely buy from expenditure estimates, in order that the latter through foreign firms estabhshed in Rangoon; how may not be biased by the need to make the estimate many do a wholesale or retail trade in Burma, and high enough to cover aU contingencies. The present how many merely import and sell to nonrecipients of system forces exaggerated estimates for expanding licenses; in what lines of business the establishment programs and makes it necessary to disregard the of Burmese nationals has been and is apt to be most official budget in order to budget accurately. successful; and many related facts and judgements. (4) Expendhures for current purposes must be Import licensing, if continued, should be admin¬ controlled. It is recommended that an attempt be istered in accordance with two main principles. made to hold expenditures for all non-defense current (a) Licenses should be granted for at least as large a purposes during the remainder of this decade to K450 volume of imports of each commodity as would enter mUlion per year or K50 mUlion above those budgeted under open general license, the only protective for 1952 53. Since new programs once under way feature of licensing being the limitation of the quan¬ create demand for increases in funds which are tity of licenses granted to non-nationals. The bur¬ difficult to resist, advanced budgeting to determine the den on the cost of living wUl thereby be minimized future expenditures implicit in small beginnings before without removing protection to Burmese nationals. approving them is necessary. Liberal licensing to Burmese traders will render less (5) In restricting current expenditures, expendhures profitable or less valuable the transferring of licenses for research, technical training and extension work to foreign traders. Wherever such transfers can be must not be made the objects of restriction, for these ferreted out, the penalties should be severe. services are key phases of the development program. (b) As a supplement, and where possible an alter¬ (6) Tax rates should not now be increased, but native, to import licensing, Burmese traders should be study should be made of a tax increase program if tax helped by the Government to make contact with increases should become necessary later. CENTRAL ECONOMIC POLICIES FOR THE PROGRAM 75 (7) Various changes should be made in present tax (13) Until this development can be brought about laws to remove inequities. other loans to agriculturists through cooperative (8) To insure that increasing tax liabilities will be societies and direct government loans to agriculturists fuUy reflected in increasing governmental revenues and small-scale industry should continue, under as the national income rises, steps recommended in procedures by which mobile units will reach every the report of the Income Tax Administration Advisory viUage in person, and by which repayment in full Committee for improvement in tax administration will be enforced. should be adopted and the services of one or more tax (14) The present experiment in establishing state enforcement experts should be sought. pawnshops should be pursued energetically but (9) To remove deterrents to the incentive to pro¬ carefully. duce, various changes should be made in corporate (15) Burma need not plan to introduce inefficient and individual income taxes. The so-called business industries into Burma to save foreign exchange; her profits tax should be abolished, other taxes being foreign exchange prospects are good. substituted for it if necessary. (16) Tariffs rather than import licensing should be used to protect infant industries. (10) A comprehensive study of the tax structure (17) If import licensing is continued to foster as a whole embracing the questions summarized above, Burmanization of import trading, licenses should be should be made. issued for as large a quantity of imports as would (11) Union Bank control of credit expansion by enter under free trade, but with restriction of the commercial banks should be integrated with other number issued to non-nationals; and positive steps phases of fiscal and monetary policy. should be taken to aid Burmese traders in estabhshing (12) The State Agricultural Credit Bank system efficient contacts with foreign suppliers and efficient should be gradually extended, until there is estabhshed trading procedures. in each village a village bank which wiU be at the (18) To diminish the pressure of spending within heart of a multi-purpose village cooperative society. Burma, restrictions on remittances abroad should This expansion of the system, however, must proceed be relaxed. Cautious experimentation should be made only at the rate at which thorough training of village to determine the volume of funds which would seek to residents and of administrative officials can be leave Burma if restrictions on export of capital were accomplished. relaxed. CHAPTER V

ORGANIZATION FOR COORDINATING THE PROGRAM

Having determined to achieve the fullest possible functional policies designed to govern the adequacy development of the country's productive resources by of both the programmed operating activities and such the end of the current decade, and to promote to the supporting activities as investigations and analysis, fuUest possible extent the welfare of the Burmese contracting and purchasing, organization and manage¬ people, the Government of the Union of Burma not ment and personnel and personnel training. It involves only must formulate plans, programs and policies but also continuous review and possible modification of must also develop satisfactory means for coordinating the comprehensive development plan in the hght of and integrating them. The larger the degree of changing conditions, both foreign and domestic. government participation in economic activity, the (2) The programming function consists essentiaUy greater the need for coordination of all activity by of the formulation of detailed objectives, pohcies, and Government. Not only must the individual features of programs of action for the year immediately foUowing. the development program be coordinated with each The comprehensive plan and program must be carried other, but the program as a whole must be coordinated out in successive steps. There must be a determina¬ with aU other production and utilization of goods and tion, each year, in the hght of prevaihng and prospec¬ services. tive conditions, of how much of the total plan can be achieved in the coming year, and of how this may A. THE FOUR MAJOR STEPS IN COORDINATING best be accomphshed. Annual programs, in some ECONOMIC ACTIVITY sectors, may be broken down into semi-annual or This chapter is concerned with the organization and even quarterly programs. Provision must be made in activities of central governmental agencies in coordi¬ programming for the year ahead for lags or faUures in nating economic activity. It therefore does not discuss certain elements in the program during the current the planning of individual projects, their execution, or period. theh operation. The major steps in coordination are (3) The implementation of central economic long-range, over-aU planning, annual programming, pohcies involves the development of specific economic implementation of supporting pohcies, and progress measures which must be conceived, approved and reporting and expediting. These are logicaUy succes¬ carried through if the policies decided on as necessary sive steps. They do not always lend themselves to for the program are to be put into effect. These will precise hnes of demarcation, but they provide a sound include not only the major central economic pohcies basis for the aUocation of responsibihty within the discussed in Chapter IV, but also pohcy in a number Government. While progress reporting and expediting of scarcely less important fields, such as wage pohcy, are distinct functions, they may be discussed in com¬ price pohcy, agricultural credit pohcy, and the hke, bination because of their intimate relationship with all of which will have a profound significance for the each other. economic development program. (1) The over-aU planning function in Burma The implementation of functional pohcies requhes encompasses the preparation of the over-all develop¬ the development of standards and specific functional ment plan designed to maximize production by the measures which must be likewise conceived, approved most effective use of total resources. The plan must and apphed generally throughout the program in incorporate both goals for aggregate output and order to insure against failures through functional balance between the various industries and sectors. incompetence of men, their methods, or theh materials Planning also involves fiscal, banking and other and equipment. Goals must be estabhshed for the economic pohcies designed to govern the distribu¬ quahty of performance or residts to be achieved in tion of income, the division of total income between different areas of the program and general criteria consumption and savings, the flow of savings into developed to insure the competence of studies, plans, investment, both pubhc and private, the level of field investigations, contracting and purchasing exports and imports and the use of foreign exchange, procedures, operating and management attitudes, and other major aspects of economic activity. In personnel training, and the interflow of information addition, planning involves the estabhshment of and services. 76 ORGANIZATION FOR COORDINATING THE PROGRAM 77 (4) The progress reporting and expediting func¬ Planning in Burma has had a good start. It must be tions, which may be discussed in combination because continued. of their intimate relationship with each other, entad Though planning must be participated in by all continuous analysis of the progress being made agencies of Government and at both the central and toward achieving the development goals, the analysis local levels, it must be coordinated as the major of factors tending to retard or accelerate economic function of a single agency. The Ministry of National progress, and the expediting of appropriate activities. Planning should therefore continue to bear full Statistics bearing on progress must be carefully responsibility for economic planning. It should assembled and incisively analyzed and evaluated, so review and continually refine and perhaps revise the that those responsible for the progress of the program basic development plan. Some change in the balance may at all times have a clear picture of where remedial between productive sectors may be required, or action is needed, and what kind of remedial action between the private and pubhc sectors. Experience wiU do the job. With analytic progress reporting of may indicate that total goals and objectives need some this nature, expediting can be undertaken with good modification. Dedication to the achievement of the prospects for success. objectives set forth in the present development plan The operation function consists of the actual should not restrain the Ministry of National Planning execution of each specific project and undertaking. from making warranted adjustments in the plan Organization for this will be dealt with separately in itself; on the contrary, the adoption and implementa¬ Chapter VI. tion of timely and weU-considered changes may be regarded as indispensable indices of healthy attention B. ORGANIZATION FOR PLANNING to the plan. In the development of the present plan, the help of A comprehensive plan for the economic develop¬ various ministries and boards was sought to the ment of Burma for the remaining years of the current maximum feasible extent. However, in the revisions decade is presented in this Report. Plans for the level and modffications which should and wiU have to be of the total output and consumption goals, the made from time to time in the basic development magnitude of the investment needs, the appropriate plan, much fuller participation by other ministries, fiscal, monetary and other economic policies for boards, and agencies of Government should be sought achieving the objectives, the requhed activities in and secured. Each ministry and each agency of each sector of the economy, and specific projects Government must play a positive part in the over-all within these sectors constitute together a compre¬ development plan if the plan is to have the best hensive framework for Burma's economic develop¬ quahty and reahsm. Further, and equally important, ment for the remainder of the decade. successful implementation can be achieved only to the The plan presented here should be reviewed by the extent that each agency shares a sense of respon¬ Government and approved as submitted or with sibihty for the evolution of the plan and accepts reservations or amendments. Approval in principle responsibility for its share of the execution of the plan. would provide each of the ministries and other Participation in the planning process should not government organizations concerned with a frame¬ stop at the central or national government level. To work for theh own planning and activities. ensure that the programs adopted respond to the Many steps have aheady been taken to improve conscious needs and desires of people in the various the scope and rehabihty of the statistical and scientific localities, there must be a means through which information needed for planning. As the results of people throughout the country can contribute. Such these efforts become available, it will be possible to an organizational instrument has been created in the give certain aspects of the plan greater refinement and divisional, district, and township Pyidawtha commit¬ precision. Also, as economic developments both tees which have been assigned responsibility and within and outside Burma diverge from those now provided opportunity to recommend projects and foreseen and as conditions change in unanticipated programs annuaUy for consideration and possible ways in the countries from which Burma purchases incorporation by the Government into the national materials and supphes and to which Burma sells its plan. These committees can make a contribution of products, it wUl be necessary to make revisions in the great sigiuficance to the execution of plans and pro¬ objectives and pohcies of the basic plan. Planning is a grams as well as to the planning process. living function. A plan cannot be made once for all For some time the indigenous staff of the Ministry tune. It must adapt itself to changing chcumstances. of National Planning will need economists and The fact that a comprehensive plan has been prepared engineers from abroad. This need should be reviewed does not mean there is no more planning to do. from time to time to minimize reliance on foreign 78 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA experts and maximize the responsibUity of Burmese composition, for government current expenditures, personnel. Some progress has been made in training and for private activity. The Ministry should then Burmese technicians in the field of planning. To the submit to each operating agency a tentative target fullest possible extent, this training policy should for its developmental expenditure, consistent with the be accelerated by more education abroad and by over-all economic budget, and should submit to the added experience under competent guidance at home. Ministry of Finance and Revenue the tentative target for current expenditures together with proposals C. ORGANIZATION FOR PROGRAMMING concerning fiscal and banking policies. Each agency In programming policies and projects for each year should in response submit its proposed capital the need for a top-level coordinating government expenditure budget, and the Ministry of Finance and agency is especially great. This need applies with Revenue should notify the Ministry of National equal force to over-all fiscal and financial policies Planning of the proposed current expenditure and and to specific projects and functions. revenue budget. "While the agencies will be guided to As Chapter IV has indicated, at this stage in some extent by the proposed targets they wiU be free Burma's development expansionist and stimulatory to deviate from them. On the basis of these materials, fiscal, banking and foreign exchange policies are in close cooperation with the operating agencies and essential. At some later date, the expansionist effect the Ministry of Finance and Revenue, the Ministry should be reduced or possibly even reversed. The of National Planning should prepare its program for proper timing of such adjustments and the exact the year, and should also discuss with the Union Bank measures appropriate to carry them out cannot now of Burma banking and related policies involved in the be projected several years in the future. They must be program. To the degree that the Ministry of National geared to the realities of each current year and Planning has sought and received cooperation, there prospective conditions during the ensuing year. should normally be little difficulty in securing accep¬ The timing is extremely important, because it must be tance of the program by each ministry and board. based on analysis of the time required for new The economic budget should be submitted to the pohcies to have the desired effects. Economic and Social Board for review and approval. Just as the broad economic pohcies must be If the Ministry of National Planning has found it integrated to complement each other in accelerating necessary to submit a program with which an indi¬ development, so must activities in the various pro¬ vidual ministry or board disagrees importantly, the ductive sectors and on individual development Economic and Social Board should work whh the projects be coordinated effectively. Available raw Ministry of National Planning and the agency con¬ materials, power, transportation, manufacturing cerned to reconcile the difference and must arrive at equipment, management and technical personnel need a final judgement. Similarly, should the Ministry of to be integrated in a practical manner. It would make Finance and Revenue believe that Government's little sense, for example, to construct a factory without budget should differ materially from that included in making power avadable or providing effective man¬ the economic budget, the Economic and Social Board agement by the time the factory is completed. Per¬ must effect the necessary reconcihation in consulta¬ fection in relationships and timing is too much to tion with the two ministries. expect, yet coordination cannot be left to chance. The annual economic budget should then be sub¬ Determination of orders of priority and timing must mitted to the cabinet for approval. Once approved, be the responsibihty of a single organization. it serves two chief purposes. First h provides a The Ministry of National Planning should be res¬ framework for the Ministry of Finance and Revenue ponsible for programming. Thus the planning and pro¬ in the preparation of the annual government budget. gramming functions will be integrated. The Ministry Secondly, when the program has been approved by should set forth the goal for the year's production Pariiament it provides to the individual ministries and should prepare both a schedule of the year's and boards a framework for their detailed programs progress on development projects in each sector of for the ensuing year. The chart, Plate 1, illustrates the economy and a plan for any needed changes in budget and program formulating procedures. the fiscal and other economic pohcies. The annual economic program wiU then be in essence a budget D. STAFF FOR PLANNING AND PROGRAMMING for the economy of Burma. The prehminary Report made a number of sug¬ The first step in evolving the nation's economic gestions with respect to the internal structure and budget for the year should be preparation by the staffing of the Ministry of National Planning. No Ministry of National Planning of tentative goals for major modification of those suggestions is required governmental development expenditures and their here, but two passages may be quoted for convenient PLATE NO. 1 BUDGET AND PROGRAM FORMULATION

Targets for Targets for Ministry of National Operating Agencies < -developments- -^current — Ministry of Finance Planning budget budget and Revenue

Prepares independent. Prepares tentative - Prepares proposed first tentative goals for development current expenditure budget and current and revenue budget expenditures and private activities

"Reconciliation' -of individual budgets. with over-all objectives. Reconsideration Prepares program -Reconsideration and for year and amendment of preparation of i"evised separate budget current budget

Second tentative budget Current budget

Reconciliation and' preparation of- Review of Consolidated Consohdated Economic 'Review of Consohdated Economic Budget Budget Economii budget

Unreconciled Unreconciled differences differences

N Economic and Social Board

Cabinet

Note.—Al each stage there is direct consullation between the Ministry of Finance and Revenue and operating agencies on the current budget.

79 80 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA reference. It was suggested that in addition to an the annual economic budget. These pohcies should administrative staff and a Central Statistical Office, be suggested in broad outline, rather than in detaU. the Ministry should have an Economic Research and Thus if the Ministry of National Planning concludes Planning Division and a Project and Resource Use that for a given year anti-inflationary credit and Division. fiscal policies wiU be needed, the general measures "The Economic Research and Planning Division should and steps required of the central bank and of the be responsible for the preparation of the over-all plan various ministries of the Government concerned with for the country's development on a continuing basis and fiscal operations should be indicated as pohcies for for recommendations of basic policies. The creation of the period in question. However, there are many a staff of economic specialists is an absolute necessity, intermediate steps to be taken between broad pohcy without which the Ministry of National Planning will not proposals, the consideration and elaboration of these be able to discharge its function adequately. Such a staff policies in detad, and their implementation. If an should include as a minimum speciahsts in the following fields: national income analysis; fiscal policy; taxation; increase in tax revenues is recommended, considera¬ money, credit, and banking; foreign trade and exchange; tion must be given to such matters as which groups labor and labor relations; marketing and distribution; and should bear the burden and what rate increases wiU cooperatives. bring the additional revenues deshed. If, to tighten "The Project and Resource Use Division should be credit, an increase in the reserve requirements for responsible for guiding and coordinating the work of the scheduled banks is proposed, there must be considered several agencies in the preparation of projects, for what increase wiU achieve the desired objective and evaluating specific projects in relation to each other, and what action, if any, should be taken concurrently for translating specific project plans into requirements for with respect to interest rates on various types of materials, facilities and manpower. This Division would government loans or Union Bank loans. Similarly, require a small staff of experts, including specialists in the fields of agriculture, forestry, mining, industry, trans¬ broad functional pohcies affecting both the opera¬ portation, power, construction and manpower." To this tions and the support of the operating agencies must list of fields should be added, as a minimum, cottage be explored and reconciled with the various ministries industry, social services and research and development. concerned. Such questions cannot fully be explored The range of experts needed in the Ministry of by the Ministry of National Planning. Finance and Revenue to review and evaluate expen¬ Clearly, responsibility for the considered review of diture programs for current purposes is far smaller, economic and functional policy proposals must be but the present budgeting staff of the Ministry must fixed in the agency which will be responsible for be greatly strengthened. At the present time, even supervising their implementation; namely, the Econ¬ the detailed budget decisions concerning individual omic and Social Board. The Board having reviewed agencies are made by top officials with almost no and obtained cabinet approval of pohcy proposals professional staff whatever. Chapter IV has noted not should direct the ministries and agencies concerned to only the necessity for evaluating many new programs submit concrete and detailed recommendations in con¬ against each other, against existing current programs nection with policies to be adopted and implemented. and against capital programs, but also the need to For instance, if the cabinet approves the proposal of project several years in the future the expenditure the Ministry of National Planning for a tax increase, requirements of projects which are expanding or the Economic and Social Board should request the otherwise changing. Without recruitment of added Ministry of Finance to formulate a specific program capable professional staff" this procedure wiU not be in harmony with the board pohcy proposals of the possible. The judgement of senior officials, based on Ministry of National Planning. The resulting tax years of acquaintanceship with the government proposals should be subject to the approval of the administration, must be supplemented by thorough Economic and Social Board, which must carry the analysis prepared for their information by an primary responsibihty for assurance that these expanded professional staff". pohcies are coordinated with other basic pohcies. In The general comments made in Chapter VI relating the area of credit expansion or contraction, the Board to problems of organization and administration are should secure from the Union Bank of Burma a pertinent here as well. specific program which it will review and approve. The same procedure wiU apply in other areas. E. ORGANIZATION AND PROCEDURE FOR IMPLE¬ Where given policies directly affect the functions MENTATION OF ECONOMIC AND FUNCTIONAL of various ministries, the Board should secure the POLICIES fullest cooperation of every such agency in the pre¬ Economic pohcies should be proposed for the long paration of properly coordinated and integrated run in the comprehensive plan and for each year in policies. In the field of transportation, for example, ORGANIZATION FOR COORDINATING THE PROGRAM 81 the Board should exercise approval authority of rate Economic and Social Board, so that the Ministry structures proposed by the Transport Commission, can take progress analysis fuUy into account in its since these dhectly affect many ministries and agencies. annual programming. The progress reporting staff" In short, the Economic and Social Board should act must in effect be a joint staff of the Economic and much as a subcommittee of the cabinet. Social Board and the Ministry. It is appropriate that the Economic and Social F. ORGANIZATION FOR PROGRESS REPORTING Board has as its chairman the Prime Minister, thus AND EXPEDITING giving it high level authority in its expediting work. But not aU the pressure for positive results can be The body responsible for program review must be expected to be exerted by the Prime Minister. given responsibihty for keeping track of over-aU Obviously he should be caUed upon to lend his progress and of progress in various sectors, and must prestige and authority to the expediting of the most be assigned responsibihty for expediting the program. important matters, but he must not be called upon The functions are intimately related. A highly com¬ every time there is trouble. The "Big Gun" cannot be petent staff" must prepare regular reports on the pro¬ used all the time. Expediting wUl not succeed unless gress of the development program for the expediting most of it is accomphshed by the board members body. Some of these should be for publication and and the staff". some should be confidential, for use only within the Effective expediting, given skillful progress report¬ Government. These reports should include not just ing so that the state of affairs is clearly understood, statistics, but primarily analysis of program progress, is partly a matter of effective devices and techniques and criticism of lack of progress, along with proposals and partiy a matter of personal relationships. The for accelerating it. They must not deal merely with mere issuance of critical progress reports or even of individual projects but must deal with the inter¬ directives to operating agencies wiU not be adequate. relationships between projects and between program The Board and staff" should give special consideration areas, and must show the implications for the pro¬ to the developing of devices for facilitating and gram as a whole, of lack of progress or of accelerated motivating action. They must avoid becoming so progress in various projects or areas. In addition to criticaUy negative in their relations with operators as regular reports, the staff should prepare from time to damage their effectiveness. The members of the to time as requhed special studies and reports on Board should devote themselves assiduously to the important pohcies, problems and projects. task of knowing what is going on, and of working as Armed with these analyses, the expediting body can closely and harmoniously as possible with the operat¬ pin-point trouble spots and take the steps necessary ing arms of the Government. The staff should attempt to remedy the situation. It should be stressed that to develop harmonious relationships with working the expediting organization cannot in and of itself staffs in the operating agencies, in order to perform execute the program. Operations must be handled by as much expediting themselves as possible. There must operating organizations and agencies. The expediting also be the closest possible relationship between the body can only review progress, analyze reasons for staff, the Executive Secretary, and board members, faUures to fulfiU objectives, make suggestions for so that the staff members wUl know that they are improvement and extend assistance where necessary. accurately and fuUy reflecting board poUcies and so It cannot do the operations job itself. that the board members will possess more than a Responsibihty for progress analysis and for expe¬ formal knowledge of developing problems and can diting must rest in the body responsible for program expedite where the staff" cannot succeed. review and pohcy implementation, for each pair of The Board and its staff should not try to expedite functions depends upon the other pah. Progress where detail is concerned. That is the function of the analysis and expediting can be done only in relation head of each operating agency. The Board should to the program goals, and conversely annual program concern itself with top-level implementation only. proposals or pohcy changes can be formed reahsti- There is no easy road to implementation. Expedi¬ cally only in the light of progress analysis. The body ters are seldom popular. Effective expediting requhes responsible for expediting must be a high-level understanding of construction, production and ad¬ operating, not the planning, body. ResponsibUity ministration, exceUent judgement and unlimited tact. for progress reporting and for expediting should The expediter must help the operating head analyze therefore be vested in the Economic and Social his problem. He must hsten more than he talks, and Board. on occasion must be overwhelmingly persuasive. This Progress reporting must however be available to task is a difficult and demanding one but an essential the Mirustry of National Planning as weU as to the one for Burma.

R.B.-—6 82 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA G. ECONOMIC AND SOCIAL BOARD STAFF formation; should recommend fiscal and other econ¬ The size and composition of the staff" of the Econ¬ omic measures for achieving the aUocation and for omic and Social Board must be determined by the otherwise regulating economic conditions, and should functions of the Board. In summary, the major func¬ present an allocation of government development tions of the Economic and Social Board wiU be: the expenditures among projects. review and determination of the plans and programs (3) The Economic and Social Board should review proposed by the Ministry of National Planning; the the economic budget and all aspects of the develop¬ review and determination of policy proposals with ment program, reconcile any important differences special attention to their details and timing; the between the Ministry of National Planning and other review of program progress; and top-level expediting. agencies which the Ministry of National Planning has Staff" performance will be divided between these four not been able to resolve, and should submit the final functions. budget and development program to the Cabinet for The staff" requirements will therefore comprise both approval. The approved economic budget and pro¬ engineers and economists capable of advising the gram will provide the framework for the preparation Board as to the desirability, feasibility and optimum of the annual government budget and provide indivi¬ implementation of the plans, programs and pohcies dual agencies with the framework for their detaUed presented to it, and of assisting it in analyzing the programs for the year. progress made and in expediting where necessary to (4) The Economic and Social Board should be keep progress on schedule. responsible for reviewing and implementing broad economic and functional policies proposed in the Narrowly viewed, the staff work of the Economic comprehensive plan and in each year's economic and Social Board wiU be performed by its own staff budget. The board should see that specific proposals personnel. Reahstically, it would be desirable for the and programs are consistent with the broad policy smaU nucleus of staff" of the Board to be supplemented proposals of the Ministry of National Planning. as required by the professional staff of the Ministry (5) The Economic and Social Board should be of National Planning. The broadest view would regard responsible for keeping track of the progress and the staff of the Board as embracing the staff speciahsts competence of the development program and for of every government ministry, agency and depart¬ expediting the program. The progress reports should ment as required. This indeed is the proper view. AU the specialized manpower resources of Govern¬ analyze the status of each program and its contribu¬ tion to the over-all program. They will enable the ment should be brought to bear on any problem with which the Board has to deal. Economic and Social Board to pin-point trouble areas and effect remedial measures. They will also be needed H. SUMMARY by the Ministry of National Planning in its annual programming. (1) The Ministry of National Planning should con¬ (6) The economic and Social Board should concern tinue to bear full responsibility for long-range over-all itself with top-level expediting only. Details should be economic planning. The development plan should be the responsibihty of the head of each operating subjected to continuing review and refined and agency. modified to fit changing circumstances. In doing this (7) The staff" of the Economic and Social Board the Ministry of National Planning should give due should comprise both engineers and economists cap¬ regard to the suggestions of local Pyidawtha com¬ able of advising the Board on aU phases of the plan¬ mittees and obtain full participation by other minis¬ ning, programming and implementation of the pro¬ tries, boards and agencies. posals presented to it. The staff should assist the (2) The annual economic program will be an econ¬ Board in analyzing the progress made and in expedit¬ omic budget for the nation. The Ministry of National ing where necessary to keep the program on schedule. Planning should prepare it in close cooperation with The staff should be supplemented as required by each operating agency and with the Ministry of the professional staff of the Ministry of National Finance and Revenue and the Union Bank of Bunna. Planning and specialists of every government agency. The economic budget should set the goal for each All the speciahzed manpower of Government should year's total production; should plan the allocation be brought to bear on any problem which comes of production between consumption and capital before the Board. CHAPTER VI. PLATE I PRESENT MINISTERIAL ORGANIZATION GOVERNMENT OF THE UNION OF BURMA (As of 15th July 1953)

PRIME MINISTER Economic & Social Board Bureau of Special Investigation

MINISTRY OF NATIONAL PLANNING AND RELIGIOUS AFFAIRS MINISTRY OF INFORMATION MINISTRY OF INDUSTRY MINISTRY OF MINES I MINISTRY OF COMMERCE MINISTRY OF HOUSING AND LABOUR MINISTRY OF FINANCE & REVENUE MINISTRY OF HOME Social Planning Commission Union Buddha Sasana Council Department of Information Industrial Development Corporation Mineral Resources Development Corporation State Agricultural Marketing Board Directorate of Labour Standing Finance Committee AFFAIRS Economic Planning Commission Directorate of Religious Affairs Department of Broadcasting Directorate of Industries Mining Adviser & Chief Inspector of Explosives Import Licensing Board Inspectorate of Factories and General Labour Laws Fiscal Committee Public Service Commission Burma Economic Aid Committee The Pali University Council Office Department of Stage and Films Electricity Supply Board Burma Geological Department Army Surplus Disposal Board Union Insurance Board Surtee Bara Bazaar Administration Board Secret Branch Central Statistical and Economics Office The Pali Education Office Government Printing and Stationery Department Boiler Inspectorate State Mineral Produce Marketing Board Accounts and Administrative Branch Rangoon Development Trust Land and Survey Branch Police Branch I Census Office Religious Affairs I Branch Audio Visual Aids Board Superintendent Cottage Industries Information Branch National Housing Board Excise and Taxes Branch Police Branch II E.C.A. Branch Religious Affairs II Branch Government Spinning & Weaving Factory Procurement Branch Standing Joint Labour Advisory Board Customs Branch Miscellaneous Branch U.N. and Colombo Plan Branch Paper Factory & Chemical Industries Board Licensing Policy Branch Labour Legislation Committee Budget Branch General Branch Planning, Social and Economic Electricity Inspectorate Licensing Branches Dock Labour Board Public Accounts Branch Accounts Branch Commission Branch Weaving Institutes & Lacquer School Legislation Branches Court of Industrial Arbitration Ways and Means Branch Appointment Branch I Census, Statistics and Economics Branch Directorate of State Aid to Industries Statistics Branch Tile Factory Board Currency and Banking Branch Appointment Branch II Pyidawtha Branch Industrial Research Institute Treaties and Development Branch Urban Rent Control Projects Branch Security Branch General Administrative Branch Labour I Branch Claims Branch (a) Law and Order Miscellaneous Labour II Branch Pensions Branch (b) Fire Services Labour III Branch Civil Branches Civil List Branch Labour IV Branch Accounts Branch Labour V Branch Statistics and Miscellaneous Branch Savings Scheme Branch

1 1 1

MINISTRY OF PUBLIC WORKS MINISTRY OF TRANSPORT AND MINISTRY OF AGRICULTURE AND FORESTS MINISTRY OF CO-OPERATION AND 2 MINISTRY OF LAND MINISTRY OF DEMOCRATIZATION WAR OFFICE I MINISTRY OF EDUCATION AND REHABILITATION COMMUNICATIONS COMMODITY DISTRIBUTION NATIONALIZATION OF LOCAL ADMINISTRATION State Timber Board Permanent Secretary's Department Directorate of Public Instruction Rehabilitation Board Union of Burma Railways Board Agriculture and Water Resources Development Corporation Civil Supplies Management Board Land Nationalization Department Rule Drafting Committee Chief of General Staff Department Directorate of Teachers Training Building and Roads Department Postal Department Agriculture Department Cooperative Societies Department Settlement and Land Record Department Legislative Branch Adjutant General's Department Directorate of Technical Education Public Works 1 Branch Telecommunications Department Forest Department Cooperative 1 Branch Survey Department General Branch Quartermaster-General's Department National Commission Secretariat Public Works II Branch Inland Waterways Transport Board Veterinary Department Cooperative II Branch Registration Department Implementation Branch Chief of Naval Staff Department Directorate of Text Book Production Public Works III Branch Board of Management for the Port of Rangoon Fisheries Bureau Project Branch State Colonies Department Chief of Air Staff Department Mass Education Council Miscellaneous Branch Civil Aviation Department Sugar Control Board Civil Supplies Branch Military Secretary's Department Union Youth Council Union of Burma Airways Board Irrigation Department Miscellaneous & Accounts Branch Judge Advocate-General's Department University College, Rangoon Mercantile and Marine Department Agriculture Credit Department Office of the Controller of Military Accounts Burma University College, Mandalay Union of Burma Shipping Board Salt Department Intermediate College, Moulmein Burma Meteorological Department State Land Committee University for Adult Education (Rangoon and Akyab) Education I, II, III. IV & U.N.E.S.C.O. (Branches)

MINISTRY OF UNION CULTURE MINISTRY OF SOCIAL SERVICES MINISTRY OF RELIEF AND FOREIGN OFFICE 3 MINISTRY OF JUDICIAL CHIN AFFAIRS MINISTRY KACHIN STATE MINISTRY SHAN STATE MINISTRY 3 KAREN AFFAIRS MINISTRY KAYAH STATE MINISTRY Cultural Department RESETTLEMENT AFFAIRS Directorate of Health Services United Nations Branches General Administration Kachin State Government Shan State Government Karen State Government Kayah State Government State Library, Museum, Art Gallery Directorate of Social Welfare Rangoon Welfare Committee Foreign Service Branches Judicial Branch I Education Department State Minister for Finance & Revenue State Minister for Information Minister for Finance & Revenue Publicity Officer State School of Fine Arts & Music & Drama (Rangoon) National Health Council Mobile Relief Party Cypher Branch Judicial Branch II Cooperative Department State Minister for Education, Public Health & Medicine State Minister for Education Minister for Education Agricultural Officer State School of Fine Arts & Music & Drama (Mandalay) National Fitness Council Recovery I Branch Foreign Intelligence Branch General Branch Public Relations State Minister for Agriculture & Forests State Minister for Health Minister for Transport & Communication Resident Kayah State, Loikaw Department of Archaeology Medical I Branch Recovery II Branch Political Branches Citizenship Branch Medical & Public Health State Minister for Works Minister for Religious Affairs & Information Medical Officer, Loikaw State Musical Troupes Medical II Branch Recovery III Branch Consular Branch Miscellaneous Branch Public Works Department State Minister for Agriculture, Forests, Land Utilization, Minister for Relief and Resettlement Principal Works Officer, Taunggyi Dha Ka Branch Medical III Branch Relief I Branch Protocol Branch Legislative Branch I Veterinary Department Veterinary, & Cooperative Minister for Agriculture, Forests & Mines Principal Veterinary Officer, Taunggyi Dha Kha Branch Medical IV Branch Relief II Branch General Branch Legislative Branch II Judicial Department State Minister for Finance & Revenue Principal Education Officer, Taunggyi Medical V Branch Miscellaneous Branch Immigration Branch Postal Department Special Branch Passport Branch Telecoms. Departments General Branch Administration Branch Local Government General Branch Local Government Administrative Branch Local Government Municipal Branch Local Government Rural Financial Branch

NOTE.—In the case of three pairs of ministries (designated by the figures I, 2, and 3 respectively), one minister presently holds two portfolios.

CHAPTER VI

ADMINISTERING THE DEVELOPMENT PROGRAM

A. THE MINISTRIES possible extent that part of the burden which arises Consideration of how governmental organization out of the necessity for such coordination and and administration in the ministries can be improved reconciliation. to carry out more effectively the economic develop¬ The above observations arise not merely from study ment program should take into account the assign¬ of the situation in Burma. They are theoretical as ment of responsibilities and functions among the weU. Such consideration as it has been possible to various ministries and the internal organizational give to the ministerial structure in Burma has not structure within the ministries, as well as the problems been detailed. Nevertheless, even a superficial exam¬ of personnel and operating procedures which are ination of the structure of the present ministries, as common to other agencies and are discussed later in shown in Plate 1, suggests that in a number of the chapter. instances functions presently distributed among two or more ministries might be consolidated in I. ASSIGNMENT OF MINISTERIAL RESPONSIBILITIES one ministry with useful results. Thus, for illustra¬ The Cabinet is composed of 23 ministers who head tive purposes, it is suggested that consideration be 26 ministries; three of the ministers hold double given to the consolidation of the Ministry of Culture portfolios. The question naturally arises as to whether with the Ministry of Education; of the Relief and Re¬ the assignment of government functions and respon¬ settlement Ministry with that for Social Services; of sibilities among the ministries might not be improved the Land Nationahzation Ministry with the Ministry by judicious consolidation. In every government there of Agriculture and Forests. A considerable number of is apt to be a tendency toward proliferation of more far-reaching consolidations might be proposed. cabinet-level agencies. This alone would probably It may well be that there are good and compelling warrant a periodic re-examination of the distribution reasons in some of these instances for the separate of responsibilities for the various governmental func¬ existence of the ministries concerned. What is sug¬ tions, in order to consolidate closely related functions gested is that a thorough study of the allocation of and to achieve greater operating efficiency. Another governmental responsibilities among the several reason for such a re-examination is that as govern¬ ministries conducted by competent experts might lead ment policies change to take on new emphasis in to greater administrative efficiency and more rapid response to changing conditions, a modified aUoca¬ attainment of the goals of the development program. tion of responsibilhies may be more appropriate to the new conditions and policies. There are other 2. INTERNAL MINISTERIAL STRUCTURE compelling reasons why the various governmental Such examination of the internal structure of responsibihties should be divided to the extent pos¬ several ministries as it has been possible to make sible among a relatively smaller rather than a rela¬ suggests that, in a number of instances, reorganiza¬ tively larger number of ministries. Where superior tion of existing organizational structures within the executive and administrative abilities are in great ministries would assist in the improvement of their demand, reduction in the number of ministers and operations. The internal organization of the minis¬ secretaries will result in the availabUity of more able tries in large part is an inheritance from the colonial people for key posts elsewhere in the development administration, when the Government played a lesser program. Finally, where two or more closely related role in the direction of economic life in Burma than ministries are not consolidated, many questions wiU is now the case. What seems to be lacking in these arise which will require coordination of their activities, instances is a structure in which separate organiza¬ or reconcihation of their differing views at a higher tional units and sub-units are established with a level. This will impose an unnecessarily heavy load clear delegation of authority for certain functions for on the Cabinet and on the Prime Minister. The which the ministry as a whole has responsibihty. responsibilities of the Prime Minister and of the A desirable organizational structure may be illus¬ Cabinet are already so burdensome that it would trated as follows: if a given ministry has responsi¬ seem highly desirable to minimize to the greatest bility for six major functions, it should be so organized 83 84 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA internally that six separate organizational units Corporation have major roles to play in the economic within the ministry are each assigned responsibihty development program. These organizations have been for one of those functions. The officers in charge of established by acts of parliament vesting imposing each of the six major organizational units should responsibilities in them. The duty of the Industrial report directiy to the secretary and the minister. If a Development Corporation is to promote the estab¬ larger number of major functions exist, they should hshment and development of industrial enterprises. normaUy be combined so that six or a smaller number The responsibility of the Mineral Resources Develop¬ of persons report directiy to the secretary and ment Corporation is the exploitation, development minister. Normally, each of the major units should and utilization of the nation's mineral resources. be further sub-divided with the same clear assignment The Agricultural and Water Resources Development of responsibUity. In the language of public or business Corporation has the task, under its act, of sponsoring administration, such an organizational structure is construction of irrigation canals, dams and reservohs, called an administrative pyramid or hierarchy. The making loans to farmers, and taking other measures pyramid does not normally constitute the entire to expand agricultural production. The Industrial organization of the ministry; there may for example and Mineral Resources Corporations are specificaUy be at one side a planning unit concerned with aU authorized to carry out aU activities necessary to their the work of the ministry, but it must merely be functions; and the powers granted to the Agricultural advisory to the top officials and must not blur the and Water Resources Development Corporation are hnes of responsibility by sharing with them responsi¬ correspondingly broad. The three have tremendously bUity for operation. There must also be clear arrange¬ significant roles to play in the development program. ments for coordination between units, but these It is therefore important to consider some of the arrangements must not diffuse responsibility or create major orgaruzational and administrative problems confficting hnes of authority. which arise in connection with their activities. The internal structure of many ministries in Burma seems not to be organized in this manner. A number 1. AUTONOMY of the ministries seem rather to be organized in such First and foremost among these is the question of a way as to foster undue dehberation, an excessive autonomy, namely, the proper balance between number of lateral clearances, delays and blurred independence and democratic accountabihty. Experi¬ responsibihty and accountability. It has been stated ence indicates that the best answer here is for the that, in some instances, nobody seems to be clearly development corporations to be organizationaUy in charge of anything. The internal structure within outside of the ministries, and to enjoy complete each ministry should be one which encourages the freedom in respect to day-to-day decisions. In broad orderly delegation of responsibihty, prompt action pohcy matters each may report to an appropriate and sharply focused accountabihty for results in minister, or alternatively the head of the corporation specific areas of responsibility. may himself have cabinet status. If the former arrange¬ Another defect of the top-level structure of the ment is foUowed, as seems to be preferable, the executive branch is the lack of "deputy ministries." minister should guide only the broad hnes of over-aU Ministers are frequently on tour, both in the course policy. If a development corporation acts merely as a of their executive duties and for legitimate pohtical division of a ministry, one of its main aims is frus¬ and other purposes. When they are away, work on trated. On the other hand, there must be effective important matters often comes to a standstill. The provisions for integration of the corporation's opera¬ secretary is hesitant to make decisions, except on tions with over-all government pohcy. relatively minor matters, and business is delayed. Efficiency would be increased if some official 2. DIRECTION acquainted with the minister's views and the prin¬ Another extremely important and closely related ciples which guide his decisions were placed in aspect of the problem of organizing and administering position to make final decisions in the absence of the development corporations has to do with the com¬ minister. Perhaps the elevation of parhamentary position of board membership, and with the nature secretaries to the role of "deputy ministers" is a of the direction of the corporations. Experience in feasible solution. other countries has shown that where membership on the board of directors of a development corpora¬ B. THE DEVELGPIVIENT CORPORATIONS tion is heavily weighted with government officials, The Agricultural and Water Resources Develop¬ and especiaUy with representation of miiusterial rank, ment Corporation, the Industrial Development Cor¬ there is a tendency for such a board to be dominated poration and the Mineral Resources Development by the minister or miiusters and to lose its autonomy ADMINISTERING THE DEVELOPMENT PROGRAM 85 and vigor of action. Experience in other countries more effectively, and without diverting time and has also led students of the question to the opinion energies from the basic task of new development, if that the chairman of the board of such a corporation separate divisions with separate personnel are estab¬ should serve on a full-time basis, free of any other hshed in the development corporation to handle these pubhc or private responsibilities. CompeUing reasons essentiaUy different, although complementary, jobs. may of course exist for deviating from this general rule. Where the chairman of a development corpora¬ 5. BOLD CONCEPTS tion cannot devote himself exclusively to its affairs It is important that the managements of the it becomes the more imperative that the director- development corporations think in large terms, and general or managing director of the development that they display imagination, enthusiasm and energy corporation be a person of the highest capabihty and in their approach to their tasks. Management must willingness to accept the fuUest possible range of not be timid or hampered by fears of petty criticism authority and responsibility, subject only to the from higher authority because of mistakes that are general pohcy guidance and review of his board and bound to be made in good faith by the most capable board chairman, and that the board in fact delegate of people, if they are doing a dynamic job. One of the such authority and responsibUity to the director- chief purposes of development corporations is to general. provide organizations which can act boldly and responsibly, unhampered by the many restrictions 3. AVOIDANCE OF DIRECT OPERATIONS which so often make action by government agencies The function of a development corporation with cautious and time-consuming. It is essential that the respect to new development projects should be to see boards of directors of the development corporations to it that such projects are undertaken by bodies approach their responsibihties with a determination appropriate to the purpose. If for example, it is to do a big imaginative job in a dynamic way, and desired to initiate a new pulp and paper plant, the that they convey this feehng and attitude to the Industrial Development Corporation should see to it executive officers of the corporations. In fact, the that the job is done; it should not undertake the task managing director of a development corporation itself. The Industrial Development Corporation may should be made to feel that unless he undertakes a set up an autonomous, businesshke publicly owned large-scale and ambitious program, and seeks to corporation to do the job; it may make arrangements accomphsh it in a relatively short time, he wiU be for a joint venture, in which government and private subject to censure by his board. capital would jointly undertake the task; or it may This vigor of action does not mean action un¬ insure initiation and proper execution of the project coordinated with the rest of the Government. The in any other way which seems desirable and feasible. scope of the program of each development corpora¬ The Industrial Development Corporation itself, how¬ tion must be planned in relation to the over-all plan ever, should not become engaged in direct operations. and the annual program whose formulation is dis¬ Its role should be confined to initiation, financing cussed in Chapter V. But each corporation will not and the subsequent exercise of such controls as would be a passive recipient of an assignment within that be appropriate to any large owner of an enterprise, plan. It must propose action, indicate the work it is to insure that it was weU managed and efficiently prepared to carry out and its desirability, and so operated. If the development corporations go beyond partake actively in the formulation of the over-all the exercise of such functions, and extend themselves plan. into the sphere of actual operations, they will become hopelessly bogged down in detail, and they will be 6. FUNDING POVS'ERS unable to carry on their development activities on It is exceedingly important that the development the scale and with the objectivity required for satis¬ corporations be empowered to finance new and factory performance. existing enterprises, whether by loans or equity participation, that they be empowered to raise money 4. FOSTERING PRIVATE ENTERPRISE by the issuance of bonds, debentures and stocks, and While the responsibilities of the development cor¬ that they be empowered to raise very substantial porations wiU undoubtedly be primarily the initiation sums initially for these purposes without the necessity and guidance of new development projects, an for seeking further specific authority for so doing. exceedingly important aspect of their work, and one Initial authority to employ substantial sums before which should not be shghted, should be the encourage¬ being required to obtain further financial authority ment and fostering of modernization and expansion wiU help develop the necessary vigorous approach to by existing private enterprises. This can be done the development program. 86 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA 7. STAFFING should be in the hands of a board of directors If the new corporations are to perform the major selected, not on the basis of political considerations, role assigned to them in the development program, but on the basis of the capabilities and experience it is ess-ntial that they swiftly build up sizable staffs they can contribute to the policy direction of the composed of capable people with adequate training enterprise. and experience. In June, 1953, after the Industrial Where actual production activities are presentiy and Mineral Resources De\elopment Corporations engaged in by existing government boards, these had been in existence for eight months and the should be converted to public corporations sub¬ Agricultural and Water Resources Development Cor¬ sidiary to the appropriate development corporation, poration for a slightly shorter period, the total staff and thus made part of a uniform organizational plan. of the Agricuhural and Water Resources Develop¬ New legislation will in some instances be required to ment Corporation, including stenographers and mes¬ accomplish this. sengers, was reported as including less than two The problem of the quality of management of dozen persons, and of the other two corporations existing and prospective state enterprises is crucial. combined, a smaller number. It is important that Probably no other aspect wUl be so important a the development corporations proceed without delay determinant of their success or failure. Management to recruit necessary staff of the highest possible is further discussed in Chapter Vll. caliber in order to be in a state of readiness for The organizational and operating problems of the operations once programs and projects presently transport, marketing and other productive boards under consideration are approved. are similar to those of the boards engaged in com¬ modity production. Those of the regulatory boards 8. INTERNAL STRUCTURE differ. Careful studies are needed of both types of As in the case of the several ministries, it is highly bodies, with respect both to their internal organization important that the internal structure of the several and procedures and to their direction and adminis¬ development corporations be appropriate to the trative relationships to other agencies. In some cases execution of their functions. The spechlc internal the chapter of this report dealing with a given field organization of a corporation should differ from that makes recommendations concerning the direction, of a ministry, because of the difference in functions, organization and operation of the government board but the same principles of organizations divided or boards operating in it. according to function, with clear-cut lines of authority and responsibility and clear provision for internal D. PROBLEMS OF PLANNING, REPORTING AND coordination of related functions should govern. EXPEDITING Successful administration of any agency requires C. OTHER GOVERNMENT CORPORATIONS AND that the top executive be informed concerning the BOARDS relationship between the agency's goals and those of Like other modern governments, the Union Gov¬ related organizations, the degree to which the agency's ernment has found it advisable to create a variety work is progressing satisfactorily toward those goals, of other corporations and boards. These faU into and the need for special attention to problem areas three groups: state enterprises presently or potentially of the agency's work. In any large agency, special engaged in the production of commodities, such as arrangements are necessary to accomphsh this most the State Cotton Spinning and Weaving Factory effectively. Board, the State Timber Board (which also has other In agencies carrying out a changing program rather functions), the Tile Factory Board; state enterprises than merely a continuing operation, such arrange¬ engaged in other productive activity, such as trans¬ ments are especially important. This will be true of portation or marketing; and boards engaged in almost every agency of the Union Government during regulatory activities. the period of the development program. Specific Comment has already been made concerning the arrangement is necessary within each agency for appropriate relationship between the development planning, reporting and expediting. corporations and subsidiary operating corporations. In Chapter V it was emphasized that planning of The latter should be set up in simulation of private specific projects and programs must typically origi¬ business corporations, and be guided by the same nate in the operating agencies rather than in the principles of good management, good service and Ministry of National Planning or any other central reasonable profit as should motivate the privately body. The formulation of an integrated program owned corporation which has a sense of pubhc must be a process of mutual fertUization, stimulus responsibUity. The direction of such a corporation and adjustment between the planning agency and ADMINISTERING THE DEVELOPMENT PROGRAM 87 the operating agency. Each operating agency must and statistics section of the agency, which he should "feed" ideas and information to the central planners. direct. Without such aids, central planning soon becomes He should develop and maintain a progress report¬ sterile and unrelated to actual conditions "on the ing system. This should show the status of each major front line" of the work of Government. Conversely, program, of all the projects composing it, and of each operating agency must receive from the central the component elements of each project, all in rela¬ agency a clear understanding of the role of its work tion to pre-established time schedules. Where pro¬ in the over-aU plan. Without it, cooperation in grams, projects, or parts of projects are falling behind executing programs is not as effective as is possible. schedule, he should attempt to discover the reasons, It was also pointed out in Chapter V that expediting and should recommend corrective measures. Where by the Economic and Social Board must not enter performance is ahead of schedule he may make within the operating agencies; expediting within the recommendations for advancing the schedule or for agency must be done by the agency itself There are shifting resources to other programs or components several good reasons for this. In the first place, the of programs which are lagging. Thus the planning staff of an implementing ministry or development and expediting functions merge. corporation will commonly know much more about It is extremely important that expediting staff one of its projects than will anybody in the central avoid issuing orders or edicts. Informal personal planning or coordinating groups. Secondly, the contacts, conferences and brief memoranda wiU be operating agency will be legitimately resentful if the principal tools. Any orders which the expediters there are unsolicited intrusions in matters which are may consider necessary should be issued by one of properly within its jurisdiction. Third, in addition to the heads of the agency concerned; the expediters the resentment generated, interference whhin the area must not constitute separate hnes of authority reach¬ of responsibility of an implementing agency weakens ing down into units. energy and initiative and is apt to retard the solution The expediters should, in the course of deaUng with of the problems which required the expediting action. actual cases, recommend administrative improve¬ The top official of each government ministry, ments which will prevent the recurrence of th; department or agency whl, of course, be responsible problem. This is the most important aspect of an for both planning and implementation. The first expediter's job; preventing recurrence of fadure by requirement for effectively carrying out this responsi¬ administrative improvement multiplies his effective¬ bihty is capable people and proper organization and ness many-fold. procedures throughout the agency. The principle of the administrative pyramid has been discussed. E. OTHER GENERAL PROBLEMS The second requirement is effective assistance by 1. PERSONNEL TRAINING, RECRUITMENT AND one or more officers or groups who are in a "staff" MANAGEMENT rather than a "line" relationship to him; that is, who The pervasive shortage of trained and experienced are direct advisers to the head but without adminis¬ administrators and speciahzed workers, mentioned trative responsibihty or authority over operating repeatedly throughout this Report, is as acute in units. Each agency should have at least one such government administrative agencies as elsewhere in planning and implementation officer and unit under the economy. The needs of the development program him. The officer should be attached administratively require early and large increases in the staffs of a to the secretary, in the case of a ministry, or to the number of key ministries. Analysis, as previously chief executive officer of the government agency con¬ recommended, of the internal organizational structure cerned. He should be strictly a staff adviser, having and procedures of the several ministries is bound to no executive authority in his own right; any other involve estimates of the number and kind of personnel arrangement would tend to blur responsibility and necessary to execute efficiently the responsibUities accountability by interfering with the prerogatives of assigned. Analyses should provide quantitative apprai¬ the line executives whose job is the actual execution sal of the personnel needs of the several ministries of programs and projects. and of the Government Executive Department as a His planning function should consist not merely of whole. Somewhere the necessary trained and experi¬ initiating project plans, but also in translating, in enced people must be found. terms of the work of his agency, the Government's over-aU plans, and in making continued adjustments a. Training in the agency's plans in the light of changing condi¬ The problems of training specialized workers for tions. His planning should be solidly based on the government service are similar to training problems factual data gathered and analyzed by the research for any other organization. Such problems are 88 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA discussed in Chapter VII. One special type of train¬ Ministry of Education should cooperatively foster the ing should, however, be instituted: training in pubhc establishment of guidance programs at high schools, administration itseh". To this end the University of technical institutes, Mandalay CoUege and the Uni¬ Rangoon (and Mandalay College if maintained as a versity of Rangoon, with the object of interesting four-year college) should estabhsh a pubhc adminis¬ promising students in public service careers and of tration curriculum including courses to teach the role counseling them in respect to proper training for such of the Union Government in the economy, the careers. purposes of the development program and the require¬ In addition, Government should study the need ments for its success, the principles of government over the next few years for temporary foreign per¬ organization and operation, public personnel admin- sonnel and should develop more systematic means istration and similar matters. The Ministry of Home for recruiting such people. An important function of Affairs, either independently or in appropriate circum¬ such experts should be to teach the maximum number stances in coUaboration with the University, should of Burmese to understudy their work and to perform conduct public administration in-service training and specialized jobs; this function should be stressed in research available to suitably qualified personnel of recruiting such experts. aU public agencies. In addition, scholars and officials should be sent abroad for postgraduate public c. Conditions of Work: Salary Scales administration studies and practical observation. Success in recruiting personnel depends in part on In the Government as elsewhere, in-service training the conditions of work to which people are being can contribute greatly to efficiency. The worker who recruited. The desirability of in-service training has is plunged into a job without understanding its been mentioned. The general atmosphere of work, relationship to the over-all work of the agency or to discussed in Chapter VII, is as important in Govern¬ other jobs is not effective as he might otherwise be. ment as elsewhere. There are other questions. Are Further, the worker's effectiveness is increased if he goverrmient pay scales adequate to attract and to is offered a means of preparing for promotion as he keep in Government desirable personnel of the works. In-service traiiung of both types should be capabihties desired? Are existing personnel practices introduced. A Center for Training Aids is recom¬ such as to encourage the most able staff members mended in Chapter VII. Its services should improve to exert themselves to the fullest extent of their the effectiveness of orientation and in-service traiiung capabihties in the search for monetary rewards or throughout the Government. promotion? Without intensive study of such questions, a few general observations can be made. b. Recruitment The time would seem to be long overdue for There should be well-defined and weU-publicized adopting pay scales adequate to meet the existing avenues into the pubhc service. Yet the majority cost of hving of government employees. Present even of educated Burmese seem to have shght know¬ salary scales are too low to attract and to retain in ledge of routes into a pubhc service career. The government service people of the deshed quahfica- Ministry of Home Affairs should, therefore, regu¬ tions and abihties, and a general pay increase through¬ larly pubhsh and disseminate bilingual cumulative out the government service would seem to be in order. announcements of all vacancies, the qualifications This recommendation is made with due consideration needed and procedures for applying. Through arrange¬ of the desirabihty mentioned in Chapter III of ments with the Director of Posts, these announce¬ hmiting current government expenditures. A salary ments should be exhibited in post offices throughout increase is an expenditure which it would be wasteful Burma. The Ministry of Home Affairs should also not to make. The caliber of government workers of coUaborate with the Ministry of Information to issue some types and grades is low because even at the and widely distribute a readable and attractive reduced level of private activity the best workers bihngual pamphlet describing opportunities in find it possible to obtain positions in private industry Burma's pubhc service and steps necessary to qualify paying much higher salaries; many leave government for positions. service to accept them. Every effort should be made (a) to encourage In considering such a general pay increase, it must promising young people to aspire to government be kept in mind that the most significant services are service, (b) to guide them in taking appropriate those performed by officials at the upper end of the training, and (c) to make sure that, once they are civil service ladder. These highly responsible officials, properly quahfied, they can, without hindrance or plus those in the ranks next below, merit increases undue "red tape," receive public service appointments. just as much as do those at the lower end of the To this end the Ministry of Home Affairs and the salary scale. Reaction against the top civU service ADMINISTERING THE DEVELOPMENT PROGRAM 89 salaries under the British reghne, which were based toward the solution of pressing current problems. upon British hving standards and were beheved Similariy, the expediting staff of the Economic and excessive, plus the financial crisis of 1948-49, have Social Board, discussed in Chapter V, would con¬ caused a reduction in top-level salaries to much below stitute a central administrative management staff. the prewar level in spite of the several-fold increase in The improvement of procedures and organization to Uving costs since before the war. Even though the prevent recurrence of problems and to increase the top salaries may have been adequate, the reduction efficiency of work is one of its central functions. of 75% or more in purchasing power is conducive The need for administrative talent and experience in to inefficient admiidstration and is contrary to the administrative analysis must be recognized in selecting pubhc interest. its staff". The staff should not be thought of as merely Consideration of a general salary increase through¬ an ad hoc group meeting emergencies. out the government services should be linked with investigation of the extent to which standards of 2. OFFICE PROCEDURES performance may be raised, more efficient workers It seems clear that considerable improvement in employed, and currentiy employed inefficient per¬ operating efficiency could be effected throughout sonnel released. Many government positions are of Government by introducing improved office equip¬ such a nature that the actual work accomphshed per ment and methods. Typewriters, calculating machines, day varies tremendously, depending on the efficiency card files, biffing and posting machines and simUar of workers. An inefficient typist or clerk, even though equipment could be effectively used in many places paid a low monthly wage, is a very expensive employee. where they are not now used, and would be a source in many posts, the work would be done at consider¬ of economy. Modern files and filing systems should ably lower cost to the Government if the salary paid be introduced. The various steps required in the were higher. A study of the possibUity of increasing work of each office should be analyzed, and office efficiency would be necessary in order to estimate layouts and procedures arranged in such a way as the increase in expenditures which would be required best to facihtate the logical work flow. Progress in by a general wage income. these matters wiU make for a more effective utilization One road to increased output per worker should and conservation of staff" as well. A centralized pool be lengthened hours of work. Presumably, the higher of four or five messengers in a building for example, the productivity in an economy, the larger the share could serve fifteen individual officials fuUy as well as of time which can be afforded for leisure and the fifteen individual peons sitting outside theh indi¬ shorter need be the number of hours devoted to vidual doors to respond to the occasional caU of a labor. Yet in none of the higher productivity coun¬ beU, and could do so at far lower cost. tries of the world is it deemed feasible to afford as short a work week in government employment as is 3. STATISTICS, ACCOUNTING AND REPORTING the practice in Burma. This practice hke others The Preliminary Report stressed the importance of referred to above is apparently a colonial practice, well-selected, comprehensive, rehable and timely which an independent nation striving for an increased statistics as an indispensable tool in the planning of level of hving cannot afford. Effective institution of a economic development programs and their execution. longer work week, at the time of a general pay It suggested the need for continuous effort to increase, could offset a considerable share of the cost. improve the statistical data avaUable in Burma. It Improved office procedures, discussed below, could also stressed the benefits of full pubhc reporting and also offset the cost of a pay increase. financial accounting throughout Government. These recommendations continue to be of great significance d. Personnel Management and Administrative to the effective organization and administration of Management the economic development program, and continuing A central personnel management staff" and a central efforts should be devoted to these problems. administrative management staff" (often combined) are accepted parts of the government structure of F. THE PRIVATE AND MIXED SECTORS OF THE most countries. Theh effectiveness depends on the ECONOMY degree to which their work is integrated with the exe¬ Examination of how Government can improve cution of the current work and problems of the organization and administration best to promote the operating agencies. The planning-reporting-expedit- execution of the economic development program ing unit recommended in previous paragraphs for must take into account what Government can do to each agency would in effect constitute an adminis¬ improve the scale and efficiency of economic activity trative and personnel management unit oriented in the private and mixed sectors of the economy. 90 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA Although the Government must plan for all economic weights and measures, competitive pricing, reason¬ activity, it will not wish to plan all economic activhy. able profits and the like. In a great many cases It wiU certainly not wish to conduct all economic Government can better serve the general welfare by activity. Private enterprise, in the form of the indi¬ playing the role of umpire, by establishing the rules vidually owned business, the partnership, the cor¬ under which private production may be conducted, poration and the cooperative will exist and function. and by fostering the development of institutions It wUl undoubtedly be dominant in many important which can assist producers, than by itself engaging in sectors of the economy, such as agriculture, trade, production. various services, and small-scale or cottage industry; its participation wih be desired in many other areas 2. CLARIFICATIONS OF GOVERNMENT POLICY as well. Progress toward economic development It has become clear that in a significant number of goals wiU be facUitated if that significant part of total instances potentially desirable private economic acti¬ economic activity which is conducted in the private vity has not been undertaken because the individuals sector operates more efficiently than is presently or firms concerned were in grave doubt as to Govern¬ the case. The same is true of public-private joint ment's policies in a number of matters. In some cases ventures. the chief question was whether Government would The responsibihty for achieving efficiency in private eventually nationalize the project concerned if it were and mixed public-private enterprises rests in the first undertaken. In others the question was whether instance with the individual enterprises concerned. Government would set up a competitive plant in the They must make a determined effort to modernize same field. In still others it was whether Government their equipment and production methods; to keep up had sufficient interest to facilitate private develop¬ with the latest techniques; to develop better labor ment by granting visas for the technicians who would relations; to provide better incentives to workers; to be necessary from abroad, by granting import licenses aim at larger sales volume and lower profits per unit; for the equipment that would be required, or by to improve their record-keeping and accounting, and similar measures. Hesitations, doubts and fears of analyze their costs; to develop the art of salesman¬ this kind have apparently deterred much new invest¬ ship; and to give better service to the public. ment and resulted in lower levels of output, produc¬ tion, income and welfare than would otherwise have 1. GOVERNMENT ASSISTANCE been the case. Nevertheless, there are a number of ways in which In view of the many declarations which have been Government can and should render assistance to made in the past with respect to the industrial pohcy such enterprises. Examples include the provision of of the Government, beginning with the Constitution cheaper fuel and electric power, and of improved of 1948 and continuing through those declarations transportation and communication facihties; the contained in the Two-Year Plan of 1948, the state¬ development of natural resources and basic industries ments of the Prime Minister on June 14, 1949, and to provide a greater variety of cheaper raw materials; September 29, 1949, and in the resolution of the the fostering of adequate and low cost credit; the Economic CouncU in 1949, it may be asserted that provision of research and technical assistance; the private enterprisers have been afforded a clear elimination of unnecessary restrictions on business statement of Government's poshion on these ques¬ activity; the more expeditious treatment of business tions and should have no real doubts about them. matters where restrictions or regulations are neces¬ In spite of these statements, doubts do exist. Their sary; the establishment of standardized weights and existence suggests the need, first of all, for a restate¬ measures; the provision of incentives to new invest¬ ment of the 1949 Resolution on Industrial Policy, ment, through the tax instrument and by other means; This would be desirable for several reasons. The the inauguration of training programs to develop Resolution was adopted more than three years ago. skilled technicians and workers; and, above all, Condhions have changed greatly in the meantime. the creation of an atmosphere of security and The Resolution related primarily to foreign capital, confidence. but does not cover the important question of steps Government should also, to the extent necessary, to mobUize indigenous capital. It is concerned only regulate private and mixed enterprises to insure that with industrial development and does not consider they operate in a manner conducive to the general the encouragement of private and mixed public- welfare. Such regulatory activities will apply to private development in agriculture, trade, and other minimum wages, healthful working conditions, col¬ fields. Finally, h related primarily to the starting lective bargaining, satisfactory and honest quahty of new enterprises; only by implication does it standards, truthful advertising, uniform and reliable refer to the need for encouraging expansion and ADMINISTERING THE DEVELOPMENT PROGRAM 91 modernization of existing enterprises. A restatement their salarie.', it will he proper for candidates for such of the policy, expanded in scope as indicated above, technical positions to send home? How? and made as specific as possible, should be prepared. (11) How, in cases where the enterprise is to be in whole It should be disseminated widely both at home and or in part foreign capitalized, can one get a detcrminaticn abroad. of the percentage of the proposed factory's profits, after taxes, to be remitted abroad? Such a restatement wiU not, however, be sufficient (12) Where foreign participation is conteinplated, may to allay fears and stimulate private investment. This the foreign group send representatives to Burma for an effect can be achieved if Government will not only on-the-spot survey? reaffirm and clarify its policies, but will also give Nobody would wisely establish or expand an evidence and assurance by its actions that h intends industry in Burma without obtaining official deter¬ to implement these policies vigorously. Thus, the minations on such matters as listed above. In addition, several government ministries and departments must be given to understand not only what are the Gov¬ any enterpriser is likely to face other problems on ernment's policies in this area, but how each agency which Government can provide assistance. For and department of the Government is expected to example. Government should constantiy be coUecting, for a variety of industries, data on the following: contribute to the implementation of these policies. markets; labor; raw materials; suitable technical In the area of new industrial development, for processes; plant cost and amortization rate; and example, experience has shown that such specific income, sales, and other taxes. Government should practical questions as the following wiU be asked: make such information freely available to indigenous (1) How will security conditions affect location of the and foreign enterprisers who are contemplating estab¬ proposed factory? How will they affect sales as well as lishing plants in Burma. the smooth flow of raw materials? (2) Can one get agreement from Government as to If the Government wishes to expedite private non-nationalization of the proposed plant for an agreed- investment in certain fields, it would be desirable to upon period of years? Through what channels? How can establish an "Investors' Bureau," with which a pros¬ necessary papers be expedited? pective investor can communicate or to which he can (3) How does one get prompt, responsible assurances go in person to determine what the Government's as to freedom from government competition (especially on general policy is concerning the field in question, and a non-fuU-cost basis) for a definite time? to learn where he must go to obtain answers to various (4) How will the proposed enterprise be affected by questions such as those stated above, and what he income, sales or other taxes? With whom may one discuss can do to obtain prompt replies and decisions. Such these points to obtain advance estimates necessary to an agency would be most effective if it aided the help decide whether to establish the proposed enterprise in Burma? applicant in obtaining expeditious treatment of his problems by the appropriate ministries, and attempted (5) How does one go about requesting Government loan or equity capital participation? Does one apply in to coordinate their consideration by, for example, the first instance to the Industrial Development Corpora¬ aiding in speeding action by a ministry whose tion or to the Ministry of Industry? Are there forms to consideration was causing delay. The Bureau would be filled in? Before one goes to the time and trouble to of course have no administrative authority. Since its dravv' up a detailed application, with whom may one functions would be inter-ministerial, perhaps organi¬ discuss the matter firsthand? Who actually makes the zationally it might most appropriately be attached to decision? the Economic and Social Board. (6) In the case of a. Joint venture or management contract, If the Government makes clear that it is not, in what terms is Government likely to desire? Which respon¬ principle, hostile to private economic activity in sible Government officials should one see for prehminary spheres which Government has not reserved to itself, discussions? and if it indicates further that it welcomes the con¬ (7) How can one without undue delay obtain import tributions which private economic activity can in the licenses for raw materials and equipment? non-reserved sectors make to the economic develop¬ (8) If one can show that tariffs on raw materials or ment of the country (providing, of course, that the component parts are higher than on the corresponding private activity is conducted in accordance with finished articles, can one get tarijf relief a.s an encourage¬ ment to manufacture finished products within Burma? Is clearly established rules set up by Government to there any quick standard procedure? protect the general welfare), it may be anticipated (9) Can one get assurance of visas for required foreign with confidence that private economic activity will technical personnel? How can one avoid delays, sometimes increase in volume and in efficiency. If so, it will of many months, in obtaining such visas? contribute in major degree toward the realization of (10) Can one determine in advance what proportion of economic development goals. 92 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA G. SUMMARY OF RECOMMENDATIONS OTHER GOVERNMENT CORPORATIONS AND MINISTRIES BOARDS (1) A thorough study of the responsibihties of the (12) Each existing government transport, marketing several ministries should be undertaken with a view and regulatory board should be carefuUy studied from to consolidation of responsibihties into a smaller the point of view of its internal organization and pro¬ number of ministries. cedures and its administrative relationships to the ministries with which each is affihated. (2) The ministries should be internally reorganized so that in each case the minister and secretary will GENERAL PROBLEMS be at the head of a pyramidal structure with straight (13) The operating procedures and personnel lines of command running from top to bottom. requirements of each government agency should be (3) Each minister (or each one significantly con¬ reviewed. In many cases revision in office procedures cerned with the development program) should be is desirable. provided with a deputy who wiU act for him when he (14) Every major executive agency of the Govern¬ is absent and who wUl shoulder some of his adminis¬ ment should have a planning, progress reporting, trative load when he is present. expediting, and administrative improvement officer or uiut attached in a staff capacity dhectly to the secre¬ DEVELOPMENT CORPORATIONS tary or comparable executive, to initiate plans and integrate the agency's plans with the over-aU program (4) The development corporations should be of the Goverrmient, to maintain progress reporting organizationaUy outside of the ministries, and should systems, to recommend measures to break bottlenecks enjoy complete freedom in respect to day-to-day retarding specific projects and to recommend admin¬ decisions. In respect to broad pohcy only, each may istrative improvements designed to prevent the same appropriately report to a minister. delays from recurring. (5) The development corporations must be bold (15) To expand and improve the training of pubhc and imaginative, wUhng to risk some errors for the servants in Burma, courses in public administration sake of action. Bureaucratic caution is out of place. should be estabhshed at the University of Rangoon (6) The development corporations should be dele¬ (and at Mandalay College if maintained as a four- gated power to raise and to employ substantial sums year coUege); the Ministry of Home Aflfahs should of money before being requhed to obtain further conduct pubhc administration in-service training and financial authority. research; and state scholars and mature government (7) The internal structure of the development officials should be sent abroad for pubhc admirustra¬ corporations should be carefuUy patterned in the tion study and practical observation. light of sound principles of public administration. (16) The Ministry of Home Affahs should regularly (8) Staffing plans, to include locally available per¬ pubhsh and disseminate bUingual announcements of sonnel plus such temporary foreign consultants as all pubhc service vacancies, the quahfications needed may be initially required, should be formulated for and procedures for applying; these should be exhibited achieving early and significant increases in the staff in post offices throughout Burma. The Ministry of available to the development corporations. Home Affairs and the Ministry of Information should (9) To initiate new production or other projects, publicize the opportunities provided by government the development corporations should establish sub¬ service. sidiary pubhc corporations, organize joint ventures, (17) The same ministries should cooperatively foster or employ other indirect means; they should not the estabhshment of guidance programs at high dhectly estabhsh or operate such projects. schools, technical institutes, Mandalay College, and (10) Preferably through separate divisions estab¬ the University of Rangoon, with the object of inter¬ lished for the purpose, the development corporations esting promising students in public service careers should, to the extent indicated by basic government and of counseling them in respect to proper training pohcy, encourage the estabhshment of new private for such careers. as well as joint-venture and public enterprises, and (18) To stimulate recruitment and retention of the modernization and expansion of existing enter¬ quahfied personnel, pubhc service pay increases prises. should be instituted. (11) For improved administrative efficiency, exist¬ THE PRIVATE AND MIXED SECTORS OF THE ing government production boards should be attached ECONOMY to, and made subsidiary to, the appropriate develop¬ (19) With the aim of clarifying its attitude to¬ ment corporation. ward private and mixed pubhc-private economic ADMINISTERING THE DEVELOPMENT PROGRAM 93 development, the Government should restate the 1949 many questions to which a prospective investor must Resolution on Industrial Pohcy. The restatement have answers before he wiU feel assured that he can should make specffic reference to the role of indigenous safely proceed. To expedite such action, the establish¬ as weU as foreign capital; should include private and ment of an Investors' Bureau to give information to pubhc-private agriculture, trade and other fields; and prospective investors and to guide them to the should include existing as weU as new enterprises. appropriate officials is deshable. (20) The major stimulus to desired private invest¬ (21) Other recommendations conceriung personnel ment (including private participation in joint ventures training, pertinent to government agencies as weU as and other mixed enterprises) must be action by the to other organizations in the economy, are made in Government in rendering decisions concerning the Chapter VII. CHAPTER VII

MANNING THE PROGRAM

A. THE PROBLEM OF SPECIALIZED MANPOWER entire labor force. The instructor in a technical or vocational training school who trains hundreds of 1. SPECIALIZED MANPOWER THE CRITICAL FACTOR machinists over a period of years makes a tremendous In terms of numbers of workers, Burma's man¬ contribution to productivity and output in a number power resources are more than adequate for meeting of industries dependent on such skills. The produc¬ the requirements of the development program. Indeed, tion superintendent in a factory who organizes and the fuUer employment of labor is one of the broad directs the work processes of a thousand workers with objectives of the program. However, another and much higher efficiency than previously prevailed, con¬ more profound objective, the employment of labor tributes in effect the equivalent of the output of a in a continuously more productive manner, will great many additional workers. Such examples, involve a serious manpower problem, in many ways which could be endlessly multiplied, illustrate the the most serious economic problem to be faced for tremendous importance of skiUed manpower resour¬ many years to come. ces and dramatize their significance to the economic Burma possesses the other basic requirements for development program. Unless the needs for such rapidly increasing output per worker employed: the persons are appreciated in their full signfficance, and adequacy of her natural resources in relation to the unless adequate steps are taken to assure their population and her ability to procure the necessary availability in time, the fuffiUment of the development capital goods abroad. The situation is not as fortunate program itself within the time contemplated will not with respect to the third major factor, speciahzed be feasible. While skills and special abilities can be manpower. The economic development program will imported, it wiU not be feasible or desirable to meet generate needs for specialized types of manpower more than a smaU part of the total needs for spec¬ now either non-existent or very scarce in Burma. iahzed manpower in this way. A major effort wiU be These include many kinds of professional personnel, needed, therefore, to develop the necessary personnel technicians, skilled workers, managers and adminis¬ within Burma. trators. These persons will be needed throughout the The treatment of the problem of specialized man¬ economy, and especiaUy in the fields of transport, power resources in this chapter relates to every seg¬ communications, industry, power, mining, construc¬ ment of the economy and not just to the specific tion, irrigation, health, education and government. projects which are recommended in the Report. The While the required number of persons of specialized analyses and proposals apply to agriculture as weU skills and abilities will not be great in many of these as industry. They apply to existing enterprises as well sectors, it will in the aggregate be considerable, as to new projects. The achievement of the aggregate particularly in relation to the number of such persons goals of the development program rests necessarily presently available. It is this present and anticipated on the assumption that improved methods, greater lack of speciahzed personnel which constitutes the know-how, and better organization will gradually be critical manpower factor and the greatest obstacle to applied throughout the whole economy. The problem the development program. of providing the specialized personnel who are the The contribution which is made by specialized key to improved practices has, therefore, a very broad manpower—by managers and administrators, by and general application. scientists, engineers and other professional personnel; Succeeding sections of this chapter will deal with by skiUed technicians; and by skilled workers goes this critical manpower problem in its several aspects: far beyond their individual roles in the productive existing manpower resources, the requirements of the process. Their importance lies even more in their development program for specialized skiUs, and ways ability to promote the productivity of other workers. and means of satisfying those needs and increasing The scientist in the medical research laboratory who labor productivity in general. A special problem and develops a cure for a widely prevalent disease con¬ the most difficult of all—that of top-level management tributes thereby to the health and productivity of the —is dealt with separately in the concluding section. 94 MANNING THE PROGRAM 95 2. EXISTING MANPOWER RESOURCES TAHLE VII 1 The manpower resources in Burma were described DISTRIBUTION OF WORKERS IN BURMA BY in Section I of Chapter I. The known facts can be MAJOR CENSUS CLASSIFICATION, 1931 summarized briefly. Of an estimated population of Major Census Classification Total Number PeicenU.life of 19 million persons in Burma about 45% some of Workers of Workers Workers in 8-5 miUion—may be considered workers, i.e., mem¬ {in thousands) Each C ■roup bers of the labor force. As compared to Southeast Exploitation of Animals and Vegetation 4,321-3 69-6 Asia generally, the population and labor force in Ordinary Cultivation 4,009 1 64-5 Burma are small relative to land area and the Special Crops 1I8-6 1-9 country's resources. The bulk of the population, and Forestry 527 -9 Animal Raising 79-9 1-3 therefore of the workers, is located in the broad Fishing and Hunting 61 0 1-0 southern dehas and in the main river valleys from Exploitation of Minerals 21-9 -3 the deltas northward to the region of Mandalay. Exploitation of Petroleum 17-6 -3 Limited concentrations are also found in the deltas Industry (including Cottage around Akyab and Moulmein. This river valley and Industries) 664-4 10-7 Textiles 2332 3-7 delta population is predominantly rural and widely Sawyers 21-3 ■3 dispersed. This is even more the case with the remain¬ Metals 21-6 •3 der of the population inhabiting the horse-shoe of Ceramics 135 •2 Chemical Products 185 ■3 hills which surrounds the central region. The migration Rice Processing 63-3 11 into towns which has accompanied war and insur¬ Other Food Industries 78-2 1-3 rection has not altered significantly this basic pattern. Articles of Dress 60 0 10 Misc. Construction and The industrial work force which mans the few Wood Crafts 101-5 1-6 existing modern industrial enterprises is concentrated Misc. Industry 53-3 -9 in Rangoon, and to a lesser extent in Mandalay and Transport 222-0 3-5 Moulmein. Water Transport 73-7 1-2 Roads and Bridges 35-0 •5 About 5% of the population and a somewhat Road Transport 805 1-3 higher percentage of the labor force is composed of Rail Transport 27-8 -4 non-indigenous races—primarily Indians and, to a Other 50 -1 Trade 557-4 90 lesser degree, Chinese. In the past the proportion of Banks, Insurance, Broker¬ non-Burmese workers participating in industry, com¬ age, etc. 13-2 ■2 merce, transport and administration was higher than Textiles 18-8 •3 Wood (excluding firewood) 14-9 •2 for Burmese workers. This was true of jobs at both Trade in Foodstuffs (incl. ends of the economic scale. At the bottom of the petty trade) 446-7 7-3 scale this had the result of sparing the Burman from Other 63-8 1-0 some of the least desirable jobs. At the top, the result Public Administration 49-9 -8 Professions and Liberal Arts 199-0 3-2 was relatively little training and experience for the Religion 1283 2-1 Burman in the tasks of an advanced economy. Now, Medicine (incl. unregistered both dehberate policy and prevailing attitudes assure healers) 29-1 •5 Instructors 20-7 •3 that opportunities wiU be granted to indigenous races Arts, Sciences, Entertain¬ to overcome any handicap suffered in the past. ment, Astrology, etc. 209 •3 No recent comprehensive data are available des¬ Domestic Sers'ice 44-7 ■1 cribing the composition of the labor force according Miscellaneous 118-1 1-9 to workers' occupations or according to the indus¬ tries in which they are employed. Occupational data will have to await the completion of the present Although considerable changes have occurred since census operations. Industrial employment data must 1931 and the total labor force has increased, its com¬ await more complete coverage by the Directorate of position as shown above no doubt remains essentially Labor monthly surveys. The types of skills possessed the same. It is dominated by peasant farmers, petty by the population have received little statistical atten¬ traders and handicraft workers. Although some of tion. The best avaUable description of the Burmese these workers possess a high order of skill, their labor force in terms of any of these three interrelated skills are oriented to traditional and primitive methods characteristics—occupations, industries, skills is of production. In the fields where modern enter¬ found in the 1931 census. The distribution of workers prises, rice-milling and mining have been introduced in that year according to a combined industry-occupa¬ the Directorate of Labor in June, 1951, accounted tional classification is shown in Table VII-1. for only some 40,000 permanent workers in 475 96 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA

TABLE VII - 2 NEW SKILLED MANPO'WER REQUIREMENTS, PLANNED PROJECTS CLASSIFIED BY TYPE OF WORKER {Cumulative)*

1953 54 1954-55 1955-56 1956 57 1957 58 1958-59 1959-60

Managerial and Supervisory Construction 382 484 583 554 516 472 454 Maintenance and Operation 0 47 135 351 456 510 583 Total 382 531 718 905 972 982 1,037 Professional Construction 430 525 580 585 554 508 496 Maintenance and Operation 0 20 50 103 145 159 192 Total 430 545 630 688 699 667 688 Sub-professional Construction 1,224 1,660 1,892 1,952 1,761 1,637 1,599 Maintenance and Operation 0 48 114 288 409 451 517 Total 1,224 1,708 2,006 2,240 2,170 2,088 2,116 Carpenters Construction 754 1,135 1,191 872 843 634 574 Maintenance and Operation 0 38 78 139 169 200 211 Total 754 1,173 1,269 1,011 1,012 834 785 Masons Construction 268 388 401 314 289 240 228 Maintenance and Operation 0 16 29 55 71 80 92 Total 268 404 430 369 360 320 320 Electricians Construction 378 553 546 456 435 400 420 Maintenance and Operation 0 31 124 267 361 442 509 Total 378 584 670 723 796 842 929 Machinists Construction 108 161 166 149 143 131 116 Maintenance and Operation 0 8 19 44 50 60 65 Total 108 169 185 193 193 191 181 Mechanics Construction 440 645 705 640 660 627 559 Maintenance and Operation 0 47 90 176 228 262 296 Total 440 692 795 816 888 889 855 Pipe Fitters Construction 313 518 576 517 516 460 439 Maintenance and Operation 0 16 33 61 75 98 121 Total 313 534 609 578 591 558 560 Foundry Workers Construction 93 146 152 146 151 147 144 Maintenance and Operation 0 8 18 37 45 51 61 MANNING THE PROGRAM 97

TABLE VII - 2 (contd) {Cumulative)*

1953 54 1954 55 1955 56 1956 57 1957 58 1958 59 1959-60 Smiths Construction 173 270 293 285 270 240 237 Maintenance and Operation 0 24 59 105 136 169 199 Total 173 294 352 390 406 409 436 Power Plant Operators Construction 124 209 219 202 196 172 171 Maintenance and Operation 0 11 22 71 81 109 132 Total 124 220 241 273 277 281 303 Processing Plant Operators Construction 0 0 0 0 0 0 0 Maintenance and Operation 0 25 122 522 560 700 705 Total 0 25 122 522 560 700 705 Drivers Construction 1,648 2,578 2,738 2,642 2,551 2,340 2,324 Maintenance and Operation 0 305 446 759 939 1,011 1,127 Total 1,648 2,883 3,184 3,401 3,490 3,351 3,451 MisceUaneous Skilled Workers Construction 135 229 241 208 235 208 205 Maintenance and Operation 0 22 80 211 274 318 339 Total 135 251 321 419 509 526 544 Total SkUled Workers Construction 6,470 9,501 10,283 9,522 9,120 8,216 7,966 Maintenance and Operation 0 666 1,419 3,187 3,999 4,620 5,149 12,836

*Figure for each year represents total requirements above 1952-53 level; figures for successive years are not additive.

estabhshments, which probably represented most of and to some extent to help train other workers. the larger ones. Even in the most advanced of these Literacy, which is necessary for maintaining adminis¬ enterprises the technology typicaUy has been kept as trative organization and for transmitting skills rapidly, simple as possible, with an emphasis on brawn rather is relatively widespread and increasing. There is no than skill for the great mass of the workers. The problem, for example, of staffing the large clerical number of skiUed personnel and their standards has civil service. According to the experience of large always been very limited. Certain critical skUls are employers of labor, the Burmese national is adept at almost completely lacking. Primarily these are the assimilating modern industrial skiUs. skiUs requiring advanced training and experience and The over-all situation, then, is one of a relatively falhng into two broad classes: leadership (managers, under-developed labor force, but a labor force which supervisors, administrators of public institutions), and possesses a potential for rapid upgrading. technical "know-how" (engineers, scientists, econ¬ omists, highly skUled workers).* 3. FUTURE SKILLED MANPOWER REQUIREMENTS There is, however, a brighter side to the picture. In general there is no existing reservoir of unem¬ A small nucleus of skilled workers does exist, which ployed skUls nor, in the present state of economic can be utUized to fiU the most critical jobs at present activity in Burma, is there any considerable unsatis¬ fied demand for skilled manpower. In the past ten *These classes overlap, as the best leadership material may have a "technical" background, but not all technical people need be good years, emigration and the economic disintegration administrators. due to war and insurrection have depleted the ranks R.B.—7 98 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA of skilled workers, caused deterioration of skills The requirements shown are for additional work¬ through disuse and retarded the previous rate of ers; workers who are presently employed in an enter¬ training of new workers. These same factors have also prise which will execute one of the projects, and who decreased employment opportunities. At the present will be available for work on the project, are not very low levels of both supply and demand of skills, included. This is true, for example, on the Burma any disparity between them is neghgible for planning Railways, where only a fraction of the workers who purposes, and the two may be assumed to be in will be needed on construction are shown on the balance. Attention should therefore be directed prim¬ table, because many workers presently employed by arily to the magnitude and nature of future additional the Railways will be avaUable. requirements, and to ways of meeting them. In excep¬ For 1953-54, the requirements shown should be tional cases of surpluses, such as those of skilled regarded as applying to the end of the fiscal year; sawmdl employees, the workers can be absorbed by materials and equipment wUl not be received in time existing plants including those which are now closed to create demand for this number of workers before down, and the demand for such workers is not the year's end. For other years, the figures are annual reffected in the following estimates, which are based averages. on new investment. The needs for skilled manpower resources wUl not Estimates of managerial, professional and skiUed be hmited to those shown in Table VII-2, which manpower required in the next seven years for pro¬ reflect only the requirements for projects specffically jects in the fields of power, irrigation, industry, recommended. Total investment in the various sectors mining, transportation and communications specifi¬ of the economy will substantially exceed that in cally recommended in this Report are presented in specifically recommended projects. It is necessary, Table VII-2 (see p. 96). The personnel required are therefore, to estimate requirements for skiUed man¬ shown by major work categories and by the sectors power which will reflect the needs generated by total of the economy within which the projects fall. investment in these sectors. Estimates have been made Requirements for workers who will construct plants for the additional manpower requirements of each and install equipment in them, and for workers sector for the entire development program. While who will subsequently operate and maintain the they have wide margins of error, they indicate the plants, are shown separately. order of magnitude of the specialized manpower

TABLE VII - 3 NEW SKILLED MANPOWER REQUIREMENTS, ENTIRE DEVELOPMENT PROGRAM, CLASSIFIED BY TYPE OF WORKER {Cumulative)"

1953-54 1954 55 1955 56 1956 57 1957-58 1958-59 1959-60

Managerial and Supervisory 692 851 1,128 1,375 1,502 1,532 1,657 Professional 730 855 1,000 1,098 1,149 1,152 1,203 Sub-professional 1,824 2,328 2,716 3,040 3,070 3,018 3,166 Carpenters 3,754 4,773 6,469 7,411 8,612 9,184 10,485 Masons 1,268 1,654 2,230 2,619 3,060 3,320 3,620 Electricians 578 794 950 1,053 1,176 1,242 1,379 Machinists 168 231 261 277 280 281 281 Mechanics 640 902 1,075 1,136 1,223 1,239 1,255 Pipe Fitters 513 744 889 908 971 978 1,010 Foundry Workers 128 190 218 238 253 258 274 Smiths 248 372 457 510 531 539 586 Power Plant Operators 164 262 297 337 344 356 383 Processing Plant Operators 5 30 129 528 568 708 714 Drivers 2,348 3,723 4,294 4,746 5,070 5,121 5,431 Miscellaneous SkiUed Workers 210 331 426 539 634 656 694 Total 28,443 29,584 32,138

*Figure for each year represents total requirements above 1952-53 level; figures for successive years are not additive. MANNING THE PROGRAM 99 problem. They are shown in Table VII-3. As in hiring foreign specialists. A maximum effort wUl be Table VII-2, they include only the additional persons required to meet the remaining needs with indigenous needed. AUowance has been made for workers of personnel. Almost aU professional workers requhe each type who are now at work. It is believed that formal training at the University level, often including virtually no workers possessing these skiUs are now advanced study in Burma or abroad, or both. idle and available to meet the need for added workers. The most important general conclusion to be drawn a. University Training from this table is that it wiU be virtually impossible to meet the requirements indicated for the next Training at the University level is provided in several years. By the end of 1953-54, about 700 added Burma by the University of Rangoon with its affUi- managerial and supervisory personnel wih be needed, ates, the University CoUege at Mandalay and the more than 700 additional professional personnel, more newly opened Intermediate College at Moulmein, and than 1,800 sub-professional, and more than 10,000 the University for Adult Education. The latter has skiUed workers. The number of workers needed is some 500 working people enroUed but the facUities much greater than the number now in training. To for professional training are limited. The trends in meet the requirements for many skills it would be registrations and the number of students completing necessary to go back several years in time to begin work at the University of Rangoon, by major courses, traiiung the workers. To meet those at professional for the past several school years are shown in and managerial levels, it would be necessary to go Table VII-4. back six to ten or more years in time to begin dhecting students into nonexistent courses of study TABLE VII - 4 and to begin giving necessary experience to young UNIVERSITY REGISTRATIONS AND PASSES* businessmen. The significance of this fact is that management, Number of Number professional abihties and skiUs will be the hmiting Students Completing factor in the progress of the development program. Course Registered Course Unspecialized manpower and natural resources are 1950 51 1951-521952 53 1950 1951 1952 available. Skdls, professional training and manage¬ ment and every possible device must be used to 1. Intermediate (first economize on them. Foreign experts must be used two years for all students) 1,501 1,205 2,903 liberally; sub-professional workers must be used 2. Intermediate, 499 588 755 wherever possible, saving the time of professional Mandalay 244 413 504 I 3.B.A.; workers for guidance, management and purely pro¬ B.A. (Honors) 437 394 486 , fessional analysis; and training must be accelerated in 4.B.SC.; every possible way. B.Sc. (Honors) 230 266 310 - 152 251 264 5. B.A.; 791 B. MEETING THE PROBLEM OF SKILL AND B.Sc, Mandalay 45 59 6. M.A. 68 102 126 1 8 12 11 KNOWLEDGE 7. M.Sc. 6 52 36 1 Taking into consideration the estimates of specia¬ 8. M.B.;B.S.t 580 530 657 19 26 29 9. B.Sc. hzed manpower needs in 1953-54 to 1959-60, the (Engineering) t 229 294 321 __ 15 34 means for developing the professional, sub-profes¬ 10. B.L. 198 ll.B.A. (Ed,); B.Ed; sional and skilled workers required are discussed in Diploma in this section. Because of a number of special problems Teaching 57 96 128 23 30 64 involved, meeting the need for top-level management 12. B.Com. 75 69 101 11 32 23 13. B.Sc. (Agricul¬ will be separately discussed in Sections D and E of ture), Mandalay 25 30 22 12 13 this chapter. 14. B.Sc. (Forestry) 14 28 42

1. PROFESSIONAL WORKERS Total 3,709 3,762 5,941 773 1,006 1,238 The estimated needs for additional professional workers were presented in Table VII-3. The largest *The available classification of the student body at the University College at Mandalay is in two groups, which are shown separately. single group is engineers, but architects, physical No data are yet available for the Intermediate College at Moulmein scientists in a number of fields, lavi^ers, economists, which was opened in June, 1953. statisticians and others wiU be needed. The number tBachelor of Medicine and Bachelor of Surgery. ^Approximately two thirds of the engineering registrations and requhed is much greater than the number available. passes were in civil engineering; the other third was in electrical and Only a smaU part of these needs can be met by mechanical engineering. 100 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA The rapid increase in the number of University richer and more satisfactory hfe, but will also enable students, which is now equal to more than twice the them to make a real contribution to the development prewar enrollment, is encouraging. Even more sig¬ of their country and people. nificant, in view of the different type of personnel The problem of improving the quahty of students in required by the future Burmese economy, has been professional courses and of increasing their numbers the postwar shift in composition of the student body as weU has a forward-looking aspect also. More in favor of professional studies. Within the profes¬ attractive rewards in the form of assurances of sional field the number of law students, who in the employment upon graduation and higher professional past dominated the professional field, has been rela¬ wage scales will have to be offered to prospective tively stabilized, and increasing numbers are studying students to induce them to enter upon these fields. medicine, education and engineering. The fact that In the natural course of events, these measures wiU there are still almost twice as many students in law induce many to seek professional education who are as there are in education and two thirds as many as unqualified or who are not diligent students. Although there are in engineering suggests that further move¬ existing facihties for such education should be ment in this direction is desirable. The reallocation greatly increased, they cannot be expanded indefi¬ of the student body, however, can only meet a smaU nitely. Improvement in opportunities and rewards for part of the increased requirements of trained pro¬ professional education must be accompanied by fessional personnel. positive steps to improve the selection of candidates It is plain from a comparison of Tables VII-3 and for such education. Qualffication for university work VII-4 that, in all professional fields, the number of cannot be adequately estabhshed by a single formal students trained and graduated every year wUl have to examination, subject to passing by "cramming." A be substantially increased. The existing training faci¬ more comprehensive system is needed for weeding hties, which are aheady over-crowded in many out from would-be entrants those whose preliminary respects, cannot accommodate many more students. training records and references do not give promise of The sending of students abroad is largely for purposes satisfactory future educational and professional per¬ of advanced training of uruversity graduates, and formance. Students in attendance at the uiuversity properly so; the net number of university trainees wiU should be required to meet rather severe criteria of be only shghtly augmented. It is clear, therefore, that performance as a condition of continued study. university facilities within Burma, especially for It may be possible by a series of related measures training specialized personnel, wih have to be to expand the training facihties of the university, expanded. democratize the opportunities for university educa¬ Along with the need for increasing the numbers of tion, and apply rigorous standards of selection to young people training for these professions, the students applying for entrance to advanced profes¬ quality both of the students and of the professional sional studies. Estabhshment of a number of inter¬ training itself should be improved. Improving the mediate colleges in the large cities, which would offer quahty of students entering upon the professions is a instruction only in the first two years of the university task which goes back to the very beginning of the course, would provide an educational opportunity to educational process, at the primary school level, and many who are now deprived of it. It would also which continues through the middle school and the reduce the burden of elementary instruction at high school. The quahty of instruction at these levels Rangoon, part of which is now inadvertently offered must be improved and the courses of study must be to students who are attending for reasons of social modffied to prepare all young persons for modern prestige, or who in any event are not qualified for living and working conditions and to prepare some of studying further. The intermediate branch coUeges them for advanced university studies. Other aspects could serve as training and testing grounds for of this problem are treated in a section of Chapter advanced study, facilities for which could then be XXIV dealing with general education and other provided on a larger scale in Rangoon. Only the social services. better graduates with acceptable grades and recom¬ Adequate financial assistance should be provided mendations from the branch coUeges would be ad¬ throughout the educational process in the form of mitted to the centrahzed "Upper Division" in scholarships and stipends for needy students of Rangoon. For special reasons, advanced study in promise. It should be possible for aU Burmese youths certain fields may be located elsewhere. of abihty, both male and female, to continue their So far as improving the quality of uiuversity studies until they have had all the education which instruction is concerned, arrangements such as those their intellectual interests and capabilities warrant. already made between the University of Rangoon Such development wiU not only prepare them for a CoUege of Engineering and the Massachusetts MANNING THE PROGRAM 101 Institute of Technology have produced encouraging necessary in those fields for which adequate training results. Similar continuing arrangements for the facihties have not yet been developed in Burma. To training of local personnel abroad and for the pro¬ the present, for example, no one has undertaken vision of visiting instructors at the University of foreign study in public administration; a few selected Rangoon should be made with other foreign univer¬ students should be encouraged to study in this field. sities in other fields, such as the natural sciences, The program of state scholarships to meet these needs agriculture, accounting, and statistics. Because of the has become well established and is supplemented by more controversial nature of the social sciences, deputation for training abroad of members of the isolated exchanges with a series of foreign universities public service and by scholarships granted under the might be preferable in these fields of study. auspices of the United Nations, Colombo Plan, US Technical Assistance Administration, British Council b. Advanced Training Abroad Fulbright programs, the Massachusetts Institute of A continuing program of foreign study for qualified Technology agreement, and others. The available personnel is generally desirable because it assures data on the magnitude of some of these programs, that professional workers will be abreast of latest which may be somewhat incomplete, are presented in developments in their respective fields. It is especially Table VII-5.

TABLE VII - 5 DEPARTURES FOR STUDY ABROAD, BY COURSES OF STUDY, 1948 to 1953*

1948 1949 1950 1951 1952 1953^ Total

Course State State State State State State State Schol¬ Others Schol¬ Others Schol- Others Schol- Others Schol- Others Schol- Others Schol- Others ars ars

CivU Engineering — — — 4 12 8 10 16 Mechanical Engineering 2 — — 3 — 3 — 11 1 Electrical Engineering 6 — 1 — — 2 — 11 1 Communications Engineering 4 — 2 6 Mining Engineering, Metal¬ lurgy, Geology 3 — I 1 — 14 Marine Engineering, Naval Drafting 3 — — — 2 13 Aeronautical Engineering 8 — 1 12 Chemical Engineering, Chemistry 2 — — 3 4 11 Physics, Meteorology 1 — I 1 3 6 7 Medicine and related subjects 6 — 2 4 4 27 27 43 Marine Officers' training 4 — — 3 1 13 Civil Aviation (pilots, control officers, etc.) 5 — 5 4 6 20

Textile Engineering 2 — ■— I 1 7 Agriculture and related subjects 7 — I 2 5 21 Forestry 1 — — 3 2 6 11 Education 3 2 — 9 4 11 27 Commerce and related subjects 2 — 3 — I I 3 15 7 History, Anthropology, Sociology — 1 — — 5 7 3 1 10 20 Literature — — — 2 I 6 Economics — — I 2 1 7 5 2 9 16 16 30 49

Total 65 22 17 27 37 41 38 59 86 47 31 261 212

*Under each year, the figures in left-hand column represent state scholars departed; figures in the right-hand column represent departure for study abroad under all other training programs. fData for 1953 are known to be incomplete. Those for other years may also not be entirely complete. 102 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA Full data would undoubtedly show that the number train Burmese nationals. Some of these wiU continue of trainees sent abroad reached its highest postwar to be provided through the United Nations and other level in 1953. The further expansion of this program technical assistance programs. Some wiU undoubtedly is strongly recommended. The loss of the services of be brought in by firms to whom management con¬ even a few outstanding persons for a year or more, tracts will be awarded, particularly in the industrial when there is a general shortage of competent sector, while many other professionals may be personnel, represents large short-term sacrifices. engaged as individuals. Whereas untU now a number However, it is weU worth while from the longer-range of foreign experts have been engaged to study and point of view because the training and experience evaluate particular problems and situations and to which such persons can acquire abroad enhances develop plans and programs for dealing with them, their value over many years. the foreign experts who will be required in the future A stage has now been reached when it is necessary will be needed increasingly for operating purposes, to improve the foreign training program quahtatively namely, to execute plans and to implement develop¬ as weU as quantitatively. This is particularly impor¬ ment programs. Such personnel will be required for tant in the case of the state-scholarship system, which substantial periods of time and will have to work encompasses by far the largest number of foreign closely with Burmese nationals on a day-to-day basis trainees. The most important aspects requiring somewhere below the top policy level. In engaging attention are the selection of scholars, the deter¬ these personnel, it should be kept in mind that the mination of appropriate training programs, and the quahties needed involve more than high standards of treatment of returned trainees. From the standpoint professional competence and experience. These indi¬ of the country's interests, it is important that a viduals should also have sufficient ffexibility to adapt systematic method be estabhshed for the placement themselves to working conditions in Burma, and of such returned trainees in positions where their attitudes which are basically in sympathy with the talents can be utilized most effectively. aspirations of the Burmese people. Individual assign¬ The entire process of selection, programming, and ments and responsibihties should be closely desig¬ placement of scholars may be much advanced by nated, and organized plans should be made for the designating a specially trained educator as counsellor prompt orientation of such personnel upon their for this purpose and providing him with a small arrival in Burma, including the provision of necessary staff. The advanced studies counsellor would assist information, staff and facilities, so that they can those presently responsible for the advanced training make their maximum contribution during their program abroad by canvassing promising graduates period of service. Their use to train Burmese nationals and other individuals to assure that the best qualified in the process of their work in Burma is important. become candidates, by making a careful study of the qualifications of candidates, by advising on the most 2. SUB-PROFESSIONAL WORKERS appropriate institutions and curricula for various Table VII-3 shows that 3,166 additional sub- courses of study, by arranging to keep in contact with professional workers will be needed during the next the progress being made by students abroad, by seven years. In this group are included sub-engineers, obtaining full references on their achievements and surveyors, draftsmen, supervising mechanics and abUity on the conclusion of their training, and by supervising electricians, who require a fairly con¬ assisting in channeling the trainees on their return siderable formal training, though not of the extended into the positions for which they are best quahfied. and costly university type. The fact that under proper With the aid of such a permanent staff, the over-aU supervision they can do a great deal of supervisory planning of the foreign training program also could work which would otherwise need to be done by be improved. This would include systematic deter¬ graduate engineers and other professionals lends a mination of the needs and priorities for types of special importance to this group. personnel who require foreign training, fuU explora¬ Existing training facilities for such personnel are tion of the many foreign and international scholarship concentrated in the Technical Institute at Insein. The opportunities available, and investigation of possibi¬ prewar Government Technical Institute at Insein was lities for on-the-job training to supplement and in re-estabhshed on a permanent basis in 1951 for some cases replace academic study. the training of sub-professional personnel. It offers three-year courses in civil, mechanical, electrical and c. Hiring Professionals Abroad communications engineering and in civU engineering For some years to come, it will be necessary to drafting. Because the Government Technical Institute engage a number of professional personnel from is the only existing institution for the formal training abroad to overcome domestic shortages and to help of sub-professional workers, and because of the MANNING THE PROGRAM 103 extremely important role it must play in preparing students, on the basis of scholarship rather than need. such workers for the development program, a rather Living accommodations are provided free of charge. detaUed discussion of the shuation with respect to Students themselves supervise the provision of food the Institute and its problems is appropriate. for which each student contributes K40 per month. The Technical Institute occupies several acres of The students seem to be reasonably weU prepared for, land off the main road at Insein. It has a number of and interested in, their courses of study. Over 40% exceUent buildings among which the main budding, of the students are enrolled in the civd engineering designed for lectures and laboratories, is outstanding. course. It has living accommodations in a separate building It seems clear that the Technical Institute at Insein for some 130 students. With a slight degree of represents a magnificent potential for technical crowding, 150 second- and third-year students are training. In view of the acute need for technicians, presentiy accommodated. It is anticipated that the plans for getting the Technical Institute functioning entering first-year class wih add 110 to 120 new properly should be aimed at the largest possible students. In addition to the buddings mentioned, student body. Existing classroom and laboratory there are also several workshops, three faculty houses space can accommodate a much larger student body and a number of storage and service buddings. than is now enrolled. However, expansion will entad a Instructional equipment and aids, both in the larger faculty than the 17 lecturers and instructors laboratories and in the workshops, are seriously contemplated, more equipment than would be lacking. The hbrary is also seriously deficient. TCA provided by the 5190,000 program previously envi¬ had aUotted SI90,000 for basic equipment require¬ saged, and additional workshop space. It would ments. However, since this program had not reached require also the provision of student hving and dining the stage of procurement at the time TCA aid was accommodations over and above those presently terminated, other means will have to be found to planned, which would increase hostel capacity only to procure this and other needed equipment. about 350. In this connection, however, it may be At the present time the instructional staff consists noted that approximately 40 % of the students at the of two lecturers, four instructors and a number of Institute come from the Rangoon area, and pending workshop demonstrators. A minimum of 11 addi¬ solution of the hostel problem these might be tional lecturers and instructors is stated to be required required to become day students only, with provision to serve the present student body plus the entering made for their daily transport to and from the class. Sanctions exist for additional staff, but it is Institute. reported that competent teachers cannot be hired at It wiU not be difficult to solve these problems if existing salary rates. One of the present staff wiU soon procedural administrative log-jams can be broken. transfer to another government position which is It would be unfortunate if remedial action were more remunerative. The Dhector of Technical delayed further. Vigorous efforts should be made to Education has recommended that the monthly salary obtain the necessary finances from avaUable con¬ scales be increased to K600-40-800 plus CLA for tingency funds as soon as possible, and to press lecturers (nationals and non-nationals), K350-25-700 forward with the necessary program. It is understood plus CLA for assistant lecturers (ad hoc K500 for that the problem of appropriate pay scales for non-nationals), and K330-15-450 plus CLA for lecturers and instructors presents an unusual difficulty instructors (ad hoc K400 for non-nationals). It is because it is related to comparable problems through¬ reported that at the salary scales recommended it wUl out the various government departments. In view of be possible to engage the necessary staff either within the crucial role of the Institute in providing trained Burma or by recruiting in India. At the present time personnel for the economic development program, it some scheduled classes for second- and third-year is urged that every effort be made to solve this students are not meeting because staff is lacking. The difficulty apart from the more general problem of morale of the student body and of the staff is seriously government wage scales. The service which the threatened by this situation, which wUl be aggravated Institute can perform is so important that reluctance when the first-year class enters. to exceed pay scales for what are regarded as com¬ Students who have completed high school or passed parable personnel elsewhere should not stand in the matriculation examinations may sit for entrance way of salary increases. examinations to the Institute. Beginning with this It seems plain that the Government Institute at year entrance examinations are to be held in major Insein, even when operating at fuU capacity basis, cities throughout Burma, rather than in Rangoon will not be able to provide all the trained technical alone. No tuition fees are charged for attendance at workers needed. At least one or two addhional the Institute. Stipends are awarded to half the present insthutions for technical training wiU be required 104 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA elsewhere. Under the circumstances, however, it is number of admissions, graduations and drop-outs in considered expedient to recommend that aU available each of the past classes is shown in Table VII-6. energies be concentrated on realizing the potential at Insein before attempting to develop additional formal TABLE VII - 6 training facihties in other cities. It will be deshable, ADMISSIONS, GRADUATIONS AND DROP-OUTS however, to supplement the formal training of sub- AT THE ARTISAN TRAINING CENTER professional workers at Insein to the greatest possible extent by in-service training courses, conducted by No. of No. No. Not Class Trainees Completing Completing the various government departments and agencies, as entering in Admitted Course Course recommended in Chapter VI, and by the larger private employers. In many cases, both formal and 55 15 40 in-service training should be augmented by advanced February, 1948 55 61 training abroad. June, 1948 116 January, 1950 93 24 69 3. SKILLED WORKERS July, 1950 57 19 38 Table VII-3 shows an estimated need for some 26,112 additional skilled workers during the period of the development program. Among this group are Total 491 155 336 included such workers as carpenters, electricians, masons, machinists and mechanics. Some types of Only 155 trainees have graduated from the Artisan skiUed workers can be trained on the job, provided Training Center in Rangoon in its five years of that competent foremen are available to supervise operation. More than twice this number of trainees their work and provided that a nucleus of such have dropped out of the school before completing workers exists alongside whom the novices can work their training courses. This high drop-out rate is and learn. However, some of these workers wiU due to a number of causes. In some measure student require formal training. This wUl be especiaUy true registrations are exploratory and students soon drop of those who will need to qualffy as master mechanics, out because they discover either that they have no tool makers and group or crew supervisors. real interest in the craft or because they are dissatisfied Existing facihties for the training of skilled workers with the instruction and equipment, both of which are represented chiefly by the Artisan Training are of varied quahty. In some cases students drop Center, estabhshed in Rangoon in 1948, and by the out of school because they find jobs which are more training project of the Rehabilitation Brigade at attractive or because they find the stipends inade¬ Insein. Some equipment and staff have been mobi¬ quate. Vigorous efforts should be made to improve lized for a projected artisan training center at the quality of instruction and equipment, to interest Mandalay, which now awaits the construction of more youths in vocational training instruction, to workshop buildings. Centers for Moulmein, Akyab, select and guide students into training for which they Myitkyina and other cities are intended. have aptitude and interest, and to place students in good jobs upon completion of theh studies. The a. The Artisan Training Center inadequate staffing of the Directorate of Technical The Artisan Training Center in Rangoon offers Education, plus the more obvious and pressing needs courses of two years duration in nine basic trades: for sub-professional workers, has led the Directorate carpentry, electricity, radio, motor vehicles, machine of Technical Education to concentrate its energies on shop, foundry, diesel engines, fitting and welding, and the Technical Institute at Insein. It is necessary, blacksmithing. The instruction is essentially practical however difficult the problems posed, to move in nature, but includes rudimentary theoretical forward also with the Artisan Training program training as weU. Stipends of K30 and K40 per both in Rangoon and elsewhere. month are granted to first- and second-year students respectively. Approximately 20 students per course, or b. The Rehabilitation Brigade a total of about 180 students, can be accommodated. A program of training in skills is being carried out At the present time 106 first-year trainees and 37 by the Rehabilitation Brigade at Aung San village, second-year trainees, or a total of 143 students, are 13 miles from Rangoon. Some 3,000 members of the enrolled. The relatively smaU number of students in Brigade are located there at present. They are the second year of training is typical of past enroll¬ provided with free housing and a stipend of K80 per ments and reflects the fact that a very high proportion month. AU members of the Brigade, and many of of entrants do not complete their course. The their wives as weU, receive training in technical and MANNING THE PROGRAM 105 vocational subjects. A number of large, weU-planned given in District Weaving Schools, selected graduates and weU-equipped training shops have been installed, of which make up the trainees at the more advanced with a heavy emphasis on woodworking and metal- Saunders Institute. Traveling demonstrators give working skills and the construction occupations. The advice and training in spinning, weaving and dyeing scope of training is gradually being expanded towards to operating estabhshments throughout Burma. the goal of some 25 subjects to be offered to about The Superintendent of Cottage Industries is res¬ 4,000 trainees per year. Tfhe investment in plant and ponsible for initiating training and advisory programs equipment is very substantial. Approximately K2-5 in other special branches of smaU-scale industry and milhon worth of equipment alone has been procured for coordinating the work in this field of 11 United to date. The instructional staff comprises some 72 Nations technical assistants, most of whom arrived in personnel, including workshop demonstrators. The the past year. A training program in textile printing at facilities are intensively used, with half of the Brigade Rangoon aimed at improving the quality and design members at Aung San village receiving instruction in of work by introducing new techniques is firmly the morning and the other half in the afternoon. The estabhshed. Two eight-month classes have already instructional plan calls for six months of such been graduated, the last one consisting of 18 students. training during each of the two years of minimum Twelve students have almost completed a course in enrollment. The remaining time is spent acquiring sericulture at the new mulberry farm at Maymyo. on-the-job experience in organized production work Detailed plans have been made and equipment has outside the camp. been ordered and some received for training centers— This project is inspiring. It is well organized and in some cases complete pilot plants in the silk- dynamicaUy directed. Efforts have been made to reeling, pottery, handmade paper, sugar refining and organize courses of study systematically and to condensed mUk industries. On-the-job advice to develop training manuals and instructional aids. Its existing enterprises is already being given in some of scale of operations is such as to suggest quite strongly these fields. A United Nations and a Burmese expert that the major contribution to formalized training of are also advising sUk weavers on patterns and dyes, skiUed workers in Burma in the coming years wUl be and two additional United Nations technical assis¬ made by the Rehabilitation Brigade. tants will arrive soon to extend this program to the Membership in the Brigade is open, not only to woodworking and electroplating and anodizing ex-insurgents, but also to unemployed and displaced industries. The importance of these brief orientation youth. The disposition of trainees, once they have classes for limited numbers of trainees and of on-the- completed their courses of training—employment on job advisory programs is enhanced by the fact that organized production or release to private or other they are oriented to the immediate practical needs pubhc employment—has not been finally determined. of the industries and to persons already working or In either event, of course, the contribution being about to be working in them. Thus, for example, made is of great significance to the economic future some 15 printers who attended the textile printing of Burma. It is suggested, however, that to the extent classes already have introduced the new screen- feasible the exceUent facilities for training at Aung printing process in their establishments, and the San village be made available to non-Brigade mem¬ sericulture trainees will be used for instruction and bers who upon completion of their training could other work in implementing the three-year program flow into whatever areas need their acquired skills for self-sufficiency in silk production. most acutely. Two small vocational handicraft schools are under the administration of the Director of Technical c. Other Training Programs Education. The Polytechnic School occupying two Training in handicrafts and small-scale industrial rooms at the Government Technical Institute teaches processes is primarUy the responsibility of the Office leather-tanning and leather-working to about 25 of the Superintendent of Cottage Industries. In 1952 students from the Rehabilitation Brigade. Another 25 53, about 30 students were enrolled in a three-year youngsters receive training in bookbinding, toy- course at the Lacquer School at Pagan and some 50 making, and cane and bamboo work at the Handi¬ students in a two-year course at the Saunders Weaving craft School located in the compound of the Rangoon Institute at . Twelve recendy obtained Artisan Training Center. power looms are now being installed at the latter The Adult Education University provides a learning school, and a three-year course in power-loom opportunity for some 400 working adults. Engineering weaving wiU be started by a United Nations technical Technology evening classes, which have been sus¬ assistant for selected graduates of the hand-loom pended for lack of classroom space, wiU be resumed course. In 17 different districts one-year courses are at the Artisan Training Center when additional 106 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA buildings now under construction are completed. The the special efforts required for promoting technical two-year course of training, meeting three nights a education. For example, the disinclination to award week, had been attended by some 250 students. higher pay scales to technical teachers results from a concern with comparative salaries throughout the 4. ORGANIZING AND ADMINISTERING THE educational system. Yet only a relatively few tech¬ TRAINING PROGRAM nical teaching positions are involved, and the impor¬ Training of professional personnel is sufficiently tance of filling these positions is so critical to the distant to warrant its own organization structure. whole development that special consideration is In so far as such training is performed in Burma, it of essential. course falls under the separate administration of the The problems of technical education will be solved University of Rangoon. The responsibility for admini¬ more expeditiously if ultimate responsibiUty is placed stering the major foreign training program, state either in a ministry more immediately concerned with scholarships, is shared by the Ministry of Education this problem, or in an agency concerned exclusively and a special selection board. Comments on the with this problem. The responsibilities of the Ministry organization and administration of professional of Industry tend to make it acutely sensitive to the training were included in Section B-1. As concerns needs for technical and skiUed workers, and it is training of sub-professional and of skdled workers, anticipated that this awareness would result in treat¬ two special problems which are common to both of ment of the problem on a top priority basis. It is these programs are discussed in this section. suggested, therefore, either that the Directorate of Technical Education be moved back to the Ministry a. Central Responsibility of Industry or that an autonomous board for tech¬ Responsibility for organizing, administering and nical education and training be constituted and executing the technical training program is vested in assigned responsibihty for developing and executing the Directorate of Technical Education within the the necessary programs. Ministry of Education, to which it was transferred from the Ministry of Industry in 1952. Responsibih¬ b. Developing Teachers of Vocational Training ties for technical training have also been vested in the The number of qualified instructors avaUable for Industrial Development Corporation and the Mineral training sub-professional and skUled workers is highly Resources Development Corporation. As of the inadequate to present needs, and wiU be even more present time, arrangements for cooperation between seriously deficient as training programs are expanded. and coordination of the efforts of these bodies do not In the long run, the situation wih tend to correct seem to have been developed. Similarly, such co¬ itself For the short run, however, it wiU be necessary ordination and cooperation do not seem to have been to employ a number of expedients. developed vis-a-vis the Rehabilitation Brigade. It is To augment the personnel available as lecturers and recommended that such arrangements be made by instructors in the training of more advanced tech¬ means of an advisory board on which all interested nicians, it wiU be necessary in many cases to engage agencies would be represented. staff from abroad. Efforts should be made to enhst In the Preliminary Report it was noted that "an the services of engineers who have rethed from organizational problem which merits serious con¬ gainful employment, and to enhst the part-time sideration is whether the Directorate of Technical services of engineers presently employed in the Education should reside within the Ministry of various government departments and in private Industry or within the Ministry of Education." It now employment as well. Encouragement should be given appears that important practical grounds exist for to the further development of and increased partici¬ moving the Directorate of Technical Education from pation by national professional societies (especiaUy the Ministry of Education, where perhaps on strict engineering and educational) in solving these prob¬ grounds of organizational theory it should find its lems. Such private bodies could be of real assistance home. The responsibilities of the Ministry of Educa¬ both in mobilizing aid and in providing valuable tion are both comprehensive and varied, and it is advisory services to all agencies engaged in training. unreasonable to expect that harried officials con¬ Teachers of skilled workers must be drawn in the fronted with a multitude of problems on every main from two sources—from the sub-professional educational front can devote to the speciahzed technician group and from the artisan class itself The program of technical education the fuU measure of number of technicians who wiU be available to serve attention and energy it requires. Moreover, these as teachers of vocational training wUl be limited by other broad commitments of the Ministry of Educa¬ competitive demands from the various government tion in their very nature frequently act as obstacles to departments and from industry. Such persons might MANNING THE PROGRAM 107 be readily available for part-time service as instructors schemes, teacher-learner squads, and a variety of in courses conducted in the evening. There is no other methods and aspects. reason, moreover, why the skiUed worker class itself The Center wiU be of httle use without the right should not be able to yield a considerable number of head. In-service training, done by rote because it is instructors and workshop demonstrators for artisan said to be good practice, can be a waste of time and in training classes. It will be exceedingly important, fact a means of dulhng enthusiasm. Only under a however, that some in-service training be provided leader who has seen accelerated training at work in for such artisan instructors to convey to them the offices and shops and has the imagination to appre¬ basic pedagogic principles and practices which will ciate its possible applications in varied circumstances enable them to impart their artisan skills more in Burma wih the work of such a Center be fully effectively. fruitful.

5. IN-SERVICE TRAINING: A CENTER FOR 6. PREPARING A COMPREHENSIVE PROGRAM TRAINING AIDS FOR TECHNICAL TRAINING The discussion above has dealt almost entirely with While an attempt has been made to present a training before the worker enters upon his job. useful statement of the situation and problems with Another important aspect of training is training while respect to training of sub-professional and skiUed in service. For many lower-level workers, in-service workers in Burma, and to make helpful recommen¬ training is more effective than formal pre-job training, dations concerning them, it has not been possible to and completely takes its place. It is also important for explore fully all the considerations and data involved all of the levels of workers discussed above. No in the preparation of a comprehensive training employee at any level is completely prepared for a program. It is urged that further and continuous new position when he enters upon it; an important study and consideration be given to the preparation of part of his training is what he learns on the job. His a comprehensive program in this most significant learning on the job may be haphazard and accidental area. The Government might estabhsh a commission or planned and organized. Organized in-service or engage experts for this purpose. It could also invite training can greatly accelerate both the approach to foreign technical assistance, whether international or peak effectiveness by a worker and his preparation for privately endowed in nature, for advice in this field. moving to higher-level positions. Many of the larger business organizations in C. MEETING THE GENERAL PROBLEMS OF Burma, both governmental and private, have had INCREASING LABOR PRODUCTIVITY ON THE their own training programs for many years. Not JOB enough study has been given to the individual The many broad factors which influence labor programs to make specific comment useful. Organized productivity in general are outlined in Section C of in-service training should be introduced not only into Chapter II. In a real sense, this entire Report is con¬ the new productive enterprises to be estabhshed, but cerned with bringing these influences to bear in the into vhtually aU existing government agencies which Burmese economy. Within the field of manpower do not now have it. It is as important in government considerations, the special problems of developing administrative agencies as in business-type enter¬ the necessary professional, sub-professional and prises. skilled personnel have been defined and measures for While the specffic type of training will vary greatly their solution have been recommended. There remain from agency to agency, there wUl be many elements certain aspects of labor productivity which have to do in common. Many devices learned by the govern¬ with workers as such, as distinguished from more ments and business enterprises of belhgerent nations comprehensive factors such as health, which affect all during World War II, in theh attempts to accelerate citizens but which are equally applicable to aU their greatly expanded needs for specialized man¬ workers, speciahzed or non-speciahzed. An analysis is power, can be apphed in Burma. It is recommended required of the factors making for increased produc¬ that a Center for Training Aids, attached to the tivity and output on the job—what may be caUed, in Ministry of Home Affairs, be estabhshed, one of short, management-labor relations. whose main functions should be to advise every Those aspects of management-labor relations which agency of Government concerning means of expedi¬ bear most significantly on labor productivity and ting effective worker orientation and in-service output are the earnings and hours of work; such training. This advice should relate to training pamph¬ related conditions as holidays, vacations, sick leave, lets, audio-visual aids, orientation courses, refresher pensions and similar benefits having monetary value; or improvement courses, accelerated apprenticeship non-monetary conditions of work such as tenure. 108 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA seniority and physical comfort on the job (cleanhness, TABLE VII - 7 hght, heat, sanitation, protection against hazards, TYPICAL MONTHLY RATES OF PAY IN LARGE etc.); the arrangements which exist for management- INDUSTRIES, BY TEN MAJOR OCCUPATIONAL labor cooperation and bargaining (such as union GROUPS (44-HOUR WORK WEEK) contracts, grievance machinery and the hke); and Wages Plus Cost-of- Occupational Group finaUy the very "atmosphere" of work hself which is Living Allowance a sensitive complex of a number of factors both {Kyats) tangible and intangible affecting the worker's morale Engineers 880 and disciphne, and which can make him either a Assistant Engineers 500 sullen and resentful cog in a machine or an eager and Senior Foremen 380 cooperative worker in a purposeful group. Lower-level Foremen 270 Administrative Workers; highest level 470 1. EARNINGS AND HOURS OF WORK Administrative Workers; intermediate level 270 Earnings and hving standards throughout the Administrative Workers; low level 180 Burmese economy are low, not only in relation to the Skilled Laborers 180 standards of more highly developed countries, but Semi-skilled Laborers 110 also in relation to the wage levels which can be Unskilled Laborers 80 achieved in Burma. They vary considerably between industry and agriculture, between one geographic total output of goods and services which can be region and another, between large and small estab¬ achieved, which in turn depends on the amount of lishments, and between higher and lower skUls. work which is performed and on the efficiency or Adequate data do not as yet exist for the precise productivity of that labor. measurement of incomes throughout the economy. Individuals and organized economic groups fre¬ These can be more accurately measured for the quently have a disposition to think that their standard relatively small groups of workers who are employed of living can best be raised by striking a better by the larger trading and industrial enterprises and on bargain with their employer. This, of course, may at major government projects. A brief study made by any given time be the case, although very often when a this survey group indicates that the average value of group of workers succeed in obtaining an increase in wages and cost-of-living allowances received by pro¬ pay, this increase is paid in reality not by their em¬ duction workers in such enterprises, on the basis of a ployer but by the rest of the population, in the form 44-hour week, is approximately 110 kyats per month. of higher prices for the goods or services produced. This finding is supported in a general way by the The effect of the pay increase in such case is for the calculations of the Directorate of Labour which standard of living of the small group immediately indicate that the average incomes of permanent involved to be increased, at the expense of a decrease workers for all industries hsted in the latest tabulations in the standard of hving of the much larger group (except banking and air transport, which are special who consume their product, many of whom, although cases) is 117 kyats per month. Typical rates of pay for they may be especially needy or deserving, are not in ten major occupational groups based on information a position to press for pay increases. received from 14 large employers of labor are presen¬ The intention of this analysis is not to dissuade ted in Table VII-7. These show that unskilled workers, whether individually or in groups, from laborers in such selected enterprises, which must be seeking to improve their living standards through presumed to be relatively better paying than others, bargaining with their employers; indeed, such bar¬ averaged about 80 kyats per month; semi-skilled gaining is one of the ways in which the benefits of workers averaged about 110 kyats per month; and increased productivity are allocated in a democratic skUled workers averaged about 180 kyats per month. society. The objective of this analysis rather is to The need for higher incomes foi" Burmese workers emphasize that in the long run real and substantial with which they could better provide for the basic increases in the hving standards of aU the Burmese requirements of living such as health-maintaining people can be achieved only through substantial food consumption, decent and sanitary housing, and increases in the total production of goods and necessary clothing and for education, recreation, services. transportation, vacations, insurance and other essen¬ With special reference to the so-called industrial tials of everyday life is universaUy recognized. "wage workers," who constitute most of the non- It has been repeatedly emphasized throughout this self-employed workers in industry, it would not be Report that in the long run the standard of hving and practicable in general to increase wage levels in the welfare of the Burmese people will depend on the Burma at this time. The effect of such increases at MANNING THE PROGRAM 109 current levels of production could only be to increase that in the highly developed United States economy, costs and selling prices and achieve gains in the living powerful labor unions have achieved, for their mem¬ standards of the favored groups at the expense of the bers who work in industry, no more than seven to nine hving standards of other working groups and perhaps paid holidays per year and two weeks vacation with of the cultivators. It would be more practicable to pay (although in some cases three and even four weeks provide monetary incentives to increased productivity of paid vacations are granted to workers who have and output. There are in general two ways in which been on the job five or ten years). In further sharp this can be done. One is by associating current levels contrast, allowance for sick leave with pay to industrial of workers' output with the current wage, and of workers is virtually non-existent in the United States, providing extra wage bonuses for units of output in and additional paid leave for such workers on grounds excess of the current level. The other method is by other than those already mentioned is non-existent. providing a share in the profits of the enterprise for On the other hand, old age pension schemes and the workers. Both methods have been practiced in protection against unemployment have developed advanced economic societies, and both have been remarkably in the United States in recent years, both productive of extremely worthwhile results. Is is through legislation (which embraces widows' and suggested that these methods have real possibihties orphans' pensions as well) and on a private basis for increasing productivity and living standards through collective bargaining. Deshable as these concurrently. forms of protection for workers and dependents are, With respect to the hours of employment, at least theh introduction on a major scale in Burma wiU so far as the larger industrial and trading enterprises become feasible only when substantial increases in are concerned, the comparison with other countries productivity and output have been realized. is quite different. The standard week has been estabhshed at 44 hours on a five-and-a-haff-day 3. NON-MONETARY CONDITIONS OF WORK basis. This compares quite favorably with the hourly With comparatively few exceptions, the physical conditions of work in other advanced countries. In conditions of work in Burma are far below minimum fact such countries did not reduce working hours to levels of acceptabUity. Improvements must be made in this level until they achieved standards of produc¬ terms of cleanUness, sanitation and elementary tivity much higher than now exist in Burma. Because creature comforts if real gains of labor productivity of cultural factors and the general advance in con¬ are to be achieved. ceptions of workers' welfare, it would be a mistake to The introduction of machinery and industrial occu¬ attempt to lengthen working hours beyond 44 hours pation in other countries in the past has been attended per week. However, the elementary facts of the by a high accident rate due to failure to provide economic situation in Burma indicate that it would be adequate safeguards against occupational hazards. equally a mistake to attempt to reduce the work week Such safeguards are absent in the great majority of below this level until a very substantial increase has estabhshments in Burma. Burma should not wait to been effected in productivity and total output by the experience first a large number of industrial accidents, economy. Wherever feasible, work weeks which are but should take timely measures to prevent them at now far below this level as in the government service the very outset of her industriahzation, by means of should be increased at least to about 40 hours. Such a rigorous standards for safety devices and a thorough reform is most expeditiously initiated when a corres¬ system of governmental inspection. ponding pay increase is also justified. The special Other non-monetary conditions of work which justification for pay increases in the important promote workers' productivity are security of tenure government sector of the economy is discussed in on the job and fah treatment in the granting of Section E of Chapter VI. promotions. These assurances must be provided by a system of seniority rules which will protect the 2. MONETARY FRINGE BENEFITS interests of ordinary workers, promote incentives to In some respects prevaihng benefits of this category better performance, permit the more quahfied to are quite advanced in Burma. It is reported, for advance more rapidly, and at the same time prevent example, that in the larger estabhshments referred to the creation of sinecures for the idle and incompetent. above, typical arrangements include 17 paid holidays Because the requirements of different working per year, two to four weeks of paid annual leave, 60 situations vary so much, the difficult task of devising days or more of paid sick leave, and occasionaUy ten an appropriate system is best accomphshed by days of additional paid "casual" leave per year. The agreement between the management and the workers' liberahty of these standards (however limited in organization in individual estabhshments or application they may be) may be judged by the fact enterprises. The Government, in addition to its 110 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA responsibihties for public workers in this connection, counterpart, efficient production, are dependent on may properly also lay down broad basic rules provid¬ understanding and cooperative attitudes on the side of, ing minimum protection to all workers. Its general and especially by the leadership of both labor and function, however, should be to provide advisory, management. conciliation and arbitration services and in other This is especiaUy true in connection with the special ways to promote private agreements. problem of grievances, day-to-day complaints in connection with the conduct and conditions of work. 4. ORGANIZED RELATIONS BETWEEN Workers have an unquestioned right to make known LABOR AND MANAGEMENT their displeasures and to expect prompt consideration A continually functioning system of organized of them. However, grievances must not become, as relation between management and a workers' they frequently do now, agents of continual disruption organization is, in general, the most effective method of the work process. The long history of collective for attacking most of the issues discussed above. bargaining in other countries shows that it is essential Labor organization in Burma has until recently been to set up a permanent "grievance machinery" for in the "growing pains" stage. Now, with 70,000 prompt processing of these small complaints jointly workers in trade unions, the point has been reached by representatives of both workers and management. when labor organizations can make an important That history also shows, with equal force, that the contribution to the welfare of the country at large, machinery must be manned by men of restraint and while at the same time protecting and advancing goodwiU. the interests of their members to a greater extent than before. The many and varied functions which 5. THE ATMOSPHERE OF WORK trade unions can perform in the social and cultural It is perfectly possible that collective bargaining fields as well as in the economic area are too well may be practiced sincerely and intelhgently; that known to warrant their enumeration and discussion wages, hours, physical conditions of work, pensions, here. The greatest single obstacle to the fuller per¬ vacations and other work arrangements may all be formance of these functions by the Burmese labor highly satisfactory; and yet that the general attitude of movement of today is the absence of permanent and workers in a large modern enterprise toward their jobs systematic working relations with management co¬ is one of dissatisfaction and discontent, inimical to operatively arrived at and resulting in formal and their own happiness and to the efficiency of their binding agreements. UnUateral offers and demands by work. Such a situation reflects the problem of psycho¬ employers and trade unions, often arbitrated by logical adjustment to a new technology. The trans¬ governmental decrees, generally take the place of formation from peasant cultivation or handicraft collective bargaining in the true sense of the word. production to modern industrial production involves Frequently there is a total absence of discussion and a transformation of work from an act of independent negotiation before a matter is carried to the point of creativeness, performed largely under self-determined arbitration or the calhng of a strike. Not only are the conditions, to operations, many of them routine, final outcomes of such proceedings apt to be un¬ guided by a common disciphne. This radical change satisfactory to all concerned but the very technique of in the nature of work requires a changed set of arriving at them breeds distrust and suspicion. These attitudes as well as aptitudes. Unless these attitudes are in turn lead to open violation of agreement or more acquired, labor under the new conditions loses its subtle disruption which is equally fatal to efficient meaning, and anti-social work practices arise can¬ production. celing the potential productive advantages of the new In some areas, especially in the railway, water technology. Machines are poorly tended and run idle; transportation and timber industries, progress toward pieces are spoiled; maintenance suffers. A modern collective bargaining in a spirit of goodwiU and factory, which at 95% efficiency would turn out confidence is being made. Certain legal provisions needed products cheaply and help raise the hving may encourage its extension to other sectors. These standards of the people, at 60 % efficiency turns out include modffication of the Trade Union Act to pro¬ goods at greater cost than the "inferior" hand process vide that appropriate unions be recognized by man¬ and is a burden to the economy. agements as bargaining agents for workers, that real The end result runs deeper than reduced living collective bargaining take place before arbitration by standards. When the worker derives no satisfaction Government is resorted to, and that agreements once from his work, minor frictions between him and his reached through collective bargaining are honored by supervisors give rise to suspicion and distrust of all parties to them. Ultimately, however, law can only management, and swell into a lingering bitterness, a point the way, and good labor relations and their bitterness containing the seeds of social revolt. The MANNING THE PROGRAM 111 employer, even if the employer is the State, becomes It is not sufficient that persons responsible for labor an enemy, not a leader. relations simply understand that each individual Higher wages and other benefits are not alone worker is an important individual, that his work is sufficient for solving this problem. The worker whose important in the whole project, that the entire project work itself is not satisfying will not feel contented, and is a worthwhile part of raising the nation's level of will not apply himself merely because he is well paid hving. These facts are not self-evident to workers and and can perform what he conceives of as his drudgery must be impressed upon them forcefuUy. Orientation under good conditions. A congenial atmosphere must discussions with new workers; small iUustrated be created which wiU ehcit a new set of attitudes pamphlets; family visiting days, on each of which a conducive to effective work in modern industry. The weU-organized effort is made to bring the famUies of development of these attitudes is a problem in human the workers in one department to the plant, and to engineering which must be solved specifically in teU them of the achievements of the plant and of the terms of the prevailing habits and values in the department; contact with groups of workers by the Burmese culture. Its successful solution will depend managerial staff; athletic leagues among employees, primarily upon the imagination, resourcefulness, and these and numerous other devices can be used to give dedication of managers of individual enterprises, the worker a feehng of participation in an act of trade union leaders, and government officials respon¬ creation and of companionship in a group, which he sible for labor pohcy. However, general avenues of gains in simple and direct ways in agriculture and approaches for improving human relations in industry handicraft work. are the same in Burma as elsewhere. These can be The attitudes and measures suggested involve no summarized under three major headings. relaxation in disciphne and efficiency. On the contrary Firstly, if his work is to be satisfying the worker the disciphne necessary for efficient production is the must feel that the project of which he is a part is more readily obtained if a worker is proud of his job serving a worthwhile end. Workers in new Burmese and gains satisfaction from it. He must be made to industries wUl be taking part in the advance to a reahze that the job to be done is challenging, not easy. better Burma. That they are doing so must be As one employer who had learned the lesson of dramatized to them in various ways. This can be done human relations stated, "You can buy a man's time, at the State Spinning and Weaving Factory, for you can buy a man's physical presence at a given example. It is the first factory of the new Burma, and place, you can even buy a measured number of skiUed its tasks, such as providing cheap yarn to the many muscular motions per hour or day, but you cannot handloom weavers, are important ones affecting the buy enthusiasm; you cannot buy initiative; you welfare of many people. By driving this fact home to cannot buy loyalty . . . You have to earn those workers, a sense of responsibility and importance can things." Understanding how to earn them is one of be created. the most challenging problems facing the economic Secondly, the worker must be aware, as he does his leaders of Burma. individual job, of its importance in relation to the D. THE NEED FOR ABLE MANAGEMENT—A whole. The worker in every department must be SPECIAL PROBLEM given a simple understanding of the role of his department and of his individual work. For example, 1. THE SPECIAL IMPORTANCE OF MANAGEMENT placards describing in simple language the relation¬ Although the remarks made in an earher section ship of the department or machine to the final pro¬ with regard to providing other types of specialized duct, its weekly achievement, and similar informa¬ manpower for the development program are entirely tional devices will stimulate morale. Human beings do pertinent to managerial personnel, the problem of not devote themselves enthusiastically to meaningless management in the development program has both tasks. They can become enthusiastic participants in a special complexity and special importance which meaningful one. warrant its separate treatment. Since the problem of Thirdly, it is necessary to make every worker feel obtaining effective management is in part a problem that he is individually valued as a person, not merely of estabhshing the proper administrative organiza¬ as the slave of a machine. While some of the tech¬ tion, it is also commented on in Chapter VI. niques mentioned elsewhere can be fruitful in this Management is that factor in the productive direction, ulthnately this is a matter of "personal," process which organizes, coordinates, and directs the not "personnel" relations. The personal attitudes of three other basic factors in production—natural supervisory personnel should reflect a regard of the resources, labor and capital. Able management wiU worker as a person of integrity and dignity in his own make decisions which result in the optimum utih- right. zation of these basic factors of production, thus 112 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA providing maximum benefits for society at the least execution of approved policies. The problem of possible cost. Poor and inefficient management wiU management in Burma is particularly acute because wastefuUy employ these productive resources, with Burma lacks, as of now, not only able operational the result that less goods and services wUl be produced management but also personnel qualified by their and produced at higher costs. These considerations experience and ability to serve on boards of directors, have special significance in the modern enterprise, and who could bolster operating management by whether pubhc or private, both because the problems formulating broad policies within which operational requiring solution are far more complex than is the management personnel could function satisfactorily. case where smaUer and less mechanized enterprises This means that an especiaUy large burden of respon¬ are concerned, and because the cost of inefficiency or sibility must be shouldered by those placed in failure in the larger or more modern enterprise is executive control of enterprises. vastly greater. In this connection it may be observed that the The importance of managers in the Burmese experience of colonial Burma with respect to manage¬ economy is centered in three main areas. As the ment could easily be misleading. In colonial Burma Government plays an increasingly important role in large-scale mining and trading enterprises were the development of the Burmese economy, and managed by resident staff who were primarUy strives to achieve this development in major degree operational in character. Pohcy management, whUe through development corporations in the industrial, invisible, was provided by the home office and by mining and other fields, successful management directorates of these corporations. In contrast to within the development corporations becomes a these arrangements, management in Burma will now critical factor. As autonomous or semi-autonomous be required to assume much broader responsibihties. corporations or boards are constituted to estabhsh Before proceeding to an examination of the ways in and operate new industrial, mining and other projects, which a solution of the managerial problem in Burma competent management again plays a major role. may be found, it wiU be useful to study briefly the FinaUy, since the successful accomphshment of the experience of other countries in theh attempts to development program requires continual growth and solve problems similar to those confronted here. increased efficiency in the private sector of the economy, the problem of management must be 3. SELECTED EXPERIENCE IN OTHER COUNTRIES solved in this sector as well. In recent years the Phihppines, Ceylon, and Turkey have been among the countries which have sought 2. THE NATURE OF MANAGEMENT through economic development schemes and projects It is a common mistake to think of management in to develop their economies more fully and raise the the narrow sense of being concerned primarily with living standards of their people. In this process they the production of goods within a plant. The compass have encountered problems of management analagous of management is much broader. It embraces a broad to those presently faced by Burma. In each case an area of decision-making responsibihty which requires analysis of the experience of those countries has been estimates of the market, domestic and international, made by a highly competent and objective group. present and future; judgements as to quality and Pertinent selections from the reports made by these pricing of goods which will stimulate sales; decisions authorities are hsted below. as to merits of alternative raw materials and raw material sources; choices between various types of a. Management: Philippines production equipment and production methods; The program of the PhiUppine Government sets a decisions concerning working capital and credit broad framework from which to formulate further plans requirements, sales and distribution methods, divi¬ and to select individual projects after thorough and com¬ dend policy, capital accumulation and re-investment; plete engineering and economic study. It contains no the conduct of management-labor relations; and a provisions for measures to increase production from host of other responsibilities and judgements of which existing facihties. The magnitude of the program that these are but iUustrative and typical. should be undertaken at this time is hmited by a variety In mature industrial economies, the executive in of factors. It is not only a question of finance, but more important is the rate at which engineering, planning and charge of operating the enterprise is aided in the construction can proceed, the availabihty of raw materials, discharge of these duties by a staff of highly compe¬ and the need for power and fuel which must be met. Of tent specialists. GeneraUy speaking, this management special importance is the need for engineering and man¬ team submits for approval and action by the board of agement personnel to assure the planning, scheduhng and directors its recommendation as to broad pohcies for efficient operation of the investment that is undertaken. conduct of the enterprise and is responsible for the The available technical and management skills in the MANNING THE PROGRAM 113 Philippines will not be sufficient for extensive develop¬ abolition of PRATRA—a recommendation that the ment of industry for some time. That does not mean Mission strongly endorses. If the recommendations of the that industrial development must be postponed. It does Philippine Government Committee on Reorganization indicate that rapid progress must be made in the training are promptly implemented, a good start will be made of engineers and business managers. This deficiency must toward more efficient development of the Philippine be overcome by providing engineering education and by economy. providing experience in actual operation. In the mean¬ All government corporations should be placed under time, use should be made of competent and experienced consolidated full-time management, free from any other planning, managing and technical personnel from abroad. obhgation than to manage these corporations in the It is clear that the Government wiU have to take an public interest. This could be done by establishing a active part in stimulating economic development in the Philippine Development Corporation as the responsible Philippines. It will have to provide much of the planning holding company for all government corporations. Its and some of the construction for major enterprises. It common stock would be wholly owned by the Government will have to give financial assistance to stimulate private and would be issued in exchange for the Government's investment in the industrial fields of special importance equity in the various organizations. Whenever necessary, to the economy. Precisely because of the large part that the Government would also subscribe to additional shares wiU have to be undertaken by the Government, it is to provide capital for the operations of the corporation. important that its functions in this field be clear, and The directors of the Philippine Development Corporation that it be prepared to perform these functions with would be government appointees, barred from holding honesty and efficiency. any other government or private position. The Phihppine Government has for many years been Report to the President of the United States by the operating various agricultural and industrial enterprises Economic Survey Mission to the Philippines, Washington, through government corporations. The National Develop¬ D.C., October 9, 1950, pp. 66 68. ment Company was originally organized in 1919. Existing government corporations were reorganized and certain b. Management: Ceylon new ones created between 1938 and 1941. In the postwar Lacking a broad industrial background which is only period, new corporations were organized for a multitude now being built, it is only natural that for the moment of purposes. The common experience was that a corpora¬ Ceylon has few persons of general industrial management tion once started, grew and took on new functions. experience. There are now 24 government corporations, not Among private plants, distinction between the functions including subsidiary enterprises. They have come a long of ownership and management is less frequent in Cey- way from their original objective of creating industries to lonese-owned enterprises than in the others. As larger units stimulate domestic production for export and for home are built, however, it is becoming clearer to the investors needs. Their management has become cumbersome and that ownership does not automatically confer management burdensome. The directors of the government corporations ability, In some cases trained foreign managers are being commonly include cabinet officers, many of whom serve hired, at least until local personnel can gain experience. on a number of government boards, for which special This is more common in technical positions, for Ceyloniza- remuneration is given. This involves more or less hap¬ tion pressure has made it extremely difficult to import hazard direction, so that the efficiency of the corporations skihed administrative personnel. and the government service is adversely affected. By the Where management and ownership are distinct, it is most generous evaluation, the larger number of the noted that maintenance and replacement of capital government corporations are inefficient, wastefully oper¬ equipment are often better. But as a rule Ceylonese ated, and in some instances they have been misused. factory owners tend to take out large profits at the expense Before the Government undertakes the responsibilities of maintenance, reinvesting these Of at all) in other of the development program it should clean house in the ventures or in land. Efficiency then suffers through existing corporations. What is of primary concern is that deterioration, and so does the psychological incentive for the development in the Phihppines should be weU and good performance. economically managed . . . Reports from different factories show a wide variation The extensive report of the Committee on Reorganiza¬ in the output of workers, even with the same equipment. tion of Government Corporations submitted to the Similar variations are noted in the history of individual President of the Philippines on August 18,1950, recognizes plants. All evidence indicates that such differences are the defects in the operation of the government-controlled largely attributable to the choice of managers and corporations and proposes to bring down their number to supervisors, their quahties of administration, initiative and 16. It recommends that in the development of Phihppine leadership, and their understanding of the worker as a resources preference should be given to private industry fellow individual. tif necessary, with Government financing in the form of Ceylon's cement plant, located atop the Kankesanturai preference shares), and that the Government withdraw limestone deposits on the Jaffna peninsula, has been the from trading activities in export products, from agri¬ first of the Government's modern factory projects to go culture, and from other activities that are now in com¬ into operation. Started in August, 1950, the plant uses petition with private industry. The report proposes the the dry process and a single kiln equipped with a

R.B.—K 114 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA pre-heater. Its rated capacity is supposedly about 300 long resign. This, and the fact that governmental salary tons per 24-hour day. limitations have not kept pace with the industrial worid, Although frequent press references give the present now makes h difficufi to replace them with the best men. output at 250 tons per day, the records of the factory A solution probably hes in conversion of these enter¬ indicate that on very few days has the production exceeded prises to ordinary corporations where responsibility for 225 tons. These records also show that from January to efficient management can be left to competent managers October, 1951, the plant was shut down for a total of some chosen by a board of directors, and where the Government 50 days, in periods ranging from a day to several weeks, can limit itself primarily to the role of stockholder and because of various troubles. Hence an actual output recipient of dividends. approaching rated capacity is stiff far from being achieved. Some progress is being made in discussions toward this Reasons for this are, in the main, inherent in the ad¬ goal. However, it is felt that current local thinking has not ministrative structure. At the time of the Mission's visit yet fully evaluated the real essentials of the problem. One new orders were arriving at the rate of 700 to 800 tons proposal, disclosed in a memorandum released to the daily. Outstanding orders in mid-November totaled press in February, 1952, would create government- 7,000 tons, and buyers were asked to hmit new individual owned corporations but would actually leave all final orders to 26 tons each—representing two railroad car¬ operating authority in the hands of the Ministry of loads. Meanwhile, not only was the effective plant capacity Industries, where it is now. We fear that this would merely limited to a third of the demand, but the shortage of continue the present system under a new name, and would railroad cars prevented movement of more than 60-70% of solve nothing. Further consideration wiU show that the the output. Thus, until the transport difficulty is removed, key to good management and protection of investment instaUation of a second kiln wih not solve the problem. is to delegate authority to competent personnel with a Mechanically, the plant is a fairly good one. Initially minimum of restriction, and to hold them responsible for a poorly constructed roof collapsed; since then the pre¬ performance. heating system has given some trouble; the limestone crane "The Economic Development of Ceylon," report of a is overworked through unnecessarily repetitious handhng mission organized by the International Bank for Recon¬ of material; and the sacking and carloading operations struction and Development at the request of the Govern¬ could be improved to reduce losses through breakage of ment of Ceylon, the Johns Hopkins Press, 1953, pp. bags. But these defects will soon be corrected. 519-520 and 535-537. Most of the shutdowns and troubles can be attributed, directly or indirectly, to the difficulties of outright govern¬ c. Management: Turkey ment operation of the plant, and are so recognized. The State's enterprises are bureaucratic and top-heavy. Replacement parts have been slow in arriving because of Authority is heavily concentrated at the top and is not lengthy government purchase methods; and constant sufficiently delegated to lesser officials and employees. We official intervention in management has made it difficult referred in Chapter VIT to these characteristics in the for the plant to retain competent technical help for more transport agencies. They are equally typical of the than short periods. As for operating costs, it appears industrial enterprises. Channels of communication are that the factory employs from two to three times the unnecessarily comphcated and routine activities are number of workers that it needs. hampered by restrictions and paper work to such an The Mission believes that removal of the management extent that productive efficiency is seriously impaired. functions from government offices will alleviate at least Factory employees, as far down as minor clerical staff, are 90% of the cement plant's troubles, and wiU permit it to hired and dismissed by the central office of the holding make a real contribution to the island's development as a company, not by the factory management. The Sumer- soundly based industry. The management problem in bank's head office also intervenes in the purchase of raw government-owned industries is a very acute one. It is now materials and supphes as well as in the marketing of acknowledged by all that their present administrative products of individual factories. As a result, plant structure is hopelessly unsatisfactory. managers can exercise little initiative and tend merely to To their credit, it must be said that officials have been carry out orders from above. Top Sumerbank manage¬ quick to recognize the need for experienced industrial ment, on the other hand, is hampered by lack of informa¬ managers and have imported them. But these managers tion on operations and overburdened with paper work. In are unable to give their best performance while virtually the accounting systems of public enterprises, terminology aU administrative authority is retained by the Ministry. is not uniform, so that financial statements can rarely be Inevitably, the very decisions for which their skill and read and interpreted correctly without consulting the judgement were sought are made for them by government responsible accounting department. Heavy administrative officials instead. Hiring, firing, production planning, charges add to costs of production and unnecessarily raise accounting, purchasing, distribution and sale are ah the prices of finished goods. handled through the inherentiy cumbersome mechanisms Operation of public enterprises has in general been of government, and a resulting large overhead is charged hampered by the fact that they do not have sufficient against production cost. independence to operate as business entities. A sub¬ Some very competent managers have been obtained; but stantial amount of authority should be delegated to delays, veto and frustration have caused a number to managers of individual undertakings. This would increase MANNING THE PROGRAM 115 their efficiency as well as give wider experience to the should be employed for this purpose as required. One managers. Only through such a delegation of respon¬ of the most important functions of such personnel sibihty can good managers be developed and incompetent should be the training of indigenous personnel. ones weeded out. (f) To the maximum possible extent, the Govern¬ The managers of individual enterprises should have the ment should attempt to foster and encourage economic authority to operate on the basis of a business budget as approved by the responsible minister. This means that development by private enterprise so as to minimize as each plant or agency should pay its current operating far as possible its own responsibility for management. expenses out of current revenues. Other powers which (g) Preferences' granted by Government to govern¬ should be delegated to individual factory managements are ment enterprises conceal inefficiency and prevent the freedom to buy raw materials, to hire or dismiss personnel, weeding out of incompetent managers. to set wage rates on the basis of local labor market condi¬ tions and to market their goods and services under general E. POSSIBLE SOLUTIONS TO THE price policies approved by the responsible minister. MANAGEMENT PROBLEM Based on information received from official Turkish 1. DELEGATION OF AUTHORITY sources. There is no easy solution, no single solution, and 4. LESSONS FROM THE EXPERIENCE no basic short-range solution to the problem of OF OTHER COUNTRIES providing competent management. Short-range ex¬ Among the points which emerge clearly from the pedients, however, can be found. The most certain experience of these countries, and which seem principle which can be laid down is that action should pertinent to comparable problems in Burma, are the be guided by the lessons of recent experience else¬ following. where to avoid making in Burma the mistakes which (a) Deficiencies in indigenous management and other nations have made, even if this involves, as it technical skills do not mean that industrial develop¬ must, abrupt departures from estabhshed ways of ment should be postponed, but indicate rather that doing things. Perhaps the most important of the for the short run, use should be made of competent lessons which this experience has provided is that personnel from abroad, while indigenous personnel adequate authority must be granted to personnel are simultaneously trained. charged with managerial responsibilities. (b) Participation on boards of directors by govern¬ Even an individual who possesses managerial ment personnel on a part-time basis tends toward talents, training and experience in a high degree wUl haphazard direction, and adversely affects the not be able to administer a venture effectively unless efficiency of the corporations concerned as well as he is adequately empowered to exercise this function. the government service. This applies to the directors of This does not imply that carte blanche should be government development corporations in particular. given to the manager. The board of directors must be (c) All government corporations should be placed responsible for the basic policies. At the same time, under broadly empowered, full-time management however, they must delegate to the general manager which is free from any obhgation other than to full authority to make the operational decisions manage these corporations in the public interest. necessary to execute these policies. The manager must, Managers are unable to give their best performance for example, have authority, under general pohcies while virtually all administrative authority is retained laid down by the board of directors, to employ, by the ministry concerned. Such administrative discharge and promote personnel; to purchase interference makes it difficult to retain competent material and equipment; to supervise production; managers once .they have been engaged. The key to and to make sales decisions. AU important decisions in good management and the protection of investment these fields must of course be subject to review after is to delegate authority to capable personnel with a the fact by the directors for compliance with the over- minimum of restriction, and to hold them responsible all pohcy, but to require approval for each separate for performance. decision before action can be taken paralyzes the (d) An important function of the government decision-making function and inevitably destroys development corporation should be to provide efficiency. Delegating adequate authority to the trained personnel who would be available for all manager, and holding him responsible for results government enterprises. under the authority granted him are the pillars of (e) Another important service of the development effective administrative organization. corporations should be the provision of engineering, The danger that these practices wiU not be followed industrial research, and other advisory services to is the greater because of the fact that managing boards small and medium-sized industrial enterprises, both without industrial experience as in Burma may not public and private. Foreign advisers and technicians understand the importance of the delegation of 116 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA responsibihties referred to above, and may therefore chief executive officer of the corporation; and by insist upon a degree of control of operating details attaching to the board and the chief executive officer which wUl make successful administration impossible. technical advisers of outstanding competence in the Similar administrative arrangements should exist various fields in which technical assistance is required. between any two related levels of responsibility. For the short run at least, h will be necessary to Individual project boards must be adequately em¬ engage a large number of foreign technicians for this powered by the Development Corporation, and these latter purpose. in turn should be subject only to the requirement that So far as the project corporations which wiU be set they conform whh broad government policies. To up by the development corporation are concerned, delegate authority which has customarily been the chief problem is that of supplying able operational retained in the past is a difficult thing, as difficult, management. Because it wUl be difficult to find people perhaps, as it is for a mother to part from her child. of the necessary experience and ability, who are not But excessive mothering will prevent the normal already overburdened with other tasks, to serve on development toward maturity of the child, if indeed it the boards of directors of these corporations, the does not smother the child to death. In the same way, operational management of these corporations wiU if Government embraces the budding development need also the experience and ability to formulate and and project corporations too closely, they wiU be recommend broad policies covering the entire range unable to achieve maturity and responsibility. of operations of the enterprise. With the need for delegation of authority firmly Short-run solutions to these high-priority manage¬ estabhshed, the Government can turn its full attention ment problems require a consideration of the quah¬ to the provision of competent personnel to exercise fications which must be possessed by competent this authority. managers; of the availabihty of such personnel within Burma; and of the arrangement which may be made 2. PRIORITIES IN ATTACKING THE to procure foreign managerial talent. For the longer PROBLEM OF MANAGEMENT run, consideration is required of the ways in which Attempts to solve the problem of management Burma can develop able managers of her own. must focus initially on the public sector. WhUe, as has been pointed out, the problem is important in the 3. SPECIAL QUALIFICATIONS FOR private sector as well, the advances made in the public EFFECTIVE MANAGERS sector wiU permeate in time throughout the economy. The technical knowledge and the business judge¬ Further, the Industrial Development Corporation can ment which is required for efficient administration make a significant contribution to the improvement cannot be obtained merely by academic training, no of the quality and operation of management in the matter how comprehensive and advanced. A high private sector of the economy by making available degree of native talent is essential and even if this is the results of its research activities, by the advice possessed, considerable experience is needed to apply and assistance of its technical staff, and by the pohcy academic knowledge to practical operations, before guidance which can be given by its loan and invest¬ reliable judgement can be expected. To give an ment personnel. engineer or other technician responsibUity for im¬ Within the public sector, the level at which the portant operating decisions before he has had some management problem must first be solved is at the years of experience in subordinate positions and level of the major development corporations them¬ demonstrated his ability in them is to run a grave risk selves, in industry, mining, agriculture, and in other of administrative failure. fields in which they may be constituted. The develop¬ Knowledge of personnel management is as essential ment corporations are the key to successful develop¬ to administrative success as is technical knowledge. ment in these broad areas of economic activity. Unless The manager must understand how to treat labor they are properly organized, staffed, and ably and fairly, how to stimulate labor's interest in the work dynamicaUy conducted, the development program and how to make labor eager for the success of the wiU have httle chance for success. The chief problem enterprise. The importance of this aspect of effective at this level* is to assure selection of the most able production, which is inherent in industrialization persons available for the executive staff and for itself was stressed earher. Estabhshing the personnel membership on the board of directors, and to relationships which are necessary to create favorable promote effective operation by appropriate grant of work attitudes requires personal quahties and talents authority to the board, including adequate working on the part of managers which are possessed by capital; by the necessary delegation of authority as relatively few persons, and requires in addition a well as responsibiUty by the board of directors to the special knowledge of industrial psychology and of MANNING THE PROGRAM 117 techniques for successful handhng of labor union Because experienced managers are essential in relations and workers' grievances. Neither the special initiating new ventures, it will be necessary in most personal ability nor the knowledge of personnel- cases to employ non-Burmans for the present. But to relations methods is acquired solely by training; prevent the perpetuation of this situation, vigorous both depend in part on experience. measures must be taken to accelerate the training of A third personal characteristic which is important Burmans in technical and managerial skills, and to for efficient management is coordinating ability, the give them the necessary experience. ability to keep in mind many details and relationships and to organize the necessary administrative pro¬ 5. OBTAINING FOREIGN MANAGERIAL cedures and records for keeping production ffowing AID FOR NEW ENTERPRISES smoothly and at a maximum pace. Such judgement, Effective management is a demanding task. It foresight, and organization ability are in part requires continuous vigilance, and exacts at times a inherited. But even the most skiUful manager will not heavy toll in nervous tension. The inducement to the possess them before he has had experience in a venture continuous exertion of nervous energy must be great. similar in nature, though not necessarily identical, to That inducement is provided only in part by financial that which is placed in his charge. rewards and by the satisfaction of creative achieve¬ ment. To a manager operating in his own country, 4. LACK OF QUALIFIED MANAGERS IN BURMA inducement is also provided by the esteem which he It is an unfortunate fact that very few Burmese achieves and the positions of higher rank to which nationals now possess the necessary combination success may lead. But to a man operating for a of talent, training and experience to assume manage¬ limited term in a foreign land, that inducement is ment responsibility for sizable industrial ventures. less powerful. The arrangements under which foreign This is an inevitable consequence of the economic managerial aid is obtained are therefore of the first history of Burma. When the British occupied Burma importance. and introduced some industries, the Burmese were A wide variety of such arrangements is possible. untrained and inexperienced in modern productive (a) A Burmese national may be designated as methods, and disinchned by their culture and by manager, under government ownership, and foreign theh independence of spirit to enter upon them. technicians may be employed to advise hhn. There was, furthermore, a language barrier. On the (b) A general manager and the necessary tech¬ other hand, there were considerable numbers of nicians may be employed from abroad, on an indivi¬ Indian and Chinese nationals with varying degrees of dual contract basis. industrial experience and training and with whom the (c) A joint venture may be entered into between the British had had previous economic contact. These Government and a foreign firm experienced in the were probably the major reasons why administrative industry, either on a fifty-fifty basis, or with one party and managerial posts which were not occupied by holding predominant ownership, but in either case Europeans came to be filled by non-Burmans. with the foreign firm supplying the management These statements are true of every major industry. personnel. The large rice mills were owned and operated by (d) Management may be provided by an exper¬ foreigners. Teak extraction and milling was largely in ienced foreign firm operating under a management the hands of Europeans, and there were no Burmans contract, with a profit-sharing or similar provision as in high administrative positions in the industry. an inducement to efficiency. Neither the Burma Corporation nor the Mawchi (e) A management contract may be let to an Mines placed Burmans in the more responsible experienced foreign firm on a straight fee rather than positions. The Burmah Oil Company was administered a profit-sharing basis. by Europeans. No Burmans had managerial respon¬ (f) A foreign firm might supply the equity capital in sibUity in any large bank, and few, if any, in any large such a venture with the Government providing loan import or export business. capital but not participating in ownership. These conditions persisted. It was the course of (g) The entire venture might be financed by foreign least resistance to continue to employ personnel with capital operating under certain guarantees extended the greatest industrial and commercial training and by the Government as to raw materials, markets, experience for key administrative posts. As a result security of capital and returns, etc. very few Burmese at present have acquired the (h) Ownership of the enterprise might be domestic necessary training for industrial management, and in character, assisted by Government loans and whh even fewer have experience in upper-level admin¬ management assistance provided by foreign tech¬ istrative positions. nicians. 118 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA Undoubtedly some of the eight possibUities out¬ field, but also one who understands problems of lined above are more promising than others. An personnel management in relation to workers of a elaborate analysis could be made of the relative different race who have no industrial experience, and advantages and disadvantages of each. Before who understands the problems of governmental attempting even a brief analysis, however, it should be relationship which will be involved. The experience at emphasized that these ahernative arrangements the government Cotton Spinning and Weaving cannot be adequately evaluated in the abstract. Factory is an evidence of the possible weaknesses Flexibihty must be retained, and the choice of which attend this approach. arrangements must be conditioned by the practical (c) A joint venture may be entered into with a possibihties existing in the case of each venture for foreign firm experienced in the industry. Under such a which management must be found. The person or venture the foreign firm would share in the capital firm available to supply the needed management will investment, and would share correspondingly in the be in the long run just as important, or perhaps even profits. The joint venture with the former Burma more important, than the type of arrangement Corporation seems to be working well, and is an selected for engaging that person or firm. For example, illustration of the possible success of this form of it is quite clear that the employment of a foreign firm organization. Other joint ventures for the operation on a fee basis is not likely to be as satisfactory as a of existing enterprises are now being negotiated. management contract in which provision is made for Arranging joint participation in a new industrial profit-sharing, or bonuses, to provide real incentive to venture, on terms which will attract the necessary the management firm. On the other hand it is perfectly foreign capital and at the same time be equitable to the possible that management firm "X" wUl perform more Government and the people of Burma, is a more satisfactorily on a fee arrangement than would difficult undertaking than is arranging a joint venture management firm "Y" operating on a profit-sharing with an enterprise long established in Burma. basis. With this word of caution as to the importance In estabhshing a joint venture, mutually acceptable of flexibility in the selection of arrangements, a brief provisions are far from enough. Some operating discussion of the relative merits of these various policies may cause frictions. Provisions concerning possibilities for foreign managerial aid is offered them must be clearly spelled out in the contract. below. For example, principles on which prices and wages are (a) The designation of a Burmese national as to be determined must be clearly indicated, to avoid manager of an enterprise with foreign technicians to later dispute caused by the Government's deshe for advise him might work out quite well, provided that low prices or high wages, while the foreign company the venture is not a very large one, provided that the may wish to maximize profits by contrary pohcies. manager has had some experience in a related field, Over-all control of a joint venture will of course be and provided that the range of problems that would be by a board of directors on which the Government and encountered would be largely technical and on the the foreign company are represented. Equal repre¬ production side. The greater the degree to which sentation on the board is probably the most ad¬ these conditions are departed from, the more weighty vantageous arrangement. Domination of policies by are the reasons for selecting some arrangement which either the Government or the foreign company will will place more experienced management in charge. hardly be successful. Unless the conditions of the The selection of the individual is extremely joint venture are so clearly and fairly spelled out in the important. Administrative talent is rare. The assump¬ contract that reasonable men can subsequently agree tion that a man can manage a plant effectively because upon policies without deadlock, chances of success of he has the necessary technical knowledge is false and the venture will be smaU. dangerous. One of the aims of the management of the venture (b) The employment of a general manager and must be the training of Burmese nationals as rapidly as other technicians from abroad under individual possible to take over the administrative positions. contracts involves serious hazards. The chances of Preparing them to do so will be an important part of finding the right kind of individuals are problematic, the function of the foreign managerial and technical particularly where the manager is concerned. The staff. One of the most important sections of the broad range of talent, training, experience and policy¬ contract will be that deahng with this matter, for it making ability necessary is everywhere in short supply will not be easy to arrange provisions which stimulate and the probabilities of finding persons of this caliber the foreign company to most efficient management by individual recruitment seem rather remote. The at the same time that it is working vigorously to person must be one who not only has been technically create conditions in which its participation will no and administratively successful in his industrial longer be necessary. Yet it is entirely feasible to MANNING THE PROGRAM 119 estabhsh such provisions. A minimum period of years which depends for its reputation and success upon the within which the foreign company is guaranteed efficient conduct of such management operations, against compulsory sale of hs interest to the Govern¬ either because it is primarily a management company ment is a requisite. or because in some other way the success of such Joint ventures may be entered into with the operations is interwoven with its business standing. Government taking either more or less than a half If these conditions do not exist, the inducement to share. At first glance, an arrangement of this type efficient operation provided by a fixed fee only can would seem to obviate some of the difficulties or scarcely be compared to that provided by a share in complexities which attend the joint venture on a profits. fifty-fifty basis, because the partner undertaking more (f) Ventures might be organized with foreign than a 50 % share would have the major voice in the equity capital, i.e., capital representing ownership, making of basic policy decisions. In practice, however, with Government providing loan capital, especially if such an arrangement might be exceedingly difficult to government long-term loan assistance comprised a design. In cases where the Government held a minor large share of the total capital required. Such an share, it still could hardly afford to permit its partner arrangement would absolve the Government from any to operate out of harmony with the Government's responsibility with respect to management other than views, a fact that would be well known to a prospec¬ the safeguards usually exercised by lenders to protect tive partner. On the other hand, the private partner their capital. It seems quite hkely that foreign firms would probably be reluctant to enter into a relation¬ might be interested in undertaking ventures in Burma ship where he would hold a minor share and therefore on such a basis, particularly if the prospect of earning have little or no voice in the making of critical substantial returns on a modest capital investment decisions. The probability of such arrangements seemed bright and if convertibility of the earnings to therefore may be considered remote. other currencies could be assured. Such an arrange¬ (d) The fourth possibihty is complete ownership ment, however, could yield to the foreign owners a of the venture by the Government, with development return quite disproportionate to the investment made, and management provided by an experienced foreign and would scarcely be in harmony with the economic firm under a management contract which contains views of the Government. profit-sharing or similar provisions. These provisions (g) Ventures could be financed enthely by foreign may simply take the form of a share in the profits over capital, with the Government providing the necessary a specified period of years without any capital guarantees concerning convertibility and freedom investment by the foreign firm. Alternatively, the from nationahzation. The possibilities of such firm may be given an option to purchase stock at a arrangements do not seem very great. The profit- specified price, so that it will have an inducement to making opportunities which exist in advanced econo¬ create profits which will make such a purchase mies where such capital is available are so large these advantageous. In general, the comments above days that investment abroad in an under-developed concerning the conditions and provisions necessary country like Burma would not seem very attractive for the success of a joint venture apply, though in unless the prospective profits were very great. By the somewhat lesser degree, to such a management same token, however, the Government would hardly contract. wish to encourage investment of this kind if the (e) The fifth possible arrangement is complete profits to be made by such concerns would be so large ownership by the Government, with initial manage¬ as to be embarrassing. ment of the venture provided for by a management (h) Domestic ownership and management of contract with a foreign company on a straight fee, enterprise, assisted by government loans and by rather than profit-sharing or other basis. Such a foreign technicians, might be quite feasible where contract wiU provide for management by the foreign Burmans have had some experience in the particular concern for a period of say three to ten years, industry or in a related field, where the size of the depending on the nature of the venture. The company venture is not very great, and where no especiaUy would agree to provide competent staff and pro¬ difficult or unique problems are hkely to be encoun¬ fessional judgement for construction of the plant, tered. Such an arrangement should be considered initiation and conduct of operations, and training of in the case of contemplated ventures in fields where a Burmese nationals at all levels of production and domestic private industry already exists, and where administration. It is entirely possible to obtain the there aheady exists some nucleus of capital investment services of a company to do this effectively without a and managerial know-how. profit inducement. But for such an arrangement It would appear then, from the point of view of the to be effective, the company employed must be one possible arrangements themselves, that the most 120 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA hkely methods of providing initiaUy the management sector of the economy. This is indeed the best training necessary for proposed industrial ventures are school for managers, where experience serves as methods (a), (c), (d), and (h). While it is recommended teacher, and survival is the stern criterion of economic that in each case thorough consideration and weight performance. should be given to the persons and firms likely to be involved in an arrangement, as well as to the type of F. SUMMARY OF RECOMMENDATIONS arrangement itself it would seem that, for the short (1) University facilities for the training of profes¬ run and for the more important ventures in which sional workers must be greatly expanded. Inter¬ the Government is interested, the management con¬ mediate colleges should be established, permitting the tract with an experienced firm containing an incentive Rangoon facilities of the University to be used mainly feature such as profit-sharing is hkely to be the most for upper division work. effective and satisfactory method for providing the (2) The desire to increase the number of students in management ability and experience necessary. It professional courses must not prevent improvement in needs scarcely to be emphasized that an essential quality. Financial assistance for students of promise concomitant of any such arrangement must be should be combined with rigorous standards for all provision for the training of Burmans in positions of students. responsibility so that they can in time assume the fuU (3) The present highly desirable program of burden of management themselves. advanced training abroad should be expanded; methods of selection of trainees should be improved. 6. DEVELOPMENT OF INDIGENOUS MANAGEMENT (4) Employment of foreign professional personnel IN THE LONG RUN should be continued for some years. Concurrent with the short-run solutions which have (5) The Government Technical Institute at Insein been discussed above, steps must be taken to assure should be expanded and given improved equipment at the preparation of Burmans in increasing numbers for once. Salaries must be increased to attract sufficient responsible management positions. While the major staff. steps in this process must be the placement of (6) The Artisan Training Center at Rangoon Burmans for on-the-job training with the foreign should be expanded and centers opened promptly in managements engaged, additional measures can and other cities. should be taken. (7) The excellent work of the Rehabihtation Promising young men should be encouraged by Brigade should be encouraged. At least a large scholarships, stipends, and similar inducements to share of graduates should be released for public undertake studies which will prepare them for employment outside the Brigade or for private managerial positions. These studies should then be employment. followed carefully by planned programs to give (8) The training of sub-professional and skilled trainees on-the-job experience in the productive workers, referred to in recommendations (5), (6), and processes with which they are to deal as well as in (7), should be placed under the administration of the administrative work. The training arrangements in¬ Ministry of Industry, or under an autonomous board. volve problems similar to those involved in the (9) A center for Training Aids should be estab¬ training of other professional personnel. These have lished to provide aid in in-service training throughout been discussed in Section D above. the Government. An organized program is also needed for providing (10) A comprehensive program for technical assistance to Burmans presently engaged in businesses training should be prepared. of their own. Such a program would include the (11) Where applicable, bonuses for output above a availability of research, technical, and advisory norm or profit-sharing should be adopted as a work services of the Industrial Development Corporation. incentive. In general, straight wage increases should It might also include the services of an office of small wait upon increases in productivity. business development which could be set up in the (12) Industrial safety devices should be required. Ministry of Industry. Such an office, working in close (13) Collective bargaining and the establishment of cooperation with the Industrial Development Cor¬ grievance machinery should be encouraged. poration, could make a substantial contribution to (14) An industrial revolution in Burma as in any the advancement of managerial know-how and country wUl create problems of worker attitudes ability in the private sector of the Burmese economy. which must be met. by measures to make workers On a somewhat broader scale, every reasonable aware of the worthwhile ends the enterprises are encouragement and aid should be given to the serving, the importance of their individual parts in the development of industry and commerce in the private production process, and the recognition granted to MANNING THE PROGRAM 121 their value as individuals and members of a coopera¬ management of a new enterprise depends in large de¬ ting group. gree upon the quality of the individual manager orfirm (15) The experience of other countries should be involved. With this qualification, the most promising studied to avoid their errors in operating public arrangements probably areas follows: For smaller and enterprises. less complex enterprises, in which Burmese nationals (16) Key attention must be paid to obtaining have had some experience, employment by the Gov¬ efficient managers and to estabhshing conditions ernment of a Burmese national with foreign technical conducive to effective management. advisers as needed, or domestic private ownership and operation assisted by government loans may be most (17) Management boards must delegate wide advantageous. For larger and more complex enter¬ authority. prises, a joint venture where feasible and where one is (18) In seeking managers, technical knowledge and not a management contract with a foreign company, successful experience, ability in personnel relations, may be most effective. and broad administrative and coordinating abUity (20) Any type of arrangement must make careful must aU be sought. provision for the speedy training of Burmese (19) The success of any arrangement for personnel.

PART III

AGRICULTURE AND IRRIGATION

CHAPTER VIII

AGRICULTURE

A. OBJECTFYES B. PRESENT AGRICULTURAL DEVELOPMENT Agriculture is probably the most important 1. BASIC AGRICULTURAL RESOURCES factor of the Burmese economy for two primary reasons. First, it produces 38% of the national a. Climate income, and is the greatest single source of foreign The principal agricultural areas of Burma lie exchange. Second, agriculture employs approxi¬ between the 16th and 24th paraUels of latitude. The mately two thirds of the labor population and there¬ chmate is characterized by high temperatures, varying fore supports the greater part of that population the approximately from 60° to 95° F. throughout the raising of whose living standard is the objective of the year, and heavy rainfaU. The country is rather development program. To the extent that increased sharply divided by rainfall variations into Lower foreign exchange wiU be required, and particularly Burma with preciphation from 80 250 inches per in tlie early stages of the development program, year, the Dry Zone having 25-50 inches annually, agriculture must provide the major share of the and Upper Burma with rainfall approximating 100 increased output. Even though industrial development inches annually. Each of these divisions occupies progresses rapidly, industry will remain a smaU approximately one third of Burma, the central sector of the economy for a long time. Increases in portion constituting the Dry Zone while the north and agricultural income must accrue to the farmer in south extremes form the Wet Zones. order to increase the market for industrial products, and to the Government in order to support the b. Soils capital investments required to expand industry and Soils of the agricuhural areas consist principally to mechanize productive operations of all kinds of alluvium and deposits of the Peguan and Irra- throughout the economy. Progress in agriculture waddian series. The Shan States are separated from must therefore be included with progress in other the rest of Burma by a fault hne extending the length industries to prevent destructive unbalance between of the country, and forming the boundary line of a production, marketing and foreign exchange. large hmestone plateau that stretches east into China. The agricultural development program shares The principal agricultural soils are characteristically with the general development program the basic heavy-textured clay at subsoil depths, often overlain objective of providing aU the people of Burma with a with lighter surface soils. The soil reaction is extremely greater share of the world's goods and opportunities acid in the Delta, gradually changing northward to a for inteUectual and cuhural advancement through neutral or slightly alkaline reaction in the Dry Zone. increased productivity of the individual and fuller and more efficient explohation of physical resources. If c. Topography because of its key position, agriculture is rehed upon as the principal initial resource of the federal The topography of the country is characterized development program to attain the estabhshed goal by north-south Yomas of uplifted, broken terrain of increasing the per capita income by 1960 to 5% that pass between wide, flat valleys. In lower Burma greater than its prewar value, agricultural output the topography is typically flat. The Shan States have must be increased by 77% of its 1951-52 produc¬ a roUing topography with occasional wide valleys tion. Its present production is only 81 % of its prewar having moderate slopes. value. Of the required increase, 61 % can be obtained The conditions of warm temperature throughout by the restoration of prewar acreages and by the the year, ample rainfall, and flat land of relatively addition of new acreage, 11% from increased fertile soil are ideal for exceUent agricultural pro¬ efficiency of production and 28% from state duction, and typical of the major rice production marketing. areas of Burma. 125 126 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA d. Human Resources 2. LAND USE Compared to most countries in Asia Burma is a. Cultivated Areas fortunate in having land resources that are large in A breakdown of prewar land use in divisional proportion to the population (see Plate 1). However, Burma, covering a five-year period ending in June, there are large areas of formerly cultivated land 1940, appears in Table 1-2 of Chapter I. The 170-4 which remain idle as a result of insecurity, and there million acres of total area are listed by districts has been a 10% increase in population since 1941. according to use, with the exception of approximately The result is a surplus of agricultural labor in relation 66-8 million acres lying principally in the Chin HUls, to currently cultivated crop area. As prewar acreage Shan States, Kayah State, Naga HiUs and Myitkyina is restored this surplus labor force will be reduced for which no record of use is available. The over-all but there will be ample labor for more intensive breakdown shows approximately 12 % of the total area cultivation and for expansion of cultivated acreage. in reserve forests, 24% suitable for agriculture, 25% The 1931 census indicated about two thirds of the not suitable for agriculture, and 39% unknown. The labor force to be engaged in agriculture. About 27 % 40-4 miUion acres of land suitable for agriculture is of the labor force were classified as agricultural further divided to show average annual use with laborers, 15% as tenant cultivators and 25% as net acres sown comprising 43 % of the total, 9 % left in cultivating owners. Subsequent increase in the amount fallow, and the remaining 48% not cultivated. The of tenancy and postwar reduction in the size of farms areas listed as potentially cultivable, and a portion have probably reduced the relative number of of the 66-8 mUhon acres with no use record, can be cultivating owners and agricultural laborers and expected to provide ample room for future expansion increased the number of tenant cultivators. of agriculture in the country. The map titled "Land TopographicaUy Suited for Agriculture" (Plate 2) e. Standard of Living and Income gives some indication of the extent of the potentially An agricultural laborer receives from 100 to 150 cultivable acreage in Upper Burma. Further areas of baskets of paddy plus board for working seven potential development occupy the Shan Plateau months. This amounts to about K40 to K50 per where the climate is favorable for such products as month if he is able to wait until harvest time to collect wheat, fruit and potatoes, and particularly for his wages. Actually he usually draws cash advances livestock production. at the rate of KTSO to K2 per basket for at least part The most highly productive areas are those of the of his wages so that his actual wage may be as low as Delta and along the valleys of the Irrawaddy and K20 per month. His wife and other members of the Sittang Rivers. The Dry Zone is less productive, family must also work, and during the remaining principally because of the lack of water. Upper Burma five months of the year the laborer must find other and the Shan Plateau are least productive because of employment in rice mills, carting, petty trades, their remoteness, their traditional pattern of hillside handicrafts or other unskiUed work. Income from cultivation, and the topographic conditions of that such pursuits run from about KO-50 to K3 per day. part of the country. Wages in rural areas are usually paid in terms of Burma is unique among Asian countries in having a paddy. The monetary wages are about two to three large acreage of cultivated or cultivable land per times the prewar level but the prices of cooking oU, capita. It is estimated that approximately 2-2 acres longyis, and other items which must be purchased of cultivable land are available per capita. Unusual have risen much more. too are the characteristics of much of the cultivable The differences between the incomes of laborers, land in being essentially flat and receiving sufficient tenants and the average owner cultivators are not moisture for annual, single crop cultivation without irrigation. great. The income derived from agricultural opera¬ tions is insufficient and subsidiary occupations help to make up the deficiency. Such work includes forest b. Areas Abandoned because of Insurgency work, carting, boating, fishing, thatch making, Some of the cultivated acreage is under insurgent weaving and processing of products. The cultivator control. Approximately 2 miUion acres, or 10% of all is in a somewhat better position than the laborer formerly cultivated land, is now out of cultivation but his income is stUl substantially below that in other and degenerating into shrub and forest growth. These sectors of the economy. This disparhy is clearly areas are not weU defined, but occur generaUy in indicated by the fact that agriculture with two thirds sections of the country not under government of the labor force receives only 38% of the national control. As these areas are made secure, they can be income. expected to return to cultivation rather quickly. MINISTRY OF NATIONAL PLANNING COMPARATIVE POPULATION DENSITY OF SELECTED COUNTRIES KNAPPEN TIPPETTS ABBETT ENGINEERING CO. NEW YORK RANGOON DR. BY DATE PLATE CH. BY JULY 53 NO.

LEGEND V LAND AREA ^ CULTIVATED AREA

UJ tr 3 s

UJ 0. (/>z o Q: a.UJ

o in

in 00

BURMA INDONESIA THAILAND PHILIPPINES JAPAN 127 128 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA c. Crops rice, is produced in the Dry Zone and along the Agricultural production centers around rice. Two periphery of the Dry Zone and the Delta. Table VIII-1 thirds of aU cultivated acreage is devoted to that crop. shows the approximate acreage devoted to different The lack of a practicable alternative to rice produc¬ agricultural crops in Burma. tion on heavy flat lands, and a monsoon rainfall, have A few agricultural commodities are imported into encouraged the high proportion of rice. Serving the Burma, and the increased production of some of dual function of providing staple food in the country these is of considerable importance to the national and supplying the major source of national income for economy. Principal among these are edible oils and Government, the predominant production of rice is sugar. Among fibers, long staple cotton is produced unquestionably far better suited to requirements of in insufficient quantities to supply local demands, the economy than any other combination of agri¬ while short staple cotton is exported for lack of cultural crops that could be grown under the present miUing facilities. Jute importation has been costly. farming system. Growing conditions for rice are best An analysis of that situation is discussed in detaU in in the Delta, and that area produces the export the Project Report which indicates that jute bags can fraction of the rice crop. The favorable rice-producing be manufactured in Burma from native jute for area extends beyond the limits of the Delta proper, K67/ton less than they can be imported, but that notably along the Irrawaddy and Sittang River the net revenue to the cultivator for jute fiber may not valleys, but its adaptabiUty to rice production exceed that for paddy since man-hours of labor declines northward. The demand for rice as the single required per acre are at least twice those for paddy staple food of the Burmese people results in its production. In addition, the advantage gained in the production in some areas not well suited to the reduction of jute imports is counterbalanced by the growing requirements of the plant. The lack of good loss due to the reduction of exports of rice previously communications has, on several occasions, left upper grown on the land allocated to jute production. Burma in a condition of serious rice shortage while rice glutted the market in the Delta. d. Grazing After rice, the production of vegetable oils is most The importation of dairy products is large and wUl important as a result of the dietary demand for od probably continue to be so for a long time. In spite of products within the country. Oleaginous production is apparently good conditions for livestock production, practically restricted to the Dry Zone where suitable as evidenced by reasonably abundant grazing lands growing conditions for sesamum and groundnut are on the Shan Plateau, the industry never developed in found. There, too, is the major production of pulse relation to other agricultural progress. Major reasons and fiber crops. The bulk of aU food crops, other than probably lie in the dominating interest of cultivators

TABLE VIII - 1 ESTIMATED CROP ACREAGE BY DIVISIONS

Divi¬ Ground- Fruit and Sugar Not sion Rice ,jj,, Pulses Sesamum Millet Maize Cotton Tobacco of^^,. Cane Listed Total

1 978,400 — 1,000 1,800 100 400 800 7,900 30,700 — 46,100 1,067,200 2 3,760,000 1,600 29,300 14,300 — 5,300 2,700 24,100 159,200 11,900 151,400 4,159,800 3 3,549,500 8,700 50,900 3,000 — 26,400 — 18,000 147,500 — 174,500 3,978,500 4 1,394,100 — 3,300 7,400 — 300 — 4,800 219,900 11,400 73,300 1,714,500 5 384,600 362,600 101,100 350,800 134,400 81,400 55,100 20,700 12,100 — 294,100 1,796,900 6 630,500 282,500 340,200 387,500 151,300 49,200 133,300 12,900 58,800 20,800 77,900 2,144,900

17,386,400 1. Akyab, Arakan Hills, Kyaukpyu, Sandoway. 2. Pegu, Tharrawaddy, Rangoon, Hanthawaddy, Insein, Prome, Toungoo. 3. Bassein, Henzada, Myaungmya, Maubin, Pyapon. 4. Salween, Thaton, Amherst, Tavoy, Mergui. 5. Thayetmyo, Minbu, Magwe, Pakokku, Chin Hills. 6. Mandalay, Kyaukse, Meiktila, Myingyan, Yamethin. 7. Bhamo, Myitkyina, Shwebo, Sagaing, Katha, Upper Chindwin, Lower Chindwin. 100 BURMA ^■•s 28 ■28

Scole I inch to 60 miles

50 0 50 150 200 MILES "v irrTrtTtrtf E^ /•• —-~^\

REFERENCES -i^ (A aOUNDARIES ss, Ni) ^. PROVINCE '/Vo, DISTRICT

TOWNS ^ STATE S \ 26- -26 LEGEND

CULTIVATED AND SUITABLE FOR CULTIVATION

NOT CULTIVATED BUT SUIT-^^^ ABLE FOR CULTIVATION ^/ ^ i YUNNAN :; r (CHINA ) / ^ ^. HAMO 1 I UPPER 24- .'■ \ .-■ -24 f'' ••y / / •MAWLAIK.-- i CHINDWIN .--■■ N

■ FALAN* i • LASHIO HAKA« •■ NORTH ERN SHAN ; CH)N HILL : STATE

LOWER CHiNDWi

22- •22 AGAINGV.*MANDALAY,\..,.:- ^ m .' SPECIAL DIVISION .; ^ -^ ] OF THE CHINS •Af^AN HILL •--■■N • /XRACTS •Loi MwE EASTERN SHAN -^"^ .-MEifCrrL^

• TAUNGGYI

INDO-CHINA YAMETTAIN SOUTHERN SHAN

STATE

20- -20

■^ KAYA STATE V VrouNGod

14 0 U NN5. 0 0 -^ •-•-, 14- A V 0 Y AILAND

18

THATC

-12

MOULMEIN ERGUI

16 _

0 L/fl,

ANDAMAN SEA |I0 VICT^I'(^skJomrW 10

98

AGRICULTURE 129 in cattie as draft animals instead of for meat or milk weed growth of sedges and grasses that make sod production and, more important, the difficulty of preparation difficult. producing and maintaining hvestock in the humid When the soil is a thick mud in the upper four or hot Delta country where agricultural production is five inches, and with three inches of water on the concentrated. If hvestock and dairy production are surface, the transplanting operation begins. Seed¬ properly confined to the areas most suitable for their lings are pulled and tied into bundles, five or sk development, principally on the Shan Plateau, hundred of which are required for one acre. After increased production of these commodities may be pruning, the seedlings are placed into the mud in slow in developing because of the remoteness of that bunches of two to four at six-inch intervals. Rarely, part of the country from the population centers. when labor or weather conditions dictate, sprouted seed is broadcast on the entire field in quantities of 60 e. Farming Methods or 80 pounds per acre, instead of transplanting. The very considerable exports of rice from Burma After transplanting has been completed, no care is have been produced exclusively under primitive farm¬ required for the crop other than regulation of water. ing methods httle changed from times of antiquity. The About ten days before harvesting, the water is drained methods are characterized by the use of animal power, off the fields. The removal of surface water causes hand labor, and primitive tools. A description of rice the rice plants to undergo a physiologic change that cultivation throughout the year wiU explain farming hastens ripening of the grain and discourages lodging. methods in current use, and emphasize the possibilities Harvesting is sometimes preceded by laying the for more efficient production and fuller land use. crop over in a single direction to prevent haphazard Rice production is normally a two-stage operation blowing over by the wind and to facUitate cutting. consisting of nursery preparation followed by main The crop is reaped with hand sickles by removing the paddy-field planting. Field nurseries comprise about panicle together with the top foot or so of culm. A 10% of the area to be planted, and they are the first long stubble is left in the field and usually later to be prepared. Preparation begins after four to six burned. Bundles of panicles are left on the threshing inches of rain has softened the soil sufficiently to floor for a week or longer for drying. Bullocks tread permit plowing with a steel-pointed wood plow. the grain out of the plants and it is afterwards Plowing is completed toward the end of May or winnowed to separate the grain and chaff. early June. The land is then harrowed using a timber The production of a single rice crop occupies most crossbar equipped with teeth that stir up the sod in of the year. Nursery preparation usually extends from the manner of a pegtooth harrow. After the area has the middle of May until the first of July. Trans¬ been harrowed eight or ten times, a simple rotary hoe planted in July, the crop matures in November or is passed over it. Most of the soil preparation is December. Harvesting takes place in January or carried out when there is one or more inches of water February, the fields are burned in March or April, covering the surface. The inefficiency of the tools is and in the following month soil preparation begins partially responsible for the numerous repetitions again. The graph below shows the normal rice required for each operation. One reason for repetitive cultivation pattern during the period of a year. With plowing and harrowing is to "puddle" the soil into primitive equipment, plowing is possible only during a thick mud that tends to seal the surface inches by the months of May and June. Hand harvesting destruction of the sod structure, thereby decreasing its occupies the month of January and often February. permeability. The result is less leaching, or percola¬ M J J O N D F M A tion, and a consequent reduction in the amount of irrigation water required. Soil Growing Harvesting Fields Before field nurseries are planted, the water is Preparation Season Burned drained, and seed, previously sprouted, is broadcast by hand. Sprouted seed estabhshes itself more readily In the absence of ample water at all seasons of the than dry seed and is therefore less hkely to be washed year, and unless there can be a reduction in the time out by torrential monsoon rains. Water is gradually required for plowing and harvesting, single cropping flooded into the nursery field plot, increasing in depth cannot be avoided. as the seedhngs grow. After a period of four to six weeks the seedhngs are ready to be transplanted. 3. PRESENT LAND TENURE While the nursery plot is growing, the main field is The development of commercialized paddy agri¬ prepared for transplanting. SoU preparation on the culture in lower Burma started with the British main area is usually inferior to that on the nursery occupation and brought with it western institutions of plot. Early rains encouragCa fairly rank, hydrophytic land ownership, rule by law, and a money economy

R.B.—9 130 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA based on prevaihng laissez faire notions. Production TABLE VIII - 2 for the market required larger holdings than sub¬ sistence production and larger holdings required more OCCUPANCY OF LAND IN LOWER BURMA labor and equipment. These in turn became cash {in acres) costs to the cultivator. So long as rice prices increased Total Total Resident and new rice lands were available, money for further Year Occupied Tenanted Non-agri¬ Non-agri¬ rice area development was readily available and Area Area culturist culturist cultivators found h profitable to borrow. However, by 1908 and 1909, special inquiry into the conditions of 1925 26 10,339,589 4,482,835 2,784,959 700,163 1926 27 10,456,422 4,583,092 2,893,219 735,723 the agricultural population in lower Burma concluded 1927 28 10,607,514 4,626,601 2,955,433 767,131 that small landholders were losing their lands to 1928 29 10,654,025 4,701,952 3,052,816 778,345 moneydenders, traders and large landlords. The land 1929-30 10,745,121 4,932,361 3,231,561 803,617 boom resuhing from the sustained rise in the price of 1930-31 10,805,961 5,264,090 3,513,936 821,585 paddy and the availabihty of credit from the Chettyars 1931-32 10,733,754 5,290,692 4,093,594 857,232 collapsed as a result of the worldwide coUapse of 1932-33 10,768,444 5,773,249 4,473,817 834,843 1933-34 10,846,462 5,981,012 4,816,071 860493 credit in 1907. The smaU cultivator unable to meet the 1934-35 10,926,303 6,225,308 5,061,753 890,052 sudden demand for repayment of his debts was 1935-36 11,056,018 6,372,425 5,253,082 968,161 forced to surrender his land. Since then there has been 1936-37 11,201,766 6,579,507 5,306,017 989,419 1937-38 11,300,110 6,683,797 5,359,823 981,684 a steady dechne in the area owned by cultivators. This 1938-39 11,293,092 6,682,233 5,385,150 966,968 trend was accelerated substantially during the depres¬ sion of the early 'thirties and by 1939 in lower Burma 1945-46 11,330.885 3,383,460 5,435,285 1,017,813 1946-47 11,330,243 4,684,726 5,400,483 974,716 48% of the occupied area was occupied by non- 1947-48 11,391,237 5,366,836 5,492,666 949,560 agriculturists and 59% was under tenancy. In the 1948-49 7,647,288 3,699,942 3,784,276 655,134 worst districts 70 % of the area was in the hands of 1949-50 10,402,581 4,645,683 5,095,891 891,598 non-agriculturists. The commercialization of agriculture in upper Source: Report of the Land and Agricultural Committee. Report Burma started much later than in lower Burma with on the Land Revenue Administration of Burma (Statement XI). the rapid expansion of groundnut production from about 1905. The result is that traditional patterns of vUlage hfe have been better preserved. Farms are TABLE VIII - 3 smaUer in size, and, because of varied chmatic OCCUPANCY OF LAND IN UPPER BURMA conditions, agriculture is more diversified. Landlords (in acres) usually live in the viUage or close by, and are often feUow farmers renting out surplus land. Problems of Total Total Resident Year Occupied Tenanted Non-agri¬ Non-agri¬ tenancy, indebtedness, and ahenation of land did not Area reach the proportions that they did in lower Burma. Area culturist culturist Tenancy litigations were more infrequent than in 1925-26 7,932,229 1,924,299 686,909 312,347 lower Burma and apparently tenants were relatively 1926-27 7,928,498 2,014,173 686,411 310,758 satisfied with their lot. However, while the increase in 1927-28 7,912,922 1,915,007 720,497 327,936 tenanted area and in the area of land held by non- 1928-29 7,892,047 2,010,208 731,073 324,552 1929-30 8,002,805 2,158,070 agriculturists started much later in upper Burma than 797,105 350,671 in lower Burma the rate of increase has been roughly 1930-31 8,007,426 2,160,320 842,700 368,866 as indicated in the graph (see Plate 3). Most studies 1931-32 8,021,272 2,167,279 908,230 394,425 1932-33 8,049,372 2,387,997 982,473 'MA,lTi quote data on area held by non-agriculturists to 1933-34 8,049,951 2,553,608 1,035,326 441,857 indicate the seriousness of the tenancy problem, but 1934-35 8,066,490 2,623,823 1,076,780 454,298 the area under tenancy is much greater in upper 1935-36 8,093,082 2,646,076 1,105,521 462,623 1936-37 8,103,141 2,698,094 L136,016 475,745 Burma than indicated by the area held by non- 1937-38 8,143,036 2,680,403 1,153,816 482,428 agriculturists because of the large proportion of 1938-39 8,167,666 2,654,033 1,157,944 481,350 tenant land held by agriculturists. By 1939 only 14-2 % 1945-46 7,921,959 1,795,333 1,065,932 458,471 of the land in upper Burma was owned by non- 1946^7 7,830,976 1,770,093 1,003,849 428,710 agriculturists but 32-5% of the land was tenanted. 1947-48 7,873,527 1,973,731 985,047 419,625 Plate 4 indicates the proportion of land in the various 1948-49 5,189,216 1,269,899 644,361 285,451 tenure categories. Tables VIII 2, 3 and 4 show occupancy of land in lower Burma, upper Burma and Source: Report of the Land and Agricultural Committee. Report in the whole of Burma respectively. on the Land Revenue Administration of Burma (Statement XO. AGRICULTURE 131 TABLE VIII - 4 The lot of the tenant farmer was not enviable. OCCUPANCY OF LAND (TOTAL BURMA) Rents ranged from about 25 % to 60 % of the crop. At the end of the season after paying his rent and his {in acres) debts the tenant farmer normally did not have enough Total Total Resident Tenanted "wunza," the paddy to be used for food during the Year Occupied Non-agri¬ Non-agri¬ Area coming year. Particularly in lower Burma, where fixed Area culturist culturist rents prevail, a poor crop usually meant accumulation 1925-26 18,271,818 6,407,134 3,471,863 1,012,505 of debts and eviction from the land. Prewar studies in 1926-27 18,384,920 6,597,265 3,579,630 1,046,481 lower Burma show that only about half the tenants 1927-28 18,520,436 6,541,608 3,675,930 1,095,067 remained on a given piece of land for more than one 1928-29 18,546,072 6,712,160 3,783,889 1,102,897 1929-30 18,747,926 6,985,431 4,028,666 1,154,288 year and that less than a quarter remained for more than four years. 1930-31 18,813,387 7,424,410 4,356,636 1,190,451 The average size of a holding in lower Burma is 1931-32 18,755,026 7,457,971 5,001,824 1,251,657 1932-33 18,817,816 8,161,246 5,456,298 1,259,116 now between 10 and 20 acres, or the area which can be 1933-34 18,896,413 8,534,620 5,851,397 1,302,350 plowed with one or two yokes of oxen. Some culti¬ 1934-35 18,922,793 8,849,131 6,138,538 1,344,356 vators operate as much as 50 acres which is the 1935-36 19,149,100 9,018,501 6,358,603 1,430,784 1936-37 19,304,907 9,277,601 6,442,033 1,465,164 maximum permissible under the Disposal of Tenancies 1937-38 19,443,146 9,364,200 6,513,594 1,^64,112 Act, but the postwar tendency has been toward 1938-39 19,460,758 9,336.236 6,543,094 1,448,318 smaller holdings. In Upper Burma, holdings are much 1945-46 19,252,844 5,178,793 6,501,217 1,476,284 smaller, averaging between five and ten acres. 1946-47 19,161,219 6,454,819 6,404,332 1,403,426 1947-48 19,264,764 7,340,567 6,477,713 1,369,185 4. AGRICULTURAL PRODUCTION 4,969,831 4,428,637 940,385 1948-49 12,836,504 The total area under crops and output in the prewar and postwar periods are shown in Tables Source: Report of Land and Agricultural Committee. Report on VIII-5 and 6. During the war, incentive to produce the Land Revenue Administration of Burma (Statement xO. was low and many export crops in 1945-46 feU to

TABLE VIII - 5 SOWN ACREAGES, PREWAR AND POSTWAR

Average 1936-37to 1938-39 1946-47 1947-48 1948-49 1949-50 1950-51 1951-52 1952-53 1940-41

A. In thousands of acres Total Acreage Sovra 19,117 18,990 13,456 15,305 15,783 15,031 15,120 15,366 16,270 1. Paddy 12,832 12,816 8,242 9,597 10,128 9,349 9,467 9,698 10,331 2. Groundnut 808 840 573 729 706 699 695 721 744 3. Sesamum 1,401 1,363 1,262 1,395 1,385 1,351 1,297 1,321 1,328 4. Cotton 453 408 171 222 219 216 221 255 294 5. Pulses 1,329 1,347 852 970 968 995 1,000 950 1,050 6. Sugar Cane 64 59 38 46 56 45 45 50 60 7. Millet 475 456 603 565 583 589 635 598 682 8. All Other Crops 1,781 B, As per cent of prewar average Total Sown 100 99 70 80 83 79 79 80 85 1. Paddy 100 99 64 IS 79 73 74 76 81 2. Groundnut 100 104 71 90 87 87 86 89 92 3. Sesamum 100 97 90 100 99 96 93 94 95 4. Cotton 100 90 38 49 48 48 49 56 65 5. Pulses 100 101 64 73 73 75 75 71 79 6. Sugar Cane 100 92 59 72 88 70 70 78 94 7. Millet 100 96 127 119 123 124 134 126 144 99 102 TENANTED AREA

TOTAL OCCUPIED AREA ( ALL BURMA)

20

TENANTED AREA (/) (ALL BURMA) 10 iTirrrr O _ 8

TENANTED AREA V (LOWER BURMA) 2 4

TENANTED AREA '-"^ (UPPER BURMA) K_. / V

lO <0 CO lO I*- <0 <0 00 0> o eg CM % to ro to lO to •4- in

YEAR

Source :-Report of the Land and Agriculture Connmlttee. Report on Lond Revenue Administration of Burma.

MINISTRY OF NATIONAL PLANNING.

TENANTED AREA

KNAPPEN rrPPETTS ABBETT ENGINEERING CO NEW YORK. RANGOON DR.BY. £ff. DATE PLATE CK.BY. ^■'^. JULY. 53. NO. 132 AGRICULTURE 133 TABLE VIII - 6 AGRICULTURAL PRODUCTION, PREWAR AND POSTWAR

Average 1936-37to 1938 39 1946-47 1947-48 1948-49 1949 50 1950-51 1951-52 1952-53 1940-41

A. In thousands of tons 1. Paddy 7,426 8,050 3,968 5,535 5,264 4,691 (4,979) (5,250) 5,740 2. Groundnuts 181 180 103 153 144 115 145 176 176 3. Sesamum 45 53 32 44 42 32 39 48 54 4. Cotton 20-5 18-8 3-9 1-1 1-1 7-1 1-1 6-9 9-2 5. Pulses 217 198 153 188 187 175 183 177 181 6. Sugar Cane (1,000 canes) 560 520 356 344 355 300 304 360 384 7. Tobacco 38 31 36 46 43 40 47 45 46 8. Millet and Wheat 77 Index of Total Agricultural B. As per cent of prewar average Production 100 106 56 77 74 65 70 75 81 1. Paddy 100 109 54 75 71 63 67 71 77 2. Groundnuts 100 100 57 85 80 64 80 97 97 3. Sesamum 100 118 71 98 93 71 87 107 120 4. Cotton 100 92 19 38 38 35 38 34 45 5. Pulses 100 91 71 87 86 81 84 82 83 6. Sugar Cane 100 93 64 61 63 54 54 64 69 7. Tobacco 100 82 95 121 113 105 124 118 121 8. MiUet and Wheat 120 110 subsistence levels. The biggest faU in production was Insurgency is a factor profoundly affecting agricultural in cotton. Paddy output feU to 54% of the prewar production by denying the normal cultivation of some level. The index of total agricultural production was areas. down to 56 % of the prewar base. In spite of the insur¬ rections, acreage and output in 1952-53 are now 85% b. Low Per-unit Yields and 81% respectively of the prewar level. Progress Agricultural production is at a low level of per-unit is registered by all major indicators: acreage, output yield in every crop grown. In most areas, the sod has and yields. The 10,331,000 acres of paddy sown in reached its base level of productivity. Primitive 1952-53 represent a postwar high. The production cultivation has puddled the surface soil of the entire of 5-7 miUion tons of paddy in 1952-53 is also the rice-producing area, creating conditions unfavorable highest in the postwar period. for all crops other than rice. Paddy monoculture, On the other hand, although the average yield per with its deleterious effect of exhausting the nitrogen acre of paddy over the last five years is 91 % of the and phosphorus reserves in the soil, is the rule. five-year prewar average, the yields remain far Little or no fertihzers, organic or otherwise, are below what they should be with the employment of apphed. The undesirable custom of burning paddy scientffic agricultural practices, as wiU be discussed in lands is probably made necessary by the absence of succeeding paragraphs. sufficient nitrogen in the soil to supply body-building 5. AGRICULTURE PROBLEMS material for the soil microorganisms required to reduce stubble to a humus condition. Under present a. Low National Output farming methods, the soil is not managed but mined, The coUective ills of the nation's agriculture are with resulting continued degeneration and pro¬ reflected in the low national output. The most gressively declining yields. conspicuous index of low national output is the In spite of present low yields, there are factors very difference between prewar and postwar rice exports. favorable to increased production. Some of the The present export of rice is only 41 % of the prewar possibihties that appear to be practical and financially quantity, and the efforts of Government are directed feasible for application in Burma are discussed in toward reaching the former rice export volume. this Report. LOWER BURMA

UPPER BURMA

LEGEND

TENANTS ON AGRICULTURIST HELD LAND

TENANTS ON NON - AGRICULTURIST HELD LAND —--^^ "^ OWNER CULTIVATORS 1 AOf X \ \^/^ /\ ALL / \ / \ BURMA -^ - (^ \---\r^nv---^ \ 7 ^. y J \r- 7 \t ,^ MINISTRY OF NATIONAL PLANNING PERCENT OF CULTIVATED LAND IN VARIOUS TENURE CLASSES

Source - Report on Land Revenue Administration of Burmo KNAPPEN TIPPETTS ABBETT ENGINEERING CO NEW YORK RANGOON ( 1938 -39) DR.BY. DATE PLATE CK.BY JULY 5 3 NO 4 134 AGRICULTURE 135 c. Studies, Development and Education To date only a small area in Syriam has been Much work is needed in this field. Surveys, detailed nationalized. plans, estimates, research, and various educational The Burmese Constitution provides that the State measures are required. As first steps of the develop¬ is the owner of all land. The Land Nationalization ment of new land, the program of aerial mapping Act carries out this philosophy by providing for should be carried to conclusion, and a broad program resumption by the State of land in excess of specified of land classification surveys initiated. On the basis of hmits and distribution of the land to cultivators information obtained from these sources, plans may and laborers who would operate the land as state be made for the clearing and preparation of new land tenants. The Act provides that recipients of land and for the development of irrigation and drainage must become members of cooperative societies which where required. Experimental and demonstration would be formed as part of the program. The stated farms are needed for developing the practical long-term objective is to encourage either cooperative adaptation of new methods of cultivation, application or collective farming. In the first phase it is planned to of fertihzer, new crop varieties, new methods of pest distribute about 9,900,000 acres of land in parcels control, and related measures. Demonstration farms which can be plowed with one yoke of oxen. To assure may be used to test the application of various mechan¬ maintenance of adequate living standards, cottage ical farming aids, and, as an adjunct to the extension industries, poultry farming, livestock, and cooperative services, to provide a training and instruction ground farming or collective farming are to be introduced with which to introduce these measures to the in¬ where necessary. terested population. The short-term program to improve conditions of tenancy before implementation of the Land Nationali¬ d. Fiscal and Marketing Problems zation Act consists of the Disposal of Tenancy Acts, An important reason for low incomes in agriculture the Rent Control Acts and the Land Alienation Act. has been the large share of total output which has The Land Alienation Act prohibits transfers of gone to non-agriculturists in the form of rents, agricultural land to non-agriculturists, and has interest and trading profits. The Burmese Government halted the prewar trend toward increased ownership has taken steps to correct this inequity through rent of land by non-agriculturists. The Rent Control Acts controls, land nationalization, government loans, limh gross rents to twice the land revenue tax on formation of cooperatives, and establishment of paddy land, 20% of out-turn on Ya (field crops other state and cooperative marketing. Most of these than rice) lands, and 10% of out-turn on sugar cane measures have not yet been fully implemented and land. The Disposal of Tenancies Act guarantees the some are not consistent with the objectives of in¬ tenure of a tenant so long as he pays standard rents, creasing output. Also, in the past, heavy rent and has not defaulted in the repayment of agricultural interest burdens have reduced the farmer's standard of loans, and cultivates the land. The Act also hmits living and denied him the incentive or opportunity to cultivators to cultivation of 50 acres of paddy or increase production. Insecure tenure conditions have equivalent. tended to discourage land improvement practices. These laws have given tenants most of the advan¬ The lack of proper market information and the lack tages of land ownership in areas where they have of uruform standards of weights and measures and been enforced. Rents are nominal and tenure is grades have prevented farmers from obtaining fuU secure. The main problem is that a tenant has no land market prices for their produce. Tax measures have to mortgage and has difficulty in getting credit. not been framed with adequate consideration for the These conditions would of course also be true after tax burden of the cultivator and its relationship to nationahzation so that in areas where tenancy laws production incentives. are enforced there is httle interest in land nationah¬ zation. However, enforcement of tenancy laws is by C. NATIONAL AGRICULTURAL PROGRAMS no means thorough or widespread. In addition to 1. THE LAND NATIONALIZATION PROGRAM insurgent-held areas there are many areas, particularly The Burmese Government, in recognition of the in upper Burma, where farmers know very little need for basic institutional changes in Burma's land about the laws. In a number of viUages tenants are tenure system, passed a series of laws to provide some still paying traditional rents in excess of legal maxi¬ early relief from tenancy, and the Land Nationali¬ mums. Tenure was insecure and Tenancy Disposal zation Law which will, when implemented, eliminate Boards were inactive because tenants did not know tenancy on all privately owned land. Steps to their rights under the law. implement the Land Nationalization Act have, However, even if the laws are more fully enforced, however, been delayed as a residt of the insurgency. so long as tenancy exists on a large scale the 136 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA possibilities of reverting to the old system of rack are created, and problems of surveying and distri¬ renting and insecure tenure will remain. So long as the buting the land are increased substantially over those demand for land exceeds the supply at controlled rents involved in simply continuing the tenant operator on there will be incentives for evasion of controls. Rental the land he farms. In addition, disturbances of present contracts can be changed to sales contracts. Evictions management units wiU probably reduce output untU are legally possible under some circumstances, and cultivators get accustomed to their new holdings. Tenancy Disposal Boards are not infaUible. Hence the To achieve action without encountering these objective of the Government to eliminate tenancy initial difficulties, it is recommended that the initial should be enforced. In the meantime every effort phase of the program should be limited to ehmination should be made to publicize and enforce the present of absentee ownership of tenant land and distribution temporary laws. to present tenant cultivators. This step can be taken The present plan of the Government, as expressed in without disturbing production, and can be carried Resolutions adopted by the Welfare State Conference out with much less administrative expense than a in August, 1952, and various speeches by the Minister more ambitious program. This step wiU legalize the of Land Nationalization, describe as the ultimate goal 'We facto land reform" in lower Burma and estabhsh of the program the establishment of large-scale a cutoff date on any claims which landlords may press collective and cooperative farms. The nationahzation on the tenant in the future for unpaid rents. It wiU of land and its distribution to State tenants as one- greatly improve the economic status of tenant yoke plots is considered to be only a temporary farmers in upper Burma. It will give concrete assurance phase of the program. Reduction in the size of to farmers that Government has abohshed the old tenant-managed farms to more or less equal units is system of rack renting and insecure tenure, and make expected to minimize opposition to later coUectivi- farmers more amenable to cooperation with the zation and at the same time to provide land for Government in other phases of the program to distribution to landless laborers. The problems increase farm income. involved in sub-dividing holdings and the adverse The purchase of owner-operated land in excess of effects on production of disturbing present manage¬ 50 acres should be carried through. The Disposal ment units are considered by the officials concerned of Tenancies Act has already reduced the size of to be of relatively littie consequence as compared to holdings to this level in areas where it has been the long-range advantages to be gained through enforced. Before its enactment, less than 2 % of the coUective farming. holdings were in excess of 50 acres. The amount Plans for establishment of one collective in 1954, now is probably much less, and purchase of such seven in 1955, and 66 more between 1956 and 1962 lands should not create any special administrative are included in the ten-year plan for land nationali¬ problems. zation prepared by the Ministry of Land Nationah¬ In terms of long-range development of agriculture, zation. However, Burma has had no experience in mechanization can be expected to play an increasingly collective farming and very little experience in important role. The 50-acre limit on individual mechanized farming. Substantial investment of equip¬ holdings is a real deterrent to the development of ment and technicians will be required and a number of mechanized agriculture on a privately managed collectives wiU have to be established before their basis. This is one of the important reasons why the success or failure can be fully determined. If the Burmese Government plans to estabhsh coUective or experimental collectives should prove successful the cooperative farms. If the formation of cooperative or program can be accelerated. The recent experience of collective farms progresses slowly, and if the Govern¬ Yugoslavia and the earlier Russian experience ment desires to attract private capital for agricultural indicate that many difficulties are encountered development, it is recommended that exceptions to the in the initial stages of coUectivization. Yugoslavia is no 50-acre limit be permitted where a cultivator has longer encouraging collectives and has decided to equipment necessary for mechanized farming and if carry through a program for cooperative farming there are surplus lands available, or that individual based on smaller individual holdings. The USSR also holders be encouraged to farm their holdings jointly has had to revert to individually operated farms until under a cooperative arrangement. The Government enough experience and technical skills in collective should screen each application for oversized farms farming can be developed. carefuUy to determine that the apphcant has sufficient In the process of dividing resumed land into one- capital and a sound farm plan. Periodic checks should yoke plots, tenants operating more than one yoke be made to insure that proper labor standards are wiU be adversely affected and may resist. Problems of being observed and that productive efficiency is being providing cattle and equipment for the new cultivators maintained. Private capital may be of value in opening AGRICULTURE 137 up new areas or in restoring abandoned land which mechanization, and realization of other goals wiU cannot be cleared without mechanical equipment. require many years of intensive work. The Co¬ The Act provides for exemption of lands owned by operative Department and the Department of "agricuhurists" within the Ihnits of 50 acres of paddy Agriculture are currently engaged in programs aimed or caneland, 25 acres of Ya land or ten acres of at some of these goals. The land nationahzation Kyaing land from resumption by the State. The Act program should be integrated with these programs. has very tight provisions for resumption of land held by non-agriculturists but wiU permit agriculturists to 2. THE FIVE-YEAR PLAN FOR AGRICULTURAL retain tenanted land within the authorized limits on SELF-SUFFICIENCY AND DEVELOPMENT condition that they cultivate the land themselves. In order to increase agricultural exports and to This wiU mean that tenants on land held by agri¬ provide a greater degree of self-sufficiency the Burmese culturists will be forced off the land and wiU become Government prepared a Five-year Plan for Agri¬ landless laborers. While this will not be a major cultural Development in 1952. The plan contains problem in lower Burma where the bulk of the projects for increasing the annual output of farm tenanted area is held by non-agriculturists it wiU products by K1,15,00,00,000 by 1959-60. Implemen¬ result in a substantial change in upper Burma where tation of the plan is expected to bring about fuller there are at least 1| milhon acres of tenanted land employment of resources, increased incomes, a held by agriculturists. higher level of consumption and increased foreign To maximize production, and to speed the land exchange. Specific targets are shown in Table VIII-7 nationahzation program, it is recommended that (seep. 138). efforts be made to minimize changes in the manage¬ To carry out tne projects the Agricultural and ment unit and to concentrate on changes in land- Water Resources Development Corporation was holding rights. The importance of speedy imple¬ estabhshed with a., initial grant of Kl crore. The mentation of a simplified land nationalization pro¬ Corporation is responsible for coordinating the gram cannot be overemphasized. Landlords have not operations of various agencies involved in imple¬ yet fully re-established their controls over their menting projects under the plan and for disbursement tenant lands and are probably less likely to resist of funds required to finance the projects. now than they would be at a future date when they Nine projects were selected for immediate imple¬ have re-estabhshed control. Delays will also give mentation. The program for the restoration of prewar landlords added opportunities to evade nationah¬ levels of rice exports was given the highest priority. zation through sales to tenants. Also, the longer the Programs for increased production of groundnuts, delay the more difficult it will become to determine long stapled cotton, jute, coconuts and onions were the status of landholders on January 4, 1948, which is also given high priority. Establishment of an experi¬ the basis for determining which lands are to be mental state dairy farm and a cattle breeding farm resumed and who quahfies as an agriculturist. was also planned. Immediate steps for establishment The program for land nationalization as oudined in of a State Agricultural Bank were also approved. the ten-year plan is an ambitious program which During 1952-53 the Corporation distributed sub¬ attempts to carry through a thorough-going reform sidies of K43,78,000 to farmers for bringing new of the Burmese agrarian structure. It includes not only paddy acreage into cultivation. In 1952 the target changes in land tenure, but also formation of producer acreage of 505,000 acres was exceeded by 128,000 cooperatives, improvement of agricultural produc¬ acres. K14,73,000 was also distributed for extension tion methods, settlement of new agricultural land, of groundnut crop acreage. formation of mechanized collective farms, and Two thousand acres of land have been cleared in the machine and tractor stations, diversification of Thapan Cotton Seed Farm site at Meiktila. Cattle agriculture, estabhshment of village processing and purchase and cultivation loans have been distributed institution of collective purchasing and marketing. The to tenants in that farm. They will grow long stapled first phase of the program consists primarily of basic cotton for the Government Spinning and Weaving research and training of personnel. Part of this work Factory. An additional 2,000 acres wiU be brought has been done, but the major part of the work remains. into cultivation next year. The idea that reforms in land tenure alone are only The Corporation has loaned Kl5,000 to jute seed a partial solution to the problems of improving the growers in 1952. The 1953 jute acreage goal was economic status of the cultivators is sound. However, reduced from 10,000 acres to 7,200 acres as the 1952 reforms in land tenure need not wait upon reforms in output of seed fell short of expectations. K3,25,000 other fields. Development of agricultural cooperatives, has been aUocated for loans to growers for planting use of improved production methods, large-scale the main jute crop. 138 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA TABLE VIII - 7 TARGETS OF INCREASE IN AGRICULTURAL INCOME BY 1959 {value expressed in 1951-52 prices)

Total Increase over 1952 Agricultural Income Increase from

Improvement Improvement Agricultural Projects Production Extension of Conditions of Productive Income for Growing Efficiency of or Living Plants or Animals {Tons) {K) {Acre.t) (K) m (K)

A. AGRICULTURE AND FISHERIES 1. Rice (74% of paddy) 1,750 3,50,000 *2,500 3,00,000 40,000 10,000 t500 2. Groundnut 150 75,000 *200 69,000 5,000 1,000 3. Cotton 10 10,000 *200 8,000 500 1,500 4. Pulse Crops (excluding soya beans) 100 15,000 *350 15,000 — — 5. Soya Beans 25 4,000 175 3,000 — 1,000 6. Sugar Cane 350 17,500 *t20 15,000 1,000 1,500 7. Onions 50 10,000 10 8,000 2,000 — 8. Spices (Chillies) 10 700 15 700 — — 9. Wheat and Barley 50 15,000 250 14,000 500 500 10. Jute — 4,000 70 4,000 — .—. 11. Maize 12 3,500 *50 3,500 — .—. 12. Tobacco — 4,000 —• — — 4,000 13. Tea 1 2,000 .— 1,500 250 250 14. Coff"ee 0-2 1,250 — 1,000 100 150 15. Coconut — — |10 — 16. Vegetables 100 30,000 25,000 5,000 17. Livestock 750 (no.) 1,50,000 — 1,25,000 10,000 15,000 18. Dairy Products 10 10,000 — 5,000 1,000 4,000 19. Fish and Fish Products 20 25,000 — 20,000 5,000 — 20. Miscellaneous (Fruit, Tung

Total 8,26,950 6,97,700 80,350 48,900 B. STATE MARKETING 3,20,000 Grand Total 11,46,950

♦Rehabilitation and reclamation of land previously cultivated. fOpening up of new land. |Fuil bearing only after 12 years.

Sindhi cows from Pakistan were imported for the to cultivators. The Directorate made arrangements dairy farm at Insein. This farm has now started necessary for the establishment of the State Agri¬ production. Construction of buddings on the Taung- cultural Bank with branches in four districts. The dwingyi site for the cattle breeding farm has been Bank will issue loans to cultivators in these districts. started. The Corporation has also procured coconut In other districts the Bank wiU provide farmers with seedhngs from Penang and from domestic sources for K3-77 crores in direct loans and Kl-55 crores in planting 300,000 trees. Work was started on pump cooperative loans. The total of government loans to installations required for expansion of onion acreage. agriculturists through various agencies will amount to A Directorate of State Agricultural Credit has been KIO-12 crores. This is more than double the amount estabhshed to coordinate aU government loans made issued in 1951-52. In addition to these loans special AGRICULTURE 139 subsidies of K65,00,000 will be issued for acreage During the year 1952-53, the Bank expects to lend extension. K5 crores in the four districts where branches will be The results of the first year's operation of the opened. The loans wih amount to K28 per acre in Agricultural and Water Resources Development contrast to an average of about K7 per acre issued Corporation have been encouraging. With its small previously through direct government loans and staff the Corporation has managed to expedite the cooperative loans. In addition in the districts with no flow of funds required for financing the priority banks, direct government loans amounting to K3-75 projects in the Five-year Agricultural Development crores and cooperative loans amounting to Kl-55 Plan and to meet most of the goals for the initial year. crores will be issued by the State Agricultural Bank. The Agriculture Department was responsible for In addition K65 lakhs wiU be distributed as acreage execution of most of the projects in the field. Its increase subsidies in connection with the Five-year exceUent cooperation was an important factor in this Plan. This will amount to a total of KlO-7 crores as success. The task was made relatively easy by the compared to estimates by Binns of seasonal loan availabihty of large areas of abandoned land which requirements of KIO crores on the basis of paddy were freed from insurgent disturbances. prices of about one third of the present level. In the areas where the Bank wUl operate it should be in a 3. FINANCING THE FARMER position to provide most of the required short-term A sound credit system for agriculture must be financing, and free cultivators from the usurious rates based on a prosperous and stable agricultural charged on sabape loans. In other areas farmers would population. Sound loans can be made only where receive only a slight increase in per-acre loans. How¬ there is a basis for credit, a reasonable assurance that ever, the increase in money in circulation in the the borrower can repay the loan. This will in large economy resulting from increasing rice exports and measure depend on the borrower's capacity to earn. from increasing development plan expenditures wiU The shortage of credit on reasonable terms has provide considerably increased private credit available forced farmers to borrow at interest rates ranging as for agricultural loans. high as 400 % per annum. Farmers are prevented from In view of the present shortage of administrators adopting improved practices requiring cash outlays and of the cultivators' inadequate understanding of because funds are not available at more reasonable the proper use of credit, it is desirable to start the Bank rates. It is therefore recommended that in addition to on a modest scale and to minimize red tape and the general measures recommended for raising the level need for supervision. On the basis of the experience of incomes in agriculture, a sound system of increased gained in the first years it wiU be possible to improve agricultural credit be made available to farmers. procedures and to open up additional district bran¬ ches. Too ambitious a program in the first year could a. Short-term Credit result in inefficient administration and failure to The Committee on the State Agricultural Bank collect loans when due. made a thorough study of the agricultural credit The principal obstacle to estabhshment of a sound problem in 1948, and presented a report with detailed farm credit system is the faUure of farmers to under¬ recommendations for meeting the seasonal agricul¬ stand the proper use of credit and the absence of tural credit problem. Subsequently, a Directorate of responsible village organizations through which to State Agricultural Credit has been estabhshed. A channel credit. In the past, farmers have tended to State Agricultural Bank with four district branches look upon indebtedness as a normal condhion of hfe. was estabhshed in 1953 with a capital of K5 crores. Money was borrowed not whh the idea of putting it to Under the State Agricultural Bank plan, village productive use to increase incomes, but in order to banks wUl be estabhshed. Each vUlage will elect a meet personal expenses as well as productive costs. village bank committee of four to be headed by the Little thought was given to the necessity of repayment viUage headman. The committee will be responsible with interest until the loans matured. The introduction for disbursing and collecting seasonal agricultural of cooperatives was an attempt to build up respon¬ loans. The State Agricultural Bank will provide sible viUage organizations, but few members under¬ seasonal crop loans through the district branches to stood cooperative principles. Over-expansion of viUage banks at 6 % interest. The viUage bank will lend credit and failure to build up adequate capital to the cultivator at 12%, the difference being used resulted in widespread liquidations of cooperatives to build up the capital of the village bank. Loans will during the depression. be issued to cultivators on a flat per-acre basis until The Bank Committee Report recognizes these such time that village banks become sufficiently well difficuhies and emphasizes the need for insistence estabhshed to balance loans with needs. on prompt repayment of aU loans in order to develop 140 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA greater consciousness of the responsibilities of the distributed by the Agriculture Department. It should borrower. However, this is not enough. An intensive be relatively easy to devise procedures for consohda- program of information and education on the proper ting these loans with the per-acre loans for purposes use of credit, on the need for savings, and on how and of coUection. This would assist the Department in when to borrow should be instituted immediately. obtaining more widespread use of improved methods. Likewise establishment of District Banks should be The increased output which can be expected from use preceded by intensive programs to explain to culti¬ of better methods should enable the cultivator to vators the purposes of the banks, the benefits to be assume the added loan. gained, the responsibihties to be assumed by culti¬ The foUowing measures to meet the problem of vators, and detailed procedures for organization short-term credit are therefore recommended: and operation of the Bank. When extension services (1) An intensive information program to educate have been established, this program should be re¬ farmers in the proper use of credit. oriented to incorporate conditions and features (2) Building up responsibihty at the viUage level by relating to production methods, use of equipment and insisting on adherence to certain minimum financial other factors affecting improved output. standards including contributions to share capital. The village bank should be promoted not only (3) Continuation of the program gradually to as a place to get loans but as an institution belonging establish district branches of the State Agricultural to the viUagers and which wiU provide benefits to just Bank in all districts. that extent to which vUlagers contribute to its success (4) Encouraging repayment of loans in kind where- by prompt repayments and by contributions to ever possible. capital. A financial stake in an organization stimu¬ (5) Establishment of procedures to enable the lates interest. The present plan caUs for a very gradual Agriculture Department to issue improved seed, accumulation of capital by retention of profits in the fertilizer, implements, etc., on credit in conjunction viUage banks. In addhion a program to compel culti¬ with the system of state agricultural credit, and the vators to subscribe to capital at harvest in order to farm extension and demonstration services. quahfy for loans in the succeeding years should be considered. The amounts should be small enough not b. Intermediate and Long-term Credit Requirements to be burdensome. Subscriptions of 5% or 10% of the The principal need for loans of more than one year amount borrowed would keep the total payments (intermediate term) at present is for the purchase of collected from the cultivator well below the prevaihng cattle. Other requirements are for small land develop¬ interest rates. ment projects, and for equipment and improvements Certain minimum financial standards should be of all kinds. An increasing amount of the land established for vUlage banks to insure sound opera¬ improvement work can be handled through Pyidawtha tions. Some of the points which should be covered are grants. There are very few types of farm equipment in establishment of minimum ratios of capitalization current use which cannot be paid out of the proceeds to volume of loans, and to fixed assets, accumulation from one year's production. of minimum reserves, maximum loans to individual A yoke of oxen costs from about K400 to about members, and standards for loan security. Some of K500. The average working life is about five years. these standards cannot be enforced initially but Under normal conditions a cultivator can repay such village banks should be required to estabhsh a pro¬ a loan over a period of three or four years. Death of gram for meeting certain minimum goals each year. cattle is probably the chief cause of unavoidable Unless some such steps are taken many of the viUage indebtedness among farmers. Suggestions for taking banks may be tempted to continue to rely solely care of this problem have varied from government on district banks without building up their local cattle insurance and voluntary savings plans to organization. direct government loans. Measures for reducing The suggestion of the Committee that provisions be cattle diseases and prolonging the working life of the worked out for repayment of loans in kind wherever animals are also important in reducing the size of the possible should also be followed. Such practices are financing problem. The greatest improvement can be famihar to cultivators who are accustomed to repay¬ expected to arise from the development, demonstra¬ ment of sabape loans in kind. Some cooperatives are tion, and training which will be provided by the aheady collecting in kind and report good results not demonstration farms and extension services. only in repayment of loans but in better prices. Government loans for cattie purchases in the past In addition to flat per-acre loans, cultivators have been wholly inadequate in amount and the should be allowed to obtain on credit improved seed, complicated red tape involved has prevented culti¬ fertihzer, implements, machines and other supphes vators from making much use of such loans. AGRICULTURE 141 Security for the loans had to be more substantial than 4. AGRICULTURAL TAXATION for seasonal crop loans since the amounts involved The land revenue tax is the principal direct tax on were greater and there was no guarantee that the agriculture. It has dechned in relative importance as a borrower would continue to cultivate land. With more revenue measure from 1938-39, the immediate prewar stable tenure conditions today, there appears to be year, when it accounted for more than one quarter of less risk than before in that crop liens can be taken in total tax revenues until it now provides less than 5 % addition to the security provided by the cattle. Binns, of tax revenues. This drop is attributable to the facts in his "Agricultural Economy in Burma," suggests a that land revenue rates have not been adjusted upward plan for repayment of cattle loans in equal install¬ with the general increase in price level and that land ments secured by crop mortgages. District branches of revenue is now being coUected from only about half the State Agricultural Bank might advantageously start of the prewar area. insurance of cattle loans on this basis in a few selected Persons engaged in other occupations pay no areas to determine whether such a plan is workable. direct taxes unless incomes are in excess of K2,000. Voluntary cattle-replacement savings programs Most farmers have incomes of less than K2,000 per have been started on a small scale by some of the year but pay land revenue either directly or indirectly. agricultural cooperatives to encourage farmers to Hence, in terms of abUity to pay, farmers bear a finance cattle purchase partially from their own higher proportion of direct taxes than non-farmers. savings, but generaUy there are no facilities for such In addition, the internal price control on paddy can be savings. As soon as village banks become well considered to be a form of indirect taxation which the established, consideration should be given to expand¬ farmer is bearing. Though the unbalance is minor, it ing their functions to receive savings deposits as well is a form of discrimination which is not in keeping as to make loans. with the principles of democratic government. Cattle insurance offers probably the best solution The land revenue tax is a fixed tax per acre based on in the long run since it would spread the cost of cattle the theoretical net return from the land. In prewar replacement over the average working hfe of the days these rates were determined on the basis of animal and would protect cultivators against un¬ detailed land settlement surveys conducted about expected losses through epidemics. However, before every 20 years in each district. Rates of assess¬ instituting any system of cattle insurance a thorough ment varied considerably from district to district study should be made. Accurate statistics on number since settlements were not carried out simultaneously and causes of deaths by district wiU be needed to and the rate varied with the level of prices and the determine risk and premium rates. The question of the need for revenue at the time of the settlement. basis for participation will have to be decided. Although effort was made to keep rates somewhat Compulsory participation may be required in order to consistent with neighboring districts there was no avoid problems of adverse selectivity, i.e., greater systematic effort toward uniformity of assessments for participation in high risk areas with consequent all Burma. higher premium rates. On the other hand in view of the Present land revenue rates are based on settlement Government's policy of keeping down the price of surveys extending from 1913 to 1940. During this paddy, it may be desirable to keep insurance on a time the price of rice varied from a low of K52 per voluntary basis with partial government subsidization 100 baskets to K262 per 100 baskets as compared to of premium charges. the present price of K300 per 100 baskets in Rangoon. With land nationahzation, the need for funds to As a result land revenue rates no longer reflect differ¬ purchase land, which elsewhere is the principal need ences in actual net returns from the land. So long as for really long-term credit in agriculture, will be the rates are at present levels this inequity in distribu¬ eliminated. At the same time the principal security tion of tax burden is not serious. When land is for long-term agricultural loans and mortgages on distributed under the land nationalization program it land will also be eliminated. Other requirements for will be possible to adjust revenue rates to correct long-term loans have been consohdation of accumu¬ major discrepancies without carrying through a lated shorter-term borrowings, sickness, ceremonies complete new series of settlement surveys. and "faUure of agricultural income." Improvements in The land revenue tax with its infrequent rate short-term financing will do much to take care of the adjustments is very inelastic in its revenue yields. problem of debt consolidation and "faUure of Before the war this resulted in heavy burdens on the agricultural income" since heavy interest charges farmer during periods of low prices and provided v^^ere probably the principal cause of accumulated Government with inadequate revenues in periods of indebtedness. The problem of long-term credit is not high prices. Tax revenues which faU or rise faster than therefore now a pressing one. prices are fiscally desirable. However, as long as 142 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA land revenue rates are low and land revenue is a Studies made by the prewar Marketing Section of minor source of tax revenue it wiU not create any the Department of Agriculture disclosed that the serious pressures for the farmer or interfere with the cultivator was not getting the full share of the price of Government's fiscal policy. Land revenues should his products in the central market because of his poor be increased only when persons in income brackets bargaining position, the lack of organized local comparable to that of the cultivator are also subject markets, and the lack of uniform standards of weights, to direct taxes. measures and grades. Even in the case of paddy The complex method of establishing land revenue where the market mechanism is most developed, through land settlement operations has been quite the discrepancies in prices paid in different markets costly in terms of the revenues derived from the tax. were in excess of the freight and handling charges Prewar the costs of administration amounted to about involved in hnking various markets. For other crops 10% of land revenue. Postwar the percentage has there were much greater discrepancies, and for many ranged from 59 to 174. With less emphasis on the land- crops there was no semblance of organized marketing, revenue tax the complicated settlement operations of even on a local scale. the past wiU no longer be necessary. Once initial The postwar situation is similar. Activities of the adjustments are made at the time of land nationali¬ SAMB and cooperative organizations have improved zation, rates need not be changed except as major marketing practices to some extent in areas where they changes in land use or land productivity occur or as are operating. However, disruption of communica¬ discrepancies are reported. tion and transportation and the general insecurity The job of maintaining land records should be in rural areas have made marketing conditions taken over by the agency managing state-owned lands worse than before the war in many parts of the under the land nationalization program. The records country. Much of the crop is still transferred to shop¬ should be primarily for the purpose of distributing keepers, money-lenders, brokers and landlords at the tenancies and maintaining title records on owner- threshing-floor in settlement of existing debts. cultivator land. Farmers seU the remainder of their crop to jungle Collection of crop statistics should be separated brokers or in some instances to cooperatives which from the tax collection function and established under take the produce from the viUage to primary assembly an independent agency. Statistics collected for tax points, whence it is shipped by boat or rad to the purposes usually show a downward bias since the mills in Rangoon and other port cities. farmer is anxious to conceal production in order to pay lower taxes. For crop estimating purposes it is b. Marketing Standards not necessary to have detailed data at the Kwin level. The system of grading is very rough. Different With modern statistical sampling methods it will be qualities are often mixed together at the primary possible to get accurate estimates of crop production assembly stage. Even in lower Burma where paddy is with a relatively small staff and at relatively low cost. an export crop, consignments of pure varieties can As functions of local government are expanded only be obtained from special areas devoted to parti¬ under the Pyidawtha plan consideration should be cular types. Most paddy is purchased as fah average given to making the land-revenue tax a source of quahty of a certain type, and buyers often make local government revenue. weight adjustments for inferior paddy but not for better grades. These adjustments are often arbitrary, 5. MARKETING THE CROP and the cultivator is tempted to adulterate his products as much as possible. This of course leads to further a. Farmers' Handicaps weight cuts on the part of the buyer. These factors add The position of the farmer as a small producer to the cost of marketing by necessitating more rigid engaged primarily in the production of crops and only inspection at each level. They also force buyers to try intermittently concerned with selling his product to protect themselves against adulteration by paying places him at a disadvantage in his dealings with as low a price as possible. The cultivator, who is in a traders who are engaged fuU time in buying and selling. poor bargaining position, generally has no recourse, This has led in other countries to government efforts even if the quality reduction is unfair, and he receives to assist farmers in getting better prices for theh a low price. crops. These include formation of farmers' coopera¬ There are no uniform standards of weights and tives, standardization of grades, adoption of uniform measures. The standard basket of paddy has a capacity weights and measures, provisions for furnishing of 9 gallons and a standard weight of 46 pounds. market information to farmers and price stabUization Variations from this standard are the rule for almost pohcies. all transactions outside Rangoon. The standard AGRICULTURE 143 basket for groundnuts which is 25 pounds in Rangoon markets and know by experience the prices they can ranges as high as 44 pounds in some districts. Buyers, afford to pay to the farmer in relation to prevading particularly at the primary collection centers, tend to prices in other markets. The farmer is, however, use large-size baskets or faulty scales. A check of 154 ignorant of conditions outside his village. For this beam balances by the Marketing Section of the reason, substantial changes in prices are necessary to Agricultural Department in 1940 showed that farmers effect changes in production. As market standards were being short-weighed from 3% to 11%. Even improve, prices in different markets wiU become more where standard-sized baskets are used, the method of uniform, and differences in prices between crops will measuring can result in more or less paddy per basket. assume increasing importance as a factor in deter¬ This lack of standards tends to make the operation of mining which crops are to be planted. normal market forces weak, and transactions tend to For the future, the Government should consider become personal. the establishment of a market outiook service to Paddy, groundnuts, sesamum, some of the pulses, provide farmers with accurate information on current cotton and sugar can have relatively well-developed and expected prices, timely forecasts of crop acreage markets in the producing centers, but these are not and yield, and implications of these trends on the effectively hnked with central markets as a result of farmer's production plans. The prewar Marketing the differences in standards. Other crops are generaUy Section started some basic work in its surveys which sold by the farmer in small quantities to brokers at dealt primarily with current and past trends and the vUlage or at local bazaars which are held about descriptions of the marketing mechanism. This work once every five days. Local merchants and itinerant should be resumed and eventually, as competent traders gather at these bazaars to purchase farm personnel become avaUable, increasing emphasis products. The lack of standard quahties and the use of should be placed on outlook analysis. The Depart¬ inaccurate weights and measures are even more ment of Agriculture even now collects prices of pronounced for these other crops, and the markets principal agricultural crops from various district more poorly organized. The higher trading risks headquarters. These could be used to prepare which result are usuaUy borne by the farmer in lower periodic buUetins to extension workers. This in¬ prices for his crops. formation, as well as the resuhs of any marketing Uniform standards of weights, measures and grades studies which may be undertaken, should be widely wiU provide the basis for more accurate price quo¬ disseminated to farmers through the extension and tations, facihtate trading between distant markets, information services. Market information wiU be and enable the farmer to get the full market price for usefid to the farmer not only in getting the fuU his crops. The prewar Marketing Section of the market value for his crops but also in planting crops Department of Agriculture started some very useful which wiU bring him the best returns. work toward standardization in distributing standard baskets, inspecting weights and measures and c. Price Policy estabhshing regulated markets. The work has been In a normal free marketing situation, production is discontinued since the war, however, and steps should responsive to prices. Where it controls prices the Gov¬ be taken to reinstitute this work. The local Pyidawtha ernment can fix them at levels consistent with econo¬ committees and agricultural cooperatives can serve mic objectives, but effectiveness is limited by abihty to a very useful function in assisting the Government in control the market. The Government has been able carrying through such a program. However, as the to carry out its paddy price pohcy because it buys and estabUshment and maintenance of proper standards sells sufficient quantities of paddy and rice to domin¬ of weights and measures affect the entire productive ate the market. Where the Government purchases do and scientific economy, and as they require scientific not dominate the market, price pohcy cannot be laboratory and research facihties, it is recommended enforced effectively without resorting to direct that responsibUity for the broad development, testing, distribution controls. and regulation of standards be legislatively assigned Pricing programs should therefore be limited to to a central scientific organization, with enforcement those crops for which the Government is prepared to vested in various interested agencies such as the enter the market. For certain new crops which the Ministry of Agriculture and the Ministry of Industry. Government is trying to establish it may be desirable Another consequence of the present marketing to offer incentive prices above the market. For exam¬ situation is that differences in prices between different ple, the production of long stapled cotton is at present markets or even within the same local market are very hmited, and the Government could afford to often greater than for different crops. At present, purchase total production at a premium in order to local traders and brokers keep in touch with other persuade more farmers to substitute the improved 144 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA varieties for the short stapled cotton which they are and create seasonal employment opportunities. For now growing. Likewise the Government could pay a example, small oU expellers have about 40 times the premium for jute. The premium prices should not be capacity of a single Hsizon (bullock-powered crusher), allowed to become a permanent subsidy program but and extract a much higher percentage of the oil. rather a temporary program to get enough produc¬ SmaU sugar factories requiring relatively little invest¬ tion to judge whether the crops can be economically ment can greatly increase the income from sugar cane grown. as compared to the primitive methods of making kyanthagar. Small cooperative flue curing barns have d. Cooperatives substantially increased returns from Virginia tobacco Farm cooperatives can play a significant role in to growers in the Mandalay area. Cooperative ginning improving the marketing of agricultural crops. of cotton and mUling of rice are other possibihties. Through cooperative effort farmers who individually Many cooperatives have already been estabhshed in have a poor basis for credit can collectively obtain Burma. The total in 1952 was over 12,000. That their loans. Many of the functions now performed by success has been hmited is attributed to lack of the middleman and others can be taken over by technical and management skills and to lack of farmers' cooperatives. For example, where it would coordinated effort to develop the needed skills and not pay an individual farmer to take his own produce understanding. to the primary assembling point a number of farmers The problem of establishing independent cooper¬ joined together in a cooperative could hire a boat to atives is largely one of mass education of farmers in take the produce to the market. Cooperatives can these matters. Sound cooperatives cannot be estab¬ keep in closer touch with various markets; can build lished through fiat. The basic groundwork must be cooperative facihties for storage, threshing and there, and work must be started immediately to simple processing; and, by deahng in larger quantities, provide it. An expanded agricultural education and can insist on adherence to standards of grades, information program should be carried through to weights and measures. provide the means for a determined effort to educate Multi-purpose cooperatives are fairly complex the farmers in the principles of cooperatives. business organizations requiring skilled management for successful operation. The postwar experience of 6. THE STATE AGRICULTURAL MARKETING BOARD many Japanese cooperatives indicates that the fewer The State Agricultural Marketing Board was the functions of a cooperative the greater the hke- established in 1946 as a pubhc monopoly to control hhood of success. Too ambitious a program in the all exports of rice. The original purpose was to initial phases tends to overburden the management eliminate the monopohstic position which large and results in inefficiency. Cooperatives can serve a foreign-owned miUs held in the prewar rice export useful function by providing a channel for government market, and to keep rice export profits within Burma. loans, for farmer savings, and group purchase of The subsequent rise in the world price of rice to¬ essential production supphes as well as for marketing gether with the policy of holding domestic paddy of crops. As the cooperative grows and its financial prices constant has since made the SAMB the position improves, steps can be taken to add new principal source of government revenues. Although functions as demanded by the membership. cultivators have not received direct benefits from the Cooperative storage facihties can add to the income favorable export prices of rice, they have been guaran¬ of farmers by enabhng them to hold stocks in periods teed a minimum price for paddy. The profits from of low prices for sale later at higher prices. With rice exports permit the Government to make current proper storage facihties the State Agricultural Bank and capital expenditures which wiU increase incomes or other credit institutions could extend credit on the and living standards and provide the people with security of the stored crop and relieve farmers of the services which would otherwise not be available. necessity for immediate sales. Bulk handling and The Government makes export aUocations by storage also wiU permit larger-scale sales direct to country of destination. About two thirds of each processors. Joint storage would reduce storage losses government's aUocation has been sold directly to the since better buddings and conservation methods buying government by the State Agricultural Market¬ could be used. ing Board. For the remaining third, SAMB has Establishment of cooperative processing facilities at received tenders from private domestic concerns for the viUage level would permit more efficient process¬ rice for export to specific countries. The domestic ing of crops now processed by individual farmers concern usually operates as an agent for a foreign using primitive methods, increase or stabilize income importing concern or for the foreign government from crops which require nearby processing facUities, itseff. 200

ISO

z o

tl. o 100 o z < o X

JAN. FEB. MAR. APR. MAY JUN. JUL. AUG. SEP. OCT NOV. DEC. MONTHLY RICE EXPORTS

MINISTRY OF NATIONAL PLANNING

MONTHLY RICE EXPORTS

KNAPPEN TIPPETTS ABBETT ENGINEERING CO. NEW YORK RANGOON DR. BY DATE PLATE CK. BY JULY 53 NO. 145 R.B.—10 146 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA Government-to-government prices were £50 per ton required port facUities which remained idle during the during the first half of 1952 and £55 during the last rest of the year. As also recommended in Chapter XII, half and have been £60 so far in 1953. Quantities storage facilities secure against insects, rodents and offered for private tender during the autumn and other spoilage should be constructed and bulk hand¬ winter of 1952 were accepted at prices running as high hng facilities installed so that the Government wiU be as £85 per ton for Small Mills Special. Prices offered able to store sufficient rice to spread its shipments over in 1953 are markedly lower. During January-May, the a longer period and to take advantage of short-term Government had invited private tenders on about fluctuations in the rice market. While there was no 275,000 tons but had accepted the tenders on only reason for private shippers before the war to adjust about one third of this amount. The prices paid, their shipping dates to lessen peak port requirements, however, were still well above the government-lo- it is advantageous for the Government to do so. The government price, and £10 to £15 above the prices need for improved storage facilities if this policy is during the same period last year. to be followed must be emphasized. Otherwise, Price prospects are of great importance to the quality deterioration in storage could cause an Government. increasingly serious sales problem in future years. Increases in world rice production since before the It is recommended that the Government explore the war have been much less than increased needs possibility of arranging for trade agreements for the resulting from population increases in rice-consuming sale of rice. These agreements, if they are to be areas, and are not hkely to overtake them in the advantageous, should extend over a relatively long foreseeable future, according to studies by the Food period. Such agreements would specify minimum Agricultural Organization of the United Nations and amounts which would be exported by Burma at an by the United States Department of Agriculture. agreed price (if world prices should rise above this Increases in productivity in rice production in Asia level) and minimum amounts which the importing can bring great increases in output, but they will country would accept at an agreed price (if world come only very graduaUy, and are likely to be offset by prices fall below this level). increased consumption of rice. It is safe to assume that Continued effort should be made to improve the during the remainder of this decade export prices for quahty of Burma rice. With improved availabilities of Burma's rice wiU remain well above their prewar rice Burma will have more and more difficulty in relationship to prices of Burma's imports. However, a disposing of poor-quality rice. Measures for encourag¬ level or faUing price trend seems more probable than a ing use of improved seed and for estabhshing uniform return to 1952 peaks, and price and marketing standards of grading should be adopted. Improve¬ policies of the State Agricultural Marketing Board ments in rice miUing and storage facihties are also should be adjusted—and indeed have already been important. adjusted to this expectation. During the period of sharply rising prices in 1951 7. GOVERNMENT ORGANIZATION FOR and 1952, the Government followed a policy of hold¬ AGRICULTURE ing off export aUocations. (Plate 5 shows the monthly a. The Ministries pattern of shipments during the period 1950-53.) At present, governmental functions relating to The motivation was not necessarily anticipation of agriculture are performed by four different ministries rising prices; in part at least it was required because of (see Plate 6). The Ministry of Land Nationalization the uncertainty of supplies of rice. In any case, the and that of Agriculture and Forests are the two policy resulted in maximizing foreign exchange principal ones involved. The Ministry of Land earnings. However, now that the period of rapidly Nationalization was created in 1952 to bring together increasing export prices has ended, and the prob- functions which relate to the Land Nationalization abdity seems strong of no further rise (except possibly Program in an effort to expedhe implementation of temporarily as the result of an unusually short world the Government's policies. Its functions include, in rice crop), SAMB should sell rice more expeditiously addition to planning and execution of the land in order to maximize sales at current favorable prices nationalization program, estabhshment and super¬ and hold existing markets. vision of State colonies, surveys (topographical, Earher shipment would relieve the problem of rice cadastral, map printing and mine surveys), "settle¬ storage at port cities, which is especially acute this ment" (determination of land-revenue tax rates) and year. However, earlier sale need not mean return to land records and crop reporting. the seasonal shipping peak which was typical before The Ministry of Agricuhure and Forests is respon¬ the war. The prewar pattern of concentrating rice sible for agricultural extension and research, vet¬ shipments in the months before the monsoons erinary affairs, State credit, irrigation, tenancy PLATE NO. 6 GOVERNMENT AGENCIES CONCERNED WITH AGRICULTURE

Ministry of Cooperation Ministry of Ministry of Agriculture Ministry of Land & Commodity Distribution Commerce & Forests Nationalization

Financial Commissioner Lands & Rural Development'

State Agricultural Sugar Control State Timber Agricultural & Water Marketing Board Board Board Resources Dev. Corp.

Production, distri¬ Mechanized Farming Board, bution and price of Agricultural and Rural sugar and sugar-cane. Development Five Year Plan.

Settlements and Cooperative State Agricultural Irrigation Veterinary Agricultural State Colonies Registration Land National¬ Fishery Department Survey Department Land Records Societies Credit Department Department Department Department Forestry Department Department Department ization Department Department Department

(a) Education. (a) Rural Credit. (a) Irrigation & (a) Veterinary, (a) Agricultural (a) Fisheries. (a) Forest and (o) Supervision and (o) Topographical (a) Classification (o) Registration of (a) Nationalization (b) Organization. (b) State Agri¬ Irrigation including research. Timber reha¬ control of Survey. of lands and Documents. of agricultural (c) Commodity cultural Bank. Canals Drainage improvement of (b) Agricultural bilitation, tenancy. Co¬ (b) Cadastral Survey. fixing land lands in Distribution. (c) Agricultural and Embankments. stock and pre¬ extension. including all partnership Co¬ (c) Map Printing. revenue rates. accordance with (d) Marketing. Indebtedness (b) Navigation vention of (c) Services (dis¬ buildings and operative (d) Mine Survey. (b) Compilation of the Land Nation¬ (e) Fishery. and Debt Con¬ Canals. animal diseases. tribution of works. Societies. statistics of alization Act (f) Economic. ciliation. Veterinary supplies, (b) Zoological survey. (b) Supervision and seasons and of 1948. (g) State Colonies. (d) Money Lending training and custom (c) Protection of control of crops of Burma. (b) Distribution of and Money¬ practice. plov^ing). v/ild birds and Government (c) Assessment of such lands among lenders. wild animals. estates. land revenue. the agricul¬ (e) Land Improve¬ (c) Collection of turists in ment Loans. land revenue accordance with and issue of the Land agricultural Nationalization loans to culti¬ Act of 1948. vators in the (c) Implementation areas concerned. of Land Nation¬ (d) Supervision and alization control of schemes. Cooperative Banking and Marketing Union.

'The Financial Commissioner (Lands & Rural Development) Is responsible for all fiscal and financial matters relating to land and rural development. Department heads report to him on matters relating to taxes.

AGRICULTURE 147 controls, farm labor, and fisheries and forests. The agricultural functions be brought together under one Cooperative Societies Department of the Ministry of Ministry. In bringing them together, it will be Cooperation and Commodity Distribution is respon¬ desirable to reallocate functions in order to eliminate sible for registration, audit and development of duplication and overlapping in so far as it is possible. cooperatives, rural as well as urban. The Financial It should also be possible to consolidate field staffs to Commissioner (Land and Rural Development), who some extent and to reduce overhead costs involved has a number of responsibilities relating to govern¬ in maintaining separate estabhshments. A tentative ment revenues from agriculture, usually acts with the plan for reorganization of agricultural agencies is approval of the Ministry of Agricuhure and Forests. presented in the succeeding paragraphs (see Plate 7). The recently established Agriculture and Water Resources Development Corporation, which is re¬ b. Minister's Staff sponsible for planning and financing of agricultural The staff of the Secretariat of the Ministry should projects under the Pyidawtha Plan, is under a Board be greatly strengthened to provide a small group of of Directors including representatives of aU of the experienced agriculturists of administrative caliber principal agricultural agencies. The State Agricuhural to plan and expedite an integrated program. The Marketing Board is an autonomous board which is Secretary should be assisted by a joint secretary for under the Ministry of Commerce. planning, who would head up the planning staff and Below the cabinet level, coordination of the pohcies the Agriculture and Water Resources Development of these agencies depends primarily on the initiative Corporation. The Ministry would also have deputy and imagination of persons in responsible positions. secretaries for administration, land nationalization, WhUe a number of inter-ministerial boards and and Pyidawtha, and assistant secretaries for infor¬ committees exist, they meet infrequently and have no mation, forestry and fisheries who will work with the permanent staff to provide continuing attention to the planning staff on problems relating to their respective problems of coordination. Furthermore the individual fields (see Plate 8). members of these bodies are typically overburdened The planning staff would keep in close touch with with responsibihties relating to their own programs the progress of all agricultural programs and advise and are members of so many committees that they the Minister on the formulation and execution of cannot devote the time or the energy required for broad agricultural policies. It would see that the effective integration. Consequently there is sub¬ various measures are consistent with over-all policies stantial duplication and overlapping of functions. and would assist the minister in allocating respon¬ For example, farm cooperatives are being planned sibilities to specific agencies. It would be expected to separately in two ministries, as are means for increas¬ provide a continuing appraisal of the programs in the ing the use of machinery in agriculture. Field staffs light of changing conditions. It would play a key role are now maintained separately by the Agriculture in determining priorities in the formulation of the Department, the Irrigation Department, the Ministry budget. of Land Nationahzation, the Commissioner of The planning unit would also coordinate the work Settlements and Land Records, the Cooperative of the departments so that they keep to the planning Department, and the State Agricultural Marketing body's program. It will take projects from various Board. departments and boards and fit them together into a There is also faUure to achieve a consistent coherent consistent and well-balanced program. There must be program for meeting over-all goals. Integrated close cooperation between this small unit of very planning in agriculture will make it possible to capable personnel and the entire ministry. schedule specific measures to achieve over-all goals and maximum benefits. Individual measures carried c. Agricultural Information Service out in isolation seldom yield as much benefit as an The officer-in-charge of information should have a integrated program in which various measures technical knowledge of agriculture. A fair for writing reinforce and sustain each other. Provision of farm and enthusiasm for development should also be credit on reasonable terms will increase production major assets. The most suhable person would, of but wiU be even more effective ff accompanied by course, be one who is in the agricultural service with technical advice on improved methods. Benefits from experience in journalism. Such talent is available in tenancy reforms wiU similarly be less hkely to be the department. Timely information is important, dissipated if credit on reasonable terms is available accessibUity to documents and direct relationship and farmers are taught proper methods. with aU departments is also desirable. This officer In order to achieve proper integration of agri¬ should be an assistant secretary and his unit should cultural pohcies it is recommended that the principal therefore be in the secretary's office. Funds should be PLATE NO. 7

PROPOSED GOVERNMENT AGENCIES CONCERNED WITH AGRICULTURE

Minisliy of Agriciiitiire

Stale Timber Agricultural Boaid Development Corporation

Agriculture Veterinary State Fisheries Forestry Cooperative Statistics Land Department Department Agricultural Department Department Societies Department Nationalization Credit Department Department

Agricultural Veterinary State Education Crop Land research including Agricultural Irrigation reporting nationalization improvement Bank Department Organization Agricultural of stock and Economic Land tenure extension prevention Rural credit, Commodity statistics controls of disease agricultural Application of distribution Services indebtedness water to Land records (Custom Inspection land Marketing plowing, of livestock Money-lending State colonies distribution products and money¬ Relations with Fisheries of supplies) lenders water users

Deliveries and maintenance

148 PLATE NO. 8 PROPOSED ORGANIZATION OF SECRETARIAT OF MINISTRY OF AGRICULTURE

Minister

Parliamentary Private Secretary Secretary

Executive Joint Secretary Planning Secretary (Planning) Staff

Assistant Assistant Secretary Secretary Administrative Information Services

Library Personnel Supplies Correspondence Miscellaneous Control Services

Deputy Secretary Deputy Secretary or Secretary or Secretary (Operations) (Land Nationalization)

Departments other than Land Nationalization Land Nationalization Department

149 150 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA aUocated to the preparation of information and f. Expansion of Agriculture Department technical bulletins, to the publication of a popular The Agriculture Department should be greatly periodical, and to the preparation of occasional expanded along the lines discussed later in this special exhibits and exhibiting equipment. chapter in the section on extension and research. The Acceptance of and participation in the program by Department should also assume responsibihties in the farmers is of utmost importance if the Ministry's relation to the mechanization proposals such as program is to be successful. Automatic response and establishment of the machine and tractor equipment concerted effort cannot be expected from the multitude pools and state farms which now form part of the of farmers. Hence information on the various aspects ten-year plan for land nationahzation. It should also of the program must constantly reach the farmers. supervise the establishment of model demonstration This information should stress things of interest to the farms with a view toward integrating aU of these farmer. The language must be simple and pictures proposals into the system of central farms, district must make the simple obvious. Useful pamphlets are farms, and major and minor seed farms for which the published by the Department of Agriculture. They Department is now responsible. In addition the should be revised, brought up to date technically, Department should re-estabhsh the prewar Marketing and put into language understandable to the farmer. Section to carry on work on standardization of grades, In addition, simple explanations of the regulations on weights and measures. land tenure, the land nationalization program, the government loan program, marketing information, as g. Irrigation Engineering well as every other facet of the agricultural develop¬ The engineering functions of the Irrigation Depart¬ ment program, should be widely disseminated. A farm ment should be transferred to a ministry in which magazine should also be published. Initially it should other major engineering works are being performed. be issued whenever enough material has been gathered. Preferably this should be the proposed new Ministry The printed material is only one of the means of of Engineering Services; otherwise the function should educating the farmer. Audio-visual aids should be be joined with hydro-and steam-electric organizations. used wherever possible. The Irrigation Department of the Ministry of Agri¬ culture should retain responsibility for operation d. Library and maintenance of irrigation projects, for super¬ vision of application of water to the land, and for Another unit needed is a central ministerial hbrary relations with water users. with a qualified librarian. Most departments have libraries of their own and there is the secretariat h. The New Cooperative Societies Department library, but access to these is difficult and books are The Cooperative Societies Department is now not properly catalogued. A central hbrary for agri¬ under the Ministry of Cooperation and Commodity culture with a qualified hbrarian can keep the Distribution, and handles urban consumer and ministry staff informed on new additions to the producer cooperatives as well as agricultural co¬ library and provide a central location for keeping operatives. The development of agricultural coopera¬ agricultural publications. tives is, however, so intimately related to improve¬ ments in rural credit, marketing and processing that e. New Department for Land Nationalization a Cooperative Department should be established under the Ministry of Agriculture. This Department Land nationalization is of such basic importance should take over the cooperative program now being that a separate department should be established in planned by the Ministry of Land Nationalization as the new ministry and a post of deputy secretary for well as the agricultural cooperative program of the land nationalization should be established at the present Cooperative Department. secretariat level. All of the present agencies under the present Land Nationahzation Ministry should be i. Other Departments and Offices transferred to this new department with the exception The State Agricultural Credit Department, the of the crop-reporting function of Commissioner of Veterinary Department, the Fisheries Department, Settlement and Land Records, which should be under and the Forests Department should continue in the proposed Statistics Department, and other their present functions. The Veterinary Department functions which are now being performed by other should work in close cooperation with the Agriculture existing agencies. In addition it should take over Department in developing better animal husbandry responsibilities for enforcement of rent controls and practices. It should eventually add to its respon- tenancy disposal which are now under the Ministry sibiUties the work of inspection and certification of of Agriculture and Forests. livestock products. AGRICULTURE 151 The Agricultural and Water Resources Develop¬ Burmese agriculture. The intensification of present ment Corporation now provides funds for financing cuhivation is discussed with consideration given to the Five-year Agricuhural Development Plan and is what cultivators would probably do instead of what responsible for coordinating aU activities relating to they could do to improve their farming operation. it The proposed planning staff should take over most Intensification of cultivation is considered both for of the planning functions now assigned to the Cor¬ those practices that are possible under present poration and the Corporation should be responsible methods and for those that would be possible under for providing funds as heretofore. The Corporation more advanced farming methods. Reservoir irrigation, should be directly under the joint secretary for plan¬ impounding large volumes of water, as distinct from ning, who would also be head of the planning staff. stream diversion systems, is suggested as a means of The State Agricultural Marketing Board is now increasing production and is discussed in relation to under the Ministry of Commerce. Although legisla¬ farming methods employed. It is proposed that tion was passed in 1950 which will make it an inde¬ demonstration farms be established and that exten¬ pendent board responsible to the President, it has sion services be expanded in order to point the way not been put into effect. A board responsible for of future agricultural development using modern marketing agricultural commodities abroad would methods. In the long-range view research is essential normaUy be under the Agriculture Ministry or the to increased agricultural production. Areas of specific Commerce Department. However, in view of the deficiency are indicated. Lastly, mention is made of importance of SAMB and the tremendous importance the restoration of abandoned land. of rice both as the basic food in Burma and a major source of incomes for cultivators, the SAMB should be 1. INTENSIFICATION OF CULTIVATION an independent board directly under the President. The Intensification of agriculture is considered to be composition of the board should be altered to provide potentially the most important means of increasing adequate representation of all agencies concerned. agricultural production because, in its various forms Field staffs are now maintained separately by the of application, it can be applied to all cultivated Agriculture Department, the Irrigation Department, areas. The direction and degree of intensification is the Ministry of Land Nationalization, Commis¬ dictated by need as weU as by the natural resources sioner for Settlements and Land Records, the upon which it would be apphed. The need of the Co-operative Department, and State Agricultural cultivator, although indirectly tied to the needs of the Marketing Board. More efficient operation would be nation, is usually concerned with basic requirements, possible if services and facihties such as transporta¬ particularly food. The nation needs rice exports to tion, housing, clerical and administrative staff were support her Pyidawtha (social welfare) program. The provided on a common basis. In addition to lower achievement of increased production by intensifica¬ overhead costs it would facUitate coordination tion of cuhivation rests with the cultivator. between the various officers. Under the Pyidawtha plan field officers from various departments are a. Under Present Farming Methods expected to work together in District and Township (1) The Use of Fertilizer Pyidawtha committees. Consolidation of office With present farming methods, the intensification facihties would carry this one step further. of cultivation is more likely to result from new The post of Financial Commissioner (Land and approaches to the old problem than from renewed Rural Development) should be abohshed. The efforts along relatively unsuccessful past methods. position is an anachronism remaining from the The use of chemical fertihzer is an example. This colonial days when collection of land revenue was might succeed where other methods fad because of its considered to be the principal government function in low labor effort and positive, sometimes dramatic, agriculture. The changeover to the philosophy that resuhs. Before the war fertihzers, with few exceptions, the Government should provide services to the farmer were too expensive to use, and the variety of their means that the importance of revenue collection combination was not so diverse or their preparation from farmers no longer justifies the services of the top so complete as at the present time. Today almost any civil servant in the agricultural field. Instead, the fertilizer combination can be had, such as peUeted to secretary of the new ministry should be given a rank facihtate spreading and storage, or with trace element equivalent to that of Financial Commissioner. compounds for correction of specific deficiencies. More important perhaps is the degree of concentra¬ D. INCREASE OF AGRICULTURAL PRODUCTION tion and low cost of present chemical fertilizers. The several measures for increasing agricultural Their use does not require strenuous effort. They have production suggested in this Report are new to never enjoyed widespread use in Burma, and their 152 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA novelty would be a psychological advantage.Further- the possible apphcations of chemical fertihzers on more the use of chemical fertihzers would be a short- crops indigenous to Burma. The fertihzer requhe- term investment with immediate returns. Theh ments for particular crops, indicated in the table, wUl effectiveness would be hmited by a general ignorance vary with the nutrient condition of the soil. of their value and of theh apphcation, but demon¬ Row crops are often benefited considerably by strations would be easier than for many other side-dressing fertilizers as the crops grow. The practice methods of intensification. is hmited to a mechanized operation. Placement can Chendcal fertilizers offer the greatest benefit at the significantly influence the utilization of fertilizers, and least cost for most crops. The maximum economic mechanization affords the best means of varying such return comes with the first 50 or 100 pounds applied placement. per acre. Without machinery it is extremely difficult The diversity in the requirements for different crops to distribute properly small amounts of fertiUzer per and the varieties of the sod types upon which they acre. Therefore aU fertilizer estimates are made for the are grown deny a detailed discussion of relative application of 100 pounds per acre. benefits from fertilizer application. A discussion of Experiments in the use of chemical fertihzers have rice production and the use of fertilizer wiU serve as been conducted in several areas in Burma. These an example. Chemical fertilization of rice has not been tests, carried out during the past 25 years, demon¬ completely tested in Burma. The evidence avaUable strated favorable responses in most crops, and indicates that, in general, the application of 100 covered the use of many chemical fertilizers com¬ pounds per acre of a 20-20-0 fertilizer wiU increase mercially available today. Table VIII-8 summarizes rice yields an approximate 20 % to 30 %. The method of apphcation, the type of fertilizer, the time of apph¬ TABLE VIII - 8 cation and evenness of distribution aU enter into the FERTILIZER RECOMMENDATIONS ultimate results on any plot of soil. Very great differences may be expected in yield and, in extreme Crop Fertilizer Application Remarks cases, harmful or disastrous results can occur by overdosage or improper apphcation. The use of Gramineous Sulphate of 100 Ibs./acre Continued use Paddy ammonia broadcast or lowers soil pH chemical fertilizers seems to offer the quickest drilled with consequent increase potential in rice production that is readUy ±20% complications. adaptable to present agricultural methods. The The crop may lodge relationship between the increase in rice production 50% Ammon¬ 100 Ibs./acre Low-concentrate from fertihzer and cost is discussed in Paragraph ium sulphate fertilizers expen¬ D-6-b of this chapter. 50% Super¬ 100 Ibs./acre sive due to freight phosphate drilled or and handling d=20% broadcast costs (2) Partial Mechanization Another means of intensffying ctdtivation without Ammonium 100 Ibs./acre Best effect per unit phosphate broadcast or of cost instituting radical changes in cultivation methods is 20-20-0 drUled partial mechaiuzation of the sod preparation and harvesting operations. Experience in Burma has Sugar Cane Sulphate of 100 Ibs./acre Solubility favorable ammonia broadcast or demonstrated that custom plowing during the dry ±20% side-dressed season is possible under restricted conditions. Although mechanical equipment cannot efficiently Ammonium 100 Ibs./acre Best effect per unit phosphate broadcast or of cost if soil operate on small plots, given an area of ten or more 20-20-0 side-dressed phosphorus defi¬ acres without bunds, mechanical plowing can prepare cient the soil faster and cheaper than primitive methods, Nitrate of 100 Ibs./acre Solubility unfavor¬ and do it much better. If such ten-acre plots are soda broadcast or able sufficiently numerous, a custom plowing center ±20% side-dressed would be feasible. An example for consideration Dicotyle- Complete 100 Ibs./acre Best effect per unit would be a plowing center employing five FarmaU denous ammonium broadcast, of cost Super MD tractors. A uiut of this size would justify Cotton phosphate drilled or 17-^5-0 side-dressed the establishment of a small service and repah shop to insure proper maintenance of equipment. From Table VIII-9 (seep. 154) it is calculated that custom plowing costs approximately K4-00 per acre without consideration given to the movement of machinery and equipment from one field to another, or the cost of AGRICULTURE 153 a mobile shop. Assuming that 10 % of aU time worked ton of manure per acre is used on the land. This quan¬ is so consumed, and the cost of a mobUe maintenance tity has a beneficial effect amounting to an increased unit is KM9/acre, the resultant cost per acre for yield of less than 5%. The use of manure involves a mechanical plowing is approximately K5-19. This discouraging labor effort. The result is that the value figure embraces all costs, as listed in Table VIII-9. A of manure is limited and its use not fully exploited, calculation of cost for plowing the same area with although probably well known. In Europe the degree oxen, during the beginning of the wet season, under of utilization of animal manures is very high, and unpleasant conditions and doing an inferior job special attention is gi\en to its coUection and storage. amounts to K18-3 per acre as calculated from data By placing fresh manure in a concrete basin, so con¬ hsted in Table VIII 9. structed as to drain the liquid portion into a sub¬ Essentially the same program is possible for the terranean tank, it is protected from leaching. The utihzation of separators in conjunction with harvest¬ liquid manure is drawn from the tank and sprayed ing grain. One such machine, with a capacity of 17,500 over the fields just prior to seeding. The sohd portions pounds per ten hours, is able to thresh the yield of 13 are stacked in the field and spread by hand. Such a acres of paddy daily. Stationary threshers need not system would be indeed beneficial for agricultural be confined to threshing paddy. A very wide variety of soils of Burma but the costs involved for so storing threshing discs is available for the handhng of pulse and handling manure are probably prohibitive for the crops, wheat and cereals generally. Hand-reaped average Burmese cultivator. However, a number of bundles of panicles are presently hauled from the methods which would involve little expense have been field to the threshing-floor, and to haul them some¬ developed by the Department of Agriculture. what farther would probably not be sufficiently critical (b) Composting. The use of compost in Burma has to discourage the use of a mechanical separator. The been tested experimentally with favorable end thresher is easily moved. The quahty of the separation results. Composting serves the dual purpose of soil and the reduction of lost and damaged grain would improvement, much as does green manuring. The reduce the cost of using the thresher. A considerable usual compost requires the hand mixing of cut and advantage lies in the rapidity of handling. dried vegetation with farmyard manure and sod at an The cost of threshing rice mechanically approxi¬ approximate ratio of 3:2:1. After repeated mixing mates K8-7 per ton, as calculated from Table VIII 9. over a period of six to eight months, the compost is Present costs, as taken from Table VIII 9, approxi¬ spread at the rate of ten or more tons per acre. An mate K22-8 per ton. The difference is more than cost, average farm would require 120 tons of compost for for grain mechanically separated is of considerably 12 acres of land. That tonnage would have to be higher quahty owing to less breakage, and there is handled several times, being finally spread in May more of it due to reduced loss in separation. during the busiest season of the year. Partial mechanization, as analyzed above, is there¬ Composting is a practice typical of gardening, and fore one approach to intensification of agriculture highly beneficial. It is economically feasible only if permitting more land to be cultivated, by reason of labor is to remain cheap, which is contrary to the early plowing, and the obtaining of more and better objectives of the program. Bulletin No. 29 of the grain through mechanical separation. Under unusual Department of Agriculture of Burma shows that cases of available moisture during the dry season, composting is not justified economicaUy unless labor either by precipitation or irrigation, a combination of is cheap. The increased yield of paddy by the apphca¬ custom plowing and mechanical threshing would tion of 100 pounds per acre of a 20-20 0 chemical permit double cropping, crop rotation and the use of fertilizer is equivalent to the increase in yield from ten green manures in the cropping pattern. tons of compost, and the cost of chemical fertili¬ zation is about half that of composting. Furthermore, (3) Simple Improvement Techniques the quantities of manure available for proper com¬ (a) Storage and use of manure. Within the reach of, posting are not sufficient for large-scale apphcation. and often known by, the individual cultivator are Composting is therefore recognized as an excellent numerous simple means of intensifying cultivation. means of intensifying cultivation but too difficult and None of them is easy. The average land holding of too costly to merit widespread use without partial approximately 12 acres usually has a single pair of mechanization. oxen to supply farm power. Two oxen normaUy pro¬ (c) Other. The intensification of cultivation by duce six tons of manure annually, approximately one better soil preparation, pest control, crop rotation, half the value of which is lost to evaporation and lea¬ green manuring, and double cropping does not ching due to improper storage and handhng. Accor¬ achieve optimum results under conditions of primitive dingly, under common management, one quarter of a agriculture. It is doubtful that soil could be much 154 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA TABIS CULTIVATION

Labor

Mechanized Hand or Oxen Cost Dep. Rate Acresj MDI CostI Acres! MD! Cost! Day Acre Acre Day Acre Acre Soil Preoaration K Years Soil Preparation K K TD9 Crawler 34,200 10 Plow 10a 01 O-Sb 0-5/ 20 5-Oc TD6 Crawler 27,200 10 Harrow Plow 30 0033 016 — . — Farmall Super MD 14,900 8 Disc Harrow AQh 0025 013 — — Farmall Super C 9,900 8 Border Harrow 100 001 005 — — Border Harrow 4,130 5 Pegtooth Harrow 5 0/ 0-2 0-5 Plow, 3-Disc 2,750 5 Harrow Disc, 4 Gang 1,990 5 Plow-Harrow, 8 4,920 5

Fertilizer Application Fertilizer Application Lime Spreader 2,190 3 Drill and Fertilizer 50 003 015 — .— — Surface Spreading 60 0025 013 — — — Side-dressing 16 0062 0-31 — — — Broadcast 50/ 02 0-5

Seeding Seeding Tool Bar Attachment ] Seeding (Groundnuts, Maize, Seeder Attachment 4,900 5 Sesamum, etc.) 20 006 0-25 Fertilizer Attachment Drill (Grains) 60 0017 008 Middle Buster j Seed, Fertilizing, Furrowing 16 0093 0-46 , Grain Drill with Pert. Attachment 4,030 5 Transplant and Pull — — — 012e 80 200 End-gate Seeder 631 3 Broadcast (or End-gate Seed) 80 0012 006 30 0-3 08

Cultivation Cultivation Row Cultivator 4,560 5 Springtooth 40 0-025 012 — Spring-tooth Cultivator 500 5 Row Cultivation 30 0033 016 —

Hoe (or oxen-cultivate four times) • ■ 0-25 — ■ 40 100

Chemical Treatment Chemical Treatments Duster 3.000 5 Dusting 60 0017 008 — — —

Harvesting Harvesting Shaker (Groundnuts and Pulses) 3,080 5 Bind 16 0124 062 — — — Binder 8,300 8 Combine \2d 0166 082 — — — Combine (Groundnuts) 11,900 8 Reap — — — 0-2g 50 12-5 Combine (Grain, etc.) 6 16,010 8 Thresh and Winnow Ud 0166 082 0-27/ 3-7 9-2 Separator 17,600 8 Picking (maize) (machine) 14 0071 035 — — .— Picker (Maize) 7,970 8 Picking, Hand (Groundnuts, etc.) — — — 0-2g 50 12-5 Picker (Cotton) 47,500 8 Digging (Groundnuts) 20 005 025 — — — Digger (Groundnuts) 950 5 Digging, Hand — — — 10 10 2-5 Cleaning (Groundnuts) 15 0134 066

Other Other 25 0 04 0-2 — — — Wagon 2,300 8 AGRICULTURE 155 vin-9 COST ANALYSIS

Machinery Animal and Equipment Costs'' Maint. To/a/ Maint and Total Cost! Dep. 6% and Coj// Cost! Cost Dep. Dep. 6% Cost //7f. Oper. Crop Acre Rate Cost Int. Oper. CostjCr. Per acre

K K K K All Operations K Years K K K K K Oxen, pair 500 6 83 30 8 121 10-1 1,710/ 1,030/ 2,740o 5-48 Plow, Hand 100 8 12 6 1 19 1-5 1.360/ 816/ 2,176/ 4-35 Yokes 25 3 8 1 1 10 •8 930/ 446y 1,376/ 2-75 Cart 300 10 30 18 3 51 4-2 620/ 293; 913//! 1-83 Shed 30 1 30 2 3 35 2-9 413/ 124/ 41« 578 1-15 275; 83/ 28n 386 0-77 199/ 59/ 20/1 278 0-55 492/ 148; 49/1 689 1-38 Common Costs {unless otherwise speci_tied) Cost!Acre {Kyats) Rate/Acre Present Irrigated Modern 365 65 37 467 093

Yield Increases with Improved Practices (% Increase)

Sesa¬ Sugar Ground¬ Rice Maize Pulses Tobacco Cotton mum Cane nuts 490/ 147/ 49/! 686 1-37 Operation Soil Preparation 5 5 . 5 10 5 5 5 5 403y 121; 40n 564 1-13 Fert. and Placement 30 40 (30) 10(8) 30 (20) 20 (15) 30 (20) 30 (20) 40 (30) 105/ 19; ll/i 135 0-27 Seeding — 10 15 — 10 10 — 10 Furrowing — 5 — — 5 10 — 5 Insect-Fungus Con. — 5 10 — 5 15 15 15 Preflooding — (80) — — (15) — — — Harvest Quality — — — — 10 5 — — Water Control 15 (80) 10 25 05) 25 15 20 456/ 137/ 46/j 639 1-28 Cultivation — — 10 10 10 5 5 10 50/ 15/ 5/j 70 001 Irrigated without Fert. 15 80 10 25 15 25 15 20 Irrigated with Fert. 45 110 18 45 30 45 35 50 Modern without Pert. 20 105 50 45 60 75 40 65

300 90 30 420 0-84 NOTE.—Lower yields resulting from hand placing of fertilizer are indicated by the numbers in brackets.

a Farm Machinery Publications. b @ K5/MD. c @ K2-5/MD. d Variable according to crop; here assumed 1,000-acre crops; grains 16 acres/day. 619A: 185A; 62/! 866 1-73 e IMD = Transplants pulled for planting f acre; IMD = \ acre transplanted; IMD = 515 250/ 52/z 817 1-63 I acre reaped Settlement Report Shwebo. 1,490 715A: 149/2 2,354 4-71 / Estimated. 1,000 480/ 100/! 1,580 3-16 g Hand picking 100/day; crops estimated @ 500/acre (Marketing Groundnuts). 1,100 528; llO/i 1,738 3-47 h Estimated bordered acreage prepared. 1,000 Allk 100/! 1,577 3-15 ! Agric. Survey No. 17, 1932. 5,937 2,850A: 599/! 9,381 18-76 ; 6 months or 1 crop depreciation period. 190 57A: 19/! 266 0-53 k 1 year depreciation period per crop. / 500 acres; fuel, lube, parts; K25/machine day; Rice -1126, days Sesamum -212. m 500 acres; fuel, lube, parts; K20/machine day. n 10% depreciation. o 500 acres; fuel, lube, parts; K35/machine day. p 500 acres; fuel, lube, parts; K30/machine day. 144/ 69/ 14/! 227 045 q Based on 500-acre crop. l.IlO/t 5i5k 111/! 1,756 3-51 r Based on 12-acre crop. 156 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA better prepared than at present, using primitive imple¬ mechanical equipment. An average economic unit ments and animal power. A primitive plow reaches would be about 500 acres. Lastly, h must be properly three to five inches into the soil and stirs h without organized and supervised with competent personnel. folding it over uniformly. The operation is repeated Such conditions are not impossible and in due course several times in order to pulverize fairly well the soil could very well become common as in many other or puddle it in the case of paddy. No variation of this countries. At the outset, programming on a modest system is possible. The only means of improving soil scale, perhaps in the form of demonstration farms preparation is to use equipment that will handle the to gain experience, would be desirable and more soil according to its needs. That may involve sub- compatible with investment of foreign exchange in soiling, breaking hardpan, middle breaking, stubble equipment than would large-scale development. harrowing, deep plowing, disc harrowing or a wide variety of other treatments. None of these practices (2) Advantages can be used without mechanical power. Green man¬ (a) Efficient farming. Modern agriculture auto¬ uring is another example. A green manure crop must matically permits crop rotation, green manuring and be plowed under when its development has reached a the fullest use of natural and chemical fertilizers. certain stage of succulence. Primitive implements and Practices that arc impossible under primitive agricul¬ animal power are not capable of performing that ture are an integral part of modern farming. Double operation, particularly in the heavy soils extending cropping becomes a standard practice, water per¬ over most of agricultural Burma. mitting, and farm output can often be more than The use of crop rotations and double cropping, as doubled. means of intensifying primitive cultivation, is not Mechanization is the key to modern farming. generally practiced. For most of Burma the principal Machine power is cheaper, more versatile, and easier crop is rice, and two thirds of aU cultivated acreage is to handle than are oxen. Farm equipment is avaUable annually devoted to its production. Crop rotation as for doing every job on the farm and is designed to fit an improvement measure cannot be permitted to practicaUy every unusual characteristic that an agri¬ interfere materially with rice production. Crop cultural area can present. Seed-bed preparation using rotation must therefore include a second crop. Double mechanical equipment is superior to that of primitive cropping with non-mechanized agriculture requires plows and harrows. One operation with mechanical that sod preparation and harvesting operations be equipment does the work of four or five primitive speeded, and that irrigation water or sufficient rain be operations, and does it better. The placement of avaUable to raise a second crop. fertilizers, seeding, furrowing, harvesting and culti¬ The new and very effective means of insect control, vation are more efficient and cheaper with mechanical arising from the development of nerve killing com¬ equipment. Some operations, such as chemical pounds, are of limited use to the hand cultivator. insect control and bulk handling are possible only They are most effective when distributed by special with mechanized farming. About 10% of aU paddy machinery designed for use with mechanical farm acreage now occupied by bunds could be farmed power. under mechanization by reduction and reaUgnment of b. Mechanized and Partially Mechanized bunds along contours. Instead of depleting the soU, farming with machine equipment actually improves (1) Application Limited the soil medium and the use of soil-improving crops Complete mechanization with latest farming tech¬ becomes possible. niques can achieve a degree of intensification of agri¬ (b) Soil improvement. Crop rotations, for example, culture far beyond that obtained by hand methods. have the objectives of greater economic yield through However, the required conditions will be difficult to better soil utihzation and soil improvement. Different meet in Burma. First, mechanization should be crop types can be grown for budding soil organic confined to highly productive soils to justify its matter for protecting the soil, and for controUing relatively high capital investment and operational weeds and insects. Soil fertility is better maintained by cost. Secondly, it should be located in an area of the root zone feeding at variable depths. To be effective, country not too far removed from central markets crop rotations should follow the basic cycles of green and the sources of mechanical supplies for demon¬ manure, row crops, smaU grains. Green manure stration farms engaged in producing critical com¬ should be mixed whh an adaptable legume, of which modities. Alternatively, a system of decentralized a number are currently raised in Burma as cash servicing stations could be established. Thirdly it must crops. Green manure contributes to the tdth of the be operated on a modern, scientific agricultural plan, soil and supphes a desirable level of nitrogen and adapted to a scale consistent with efficient use of carbon in a balanced ratio. Soil drainage improves AGRICULTURE 157 the land and often, depending on the green manure sod, such as nitrogen and many trace elements, type, produces a grazing benefit that may cover the and the preservation of many nutrients in the body of cost of the practice. the cover crop that might otherwise be lost to leaching. Legumes tend to exhaust sods of phosphorus. The practice of green manuring is readily adaptable Consequently phosphatic fertihzers should be used to crop rotation patterns. with hay crops where required. Row crops follow (c) Diversification of farming. In those areas of green manure in order to utilize the high nitrogen level Burma that are suitable for livestock, principally on estabhshed by green manure crops. In general, row the Shan Plateau and to a lesser but nevertheless crops draw heavily on the supply of aU soil nutrients. important degree in the Dry Zone, a diversified They require cultivation and therefore expose the farming program would have merit. Perhaps a fat¬ soil to erosion. Consequently row crops should not be tening program of short duration could even be grown for more than one quarter or one third of the carried out in the Delta area, should it develop that rotation period. SmaU grains foUow row crops as forage legumes become established in crop rotations moderate users of soil nutrients and afford sod of lower Burma. The production of oleaginous crops erosion protection. SmaU grains foUowing legumes often coincides with conditions conducive to good are sometimes subject to lodging due to a super¬ hvestock production. A combined operation utilizing abundance of nitrogen in the sod. If necessary, as is green manure for soil improvement and livestock probable in most areas of Burma, it is important that production, grain production as a cash crop, and phosphatic fertihzer be applied in sufficient quantity to groundnuts or sesamum for marketing oil and for balance the high soil nitrogen level. Crop rotation on feeding concentrates to dairy stock or hogs warrants paddy lands is predicated upon double cropping and investigation. controlled irrigation. The selection of a suhable (d) Lower costs. Cuhivation costs under mech¬ rotation is difficult because of the heavy clay sods and anized agriculture and under present cultivation the tradhional preference for rice production. Upland methods have been analyzed (Table VIII 9). The areas are capable of more effective crop rotations and costs have been prepared in three parts to show costs pernut a wider selection in rotation. The cost of now, costs with present cultivation methods but v*'ith estabhshing crop rotation is smaU and the benefits are ample irrigation water throughout the year, and costs significant, both immediately and in a long-range view. of mechanized farming with irrigation. The differences Although water deficiency during the dry season, in yield resulting from these varying practices are except with irrigation, precludes the possibility of signfficant even though based on limited data. green manuring in much of Burma, there is need for Estimates of total costs from each of the cultivation it. There is a major and general deficiency of nitrogen methods foUowed are assembled in Table VIII-10 in soils that have been cropped for extended periods. (see next page). These estimates are based on probable The organic content of nearly aU soil types in Burma costs after establishment of enough mechanized is also low. The practice of green manuring can correct farming units to support adequate maintenance and both deficiencies to a considerable extent. To increase repair services. Initial costs of mechanized farming the total and avaUable nitrogen in the soil it is may be substantially higher. necessary that a legume be used for the green manure The costs of cultivation have been separated into cover crop. There are a number of indigenous legumes those of labor, machinery or animal and equipment that are suhed to the soils and chmate of Burma, expenses, and common or other costs. For calculation principal of which are Crotelaria, Lathrus, Psopho- purposes, the various operations such as sod prepara¬ carpus, Mucuna and Vigna species. A non-legume, tion, fertilizing, seeding, chemical treatment, culti¬ plowed under for green manure, wiU decompose vation and harvesting, have been hsted separately slowly due to the paucity of soil nhrogen upon which with a varied choice of procedure according to the soil microorganisms depend for their activity. Conse¬ crop grown and the prevaihng conditions. Table quently, decomposition ceases, or nearly so, with an VIII-9 reflects all costs of cultivation, as applied to exhaustion of available nitrogen reserves, and inter¬ individual operations. mediate products of decomposition are released. Some Labor, as shown in Table VIII-9 is divided into of these are toxic to plants. A crop planted into an that for mechanized and that for hand or oxen. It is improperly decomposed, green-manured field would assumed that labor under hand or oxen methods wiU immediately suffer from shortage of nitrogen. continue to earn the current wage of K2-5 per day. Many beneficial effects of green manuring other Semi-skiUed labor necessary for the maintenance and than repleiushment of soil nitrogen can be had in operation of mechanized equipment is expected to terms of improved soil tilth, greater availability of receive the wage of K5 per day. The daily work certain nutrients held in the organic fraction of the capacity of machinery and the man-days and cost per 158 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA acre, at the pay rates Usted above, are recorded for Animal and equipment costs have been taken from individual fanning operations. It should be noted a publication enthled "A Colonization Scheme for that the transition to the higher wage is not to be Uncultivated, Reclaimed and Disforested Areas." In regarded as a handicap but would constitute an order to estabhsh an equitable comparison with instance of direct achievement of the end objective of mechanized agriculture, and to reflect a more accurate the entire development program which is to raise the picture of recurring costs, the same considerations of relative income of the individual. depreciation and interest have been shown for hand or That portion of Table VIII-9 relating to the use of oxen agriculture costs as those for mechanized costs. modern farm machinery lists the cost to Government Costs for hand or oxen methods are based on an of equipment units delivered in Rangoon and the average farm holding of 12 acres. Mechanized costs depreciation rate of equipment in years. Depreciation are calculated for a 500-acre farm. cost is recorded for the period of cultivating one crop. The common costs of land revenue, fertUizer, In a few cases where a single crop occupies land for an seed, insecticides and other materials are assembled in entire year, machinery depreciation costs cover the Table VIII-9 as a general guide to specific needs. same period. The same principle apphes to the use of Any or all of these requirements vary with individual special equipment that serves the requirements of a crops, and that variation has been taken into account single crop. It is assumed that the Government would in the final calculation of cultivation costs for each finance any mechanized cultivation program. Accord¬ crop. ingly a 6 % interest rate has been taken as an expected The use of fertilizers and the use of modern revenue to the Government for provision of capital. machinery produce yields considerably in excess of Maintenance expenses have been calculated at a 10% those of present agricultural methods. An estimate of value of the annual depreciation for all pieces of the increase in yield for each of the operations equipment except power units. Tractors have been of soil preparation, fertilizer use and its placement, considered to cost from K20 to K35 per day, accord¬ seeding techniques, furrowing, insecticide usage, ing to size, for maintenance and operation, exclusive preflooding or water control, cultivation and harvest of labor. The final columns of the machinery section quality has been prepared. Increases are expressed in of Table VIII-9 show the cost per acre and the total terms of percentage. cost per crop of each unit of equipment. The proper preparation of soil involves plowing,

TABLE VIII -10 PER-ACRE CULTIVATION COSTS {in kyats)

Labor Machinery Other Total without Fert. Total with Fert. Crop Irri¬ Irri¬ Irri¬ Irri¬ Present gated Mod. Present Mod. Present gated Mod. Present gated Mod. Present gated Mod. Paddy 49-7 50-2 1-97 20-8 26-86 3-9 38-9 38-9 74-4 74-4 34-7 109-9 109-9 69-7 Sesamum 10-75 16-25 3-04 20-8 32-96 3-9 38-9 38-9 35-5 41-0 39-9 66-6 76-0 74-9 Maize 24-25 26-75 2-02 20-8 24-03 3-9 38-9 38-9 49-0 51-5 26-7 84-0 85-5 65-0

Sugar Cane 109-5 119-5 63-36 33-7 34-08 59-9 94-9 94-9 203-1 213-1 157-3 235-1 248-1 192-3 Pulses 24-35 31-65 2-96 20-8 31-72 3-9 38-9 38-9 49-0 49-0 38-6 91-3 91-3 73-6 Groundnuts 25-75 28-95 3-88 20-8 42-35 11-9 46-9 41-4 58-5 58-5 58-1 96-6 96-6 93-1

Tobacco 43-0 45-65 30-57 20-8 17-49 3-9 38-9 38-9 67-7 67-7 52-0 105-3 105-3 87-0

Cotton 24-25 26-75 13-51 20-8 22-54 3-9 38-9 38-9 48-9 48-9 40-0 86-4 86-4 75-0 Wheat 14-9 22-2 1-34 20-8 20-40 3-9 38-9 38-9 39-6 39-6 25-7 8L9 81-9 60-6

Forage Grass — — ■86 — 9-23 — — 38-0 — — 13-0 — — 48d AGRICULTURE 159 harrowing, and somethnes subsoU tiUage, levehng hrigation, subsoU hrigation, drainage, and good and suitable mulching or other surface preparation. aeration. The benefits of furrowing soU are related to Tractor-drawn machinery allows any variation of better water utihzation. It is possible to furrow sod soil preparation imposed by sod conditions or by the with stick plows, but only a high-yielding, profitable crop to be grown. Prhnitive animal-drawn equipment crop such as sugar cane permits the operation to be does not. Accordingly, h is calculated that proper sod economically justified. preparation using modern machinery should hnprove Insecticide treatments have a pronounced bene¬ the yields of aU crops by an average of 5 %. In the case ficial effect on many crops after an infestation is of sugar cane the yield should be greater because of apparent. Others, such as groundnuts, profit from the drainage reqmrements of the plant. preventive treatments prior to infestation. Crops The use of fertilizers increases yields about 30 %, arranged in machine-seeded rows are most profitably according to experhnental testing in Burma. The treated for insect control, and mechanized equipment method of placing the fertihzer may vary this yield is most effective and economical for distributing the significantly. Modern machinery is capable of correct insecticides required. Insect and fungus control fertilizer placement or side-dressing and can produce measures, both curative and preventive, are estimated a stUl further increase in yield. The lower yields result¬ to increase crop yields from 5% to 15%. ing from hand placing of fertihzer are indicated by the Preflooding and water control are classed separately numbers in brackets in Table VIII-9. according to the crop to which the practice apphes and Seeding directly affects crop yields. Few crops other to the soil differences under which the crops may be than some small grains are best planted by hand grown. In loam soils with high water-holding capacity broadcasting. Machinery seeds any crop uniformly as preflooding could be effective with sesamum or pulses to both depth and spacing and fully utilizes sod to the under conditions of hand-oxen agriculture. If the best advantage of the crop sown. A distinct advantage farming is mechanized, furrow hrigation may be more of machine sowing is the considerable saving in seed effective. Accordingly both benefits are enclosed in that results. The average increase in total crop yields brackets to indicate that either the one system or the with machine seeding is about 10%. other can be used (see Table VIII-9). Certain crops grow better ff the sod is formed into The collection and grading of pulse and groundnut furrows and ridges. The advantages are ease of crops by hand-oxen methods is so inefficient and poor

TABLE VIII-II CROP PRODUCTION AND VALUE PER ACRE {Farm level)

Yield Value Crop Present Irrigated Modern Present Irrigated Modern lbs. 1 acre lbs.! acre lbs.!acre K K K

Paddy 1,330 1,485 1,950 90-2 103-2 135-5

Sesamum 117 210 286 34-6 62-1 62-1

Maize 537 590 860 69-6 76-6 112-0

Sugar Cane 1,770* 2,210 3,100 389-0 486-0 682-0

Pulses 392 450 705 65-0 74-6 117-0

Groundnuts 546 685 1,121 79-1 99-2 162-5

Tobacco ll6t 134 203 75-3 87-1 132-0

Jaggery. t Dry Leaf. X Lint. 160 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA in quahty that machine methods should actuaUy these tables into net returns by crop, according to increase yields. Hand picking often leaves rather large the cultivation method used. quantities of the crop in the field. Modern machinery (e) Pleasant work for fanner. Two features of reduces those losses to a miiumum, and, by separation mechanized farming have a bearing on its possible or combine methods, greatly increases the quality of success or failure in Burma. It has been said that the yield collected. Shriveled or undeveloped seeds, Burmans have never used mechanical equipment to a such as groundnut "pops," are not sacked for sale or large extent and that for that reason they cannot be shipment but instead may be used as a fotage supple¬ expected to operate machines efficiently or to service ment or returned to the sod. Better quality produce them properly. This conclusion is not supported by meanwhile commands a better market price. the widespread evidence of the manner in which Hand cultivation methods are both difficult and Burmans have repahed, remodeled and maintained expensive. For these reasons, proper weed cultivation surplus vehicles left in Btu:ma by various mihtary is usuaUy poorly done or not at aU. The consumption forces after the war. Parts have been hand made when of nutrient salts by weeds is fully as efficient as that of none were avaUable, and a major talent for improvisa¬ planted crops. The presence of weeds in competition tion has been exposed among some of the Burmese with a planted crop wiU reduce crop yields approx¬ mechanics who, without formal training, have imately in proportion to their relative density, and managed to repair such major units of equipment as may cause yields to dechne 90% in extreme cases. bulldozers. Experience in BrazU, and with the large Broadcast seeding permits no cultivation. Mechanized land clearing program in Ceylon, as weU as experience farming permits cheap and efficient cultivation which with mechanized farndng in Haiti, indicate that the is estimated to increase crop yields an average of 10 %. capacity to learn the use and care of equipment is a The various benefits of different farming practices talent that all peoples enjoy, given equal opportunities. rarely stand alone. One is usually dependent upon With mechanized agriculture, the heavy physical the other. The benefits are additive in nature and burden that the hand cultivator bears is reduced to the occasionally more than additive. Tables VIII-10 and care and operation of machinery. The cultivator VIII-11 (see previous page) hst production costs and directs power where before he often supphed it. The gross income for each of the various methods of fact is that mechanized farming is not physicaUy diffi¬ cultivation employed. Table VIII-12 summarizes cult, but eliminates forms of labor that may deprive

TABLE VIII -12 CROP COST, VALUE AND NET RETURN UNDER VARIED PRODUCTION METHODS {Farm level)

Cultivated Cost Gross Value Net Returns Crop Present Irrigated Modern Present Irrigated Modern Present Irrigated Modern K K K K K K K K K

Paddy 74-4 lA-A 69-7 90-2 103-2 135-5 15-8 28-8 65-8

Sesamum 35-5 41-0 39-9 34-6 62-1 62-1 0-9 2M 22-2

Maize 49-0 51-5 65-0 69-6 76-6 112-0 20-6 25-1 47-0

Sugar Cane 203-1 213-1 192-3 389-0 486-0 682-0 185-9 272-9 489-7

Pulses 49-0 49-0 73-6 65-0 74-6 117-0 160 25-6 43-4

Groundnuts 58-5 58-5 93-1 79-1 99-2 162-5 21-6 40-7 69-4

Tobacco 67-7 67-7 87-0 75-3 87-1 132-0 7-6 19-4 45-0 AGRICULTURE 161 the individual of health or even result in permanently considered in company with mechaiuzed farming cripphng deformities. These benefits would soon techniques, the additive benefits of aU practices are become generaUy recogiuzed, and constitute incentive several times greater than doubhng of present, single and encouragement favoring both care of equipment crop production. Double cropping is equivalent to and further extension of mechanization. acreage expansion under present cultivation practices, and in Table VIII-13 is so shown. 2. IRRIGATION In addition to the placing into cultivation of fallow Dry land farming is nearly always hmited by the areas and abandoned crop areas, and the potential water supply. A common water conservation measure double cropping of the total area irrigated, considera¬ in the Dry Zone of Burma is fallowing. By maintaining ble areas that have never been cultivated he within the a vegetation-free soil surface, the loss of soil moisture canal boundaries of potential irrigation systems. Such through plant transpiration is reduced. At the planting areas are usually not Grade I sods, but would probably season, fallowed soUs contain more moisture than have been cropped but for reasons of soil texture or those cropped or covered with weeds. A greater sod shrub cover or forest reserve classffication. The moisture reserve at the planting season gives more se¬ avadability of water would make such areas potentially curity that the seeded crop wiU not be lost from lack cultivable. Table VIII-I3 indicates the approxhnate of rain. FaUowing does not "rest" the soil but, ff done possible increase, in acres, of cultivation resulting from properly, prevents vegetative cover that would draw development of irrigation projects now in the planrung upon the soil nutrient supply. A distinct disadvantage stage. The dependence of double cropping upon of faUowing is that it leaves the soil exposed to erosion. mechaiuzation of the soU preparation and harvesting About 18 % of the cultivated area of the Dry Zone is operations should be emphasized. The development of annually recorded as fallow. Placing the Dry Zone new land into cultivated land is accompaided by area under hrigation would ehminate the necessity for capital investment in initial land preparation, often faUowing land. land clearing, and initial plowing not easily done a. Increasing Cultivated Acreage under present methods. Rather large acreages sown every year in the Dry b. Impact of Developing Irrigation Projects Zone fad to mature. These crop failures are usually The impact of developing the proposed irrigation produced by lack of water generally, although floods projects would extend beyond that of increasing sometimes wash out or drown planted areas. The sown cropped acreage. If such development should compel acreage that fails to mature amounts to an average of at least a partial mechanization of farming practice in 6 % of the cultivated acreage of the Dry Zone annuaUy. those areas of hrigation, crop production would also Irrigation would ehminate such crop failures almost be forced into a program of diversffication. Using the entirely. irrigated sod resource to its utmost economic poten¬ TABLE VIII-13 tial would result in the production of forage crops, INCREASED ACREAGE THROUGH IRRIGATION and of other crops not previously grown in large quantities in the area. Off-season production would Present Acreage Increase from Acres probably become the rule in agricultmral commodities Project such as sesamum. and would permit a more economic Fallow Aban¬ Double New Total doned Cropping Land Increase utihzation of processing facUities. Feed concentrates, produced in the dry season under irrigation, could be fed as a supplement to animals grazing on green manure forage crops in the wet season.

3. DEMONSTRATION FARMS Grand Total 2,243,562 The introduction of mechanized farming into Burma, however modest the beginning, is a basic By removing the hazard of insufficient precipita¬ requhement for fuU benefits ff proposed hrigation tion, hrigation opens up an entirely new phase of projects are carried out. An analysis of varying agricultural possibilities in the Dry Zone. The most benefits according to the cultivation method employed significant of these is double cropping. Theoretically, and particularly a consideration of total benefits double cropping doubles the production of an area. under the various methods on the Yamethin hrigation Practically, the degree of increased production through project clearly shows that some modernization is double cropping is dependent upon the degree of in¬ necessary to justify fully implementation of the tensification that is applied in the area. If irrigation is projects.

R.B.—11

AGRICULTURE 163 a. Purpose provides the conditions of climate and underpopu- Lacking a background of experience and know¬ lation that are well suited to this purpose. ledge in aU phases of improvement in farming, Burma Proposed locations for the demonstration farms are should establish one or more demonstration farm shown on the map, Plate 9. units based upon the best available agricultural c. Specialization on Demonstration Farms information and recommendations of experienced personnel. Such farms would provide accurate cost Each of the suggested locations is particularly determinations at a practical level, and would consti¬ suited to demonstration of some specialized form of tute a testing ground for laboratory research findings agriculture. Toungoo, for example, could concentrate in the fields of both agronomy and agricultural on the development of a highly intensified rice engineering. Demonstration farms would serve as production program. The Pyinmana farm could be active trairung centers for future modern farmers by devoted essentially to sugar cane production. Yame¬ overstaffing. The future development possibihties of thin could concentrate the activities of its demon- demonstration farms include the formation of custom strationfarm on the diversification of agricuhure, Dry plowing and harvesting services, growing and distri¬ Zone soil improvement techniques, and the fattening bution of improved seed, the storage and protec¬ of livestock. Pakokku, with its sandy soil, is best tion of farm products, and possibly farm credit adapted to the production of groundnuts, and could transactions. be used almost exclusively in the field of oleaginous The estabhshment of a single demonstration farm crops. The farm at Loikaw could demonstrate the as a testing ground for future development is hazard¬ practicability of combining grain and groundnut ous and uneconomical and would be inconclusive in production with that of dairy and livestock. The pro¬ evaluating farming practices. It is believed that five posed demonstration farms would be simdar only in such farms should be established to yield an adequate their organization, operation and cultivation tech¬ cross section of results. niques. The goals of each farm would be different, with each devoted to the production of an agricuhural commodity in short supply within the country or, in b. Location the case of rice, of an export commodity of interest to The sods which would most urgently require the the nation. practices of improved farming methods are those lying within the boundaries of the proposed irrigation d. Organization and Administration projects. Within the span of both wet and dry zone The organization and administration of demon¬ chmates, the Yamethin project offers three areas of stration farms could be fitted into any one of several investigation. At Toungoo the climate is essentially present government agencies, but should function best that of the Delta. Pyinmana hes in the transition zone directly under the Director of Agriculture. From the between wet and dry zone chmates. At Yamethin the Ministry of Agriculture the necessary land, funds and climate is typical of the Dry Zone. Within a single understudy personnel could be provided. irrigation project, farming can be demonstrated and Planning and initial operation of demonstration tested under aU three of the major climate conditions farms should be undertaken by foreign personnel with of Burma. successful experience in the selected types of farming. There are times when urgent necessity of the Within a short period it would be expected that both population merits consideration of an irrigation authority and responsibdity would be taken over by program on a smaU scale. Such a condition exists near Burmese personnel and the foreign speciahsts released, Pakokku, in the heart of the Dry Zone, in an area or retained temporarily in consulting capacities. It is capable of utilizing a small pump irrigation system. essential that the chain of authority be simple, strong The establishment of a successful demonstration farm and commensurate with its responsibility. A suggested in that area would have distinct advantages. An organization for operation of a demonstration farm is analysis of Pakokku soils reveals that they are rela¬ shown on Plate 10. tively fertUe and of a sandy texture. In quality they The initial step required for estabhshing a demon¬ might be compared with desert soils which have not stration farm is a survey and analysis of the resources been leached of soil nutrients. Placing this area under of each of the farms to be organized. Proper inter¬ hrigation and farming it by mechanized methods pretation of such data forms the foundation upon might result in the creation of a veritable oasis in the which a farm plan is built. Farm plans take into desert. Improved farming under dryland conditions consideration all the factors affecting agriculture. should also be tested because of the very large areas of Among these are soil quality in terms of physical and non-irrigated land. An area in the vicinity of Loikaw chemical characteristics, slope, cover, soil erodabiUty, PLATE NO. 10 DEMONSTRATION FARM —ORGANIZATIONAL CHART

Administration Manager K600/month

Servicing Operations Assistant Manager Trainee K350/month

Trainee

Skilled labor K150/month

Trainee

[- Trainee

Skilled labor Kl 50/month

Trainee

h Trainee

Skilled labor K150/month -|

[_ Trainee 1 1 u Trainee 1 1 1 , Trainee

164 AGRICULTURE 165 topography and drainage. The climate is considered farms. Foreign personnel can only suggest methods with respect to intensities of temperature and rainfaU. that have been successful in other parts of the world The aims of the individual farms are kept in mind under conditions essentially similar. The burden of while preparing the farm plan. The final plan shows implementation lies with the Burman. the types of crops that should be grown, the culti¬ vation method and machinery to be used, the crop e. Cost Estimate rotations to be followed, the areas to be grazed The following cost estimate for establishing a indicating the grazing period and number of livestock, demonstration farm in the vicinity of Yamethin is the sod conservation practices that should be adopted, considered typical. It is expected that the farm would the particulars of using irrigation water, and a host of cover 500 acres and would be engaged in producing other advisory matters. The farm plan should include the usual variety of agricultural products common in a complete cost estimate for both capital investment the area. The farm plan would include a diversifica¬ required and operating costs. The preparation of the tion of crops with two rotations consisting of green five farm plans should be the responsibility of an manure, cotton, pulses and sesamum ; and forage agronomist of experience similar to that obtained in grasses, corn, pulses and wheat. Rotations would the Soil Conservation Service of the United States, and cover a two-year period and provide for livestock should not require more than six to nine months. fattening during a portion of that period. Among foreign personnel to be employed the most The cost estimate is separated into labor, machinery important and useful individuals would be the prac¬ maintenance, improvement and other costs. The cost tical farmers to organize and operate the farms in the of foreign personnel necessary for organizing the initial period. These farmers should work closely with first demonstration farms should not be a cost their Burmese counterparts and should be released as charged against the demonstration farms proper and soon as training was found to be adequate. As a is therefore not included in operation costs. Trainee continuous farming program extends over several labor likewise is not charged to costs of demonstration years, new problems would develop. An experienced farms. farmer, retained after completion of a relatively short f. Returns teaching period on the farm, could serve as a farm consultant for a year or longer. Probably three or four Table VlII-14 (see next page) summarizes the costs foreign farmers could satisfactorily establish the pro¬ and expected returns from a typical demonstration posed five demonstration farms. After an 18-month farm operation based upon the cultivation of 500 acres or 2-year period, their numbers could be reduced to under an irrigated, double-cropping program. Costs one or two, acting as advisors. and benefits have been calculated on a pcr-crop basis., A few qualified foreign farm mechanics could also and should be doubled for determination of annual do much toward establishing and maintaining a values. It is seen that the cost per crop is approximately successful program of mechanized farming. Each of K74-0. Returns approach K102-5 per acre leaving a the demonstration farms should be equipped to handle profit of K28-4 per acre per crop. Thus annual profits aU echelons of repair for aU equipment on the farm. A would accrue at the rate of K56.87 per acre per year. program of such scope requires the services of an Indirect values of soil improvement are not taken into experienced, practical mechanic to organize and train account in the calculation of benefits. a cadre of service personnel. The overstaffing program 4. RESEARCH AND EXTENSION suggested for demonstration farms would permit the training of sufficient personnel to serve several such a. Government Plans and Organization farming units. One foreign mechanic per demonstra¬ A research and extension system has been function¬ tion farm for a two-year period would be sufficient not ing for many years under the Department of Agri¬ only to maintain farm equipment on the demonstra¬ culture. Valuable work has been performed, particu¬ tion farms, but to train a cadre of 30 to 50 Burmese larly in the field of plant breeding and development of mechanics to carry out the same program on as many improved crop varieties, but the work has been of farms. modest scale. Many methods successful in other coun¬ The use of foreign personnel in estabhshing demon¬ tries have not been tried in Burma. stration farms would serve principally to catalyze the broad changes sought in farming methods. It is not (1) Present Organization to be expected that farming in Burma should follow an The present organization of research and extension exact pattern of that in any other country. The adapta¬ work in Burma is outhned on the charts, Plates 11, tions that Burma would necessarUy make in instituting 11 A, IIB and IIC. This organization has been changes could be worked out in the demonstration handicapped by its limited staff which has 166 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA TABLE VIII -14 DEMONSTRATION FARM COST AND RETURN ANALYSIS (PER CROP) {Farm level)

Type No. Unit Cost D. Rate D. Cost 6% Int. Maint. CostiAcre CostiAcre

Labor i Manager* K600/MO. — — — — K2.40 Asst. Mgr.* 350/Mo. — — — —. 1.40

3 Skilled Labor 150/Mo. — — — — 5.40 9.20 Machinery 2 Tractors 29,800 8 1,860 894 5,000 15.50

2 Plows 5,500 5 550 166 55 1.54 2 Harrows 3,880 5 388 118 39 1.09 2 Mid. Brkvs. 9,800 5 980 294 98 2.77

Border Harrow 4,130 5 413 124 41 1.15 Duster 3,000 5 300 90 30 0.84 Separator 17,600 8 1,100 528 110 3.47

Binder 8,300 8 515 250 52 1.63 Maize Picker 7,970 8 500 238 50 3.15 Drdl 4,030 5 403 121 40 1.13 32.27 Maintenance AllEq uipment 7,000 10 350 210 35 1.19 1.19

Improvements i Mgr. House 6,000 10 100 60 10 0.34 Labor House 9,000 10 150 90 15 0.51 Shop 5,000 5 500 150 50 1.40

Equip. Shed 5,000 5 500 150 50 1.40 Granary 10,000 15 333 300 33 1.33

Feed Lot 2,000 5 200 60 20 0.56 5.54

Other Lot Fert. 15,600 — — — — 23.20

Total Cost per Acre K73.98

RETURN

Crop Acres Value Cultivation Cost Profit

Total Profit per Acre K56.87 ♦Works on three farms. fBased on value of crop production on 375 acres and green manuring plus grazing valuM on 125 acres. PLATE NO. 11

PRESENT ORGANIZATION OF THE AGRICULTURAL DEPARTMENT

DIRECTOR OF AGRICULTURE

RESEARCH WORK ADMINISTRATION DISTRICT WORK

Refer to Headquarters Plate No. IIA Deputy Director of Agriculture (a)

Senior Deputy Senior Deputy Director of Agriculture (a) Director of Agriculture (a) (Lower Burma) (Upper Burma)

Refer to Refer to Plate No. lie Plate No. IIB

Deputy Director of Agriculture (a) Arakan Circle

Assistant Director of Agriculture (b)

5 Senior Agricultural Assistants (I)

10 Fieldmen

Note; (a) indicates Selection Grade Service. {b) indicates Senior Branch of the Burma Agricultural Service. {c) indicates Junior Branch of the Burma Agricultural Service. The figures indicate the number of posts. Where no figures are shown the posts are single.

167 PLATE NO. 1 lA

PRESENT ORGANIZATION OF THE AGRICULTURAL DEPARTMENT

DIRECTOR OF AGRICULTURE

RESEARCH WORK

Senior Economic Botanist (a)

Economic Botanist (a) Agrostologist (a)

Assistant Botanist (b) 1 Assistant Mycologist (b) Botanist (b)

Senior Agricultural Assistant (Botany) (c) Statistician 2 Fieldmen 2 Assistant Entomo¬ Agrostologists (c) logist (b)

4 Fieldmen Senior Agricultural Assistant (Botany) (c) 5 Fieldmen

Chemical Assistant (c)

5 Fieldmen 2 Fieldmen

16« PLATE NO. I IB

PRESENT ORGANIZATION OF THE AGRICULTURAL DEPARTMENT

DIRECTOR OF AGRICULTURE

Senior Deputy Director of Agriculture (a) (Upper Burma)

Deputy Director Deputy Director Deputy Director Deputy Director of Agriculture (a) of Agriculture (a) of Agriculture (a) of Agriculture (a) Northern Circle Myingyan Circle West Central Circle East Central Circle

2 Assistant Directors 2 Assistant Directors 2 Assistant Directors 1 Assistant Director of Agriculture (b) of Agriculture (b) of Agriculture (b) of Agriculture (b)

10 Senior Agricultural 15 Senior Agricultural 9 Senior Agricultural 8 Senior Agricultural Assistants (c) Assistants (c) Assistants (c) Assistants (c)

12 Fieldmen 17 Fieldmen 12 Fieldmen 10 Fieldmen

169 PLATE NO. lie

PRESENT ORGANIZATION OF THE AGRICULTURAL DEPARTMENT

DIRECTOR OF AGRICULTURE

Senior Deputy Director of Agriculture (a) (Lower Burma)

Deputy Director Deputy Director Deputy Director Deputy Director of Agriculture (a) of Agriculture (a) of Agriculture (a) of Agriculture (a) Southern Circle Irrawaddy Circle Tenasserim Circle Arakan Circle

2 Assistant Directors 2 Assistant Directors Assistant Director Assistant Director of Agriculture (b) of Agriculture (b) of Agricuhure (b) of Agriculture (b)

15 Senior Agricultural 13 Senior Agricultural 11 Senior Agricultural 5 Senior Agricultural Assistants (c) Assistants (c) Assistants (c) Assistants (c)

16 Fieldmen 21 Fieldmen 18 Fieldmen 10 Fieldmen

170 AGRICULTURE 171 attempted to spread its influence over too wide an various district and circle conferences of extension area. It has therefore been unable to work closely workers can be started immediately. A manual of enough with the cultivators to win their confidence. extension methods should be prepared for use as a The average extension worker can spend only about practical guide for extension workers. Courses in 50 % of his time in the field. Much of this time is spent extension methods should be provided at Mandalay in travel to and from vdlages. He is usually responsible College, the Agricultural Training Institute, and the for about 300 villages but normally can visit only about Central Farm School. seven to eight a month. The result is that normally any one village does not see the extension worker more b. Diversification of Research than two or three times a year and many do not see him The needs of agriculture in Burma are more critical at aU. In a few areas where extension workers have been in some directions than others. Research could con¬ able to concentrate their efforts the resuhs have been tribute to the long-range satisfaction of these needs. very good. Shangalay Kyun village near Mandalay Specific emphasis should be given to the introduction offers an exceUent example of what can be done. The of new crops, improving seed other than paddy, an introduction of Virginia tobacco by the Agriculture investigation of trace element deficiencies in soils, and Department has raised incomes substantially and the establishment of the necessary library and labora¬ provided off-season employment to the viUagers. tory facilities. The field worker is further handicapped by the need not only to divide his time between research and exten¬ (1) Agronomy sion but also to care for service activities and routine The soil and climatic conditions pecuhar to Burma administrative details. In addition to his responsi¬ present a research challenge to introduce or develop bihties in the extension field he is now responsible for suitable alternative crops for the delta regions. distributioji of seed, equipment and fertilizer, super¬ Successful alternative crops, whether producing agri¬ vision of custom plowing, supervision of major and cultural commodities or green manure grazing bene¬ minor seed farms and maintenance of proper accounts fits, would render the region much more productive. for each of these activities. This does not leave him Increased production also would be of improved enough time for extension activities. quality due to better soil management. Proposed pump irrigation of certain delta areas would permit pro¬ (2) Agriculture Department duction in the dry season. An intensification of pre¬ An excellent plan for the expansion and reorgani¬ sent paddy monoculture would contribute to a decline zation of the Agriculture Department prepared in 1949 in soil productivity with consequent problems. The and subsequently modified is stiU under consideration. introduction of suitable second crops that could with¬ A report by the STEM Adviser on extension also stand moderate sahnity and grow on stiff clays typical gives detailed recommendations for expansion of of the Delta appears worthy of research consideration. extension which are in general consistent with the plan Second crops for paddy soils would permit pro¬ of the Agriculture Department (Plate 12). Immediate grams of crop rotation. Research in crop rotations steps should be taken to implement this plan. would naturally foUow the introduction of second The plan for reorganization of the Agriculture crops. Rotations involve using sod to produce crops Department calls for a viUage worker for every five that sometimes offer no direct return to the cultivator. village tracts, a supervisor for every five viUage In other instances it is impractical to utihze the graz¬ workers, a township agricultural officer for each town¬ ing value of green manure legumes. The solution of ship and a district agricultural officer for each district. one problem often creates several new ones as research This wiU mean that present senior agricultural assis¬ leads progressively toward better soil utilization. The tants wiU be fiUing district posts and that new grad¬ abundance of a forage crop grown essentially for soU uates from Mandalay College wiU also be entering the improvement purposes would require research into the service at that level. Present fieldmen wdl be taking possibilities of livestock fattening during certain jobs as supervisors or township officers. Graduates seasons and possibly the feeding of dairy stock. Con¬ of the central farm schools, the agricultural training ditions for livestock on the Delta are not ideal and institute, and vocational high schools wiU be used to research in that field would be necessary before an fill the remaining posts. action program could be initiated. The introduction of new crops and varietal improvement of those now (3) Extension produced is a research problem that extends to all Training in extension methods has been neglected in parts of the country. It is more crhical in the Deha the past and should be instituted immediately. In- and, conversely, more applicable in the Dry Zone service training consisting of short training courses at where growing conditions are less extreme. PLATE

PROPOSED EXPANSION OF

DIRECTOR OF

DIRECTOR OF

DEPUTY DIRECTOR OF

Lower Burma

Agriculture, Animal Agricultural Rural Divisions Agronomy Chemistry and Entomology Plant Pathology Industry Engineering Economics Soils

Class I Agronomist Chemist Entomologist Plant Dairyman Agricultural Economist Pathologist Engineer

Class n 3 Deputy 1 Deputy 5 Deputy 1 Deputy 1 Deputy 1 Deputy 4 Deputy Agronomists Chemist Entomologists Pathologist Dairyman Agricultural Economists Engineer

Class III 8 Assistant 3 Assistant 10 Assistant 2 Assistant 3 Assistant 1 Assistant 8 Assistant Agronomists Chemists Entomologists Pathologists Dairymen Agricultural Economists Engineer

*This diagram shows only the personnel for research in agricultural engineering and entomology.

172 NO. 12

AGRICULTURAL RESEARCH*

AGRICULTURE

AGRICULTURAL RESEARCH

AGRICULTURAL RESEARCH

Upper Burma

Fresh-water Library Agrorwmy Chemistry Entomology Plant Agricultural Fisheries Pathology Engineering Library Total

Biologist Agronomist 9

1 Deputy 1 Deputy 4 Deputy 1 Deputy 1 Deputy 1 Deputy 1 Deputy 1 Deputy 11 Biologist Librarian Agronomists Chemist Entomologist Plant Agricultural Librarian Pathologist Engineer

1 Assistant 8 Assistant 2 Assistant 4 Assistant 1 Assistant 1 Assistant 52 Biologist Agronomists Chemists Entomologists Plant Agricultural Pathologist Engineer

The staff required for the custom work is shown separately under departmental setup.

173 174 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA The Shan State, parts of northern Burma, and the for introduction in an area of ample labor supply for Yoma areas generally are characterized by Taungya picking the beans. agriculture. The custom of clearing forested slopes for The classification of soils for the Yamethin irriga¬ a two- to four-year period of cultivation leaves these tion project revealed that large tracts of Grade III areas open to rapid soil erosion. Such hiUside culti¬ sods (see p. 181) extend over that portion of the vation is traditional, and was probably originaUy project lying within the Dry Zone. Some of these soils, motivated in part by the relatively lesser incidence of and probably many other areas of Burma, are believed malaria in the hills as compared to the valleys. to be suitable for sisal production. As a new fiber Taungya cultivation is destructive of soil beyond for- crop, sisal might yield products useful for cottage seeable repair or feasible reclamation. The volume and industries and, with a httle care, make otherwise seriousness of the problem multiply with its extension. relatively unproductive land useful. Attempts to pro¬ Research could provide a factual background for the duce jute in Burma have not been very successful, but problem and would possibly yield methods of hiUside careful testing might indicate the way to better results agriculture without soil erosion. The erosion of lesser and should precede any large-scale planting of jute. slopes is a relatively minor problem and is probably The close competition of jute with better rice lands, related to the usual disregard of basic tenets of soil and the considerable hand labor that necessarily conservation such as contour cultivation, regulated enters into jute production are deterrent factors. grazing and others. The bund construction on soils The legumes currently produced in Burma are aU producing paddy is ideally suited to the ends of soil food or cash crops. The variety is large, indicating conservation, and bunded vaUeys are seen extending that growing conditions are generally good for into rather steep slopes. leguminous plants. The value of such legumes as The methods of soil management are devoted kudzu, alfalfa, lespedeza and the clovers has never presently to production under primitive conditions. been fully exploited in Burmese agriculture. Such Increased agricultural output will come from in¬ legumes are beneficial as soil improvement crops, tensification of cultivation. Such intensification wUl particularly in consideration of the grazing benefit result from the use of improved seed, fertilizer, that is possible at the same time. It is beheved that the mechanization and irrigation. The greatest benefits at introduction of leguminous crops, principally as sod lowest cost are those associated with advanced farm¬ improvement measures, should be given careful test¬ ing techniques. The major research emphasis therefore ing particularly in the dry zone area. The successfid should be placed in favor of that type of agricultural introduction of the legumes mentioned, or of any development. Agronomically, the use of natural and others serving the same purposes, would have a con¬ chemical fertihzers, and the use of improved seed offer siderable influence in promoting a diversification of a wide field for investigation. agriculture. Forage legumes, seeded in a mixture of (a) Introduction of new crops. Among food and oil pasture grasses, serve a dual purpose in providing crops, it is believed that soy beans, safflower, and the excellent grazing and in improving the soil, largely castor plant merit special consideration. Soy beans through the activity of nitrogen-fixing bacteria parasi¬ have been planted in Burma without good results but tizing the roots of the host legumes. Legumes need not should have further study. The castor plant is seen be confined to second-class or marginal sod, as the rather abundantly in the Dry Zone, growing wild. production potential of some, such as alfalfa, is These two, and safflower, are capable of good yields of sufficiently large to justify production on Grade I oil under satisfactory growing conditions in other soil, under irrigation. The introduction of some parts of the world and should be well adapted to the legumes into Burma is restricted by conditions of climate in the Dry Zone of Burma. An intensive pro¬ climate, particularly those relating to the pecuharities gram of soy bean variety introduction would yield at of photoperiodism associated with temperate varieties least a more satisfactory soy bean than has been grown of alfalfa, ladino clover, and others. Recent work in so far in Burma. Safflower is a heavy yielding oil the development of leguminous forage and sod- plant, the refined products of which are used princi¬ improvement crops in Puerto Rico and elsewhere has pally in the paint industry. Chmatic conditions would yielded varieties of "tropical" alfaffa and kudzu that seem to justify its trial introduction. The castor plant, might be suitable for the climatic conditions of a weU-known medicinal, is finding a new market in the Burma. lubrication field. Research workers in Venezuela have The grazing requirements of Burma have never developed a spineless or near spineless castor plant been large and, in the near absence of dairy and hve¬ variety that maintains an ample yield of oil. The grow¬ stock industries, grazing management has not been ing conditions in the Dry Zone appear to be favorable forced into full utiUzation of unimproved grazing for production of this crop and it might be considered resources. The major problem occurs in the Dry Zone AGRICULTURE 175 where, in the dry season, insufficient forage is avaU¬ believed that Burma suffers little from "invasion" type able and cattle must be fed. A future field of investi¬ insect pests such as the locust, although cychc varia¬ gation ndght be the introduction of forage grasses tions in population norms could create serious both for range and pasture lands. Planted with problems of a local nature. The paddy crop has not legumes, forage grasses provide both grazing and suffered appreciably from insect depredations. Cer¬ green manure benefits on cultivated land. tain other crops have. Probably the most damaging (b) Improved seed other than paddy. The emphasis insects in Burma are those attacking stored grain. on seed improvement has always been given to paddy, Chemical insect-control methods appear to be almost to the exclusion of other crops. It is beheved effective, within narrow hmits, in all climates. that many crops are deserving of attention for The numerous nerve-kiUing compounds developed development of new varieties to fit the pecuhar recently have revolutionized the methods of insect- chmatic conditions in Burma. Preference should be control application and greatly increased their effect. given to the improvement of those crops in which the Treatment costs have decreased considerably. The country is trying to become self-sufficient. Principal nature of the new insecticide compounds requhes among these are the oleaginous crops, sesamum and special distribution equipment, usually involving an groundnut. The several hundred varieties of sesamum appreciable investment. However, the equipment is give an indication, by their abundance, of the almost designed for large-scale and low-cost operation. infinite genetic variation that is characteristic of the Indeed, the use of advanced chemical insect-control plant. Outstanding work in the field of sesamum methods is predicated on modern farming practices varietal development has been carried out in for the most part. Research in chemical insect-control Venezuela, the results of which have increased yields should be confined to studies of relative toxicity and to an average of 600-800 pounds and more per acre. effect of insecticides under a variety of treatment The very low yields of sesamum in Burma, averaging conditions. Continuing programs of residual insect- around 117 pounds per acre, may be due to con¬ control should include studies of resistance develop¬ ditions not altogether related to seed variety. A ment in certain destructive insects. It is beheved that deficiency of trace elements, discussed elsewhere, or any large-scale program of insect control would faU cropping methods including water availabihty, could upon the Government to implement. Accordingly, contribute to the general low yield. AU factors that research should include an investigation into the type might depress yields requhe investigation, and careful and variety of apphcation equipment best suited to attention should be given to seed improvement. the needs of Burma. Groundnut improvement should begin only after a The control of insects attacking stored grain and thorough program of introduction of exotic varieties other farinaceous products is influenced by several is completed. Recent work in the United States has factors. Basic among these is the manner in which produced a new variety of groundnut that yields a grain is stored. Basha godowns or open deposits of hay crop instead of nuts. From Central America it is bulk or sacked rice are difficult to treat for insect reported that a new variety has been developed that is control. Granaries with grain stored in bidk are practically resistant to leaf-spot fungus (Cercospora ideally suited for such treatment. Investigations into spp). The most productive groundnut varieties are treatment methods should be conducted in coopera¬ those of the Spanish type. They are characterized by tion with SAMB or other government handling and having a bunch type growth which permits easy storage agencies. cultivation and harvesting, small nuts and a high oil content. Aside from possibly using a hay type ground¬ (3) Plant Pathology nut as a pasture mixture, the principal goal in ground¬ Infestations of fungus, virus, and other disease nut improvement should be in the oil production organisms are a problem of unknown dimensions in possibilities. Spanish varieties of groundnut are best Burma. Paddy is not greatly affected by diseases other able to provide the basic stock of genetic improvement than smut. It appears that rust is a serious and perhaps for that crop. a critical factor controUing the production and yield of wheat in some parts of the country. Research into (2) Entomology disease problems should begin with a survey of The essential first field of research investigation in indigenous disease organisms, concentration areas, entomology should be classification of the indigenous and the principal crops attacked. insect population. Following the separation of insects into those destructive, those useful, and those that he (4) Agricultural Chemistry and Soils between the two extremes, studies should be made on The near absence of soil information in Burma insect pests most damaging in their activities. It is permits a wide field of activity in soil classification and 176 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA laboratory work. Unusual climatic and growing of very small quantities of sodium borate (Borax), a conditions in the Delta warrant investigation into the water-soluble form of boron, on soils containing one relationships of low pH, reduced soil leaching and part per million or less of boron may have very sig¬ reasonably high soil calcium levels. The introduction nificant resuhs. However, in excess of 100 ppm, boron of new crops into the Delta would create a host of new may have a depressing effect on agricultural pro¬ problems in the management of delta soils, and duction. Superabundant applications of boron are research in soil chemistry would be essential in guiding soil sterilizing in nature, and are often used commer¬ the development of that program. Within the scope of cially for that purpose. agricultural chemistry, trace element deficiency in¬ Soils in the Yamethin and Pyinmana sub-divisions vestigations should be made on soils of restricted of Yamethin District have been tested for boron. The areas. It might be that large tracts of cultivated acreage results of these tests indicate that boron is generally are limited in their productivity by a deficiency of deficient in the area tested. It is possible that the trace elements. deficiency is so acute as to be seriously affecting some (a) Trace element investigations. The role of trace crops. It is suggested that the malformation charac¬ elements in crop nutrition is recognized as an import¬ teristics of sesamum are related to boron deficiency. ant and sometimes a critical factor affecting agri¬ Research can determine what corrective measures are cultural production. In recent years attention has been necessary, and whether the deficiency extends to trace given to marginal and submarginal lands with invest¬ elements other than boron. igations aimed toward determining the avadability of Investigational work in determining the extent of trace elements. Research work in subtropical areas of trace element deficiencies should be restricted to those the world has indicated that otherwise productive land areas that are suspected of such deficiencies. The is practically worthless if one or more of the trace conditions conducive to trace element deficiencies are elements are absent or nearly so. Most of the research varied, and occur in isolated areas or spread over large work has been done on boron, copper, cobalt, zinc, tracts of land. Field testing for determining the degree molybdenum and manganese. Very significant results of deficiency and for recommending corrective have been forthcoming. In Australia the practical measures should be closely coordinated with labora¬ application of corrective measures is currently under tory work. way with dramatic success. (b) Establishment of soil analysis laboratory. In hne Trace elements are those that are usually present in with the determination of trace-element deficiencies, soils, but not contributing major amounts of nutrient the estabhshment of a sod analysis laboratory is salts to growing crops. They are rarely deficient to essential. The planned program of irrigation project such a degree as to preclude crop production alto¬ construction is necessarily closely tied to land classi¬ gether. Their very low concentration leads to ex¬ fication. Proper land classification requires laboratory tremely low yields that are considerably out of pro¬ work and, for large-scale programs, a well-equipped portion to the trace element representation in the soil soil analysis laboratory is essential. Field kit complex. Deficiency symptoms usuaUy occur in the equipment is very useful and it is believed that all quahty of produce before the yield is seriously agricultural experiment stations and other field offices reduced. Trace element deficiencies appear to be more should be supplied with equipment of that type. detrimental in dicotyledenous plants. A review of the agricultural hterature of Burma (5) Animal Industry reveals that an unknown "disease," variously known This field has not been developed in Burma and no as shock head, green flowered sesamum, or chinbaung, organized livestock production program is function¬ affects the sesamum crop. The symptoms are poor ing. As a new field, investigations should start at the terminal growth and incomplete differentiation of grass roots with a survey and classification of the flower parts. These symptoms suggested a deficiency natural resources that would support such an industry. of one of the trace elements, probably boron. Those areas apparently best suited to livestock Boron is usually derived from the decomposition production by reason of climate or potentiaUy abun¬ of tourmahne. The form of boron avadable to plants dant feed, namely the Shan States and the Delta, is largely held in the organic fraction of the soil. If the should be investigated first. The survey should cover organic matter of sod is low, a consequent reduction indigenous and exotic forage plant populations, of avaUable boron can be expected. Soil pH values density and palatabihty studies. Available supplies for exceeding eight have the tendency to render boron use as supplementary feed, and animal requirements unavailable due to a chemical change that occurs in for mineral nutrition in areas of suspected deficiency the soil. Boron concentrations of less than one part should be investigated. A cursory survey of livestock per miUion are considered deficient. The application pests and diseases prevalent among draft animals AGRICULTURE 177 nught aid the selection of suitable breeds for intro¬ central library and serve as a nucleus around which duction into the areas concerned. Some breeds of a research library could be budt. Agricidtural research hvestock, particularly the typical temperate types of in every part of the world is now many years ahead of beef and dairy stock, are unable to withstand the high practice. However, it does not necessarily foUow that humidity and temperature conditions of the Deha. A every evolutionary step must be taken in solving an common disease, for example, is tuberculosis. Intro¬ agricidtural problem. It is often possible to make duction of hvestock breeds must necessarily precede immediate apphcation of the latest research results. attempts to hnprove them. It is beheved that a long- To be aware of the direction and extent of world-wide range research program shotdd be started as soon as agricultural research, and to avoid duphcating work practicable in order to have a suitable range of hve¬ already done, it is considered of importance to stock breeds avadable when those areas of agri- estabhsh and maintain an active hbrary research ctdtural development in the Delta enter the opera¬ center. tional stage. After research determines the feasi¬ bihty of economic hvestock production, plans should c. Extension be laid for investigating the possibihties of processing The organization of the present extension service is dairy and other products of the animal industry. shown on Plates 11, 11 A, IIB and IIC, and that of the proposed revision on Plate 12. The proposed (6) Agricultural Engineering organization is an ultimate target to be reached by Burma does not have a single modern farm. gradual stages. The cost of the proposed program is Unusual conditions of sod and climate have dis¬ given in Table VIII-15. couraged the introduction of mechanical farm equip¬ ment. The most productive section of the country is TABLE VIII-15 the most difficidt to convert to mechanized farming REORGANIZATION OF THE AGRICULTURE owing to the high rainfall, heavy sods, and the like. DEPARTMENT Dry plowing alone has largely failed. The causes for fadure have been due in part to unsuitabihty of equip¬ Present Staff Proposed Staff ment and partiaUy to poor management and lack of Num¬ Cost Num¬ Cost research. Mechanized farming, under conditions ber {kyats) ber {kyats) quite different from those for which most farm equip¬ ment was designed, cannot be expected to function Senior Administrative Post 1 19,200 1 19,200 Other Administrative Posts — — 5 76,000 efficiently in the hands of untrained personnel. Un¬ Selection Grade 14 1,68,000 19 2,28,000 successful attempts to use farm machinery in Burma Senior Branch 18 1,14,480 78 4,96,080 have strengthened the behef of many agriculturists Junior Branch 98 4,11,600 366 15,24,600 Inspectors — — 483 10,72,260 that mechanical equipment is not suitable for this Fieldmen 126 1,91,646 2,759 41,96,439 area. In fact, much of agricultural Burma is ideaUy Clerical and Peon 185 2,83,578 1,132 18,14,056 suited to modern mechanized farming and it is a 11,88,444 94,28,635 responsibihty of research to investigate and modify Overhead Costs 10,00,000 1,00,00,000 farm equipment to that end. Cost of Materials 10,00,000 1,00,00,000 Agricultural engineering should develop methods of farming that are compatible with the use of mech¬ anical equipment. Such problems as folding green manure crops into heavy clays, mechanically harves¬ (1) Fields of Coverage ting the various paddy-variety crops, the adaptation Burmese agriculture may remain primitive over of grain separators to handle a wide variety of crops, most of hs cultivated acreage for several decades. and the seeding of paddy using mechanical equip¬ Efforts to extend agricultural knowledge leading ment, offer chaUenges to research. By determining toward the introduction of improved practices should power and equipment types best suited to farming be devoted to primitive agriculture in proportion to conditions it would be possible for research to recom¬ hs contribution to national weffare. It appears that mend farm unit sizes best adapted to economic utih¬ lack of knowledge about credh, taxes, standards of zation using modern equipment. quahty and marketing are as detrhnental to the inter¬ ests of the farmer as the manner in which he farms. (7) Agricultural Library Basic information on soils, crops and farming methods A research program is strongly dependent upon an wiU serve to increase production. The dissemination of agricultural hbrary. The coUection of aU agricultural information on the care and management of live¬ Hterature relating to Burma could be assembled into a stock wiU help to reduce anhnal losses. An

R.B.—12 178 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA understanding of the services that Agricultural Exten¬ than lectures or pamphlets. Demonstrations should sion offers wih encourage a more active interest among be made not only for educational purposes but to farmers for soliciting advice or technical service, improve practices in common use. The quality of particularly if such service is free of cost. An import¬ demonstration work is given the test in the field and ant field of potential development is that of youth the farmers observing it will be harsh judges of poor group organization. The present generation of farmers work. At the demonstration level, errors cannot be is not likely to change agricultural methods appre¬ made without jeopardizing the whole fabric of the ciably, regardless of the progaganda to which it is extension system. The average farmer believes only subjected. Long-range extension work will be more what he sees and an effective demonstration is more effective if efforts are concentrated on youth training. likely to convince him than any other means of exten¬ A program for establishing youth training groups sion. The initial problem of demonstration extension would depend upon local extension officers to imple¬ is to generate sufficient interest among local farmers ment. The plan is simple. Young members of the farm to attend and observe what is to be done. Their community are joined into one or more groups, each attitude can be expected to be critical from the outset with a distinctive name. The group is organized into because the practice demonstrated is new. The results officials and members. Regular meetings are held and of demonstrated practices are usually not readily agricultural discussions are conducted by the exten¬ apparent and many require a waiting period as long as sion officer or other qualified person. Members are a crop season to become significant. AU of the quahfi¬ encouraged to select farm projects which will be cations and explained advantages are forgotten by the planned by them, with competent help, and executed farmer with the lapse of time, while the disadvantages by them. These projects may cover any one of a that the new practice entails are not. Among the many, number of activities such as hog raising, egg pro¬ however, there are usually a few that profit from the duction, vegetable growing, sewing and cooking. The demonstration. Those few farmers are, in fact, the spirit of competition is introduced between members core of people that wiU unconsciously carry the burden of a single group and between various groups. of disseminating agricultural knowledge. The exten¬ Accurate project records are kept and periodic sion officer serves only as a catalytic agent. The foUow¬ reports are given to the group. Youthful expression of ing hst is suggestive of the wide variety of extension sincere enthusiasm for different and better methods of practices that can be demonstrated : increasing farm production might generate some interest in the agriculturist father. A demonstration of Farm Supplements and Their Use improved production on a peasant farm might serve The Storage and Use of Manure to encourage the spread of that scope, with the The Use of Chemical Fertilizer inherent obhgation on the part of the participant to do Improved Seed, its Storage, Collection and Use aU work associated with his project. The contribution How to Construct a Granary of personal effort toward succeeding, and the spirit of Care and Feeding of Animals competition, generate the type of youth interest that The Use of Lime is conducive to learning. Even though the value of new Irrigation Techniques and better methods is not fuUy appreciated and Identifying Animal Diseases adopted by the parent agriculturist, some beneficial Methods of Controlling Insects Attacking Oxen effect should be registered. Farm First Aid Simple Methods of Laying out Bunds (2) Means of Implementation Contour and Strip Farming There is a natural resistance by agriculturists to How to Treat Seed for Better Germination changes in agricultural methods that depart from the Improved Seeding Methods traditional customs. Spoken or written propaganda Improved Cultivation Methods is usually ineffectual with uneducated farmers. It is Improved Harvesting Methods beheved that demonstration is a much more effective Farm By-products as Livestock Feed. means of persuading farmers to adopt new practices The use of propaganda as a means of agricultural for increasing their production. The average farmer extension increases its effectiveness ff it is presented as is not prepared to travel far or to allow much time to entertainment. Roving teams that travel from vdlage observe demonstrations related to farming. It is to viUage showing color and sound films demon¬ necessary, therefore, that small-scale demonstrations strating deshable practices cost relatively httle and are be arranged for execution in vdlages. Such demon¬ hkely to have some effect. The average small viUage strations are relatively costly, but it is beheved that is without a cinema, and an opportunity to attend a they are more effective per unit of money invested free show that does not interfere with the dady work AGRICULTURE 179 might appeal to many farmers. FoUow-up work by the use toward obtaining the maximum benefit consistent local extension agent would further aid the intro¬ with economy while managing it as a renewable but duction of improved farm practices. destructible resource. Such a land classification would After demonstration and training film means are designate areas according to their major suitabiUty partiaUy accepted by agriculturists, the distribution of for cultivation, watersheds, forest, grazing, wild hfe or simple pamphlets might have some beneficial effect. recreation purposes. A land classification recommend¬ Later a bimonthly or quarterly agricultural publica¬ ing general land use should be nation-wide in scope tion might be useful, at least for distribution to and could form a basis for future legislation deahng extension agents. with proper land use. Probably the most effective extension of agricultural Land classification on a smaller scale is specific in methods is the efficient operation of a demonstration its recommendations and is based upon many local farm. AU the demonstrations of farming are on factors that affect the growth of crops. Such land display every day and all phases of farming are classification is justified principally for irrigated soils, capable of observation. Modern farming would and for new areas that have never been cultivated. employ few of the simple improvement practices recommended for primitive agriculture. The nature of Nation-wide land classification on a reconnaissance its revolutionary approach to agricultural production scale and more detailed technical classification of would require that modern farming be explained and highly productive sods merits careful consideration demonstrated. Organized tours for the purpose of as a relatively low cost means of assessing the agri¬ inspecting demonstration farms would acquaint cultural resources of the nation and of indicating the farmers with possibilities of increasing production. best methods for utilizing agricultural soils. The succeeding paragraphs are a condensed presenta¬ d. Utihzation of Aerial Photographs tion of applicable principles and practices of land classification. The agricultural use of aerial photographs is potentially very great. The size of presently unknown (1) General procedure. The normal procedure in soil land areas topographically suitable for cultivation, classification begins with a field reconnaissance of the area natural boundaries, erosion conditions, drainage to be classified. Aerial photographs or other available basins and possible communication routes can be reference maps are marked to indentify outstanding land rapidly determined with a high degree of accuracy. features or characteristics that have a bearing upon class¬ Aerial photographs are an aid to land classification by ification. A general classification of soils is sketched on the map to show gross differences of soil types, distinctions in deUneating sod type boundaries of the vegetative topography, drainage characteristics, widely varied natural cover. They are useful on large areas as weU as on vegetation, and other factors bearing upon classification. tracts as smaU as 100 acres. Aerial photographs are The locations of sites for taking soil samples are tenta¬ particularly effective in determining drainage areas, tively selected. Occasional pits are opened for examination and the characteristics of topography at dam sites and of the surface and subsoil layers. Simple field tests are along canal lines. Contour maps can be constructed often made for the determination of pH, relative calcium from stereoscopic analysis of aerial photographs, with concentration, or other basic soil conditions. a degree of accuracy consistent with ordinary plane Data accumulated in the field survey are organized and table surveys. assembled systematically. The geology of the area is deter¬ Administration of the land subsidy program could mined. A topographic map with a contour interval of five be facditated by using aerial photographs for acreage feet or less is obtained, usually from aerial photographs. determinations. In the event that land restoration If the area to be classified is virgin land, the character and diversity of cover is determined. All data are assembled subsidies become differential payments dependent into a rough soil map from which site selections are made upon the density and other characteristics of the for collecting soil samples. vegetative cover, aerial photographs would serve as authority for determining into which class of subsidy (2) Sampling. Land classification appraisers enter the payment any plot of land would fall. field equipped to perform the tests outlined in succeeding paragraphs. The equipment should include such items as e. Land Classification base maps, plane table, compass, hand level, shovels, soil augers, sample containers, electrolytic bridge and acces¬ Within the framework of long-range agricultural sory utensils, and soil reaction (pH) test kit. Aerial photo¬ research, land classffication should be given con¬ graphs provide the best possible base maps. Soil samples sideration. The objective of such a program would be are taken at intervals that are determined by the com¬ to classify land according to its basic resources and plexity of the soil types over the area concerned. Usually a present conditions with the purpose of directing its sample is taken from every 100 to 300 acres. The degree of 180 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA accuracy required for classification may influence the soil has been derived, as well as its age and degree of number of samples taken. A soil auger of three- or four- weathering. Note is made of whether the soil is of primary inch diameter is used to take samples. The upper few formation or whether it has been laid down as a secondary inches of soil are removed in order to gather samples of deposit. The permeability of both surface and subsoil mineral soil free of surface detritus. At one-foot or layers is considered, particulariy for soils to be irrigated. eighteen-inch intervals a three- or four-pound soil sample These characteristics are given numerical ratings decreas¬ is collected to a depth of five or more feet. The samples are ing from an optimum condition of 100 to those of 50 or placed in canvas bags and marked for identification. less according to their degree of unsuitabihty. The average (3) Analyses. In the laboratory, soil samples are tested of ratings is then taken as a numerical rating of sod profile for chemical and physical characteristics. Determinations characteristics. Surface texture is an important factor in of the quantities of total nitrogen, available phosphoric classification and relative values are given to each of the acid, and available potash are expressed in pounds per textural classes. In areas to be irrigated, slope is a major acre. The per cent of soil organic matter is measured. The consideration with such variations as uniformity, undula¬ soil pH, indicating the hydrogen ion concentration of the tion and degree being taken into account. soil, is determined and numerically expressed. A pH value All other characteristics of the soil are grouped into the of 7-0 is neutral. Values less than seven are acidic in re¬ last soil characteristic contributing to classification. These action while those exceeding seven are alkahne. A diff¬ factors are generally normal or nearly so. However, any erence of 1-0 in pH values indicates a soil reaction diff¬ one of them could be a limiting factor or one that by its erence ten times greater. Thus, a soil pH of 4-5 is ten times unfavorable condition could render an area unsuitable more acid than one of 5-5, and 100 times more acid than for cultivation in its tested condition. The general soil pH 6-5. Other chemical tests measure the presence of toxic nutrient level is one of these. Particular emphasis is given concentrations of sodium in its water-soluble and ex¬ to total nitrogen, available phosphorus, and available changeable forms, and of calcium carbonate and chlorine. potash quantities, for these are the principal nutrients that The total concentration of salts is determined by an electric are drawn upon heavily by growing plants. The soil pH can conductivity test. In addition, the base exchange capacity be a critical factor. Values under pH 5-5 create conditions of the soil is measured. There are further chemical tests conducive to a chemical change in the sod complex that that may be helpful in soil classification. Those include renders certain nutrients unavailable to plants. Phosphorus trace element and minor element determinations, principal and magnesium are particularly affected, as are several of among them being boron, copper, cobalt, zinc, molyb¬ the secondary and trace elements. The soil reaction is denum, iron and manganese. usually slightiy acidic and reactions even of extreme The physical analysis determines textural and water- acidity are commonly corrected by lime application. Very relation characteristics of soil. Texturally the soil is graded high pH values are more difficult to lower. Soil reactions into particle sizes. Particles having a diameter exceeding approaching either extreme of the pH scale largely deter¬ 2-0 mm are considered as gravel; from 2-0 mm to 0-2 mm mine crop types that will satisfactorily grow, for every plant coarse sand; from 0-2 mm to 0-02 mm fine sand; from 0-02 has optimum conditions of pH and tolerance hmits that mm to 0-002 mm silt; and particles smaller than 0-002 mm are often rather narrow. Soil pH values between six and as clay. After determining the per cent representation of seven are favorable for most cultivated crops. sand, silt and clay, a textural class is assigned the sample. The classification of sods to be irrigated takes into Variations in textural class range from sand composed account the calcium-magnesium balance in the soil of coarse particles to clay composed of extremely fine complex, as well as a careful consideration of the total sah particles. It is generally considered that sandy loam, loam, concentration of the soil. Sodium salts are given special and silty loam constitute the best textural classes. Loams attention. A consideration of soil drainage is intimately with a preponderance of sand, silt or clay are next in order associated with those characteristics. Present erosion and of textural quahty, decreasing in desirabihty as the major soil erodability are considered, together with characteri¬ fractions become finer. As extreme conditions are stics of microrelief There are other factors pecuhar to any approached soil textural quality is lowered proportionahy particular area that could figure heavily in classification, as sand or clay increase greatly in quantity. an example being a serious deficiency of one or more of the The classification of soils to be irrigated requires the trace elements. determination of soil moisture equivalent which is The group ratings of each of the broad soil characteris¬ approximately the amount of water required to saturate a tics are then assembled and a final classification is obtained soil from an air dry condition. Usable water capacity for every soil sample analyzed. Arbitrary values are measurements are taken to ascertain the mm of water per estabhshed for sod grades depending on the degree of ^meter that a soil can hold and use. intensity desirable in classification and the number of soil (4) Classification. The field and laboratory data are grades to be used. The usual soil grade numbers he between assembled into several broad characteristics relating to five and eight. soil classification. These are sometimes separated into four After the classified soil sample locations have been groups, namely soil profile characteristics, those of surface plotted on tracing paper, that information is super¬ soil texture, slope and other conditions. The soil profile imposed on aerial photographs. Soil grade hmits are considers the kind of parent rock material from which the usually easily traced directly from aerial photographs and AGRICULTURE 181 classified sod sample iifformation. A soil map should show arable land, but in the irrigable area only after careful sod sample locations, rivers, cities, canals and other land consideration or under conditions of an ample water features of interest. supply. (5) Classification standards for urigated land. Five soil grades have been established to fit the needs of agri¬ Grade V-Non-Arable cultural land classification in Burma with due considera¬ tion given to the requirements of paddy production. The Steep, rough, broken, or badly eroded; soils of extremely first three grades are progressively less arable, the fourth is coarse or extremely heavy texture, or shaUow soils over a special or temporary classification. The fifth is a defi¬ gravel, shale, sandstone or hardpan; inadequate drainage nitely non-arable grade. For irrigated lands or lands to be and high concentrations of soluble salts. considered for irrigation, the following classifications are (6) Specifications for land classification surveys and tests. suggested: The accompanying Tables VIII-16 and VIII-17 present typical descriptive specifications for land classification surveys and tests. More detailed specifications and a Grade I - Arable description of typical soil tests and the laboratory equip¬ Highly suitable for irrigation farming, capable of ment required to make them have been prepared by the producing sustained high yields of cUmatically adapted Agricultural Section of the Technical Cooperation crops at reasonable cost; smooth lying with gentle slopes; Administration in Burma. sods deep and of heavy to fairly fine texture; good water- holding capacity; free from accumulations of soluble salts; sod and topographic conditions such that no TABLE VIII -16 specific drainage requirements anticipated in the near LAND CLASSIFICATION SURVEY REQUIRE¬ future, no erosion expected from irrigation, and land MENTS development relatively easy.

Reconnais¬ Semi- Grade II- Arable Detailed sance detailed Moderately suitable for irrigation farming; measurably lower than Grade I in productive capacity; may have Land classes recognized 1-3-5 1-3-5 1-2-3^1-5 lower water-holding capacity, as indicated by hght texture Scale of base maps 1 .- 24,000 1 : 12,000 IJ: 4,800 or Umited sod depth; may require large quantities of Accuracy—per cent 75 90 97 irrigation water as indicated by a coarse-textured subsod. Maximum distances between traverse—miles 1 -5 -25 Topographic Umitations may include uneven surface Field progress per man-day requiring moderate costs for levehng. Woody vegetation —square miles 3-5 1-3 ■25 may have to be removed from the surface. Any one or a Minimum area of Class 5 to combination of these limitations may be sufficient to be segregated from larger arable areas—acres 4 -5 -1 reduce lands from Grade I to Grade 11. Minimum area for change to lower class of arable land Grade III- Arable —acres 40 10 2 Minimum area for change to SuitabiUty for hrigation restricted because of more higher class of arable land extreme deficiencies in the soil or topographic characteris¬ —acres* 40 20 10 tics as described for Grade II lands. May be more expen¬ Soil and sub-strata examina- tion.f Boring or pits (5 ft. sive to prepare for irrigation or more costly to farm. May deep) for profile analyses. be moderately sahne. Adverse potential drainage condi¬ total salt and pH determi¬ tions, correctable at a reasonable cost, may be anticipated. nations per square mile 1 4 16 May have good topography, but with inferior soils have Deep holes (about 15 ft.) for full profile analyses; and restricted crop adaptabihty; require larger amounts of permeability studies, mech¬ irrigation water or special irrigation practices, and demand anical analyses, moisture greater fertilization or more intensive soil improvement determinations and chemical practices. analyses of the soluble salts of the soil layer—per 50 sq. Grade IV-Arable Sxutabihty for irrigation distinctly restricted because of *In addition to size, the tracts must be of such shape and so one or more extreme deficiencies in the sod, topographic located as to permit their being farmed as fields. or drainage characteristics. Soil texture may be very light, tThe depths indicated are minirnum unless impervious material restricting the variety of adaptable crops, requiring large or permanent water table are encountered at shallower depths. The number of examinations and analyses should be increased as amounts of irrigation water or special irrigation practices. necessary to meet specific objectives or with the complexity of the May have very uneven topography or restricted drainage, area. Full use should be made also of road cuts, stream banks, and susceptible of correction but at high cost. Included in similar exposures. 182 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA

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AGRICULTURAL METHOD

PRACTICE COST AND BENEFIT ANALYSIS

TOTAL COST Present farming. iiililll <» fcliliwiiil^BlA fJk

"^;"!;!:;;:!!:::::::;J;:LI FAMILY LABOR

HIRED LABOR Improved seed.

OTHER COSTS v^^^TTTrrTv? Fertilizer used under present methods. J , ...... jj.iin.iii TOTAL RETURN ( FARMER) •" ""■111TII°'

Partial mechanization Plowing and Harvesting.

'""""• Tiin """ ■

Improved farm implements.

Storage and use of manure. Li^::^ i..!ff!

Composting. i*T;> ..i..t.o|»..i..i.rtH;*i* a«iiYirt.i>.V..V

Modernization without vwvtwitwvtvm Irrigation. ;;•■::::;;:!:;•!■;;:="=' ...n...... :"!:";!-'■■

Ic tf < ^ « Irrigotion without iiuKiiPiiikfn' v^I Modernization. Al'.mu liIiiJH,i*a>niiJuw

Demonstration farms per year with Irrigation 8 nrTTTrmmtw

Modernization. lMl.i».l...... |,..,.., 0 40 80 120 160 200 24 0 280 320 KYATS PER ACRE

K.T.A. RANGOON JULY '53

AGRICULTURE 183 f. Implementation Plan The costs of present farming are grouped under It is considered essential that effective research, if labor, animal and implement, and other costs. They limited by insufficient funds, should be restricted in its reflect both farm and government costs. The values of area coverage and complete in its intensity of appli¬ the costs have been derived by considering the pro¬ cation. Extension is difficult to effect under ideal duction costs of the major agricultural crops grown in conditions. A thinly scattered program that is largely Burma, and weighting them according to their relative concerned with administrative detail is not effective representation. The average cultivation cost of the and probably does not pay to maintain. It is believed average crop grown amounts to K67.70 per acre. The that extension should be carried out to the tract level average total return to the farmer has been similarly and that most support and emphasis should be given calculated, based on 1953 prices at the farm level, and to local extension agents. A reasonably reliable and found to be K83.60 per acre. The difference, K15.90 low cost system of evaluating the effect of the exten¬ per acre, is the calculated average profit to the farmer. sion program should be established in order to Average present cultivation costs and returns form determine its economic feasibihty and to direct the the foundation of the analysis presented in Table program toward those means that are most effective. VIII-18. A program that would be effective from the outset, a. Improved Seed a basic qualification, must be modest at the start. Under present cultivation methods, the use of Consequently it would be restricted to a limited area. improved seed, chemical fertilizer, partial mechani¬ It is believed that the areas most deserving of initial zation, improved farm implements, the use of manure, attention are those lying within the proposed irriga¬ and composting are analyzed. Improved seed is tion projects. After an effective extension program is calculated to cost the Government approximately K8 functioning in those areas, it could be expanded to per acre to produce and distribute to issue stations other areas of high productive potential and to new where farmers can obtain it. The cost includes produc¬ areas of undeveloped land resources. Finally such a tion at standard paddy production costs, plus the cost program could extend itself to all cultivated acreage, of transportation and handling. In this instance the expanding only as fast as its effect is economically average hauhng distance was arbitrarily estimated to justified. be from Rangoon to Toungoo. (In addition, con¬ 5. RESTORATION OF PREWAR ACREAGE sideration was given to the income loss that Govern¬ ment suffers by producing improved seed instead of Approximately two million acres of formerly culti¬ exporting the production of paddy from the same vated land are now out of cultivation because of insur¬ acreage.) The cost of using improved seed is entirely gency. It has been found that the re-estabUshment government borne. The average 10% yield increase is of government control over these areas is followed by calculated, at present prices, to be worth K8.85 per a rapid restoration of cultivation. It is the policy of acre if exported. The total benefit to Government (as Government to assist this return to cultivation, and distinguished from the farmer) of using improved seed subsidy payments are made to cultivators returning is therefore less than one kyat per acre. to the land. It appears that no other incentive is necessary to restore formerly cultivated land into b. Chemical Fertilizer productive use, and the problem therefore resolves Chemical fertihzer application is calculated to itself to one of establishing government control over increase the cost of farming by K33.70 per acre. With the areas concerned. a 30% increase in yield, the total average return is 6. ANALYSIS OF RELATIVE BENEFITS K25.08 per acre. Within the present price structure Each method employed for increasing agricultural the use of fertiUzer is unprofitable for the farmer. The production differs in cost, division of cost between world market price for rice is several times higher labor and cash expenditure, manner of application than the controlled paddy price within Burma. By and results. The methods for increasing production controlhng the price of paddy, all other agricultural discussed previously have been cost analyzed and the production is automatically controlled relative to results detailed in Table \llI-\S(see next page) shown paddy. At the farm level, a 30% increase in yield of graphically in Plate 13. Costs are arranged under major any crop including paddy is worth less than the cost of headings such as labor, animals and implements. fertilizer to produce it if sold at controlled prices. They have been taken from Table VIII-9 or qualified However, if paddy were sold at world market prices, by footnote reference to other sources. Anticipated the use of fertilizer would be very profitable. Table returns appear under the specific reason for increased VIII-19 (see p. 186) indicates the per-acre profit- production. In both instances values are expressed in taking position of farmer and Government in paddy kyats per acre. production. 184 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA

TABLE AGRICULTURAL METHOD COST AND {Based on

Costs to Implement

Practice Animals Mach¬ Con¬ Misc. Total Labor and Produc¬ Trans¬ Distri¬ Pur¬ Imple¬ tion portation bution chase inery struction Costs Costs ments

Present Farming 43.00 20.80 — — — — — — 3.90 67.70a Improved Seed — — 8.006 — — — — — — 75.70 Fertilizer Use under Present Methods(rf) 0.50 — — 1.50 1.50e 30.20/ — — — 101.40

Partial Mechanization, Plowing and Harvesting(A) 10.78 — — — — — 19.56 — — 136.34/

Improved Farm Implements 0.25 24.60 — — — — — — — 92.55

Storage and Use of Manure — — — — — — — 3.16 — 70.86 Composting 55.60 — — — — — — — — 123.30 ModemizationCy) 2.83 — — — — — 27.80 — 36.30 66.93

Irrigation — — — — — — — 19.50 — 87.20

a Weighted nationwide average production = 0-464 tons e Estimated 100% of freight cost, storage, handling and per acre; weighted value K83.60 per acre; weighted local transportation. present cultivation cost K67.70 per acre; average net income = K15.90 per acre (Sanders and Table VIII-9). / Based on 10% of 17-45 and 90% of 20-20 chemical fertilizer. b Government cost to produce and deliver improved seed. g See separate report analysis. c Government income by use of improved seed. h If irrigated and double cropped. d Based on 100 pounds per acre from Rangoon to / Cost equal to present farming methods except soil Toungoo (considered as an average shipping distance). preparation and harvesting operation. AGRICULTURE 185

vin-18 BENEFIT ANALYSIS IN KYATS PER ACRE 1953 prices)

Expected Returns by Increased Production

Ferti¬ Practice Soil Uzer Insect Farm¬ Green Crop Double New Total Pre¬ and Seed¬ Con¬ Har¬ Culti¬ ing Man¬ Rota¬ Graz¬ Fal¬ Aban¬ Crop¬ Gen¬ Acre¬ Re¬ para¬ Place¬ ing trol vesting vation Bunds uring tion ing low doned ping eral age turn tion ment

j See Table VIII-9. p Weighted average increased yield with irrigation is 21%. k Estimated that bunds occupy 10% of land. q Estimated 15% new land cultivated under any large irrigation program. / Estimated benefit of cost. r The high labor and machinery costs are based upon a diversified farming program including supervisory m ^ cow per acre for 80 days. personnel necessary for an initial program. n 18% of present total return. o 6% of present total return. 186 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA The total benefit from the use of fertilizer, calcula¬ plowing and threshing teams would employ three men ting that all excess production would be exported, and a foreman working independently, and organized approximates K28-2 per acre exclusive of costs. The and operated as nonprofit cooperatives or govern¬ unusual division of profits between Government and ment services. farmer has created an economic situation whereby a practice is economically profitable for Government d. Improved Farm Implements and unprofitable for the grower. The profit lo Govern¬ The high initial cost of the tractor, the principal ment is so great that a partial subsidy of the cost of power source for farming operations, entails high depreciation and interest costs which may not be TABLE VIII - 19 warranted unless the tractor is fully equipped with FERTILIZER USE AND BENEFITS (PER ACRE) the less expensive accessories and implements usually provided for soil and crop working and for handling 100 lbs. Fertilizer farm chores. The improved implements are therefore No Fertilizer Per Acre to be regarded as particularly important to economical mechanization. Farmer Govt. Farmer Govt. The advantages of using improved animal-drawn equipment are limited to better seed-bed preparation, Cost of Production or Purchase K74-4 K84-6 K108.10 Kl 10.00 saving in time, and a lessening of the farmers' physical Value 84-6 161-6* 110.00 223.50 burden. Oxen for the power, sheds, yokes, carts and animal feed and care would still be necessary. The *At K146/ton plus SAMB profit of K150/ton market price of benefits from such improvements are difficult to K296/ton or K16-6/acre. evaluate because so much depends on the individual farmer's management and planning, the quality and fertilizer seems desirable to permit and encourage condition of his animal power, and the amount and chemical fertilizer use. In any case, as the development kind of equipment being used. In many cases, no program is a government program, the criterion for essential change in the farming methods may result. deciding whether or not to introduce an innovation should be the combined profit of farmer and Govern¬ e. Storage and Use of Manure ment, with any injustice to the farmer being eliminated The storage and use of manure to its fullest either by subsidy or adjustment of the profit ratios. It potential involves the construction of a storage tank would appear under present cultivation methods that and basin that can protect available manure, both fertilizer application would be profitable only for liquid and sohd portions, until the time of field appli¬ paddy production as that is the only crop that enters cation. The depreciation, interest and maintenance the world market. costs of such a tank, large enough to accommodate the normal manure output of two oxen for eight c. Partial Mechanization months, amounts to K3.16 per acre. The value of the Partial mechanization, meaning the mechanization stored manure, in terms of increased yield, is K4.55 of the soil preparation and threshing operations, is the per acre. Independent of other modernization basis for calculation of double cropping. The farming measures, the practice is therefore barely profitable. methods would not change, except for plowing and threshing, and the assumption is made that partial f. Composting mechanization would be carried out on irrigated land. A cost analysis of composting reveals that at The cost estimate makes provision for five Farmall present labor rates and without mechanization Super MD tractors with five 3-disc plows, and a measures it is more expensive than the returns result¬ maintenance shop truck to service and repair them. ing from its application. Composting costs are all Costs of depreciation, maintenance operation and labor since the constituents of compost are available interest are included in the total costs of plowing. on the farm—manure, soil and vegetable matter. The Five tractor operators at K5 per day, one mechanic at analysis was based upon a ten-ton apphcation of com¬ K8 per day, and a foreman at K500 per month make post per acre whh an estimated yield increase of 33 % up the personnel required. It is estimated that four per year for a three-year period. Labor of composting tractors would work seven hours per day while the was calculated at 66-6 man-days per acre, three- fifth is undergoing servicing or repairs. Ten per cent quarters of which was spent handhng vegetative of working time is left for moving operations from one material, 10% soil, and 15% manure. The cost of area to another. Threshing teams would be equipped K167 per acre was divided by three to obtain annual with one thresher and one tractor. Each of the per-acre cost at K55-6. AGRICULTURE 187 g. Modern Farming apparent that a wide variety of combinations for Modern farming was analyzed without irrigation or increased production is possible both under present double cropping. It will be seen at the outset that the cultivation methods and under varying degrees of total cost is less than that by present cuhivation improvement. methods and that labor costs are exceptionally low. No labor need be hired. Costs are principally in E. AGRICULTURAL AIMS AND SUGGESTED machinery and equipment, being approximately 18% GOALS more than that for animal and equipment under 1. PRESENT IMPROVEMENT MEASURES present cuhivation methods and for fertilizer. The The costs of present agriculture are not generally returns from modern farming are more than twice the realized. A careful analysis reveals that a considera¬ per-acre costs, and profits exceed those of present tion of depreciation, interest and maintenance factors cultivation methods by more than five times. in calculating farm costs results in a per-acre cost to cuhivate of approximately K42-7. This does not h. Irrigation include the labor supplied by the farmer and his Per-acre irrigation costs were taken from a weighted family amounting to an additional K25 per acre. If it cost analysis of each of the proposed irrigation pro¬ is recognized that it presently costs the farmer K42-7 jects, i.e., Yamethin, Mu, Loikaw and Kandaw. The per acre in cash or in produce to cultivate his soil, the costs include depreciation, interest, maintenance, and costs of improvements leading to much greater agri¬ operation expenses. The total returns of irrigation are cultural production and profit are better appreciated. increased over those of present cultivation methods At present the improvement factors operating in by approximately K46.57 per acre without the Burma consist of providing improved paddy seed to advantages of modern farming or double cropping. farmers and the benefits of a thinly spread research and extension service. The costs of producing im¬ i. Demonstration Farms proved seed are entirely government borne and do not Demonstration farms combine all the advantages of yield a very large per-acre return to Government. The double cropping and modern farming appearing in the effectiveness of present research and extension is not table analysis. The costs of training excess personnel great. and of hiring initial foreign technicians are not calculated in the cost estimate as they are not a 2. A SUGGESTED PROGRAM recurring part of the program proposed and make no Budgeting requires careful consideration of how to direct or continuing contribution toward increased obtain the greatest return for the least investment agricultural production. Of five demonstration farms consistent with all the advantages and disadvantages suggested for estabhshment in Section D 3, the one that accompany any improvement method. With this requiring the most machinery, and therefore the most in mind, a program has been prepared indicating the expensive, was selected to serve as the cost analysis practices recommended and the acreage that would be example. devoted to each practice. Prewar production figures from the five-year average 1936-40 are used as a base j. Research and Extension for calculation purposes. Total acreage under cultiva¬ The contributions of research and extension toward tion at that time was 17,400,000. Improved seed was increasing agricultural output were considered too planted on 1,165,000 acres leaving the remaining intangible to permit proper evaluation under a cost 16,235,000 acres without improvements. analysis. Their field of activity would be intimately The suggestions for increasing agricultural pro¬ associated with all of the practices analyzed and their duction are based upon cost and general practicabihty. cost should probably be prorated among all of the It is estimated that the use of improved seed could be suggestions discussed. The value of research and extended to twice the present acreage by the target extension, if actively pursued, would probably exceed year 1960. The use of chemical fertilizer, being similar costs of application by many times. to improved seed in its quantity requirements, freight The practices analyzed are, for the most part, and distribution pattern, is estimated to be capable of treated alone. Their values are individual and in extension to an acreage equal to that of improved seed combination are additive or slightly more than before the war, or 1,164,000 acres. It is believed that additive. If present cultivation methods are employed, partial mechanization and the proper use of manure a paddy yield will approximate 1,300 pounds per acre. could cover 10% of the acreage chemically fertilized, If improved seed is used, the yield will increase to or 116,000 acres each. All of these practices are com¬ 1,430 pounds. If fertilizer is also used the yield will patible with no irrigation, or stream diversion irri¬ increase to 1,820-1,860 pounds, etc. It becomes gation, and present cultivation methods. 188 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA Under reservoir irrigation, increased production improvements. The total investment necessary to would result from ample water supplied when needed reahze the benefits of such improvement practices as any time of the year. The weighted average increase of irrigation would be much larger than the prorated all crops properly irrigated approximates 21%. This annual costs shown in Table VIII-20. The suggested increase would also apply to the new acreage brought program would increase total profits by over 20% into cultivation by irrigation, land now fallowed, and while improvements would extend to less than 7 % of land sown but annually abandoned due to drought. cultivated land. If irrigated, the fallowed, abandoned and new acreage would yield a normal crop which is equivalent, for cal¬ F. CONCLUSIONS AND RECOMMENDATIONS culation purposes, to an increase in cultivated acreage. Burma is favored with large areas of flat land, a Modern farming, including demonstration farms moderately fertile soil, ample water resources, and a with reservoir irrigation, seems to offer the best suitable chmate for agricultural production. Among investment considering the expected returns. The Asian countries she is unique in having low population hazards of improper estabhshment and poor manage¬ in relation to her potentially cultivable land. Burma ment will be great with modern farming. The estimates has been a major exporter of rice for many years and however, both for cost and return, have assumed that is financially able to support improvement practices farms would function near their optimum. A lowering for increasing her agricultural output. of efficiency would have a depressing effect on Roughly 16 million acres are presently under expected returns. For those reasons the suggested cultivation. This area lies in the Wet Zone, the Dry acreage planned for modern farming is only 68,950 for Zone and the hill country. It is estimated that approx¬ the year 1960. Modern methods would produce two imately 1| milhon acres are out of cultivation due to crops per year, and would enjoy all the advantages insurgency. Large tracts of land topographicaUy inherent in a mechanized operation. suited for agriculture have never been cultivated. The Table VIII-20 (see p. 190) summarizes the benefits principal crop, rice, occupies two thirds of all culti¬ for the farmer and the Government under each of the vated acreage with much lesser quantities of sesamum, suggested practices. Farm profits are calculated from maize, sugar cane, pulses, groundnuts, tobacco and a weighted nationwide average based on 1953 prices. cotton produced. Farming methods employ animals Increased farm profits through the application of almost exclusively. improved practices were calculated as the total value The problems of agriculture are essentially connec¬ of the production increase less the farmer's cost of ted with low per-unit yields and are reflected in low implementing the practice. The calculation of govern¬ national output. Associated problems are those of ment profit used only the paddy portion of total credit, taxation, research and extension, price control, production. It was assumed that all increases in paddy and storage and marketing. The Land Nationah¬ production would be exported. The export quantity zation Plan and the five-year Agricultural Develop¬ was used to determine government profit with costs to ment Plan should have far-reaching long-range effects Government first deducted. on agriculture. The program suggested for 1960 would aim to Increased agricultural production requires an improve, in varying degrees of intensity, approxi¬ intensification of present cultivated acreage, an exten¬ mately 1,165,000 acres. Most of the acreage improved sion of cultivation into areas not now cultivated or would have two or more practices in effect. Thus about both. Intensification of present cultivation would be 7% of the cultivated land in Burma would be improved most effective in contributing to increased output- to some extent, principally in the use of improved seed Under present farming methods, the program should and fertihzer. The 1960 goal is arbitrary, as are the be formulated on a practical basis consistent with the methods selected and the degree of their individual farmer's interest. It is beheved that the use of chemical apphcation. The program would grow from its present fertihzer and a service program of partial mechani¬ status to that suggested for 1960 according to the zation would be acceptable to the grower, would funds invested in it and the practicabihty of estab¬ considerably increase the profits of farming, and lishing the various practices. Assuming the 1960 goal would increase agricultural output. To a lesser degree is justified on financial and practical grounds, the improved storage and use of farmyard manure would annual profit increment at the 1960 level of develop¬ do the same. With modern farming, all the advantages ment would amount to over thirteen crores exclusive of scientific agriculture are possible and would result of cost. The annual cost to realize that increment in very greatly increased production, reduced costs, would be about nine crores, or roughly a total return and greater profits. Efforts should be concentrated on of 2|- crores per crore invested. The nine crore the production of agricultural commodities in short investment is, however, only the annual cost of supply. The development of reservoir-irrigated AGRICULTURE 189 programs, both under present and modern farming c. Financing the Farmers methods, would contribute significantly to increased To meet the problem of short-term credit, it will be agricuhural production. The full benefits of irrigation necessary to carry out an intensive information are possible only under conditions of partial or com¬ program to educate the farmers in the proper use of plete mechanization of farming. credit, build up responsibility at the village level by A research and extension program is discussed and insisting on adherence to certain minimum financial specific emphasis is given to those phases of research standards including contributions to share capital, that appear to be most urgent. The introduction of continue the program to establish gradually district certain plant varieties and the improvement of others branches of the State Agricultural Banks in all is of prime importance in the research field. districts, encourage repayment of loans in kind where- The various means of intensifying presently culti¬ ever possible, and establish procedures to enable the vated acreage were individually cost-analyzed to Agriculture Department to issue improved seed, indicate both the investment required and the returns fertilizers and implements on credit in conjunction to be expected. The analyses were based upon the with the system of state agricultural credit and the assumption that management and machinery would farm extension and demonstration services. Prepara¬ operate near the optimum levels of efficiency. These tion should be made for the problem of long-term levels are obtainable if the program is undertaken ' credit, even though it is not now a pressing one, so modestly under competent management. that future requirements for livestock purchase, land In accordance with the discussion of the various development, equipment purchase and other improve¬ points of reference in this chapter, it is recommended: ments may be accommodated. (I) That action on National Agricultural Pro¬ grams, including Land Nationalization, the Five-year d. Agricultural Taxation Plan for Agricultural Self-sufficiency, financing the Land revenues should not be increased until such farmers, agricultural taxation, marketing of crops, time as persons in the income bracket of the cultivator the State Agricultural Marketing Board, and govern¬ are also subject to direct taxes. Since land records and ment organization for agriculture, be diligently crop statistics are basic data for determining land pursued, with specific attention as follows: revenue, land records should be taken over by the agency managing state-owned lands under the land a. The Land Nationalization Program nationalization program, and collection of crop Every effort should be made to pubhcize and enforce statistics should be separated from the tax collection the present laws thoroughly, the initial phase being function and estabhshed under an independent limited to ehmination of absentee ownership of tenant agency. Consideration should be given to making the land and its distribution to present tenant cultivators; land-revenue tax a source of local government the purchase of owner-operated land in excess of 50 revenue. acres should be carried through, exceptions to the e. Marketing of Crops 50-acre limit being permitted where a cultivator has Assistance should be given the farmers in getting equipment necessary for mechanized farming and if better prices for their crops by formation of co¬ there are surplus lands available; individual holders operatives, standardization of grades, adoption of should be encouraged to farm their holdings jointly uniform weights and measures, provisions for under a cooperative arrangement; periodic checks furnishing market information, price stabihzation should be made to insure proper labor standards and policies and inspection of weights and measures. The production efficiency; changes in the management unit broad development, testing and regulation of stan¬ should be minimized and changes in land-holding dards should be legislatively assigned to a central right stressed; and the total program should be inte¬ scientific organization with enforcement vested in grated with development of cooperatives, production interested agencies. A market outlook service should methods, mechanization and the pursuit of other be established to provide farmers with accurate goals. information on current and expected prices and with timely forecasts of crop acreage and yield. Pricing b. The Five-year Plan for Agricultural Self-sufficiency programs should be set up on crops for which Govern¬ The program selected by the Agricultural and ment is prepared to enter the market and offer Water Resources Development Corporation for incentive prices for new crops such as jute and long immediate implementation should be dihgently pur¬ stapled cotton. More cooperatives should be estab¬ sued with continued vigilance for additions and lished through an expanded agricultural education changes. and information program for acquainting the farmers 190 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA

TABLE A PROGRAM FOR INCREASING (.in

1936-40

Practice Annual Net Total Total Tons Net Farm Government Cost to Acres Return Profit Produced Profit Profit Implement

K K K K K

Improved Seed 1,165 67 9,UM 825e 20,010 9,325 —

Chemical Fertilizer — — — — — — —

Partial Mechanization — — — — — — —

Manure — — — — — — —

Irrigation and Modernization — — — — — — —

Irrigation and New Acreage — — — — — — —

Irrigation of Fallow Acreage — — — — — — —

Irrigation of Abandoned Acreage — — — — — — —

Irrigation without Other Improvement — — — — — — —

Total Profit by Improved Practices — — 9,860 825 — — 10,685

Base Acreage Cultivated 17,400 8,060a 2,16,200b 3,36,000c — — —

Acreage Increased by Irrigation — — — — — — —

Total Profit by Unimproved Methods 2,76,200 3,36,000 6,12,200

a 0.464 ton per acre, the weighted nationwide / At 30% increase. average production of all crops. g Paddy only. b K15-9 per acre, the weighted nationwide average per-acre profit for all crops. h At K146.00 per ton minus 50% cost of fertilizer. c Acreage x 67% (paddy) x ^ (exportable) x i At Kl 50.00 per ton nunus 50% cost of fertilizer. -58 ton/acre x Kl 50/acre. j At Kl 46.00 per ton minus K30.34 per acre for machinery. d At K146.00 per ton with no cost to Government. k At K150.00 per ton. e At Kl 50.00 per ton minus cost of production; see Table VIII-4. / At K146.00 per ton minus K3.16 per acre. AGRICULTURE 191 vin-20

AGRICULTURAL PRODUCTION thousands)

7960

Net Government Annual Cost Acres Net Farm Total Return Total Profit Tons Produced Profit Profit to Implement

K K K K K

2,330 135-2 I9,120d l,650e 40,020 18,650/ —

1,165 203 10,050/! 11,050/ 59,800 38,700M —

116 75-4 7,480; 11,300/r 23,300 3,520v —

116 3-8 188-5/ 570Jt 1,125 366-5V —

69 82-6 15,006o 8,458« 23,358 106o —

206-5 20 3,6\Op 1,867? 5,477 — —

248 24 4,330/> 2,240? 6,570 — —

82 8 1,443/7 740? 2,183 — —

773 76 13,710/7 10,510/- 39,310 15,090v —

— — 75,537-5 48,385 2,00,143 76,220-5 1,23,922-5

17,400 8,060 2,76,200Z> 3,36,000 — — —

536-5 248-5fl 8,525/) 12,8405 31,825 10,460 —

— — 2,84,725 3,48,840 6,33,565

m At K180-5/ton (all crops) plus benefit of cheaper q Acreage x 50% (paddy) x 0-121 ton/acre x K150 farming operations. per ton. r Same as q, but minus K19.50/acre for irrigation. n Acreage x 67% (paddy) x J (exportable) x 2 (double cropping) x 0-804 ton/acre minus s Acreage x 50% (paddy) x 0-58 ton/acre x K150 normal exportable surplus and K19.50/acre for per ton minus K19.50/acre for irrigation. irrigation. / Cost borne by Government. o Benefit of cheaper farming operation @ Kl .44 /acre (double cropped). u Cost 50% Government and 50% farmer. p At Kl 80-5/ton. V Cost borne by farmer. 192 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA with the basis for collective credit, transportation, Department, the Fisheries Department, and the market data, storage, threshing and simple processing. Forests Department should continue in their present functions with work of inspection and certification f. State Agricultural Marketing Board of livestock products added to the Veterinary Department. The planning staff proposed for the new Rice should be sold more expeditiously in order to ministry should take over aU the planning of the maximize sales at current favorable prices and hold Agricultural and Water Resources Development existing markets. Earher shipments should be made to Corporation, and the corporation should be made relieve the rice storage problem. Storage facilities responsible for funds only. The corporation should secure against insects, rodents and other spoilage also be placed directly under a joint secretary for should be provided. Bulk handling facilities should be planning who would also be head of the planning constructed so that the Government wiU be able to staff. The SAMB should be an independent board store sufficient rice to spread its shipment over a directly under the President, and the composition of larger period and take advantage of short-term the board should be altered to provide adequate rep¬ fluctuations. The possibility of arranging trade resentation of all agencies concerned. The field staffs agreements for sale of rice should be explored. An for all departments should be consohdated into one effort should be made to improve the quahty of rice, office to economize and standardize services and encourage the use of improved seed and estabhsh facilities such as transportation, housing and admini¬ uniform standards of grading. stration. The post of Financial Commissioner should be abohshed. g. Government Organization for Agriculture (2) That advanced agricultural practices including The principal agricultural functions should be new irrigation projects for increase of agricultural brought together under one ministry. The staff of the production be introduced in accordance with a secretariat of the ministry should be greatly streng¬ systematic program phased approximately as shown thened to provide a small group of experienced agri¬ in Table VIII-20 and Plate 14. culturists of administrative caliber to plan and expedite (3) That five demonstration farms be estabhshed at an integrated program. An agricultural information the locations suggested on Plate 9. service should be established to prepare general and (4) That research and extension be expanded in technical bulletins, publish popular periodicals and a accordance with the organization shown on Plate 12. farm magazine, and prepare special exhibits and Immediate steps should be taken to implement the equipment. It should use audio-visual programs. A plan, with specific attention as follows: central ministerial hbrary with a quahfied librarian should be set up. There should be a separate Depart¬ ment for Land Nationalization with a post of deputy a. Extension secretary, and all agencies under the present ministry Training in extension methods should be instituted should be transferred to the new department with the immediately with courses at Mandalay College, the exception of the crop reporting functions of the Com¬ Agricultural Training Institute, and Central Farm missioner of Settlement and Land Records which Schools. A manual of extension methods should be should be under the proposed Statistics Department. prepared for use as a practical guide for workers. In addition the new Department for Land Nationali¬ Fields of coverage should include basic information zation should take over enforcement of rent controls on soils, crops and farming methods, and the dis¬ and tenancy disposal. The Agriculture Department semination of information on the care and manage¬ should be greatly expanded. The engineering functions ment of livestock. A program of estabhshing youth of the Irrigation Department should be transferred to training groups should be started with each group a Ministry of Engineering Services, and the Irrigation selecting farm projects which will be planned by them Department of the Ministry of Agriculture should with competent help and executed by them. Various retain only responsibility for operation and mainten¬ means of implementing the research and extension ance of irrigation works, supervision of apphcation of programs should be adopted; for example, arranging water to the land, and relations with water users. A for small-scale demonstrations in the villages on a Cooperative Societies Department should be estab¬ variety of subjects as listed in the discussion, demon¬ lished in the Ministry of Agriculture to take over the strating desirable practices by means of sound and program now planned by the Ministry of Land color films, distributing simple pamphlets and bi¬ Nationalization as well as the agricultural cooperative monthly or quarterly agricultural publications, and program of the present Cooperative Department. The demonstrating agricultural methods by the efficient State Agricultural Credit Department, the Veterinary operation of a demonstration farm. T X •^ ULTIMATE COMBINED BENEFITS

MODERNIZATION

< FERTILIZER PARTIAL MECHANIZATION oti.

PRESENT BENEFITS

± ± 1953 55 57 59 YEAR IT IS CONSIDERED THAT THE APPLICATION OF RECOMMENDED PRACTICES WOULD NOT EXCEED THE FOLLOWING PERCENTAGES OF PRESENT CULTIVATED ACREAGE- IMPROVED SEED 50% MANURE 30% PARTIAL MECHANIZATION - 30% MODERNIZATION 20% FERTILIZATION 50% IRRIGATION 7%

MINISTRY OF NATIONAL PLANNING POTENTIAL BENEFITS OF IMPROVED PRACTICES KNAPPEN TIPPETTS ABBETT ENGINEERING CO, NEW YORK RANGOON DR.BY.-f .//> DATE PLATE CK.BY. // '^ JULY- 53 NO. 14

R.B.—13 193 194 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA b. Research unknown land areas, boundaries, erosion conditions, Specific emphasis should be given to the intro¬ drainage basins, possible communication routes, and duction of new crops; improving seed other than administration of the land subsidy program. Within paddy; classification of insects and establishing of the framework of long-range agricultural research, control methods and costs; survey of indigenous land classification should be given immediate con¬ diseases; and an investigation of trace element sideration with the objective of classifying land deficiencies in the soils and the estabhshment of the according to its basic resources and present condition. necessary library and laboratory facilities. Investiga¬ tions should start with a survey and classification of c. Implementation the natural resources that would support a hvestock industry, the areas best suited to livestock production, Effective research, if limited by insufficient funds, forage plant populations, supphes of supplementary should be restricted in its coverage and complete in feed, survey of livestock pests and diseases, livestock its intensity of apphcation. The beginning extension breeds best suited to the country, and possibilities for program should be carried out to the tract level, and the processing of the various animal products. An most support and emphasis should be given to local agricultural engineering staff should be organized to extension agents. develop methods of farming, for both mechanized (5) That irrigation be developed in the areas of equipment and improved implements. Aerial photo Yamethin, Loikaw, Mu River, and Kandaw Village coverage of the whole of Burma should be undertaken, in accordance with plans set forth in Chapter IX, and should be used to its fullest in determining including water services to the demonstration farms. MINISTRY OF AGRICULTURE AND FORESTS

IRRIGATION DEPARTMENT IRRIGATION DEPARTMENT PRESENT ORGANIZATION CHIEF ENGINEER, RANGOON

PERSONAL ASSISTANT TO WORKS OFFICER CHIEF ENGINEER RANGOON RANGOON

SUPERINTENDING ENGINEERS

OFFICE STAFF RANGOON DELTA CIRCLE IRRIG. CIRCLE RANGOON MAYMYO

DESIGN & DRAFT DESIGN & DRAFT. RANGOON MAYMYO

EXECUTIVE ENGINEERS EXECUTIVE ENGINEERS J

NORTH SOUTH EASTERN DREDGER SHWEBO YE-U KYAUKSI MEIKTILA MON CANALS EMB. DIVISION DIVISION DIVISION DIVISION DIVISION EMB. DIVISION WATERWAYS DIV. CANAL DIV. CANAL DIV. I A.E. HENZADA RANGOON KYAUKSI MEIKTILA MINBU MAUBIN PEGU SHWEBO SHWEBO MANDALAY CANAL INDEP. SUBDIV. ASSISTANT ENGINEERS ASSISTANT ENGI NEERS I ASSISTANT ENGINEERS ASSISTANT ENGINEERS ASSISTANT ENGINEERS ASSISTANT ENGINEERS ASSISTANT ENGINEERS ASSISTANT ENGINEERS ASSISTANT ENGINEERS MANDALAY

I A.E. I A.E. I A.E. I A.E. 2 2 3 VILLAGE VILLAGE VILLAGE TWANTE IRRIG. EMB. A.E. A.E. IRRIG. A.E. CANAL PROME MEIKTILA

2 108 (Permanent Posts) SUB-ASSISTANT ENGINEERS S.A.E. ALL DIVISIONS

CHAINMEN, LABORERS, REVENUE STAFF, TRACERS, DRAFTSMEN, CLERKS (ALL DIVISIONS) GATE KEEPERS (UPPER BURMA ONLY) LOCK KEEPERS (LOWER BURMA ONLY)

PLATE NO,

_ vs s - MANOAIAY CANAL - vs V : PAUNG LAUNG f^ivcK 6YST£M _. : '^ 1 1—1 Z ; ^ - ^" ^ __l 1 _ ~ ; _ -. ^ - 1—1 _—r~r~LJ - -^^ — - 1 -r - ; 1—1 r-i ^ 1 L_ — s z Q Q C> Q Oj ^ 5 OV Oj ^ Cj Ol 51 ^ ?1 h r^r- - b 1 - 80 - - Mf/KT/IA L/IK£ - z "> >>• Jo N "^ :s "^ *« I; i '*> MANDALAY D/sr/?/CT 0^5 "i 1 S k •* »i ff, =^ "^ ^ ? f=^ ^ ^ ^ T> rs ^ =-1 Ol f ; ^o ? MON CA/VALS - kri H 1—1 1—1 - 1—1 ^;^ Cj"^ S;PJ S"CJ —— r-ir-| — 1— ^ ; r-A P [-1 I AYAI/NGYANM/NMIA^NK ^ ^ 5 T (M N '^^ z r" r- ; I M rz —m 20 -- n r-i r - SHWEBO C/IA/A/. r u "n —-— - r-i - -A w " rf P z ~ ~ z z r-i n 'iR" °>^ S ^_ —, 1— r L_ MA A/ CANAL ? ?i ? X V. < V >w < V >; >. -N; : J —^ |— _ i — <0 - /^0>O,^9jC^Wl?^5j5 Ci Oi ^ C^ 0^ 5 0 ^ CI 'p -[ : ; r~Lrn Tl r -r-\ r-i _r-> .^.= »i ; i^ E SALIN CANAL N •^ > V, \I) N '- —1 1—1 5 tl (i Q •! ? - -1 5 ?>5 ?> " ■ Tl —1 40 ~r r- 1—f" -n _r^ ^JSiS^J^^S (^ IV, : «*?!?> r -| yAMETH/N O/STmCT - i - 5 "^ m ejOl ^ Oi ©1 r- .2 5 ? ? oj 5 - 1—1 r^ Ys-i/ CANAL ^1 ^ "^ §5 - r - ; "0 U*j _ \ j -T 1—I . 1 L^ ' __L_.^ ; 2A WG Y/ /?/V£/? SYSTEM ! 1 \ '■■ '' ' - II 1^ — \ ! 1 : : |—1 ______n —, n- —1 - . vr ; h - 1 ! - — -^ ^ '^ ''' -: ;. 'A - — -- _- en tji oi *> Ci c, ^^ ^ 1 1 i 1 I ^ ta-i QQc» *,;;<; <*?<.' ■^■^'-*x5'v'^S'^!^'^«!i _ ^ Oi _- I? "^ 3* '^ S" '^ rj ^ ^ Vj ^0 N j2 ;? wi S § 5 fS % Ci ^ o^ ''I o^ O, Ci Ci Cs -Ji ^ O, ^ Ov Ci -- ^ X N v^ O-t D^ ^ Ci

VI ^1 v> S) 1 AfYMG YA/V O/ST/i/C r ^^ ^ MINISTRY OF NATIONAL PLANNING. I ;J= ^1 < ^TTfT I ^ PRESENT IRRIGATION SYSTEMS ^ KW J \ \ . 1 1 1 \ I \ \ I . I . I -> ' I \ . 1 I 1 1 ! I I L_ AREAS IRRIGATED ANNUALLY ? ^ ^ ^ ? KNAPPEN TIPPETTS ABBETT ENGINEERING CO. NEW YORK. RANGOON. DR. BY. £.!/=' DATE PLATE CK.BY Z?/^^ JUNE 53. NO,

MINISTRY OF NATIONAL PLANNING

DELTA-PUMP IRRIGATION DEVELOPMENT

KNAPPEN TIPPETTS ABBETT ENGINEERING CO. NEW YORK RANGOON DR. BY EJF DATE PLATE CK. BYAy?>e MAY 53 NO.

SCALE IN MILES 0 5 10 15

LEGEND ^NUBYU rAkyaw\\ ® PUMP IRRIGATION DEVELOPMENT d) YANDOON ISLAND •' »' (6) MA-UBIN PUMP " » (g) THONGWA ISLAND " »

::i:iu:i:i'-.!i LEVEE LEVEE (New) PUMP

MINISTRY OF NATIONAL PLANNING PE6U AREA SCALE IN MILES IRRIGATION 0 S 10 15 DEVELOPMENT KNAPPEN TIPPETTS ABBETT ENGINEERING CO, NEW YORK RANGOON DR. BY/"v7-/' DATE PLATE CK. BY/4 >?./?. MAY 53 NO.

BAY of BENGA

MINISTRY OF NATIONAL PLANNING BUTHIDAUN6 AREA SCALE IN MILES IRRIGATION

0 5 10 19 DEVELOPMENT KNAPPEN TIPPETTS ABBETT ENGINEERING CO. NEW YORK RANGOON DR. BY £"-jr./=> DATE PLATE CK. BYA.P A.MAY 53 NO. 8

CHAPTER IX

IRRIGATION

A. OVER-ALL IRRIGATION PROGRAM a. Organization "Irrigation" is the artificial supply of water to An organization for the operation, maintenance and cultivated crops from a storage reservoir, by stream control of the irrigation works is a department of the diversion or by pumping from wells. Drainage is a Government of the Union of Burma under the part of any irrigation development because land irri¬ Ministry of Agriculture and Forests. The organization gated without a proper drainage system can become chart for the Department of Irrigation is shown on waterlogged and wasted for lack of aeration. Plate 1. Irrigation of crops is not necessary in areas with sufficient rainfall for the crop requirements, provided The functions and responsibilities of the positions the rainfall occurs at the time needed. Areas with in the organization, except those of Personal Assistant adequate annual rainfall the occurrence of which is to the Chief Engineer and Works Officer, are described not at the times needed, will benefit from supplemental in the Public Works Department Code, Govermnent irrigation at those times during the growing season of Burma, Volume 1 (First Edition) 1933, under which when the rainfall is deficient. Areas in which the the department operates. The two specific positions growing season is entirely within the low rainfall excepted were created by special order. The Personal period must be totally supplied from irrigation if Assistant to the Chief Engineer assists the Chief Engineer in all matters as directed, including the there is to be a crop. preparation and control of the budget and expen¬ 1. GENERAL ditures, liaison between the department and the RainfaU is abundant in most of Burma, with the Ministry of Agriculture and Forests, and control of exception of the dry area south and west of Mandalay all Rangoon office staff including the draftsmen, which represents about 40 % of the total area. Nearly tracers and designers who are also personnel under all the rainfall, however, falls during the months of the Superintending Engineer, Delta Circle. The Works May through October. The Dry Zone is deficient in Officer is a special assistant to the Chief Engineer with moisture even during the rainy season, and areas of duties in connection with new construction and plentiful annual rainfall often suffer crop losses revisions. He is the liaison officer between the field because the moisture does not occur at the proper offices and the Chief Engineer, often acts as chief time. designer, and prepares special reports in connection The average annual rainfall for all areas of Burma with new proposals. is shown on Plate 4 of Chapter I. In central Burma, At the present time, new recruits for any of the irrigation from the water resource at hand is needed, positions in the Department from Assistant Engineer and in lower Burma, water must be drained from the up are required to have a degree in engineering. New land as well as contained in the river channels by engineering college graduates accepted by the Depart¬ means of embankments. ment enter as Assistant Engineers. Advances in 2. PRESENT OPERATIONS position, as vacancies occur within the Department, Irrigation, flood control and drainage have been are based on period of service, provided the examina¬ practiced in Burma for many years. The early, simple tion required under the code has been passed. works were originally managed by men elected from There has been very little need for design except for among those who benefited from the installations. minor repairs. Design and drafting in the Rangoon Centrahzed control came into being but its activities office have been performed principally for special were restricted to those works which could produce a reports by the same staff employed under the Delta profit, and the other small irrigation projects were Circle, with technical assistance from those holding left to the management of the local committees. executive positions in the Rangoon office. Other Many of these fell into complete disuse and dis¬ construction or repair details have been prepared in repair. A small percentage of all cultivated land in the individual field offices as needed, often without the Burma is now under irrigation. Most of the irrigation prior knowledge of the Chief Engineer's office in projects are government owned. Rangoon. 195 196 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA The revenue staff, gate keepers, lock keepers, The paddy fields with their many bunds provide this tracers, draftsmen, and clerks make up the balance of major storage, which probably accounts to a great the permanent or semi-permanent employees. Survey extent for the mono-crop culture. This type of storage, parties are made up as needed, with the Sub-assistant however, is useful only for the crop growing within Engineer or Assistant Engineer as the instrument man. the bunds at the time of storage. The small storage The Revenue Staff includes canal surveyors, inspec¬ facilities and the uncertainty of stream flow limit the tors, and water-masters. The tracers and draftsmen present irrigation to supplemental supply during the are non-technical employees with a desire for that rainy season only. Crop diversification is practically type of work. impossible, and cultivation of crops during the dry The Department of Irrigation is charged not only season is not the rule because dry weather irrigation is with irrigation works but with flood control and not practiced. drainage as well. In these fields of activity two canals, The cultivated land under irrigation and its loca¬ the Twante and the Pegu-Sittang, were constructed tion are shown in Table IX-1. to transport agricultural products. This led to the assumption of navigation as one of the respon¬ TABLE IX - 1 sibilities of the Department. Operation and main¬ CULTIVATED LAND UNDER IRRIGATION tenance of the Pegu-Sittang and Twante Canals and {1948) the embankment work on the rivers necessitate the use of dredges and the maintenance of dredge crews as a 5 6 part of the organization. The natural conditions and Per cent Total Net Total of all Govt.- physical characteristics of the country divide the work Sown and Land Culti¬ Per cent Owned of the Department into two distinct classifications; Division Fallow Irrigated vated of Total Irrigation irrigation in Upper and Central Burma, and navi¬ {thousand in 1948 Land Irrigated Projects acres) {thousand under Land {thousand gation, embankments and drainage in Lower Burma. acres) Irrigation acres) The Irrigation Department has always given tech¬ nical assistance, within the hmitations of its organi¬ Arakan 1,252 zation, to irrigation works managed by local village Pegu 4,430 74 1-7 5-6 06 Irrawaddy 4,180 47 11 3-5 — committees. This assistance has been made more Tenasserim 1,948 62 3-2 4-7 — effective by the establishing of Sub-division Officers Magwe 2,792 187 6-7 14-1 Ill for this purpose alone. The close contact of these Mandalay 3,086 534 17-3 40-2 345 31-9 287 officers with the particular villages involved has resulted in better cooperation, and many of the Total 21,IS 1,327 6-3 improved irrigation facilities have come through these contacts. The supply of domestic water for the inhabitants in Some of the irrigation systems are supposed to date areas where canals exist is also a minor but vital role from earher than the 9th century. The canal systems in played by the Irrigation Department. Village tanks in the Kyaukse and Minbu districts are the oldest. The Shwebo, Meiktila, Yamethin, Kyaukse and Mandalay systems were improved by various Burmese kings and districts get their supplies replenished from time to many of the works used today were built or improved time from the irrigation canals. Mandalay, Meiktila, by the kings as early as the 10th century. The Kyaukse Yamethin and Shwebo now obtain much of their irrigation area is often referred to in Burmese history, domestic supply from works managed by the Depart¬ and was once known as the economic center of the ment. north. The regular annual increase in the land area irrigated is an indication of the appreciation of irri¬ b. Works gation and the knowledge of the artificial applica¬ Although irrigation in the Dry Zone of Burma has tion of water for crop cultivation. The acreages been practiced for centuries, there are no extensive irrigated annually under the various systems now in irrigation projects, and the supply of water is generally use are shown on Plate 2. The locations of present not dependable because there is no upstream storage irrigation works and areas irrigated are shown on for regulated supply. Water is supplied from natural Plate 3, represented by the dark green color. stream flow diversion by low headworks and from Government-owned irrigation systems are not the numerous small storage tanks. source of all the irrigation in Burma, as may be seen Early appreciation of the value of the plentiful in column 6 of Table IX~1. Present data regarding water supply during the rains has resulted in the most of those projects not government-owned are not farmers using the simple means at hand for storage. available, and many of the areas were not visited IRRIGATION 197 because of the unrest in the country. Records available the chaung is in flood these are dropped, the canal is before the war were related to land revenue which was closed, and the chaung flows both over and under the based on crop production. Most of these records have structure. The Mandalay canal system came into been destroyed, and not even the Irrigation Depart¬ operation in 1902 03. ment has knowledge of the details of all the irrigation works. (3) Zawgyi River System Data relating to existing government-controlled These irrigation works in consist irrigation projects are shown in Table lX-2. The data of five separate canals, the Nwadet Canal, Ngapyaung were compiled from the Administration Report of the Canal, Thindwe Canal, Minye and Tamok Canals, Public Works Department Burma (Irrigation Branch) and the Zidaw Canal. They were originahy constructed for the year 1939 40. Only the data of immediate during the days of the Burmese kings, and were later interest are hsted. More detailed information may be remodeled with modern masonry weirs constructed obtained from the Report. during the last part of the last century at an expen¬ Capital expenditures are all charges for the first diture of approximately K23,77,000. construction and equipment of a project, charges for (4) Paunglaung River System maintenance on sections not opened for operation, and charges for subsequent additions and improve¬ These irrigation works, also in the Kyaukse ments. Special rules apply in the case of renewals and District, consist of four separate canals, Kinda Canal, replacements of existing works. The expenditures may Nathlwe Canal, Kyime Canal and Htongyi Canal. include both direct and indirect charges which are Like the Zawgyi River System, they were originally specified as follows: works, estabhshment (surveys), constructed during the days of the Burmese kings and tools and plant, as direct charges; and capitali¬ and later remodeled at a cost of approximately zation of abatement of land revenue on area occupied K21,48,000. by works calculated at 20 years' purchase, and audit (5) Salin Canal System on accounts charges at 1 % on works outlay as This system is of more recent origin, operating indirect charges. originally in 1925-26. It is the last of more than a A brief description of the larger of the irrigation dozen canals on the Sahn Chaung. The smaller sys¬ systems follows: tems, all located above, have older water rights, and except for the Khine Canal, are not under government (1) Shwebo and Ye-U Canal Systems control. The upper canals serve approximately 3,000 These canal systems are fed from the Mu River by a acres. diversion weir 455 feet in length constructed at Kabo. The diversion weir across the Sahn River near The Ye-U canal takes off on the right side of the river Linzin is an overfall type ogee section of concrete, through a headgate structure with three Walton gates 750 feet in length with two undersluice gates each 60 each 18 ft. 4 in. wide. The Shwebo canal takes off on feet wide. The headgate structure of three sluice gates, the left side of the river through a headgate structure each 20 feet wide, serves the canal on the right side of containing 20 gates of 5-foot diameter each. The the river. Little water reaches the headworks at low diversion and headgate structures are integral, the river flows. The Khine Canal headgate structure, diversion consisting of a masonry weir 455 feet in three miles above Linzin, is somewhat of a temporary length provided with falling shutters, and two 30-foot- structure, and requires constant attention. wide stony undersluice gates on the right end and four 40-foot-wide stony undersluice gates on the left end. (6) Mon Canal System The Shwebo canal system came into operation in The diversion weir across the Mon River serving 1906-07 and the Ye-U canal system in 1911-12. canal systems from either bank of the river, is located at Mezali. The headworks consist of a weir 838 feet (2) Mandalay Canal System long, with 4-foot-high automatic falling shutters, This system has its headworks at Sedaw on the one undersluice gate on the north side and two on the Chaungmagyi River. The diversion consists of a south side, each 40 feet in width. The canals are masonry weir 310 feet in length with a subsidiary weir supplied through a headgate with three sluice gates on 500 feet long and an 80-foot-long undersluice at one the north and a headgate with four sluice gates on the end with the Mandalay canal headworks of 12 sluice south, each gate 5 feet wide. Supplies of water are gates, each 5 ft. 6 in. wide. Another structure of note usually more than ample to meet the canal require¬ is the aqueduct for the entire canal capacity across the ments. Passage of log rafts is allowed twice weekly. Thapangaing Chaung for a length of 264 feet. Each These irrigation works first came into operation in side of the aqueduct is fitted with shutters, and when 1911-12. 198 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA

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9> cS c3 I i^CO ni 21A § I nt * s ^ '5'g I II SO 1-1 ^"^ sw c^ b >■• ^ 43 "TS c Sri 3 r'^ , .2 OO CO fan O tH ri S 2 53^ §8.2 ^g -S.S SgiS" 2S gWlz; WW .«A2 « §3-(8 ; .«> >> >. ^SSt3 >HOS IRRIGATION 199 (7) Man Canal System water supply amounts only to that flowing into the The water supply for this canal system is from a canal from the chaungs across which it runs. Assured masonry weir across the Man River at Aingma. This supply from the canal is definitely limited. weir was originally of stone but was replaced by a similar structure of stone surfaced with concrete. The (10) Twante Canal crest length is 400 feet and is approximately 300 feet This canal was constructed and is maintained by downstream from the canal headgate. Coarse gravel the Department for the transportation of essential enters the canal causing a gradual reduction in the produce, especially of rice and timber from Upper capacity. The water supply in the river is not assured, Burma. It is 21 miles in length, connecting the therefore rotation of service is common. Rangoon River and the China Bakir River. The total cost was approximately K 1,03,96,000. The canal came (8) Other Minor Irrigation Works into operation in 1916-17. Irrigation from tanks or reservoirs is also practiced over a wide area in addition to the irrigation by (11) Pegu-Sittang Canal canals from the various stream diversions. These This canal connects the Pegu and Sittang Rivers, systems consist essentially of a tank or reservoir permitting transportation to Rangoon from the Pegu provided with suitable outlets to supply controlled District without necessitating passage via the open water to a network of canals. The runoff from the sea. It is 38 miles long with canal locks at each end to rainfall in the catchment area of the stream feeding compensate for the water level variations between the the tank is stored and released when required. The canal and the rivers. To augment the water supply in largest of these works is the Meiktila Lake which was the canal during the dry season, the Moyingyi Reser¬ originally constructed by the Burmese kings and later voir was constructed to store rainfall runoff. The total modernized with masonry outlets and escapes at a cost of the complete construction was approximately cost of approximately K9,39,000. Another large tank K79,46,000. system is the Nyaungyan-Minhla Tank System which was constructed at a total cost of approximately (12) Embankment Works Kl 5,56,000. Numerous other small tanks may be Embankments which protect over 1,150,000 acres of found throughout Burma. The area irrigated from cultivated land were constructed and are maintained these supphes is lunited by their small storage by the Department in the Delta and on the Irrawaddy capacities and location. and Sittang Rivers, and River Training Works in the Silting of the tanks has been very rapid, Meiktila Pyuntaza Plain. The individual works are these: Lake receiving 8 million cubic feet annually and the Nyaungyan-Minhla Tank receiving 11 miUion cubic Name Area Protected feet annually. It is said that this silting did not occur Irrawaddy Embankments 755,974 Acres until cultivation was practiced in the drainage area Maubin 142,808 „ Thongwa 32,275 „ supplying these reservoirs, a practice that was not Sittang 52,434 „ allowed in the tirhe of the Burmese kings. Yandoon 57,616 „ Tamatakaw 13,253 „ (9) Old Mu Canal Ela 5,155 „ The irrigation system under this canal is of great Belin 3,263 „ historical importance and deserves mention because River Training Works of its relation to a future irrigation development to be in Pyuntaza Plain 116,072 „ discussed later in this report. Just when the old Mu Canal was originally constructed has not been ascertained, but it is apparent that one of the Burmese kings used it to supply water to Shwebo. The original c. Field Control diversion works were constructed across the Mu River The water distribution is maintained by the Irri¬ at Wetto but they were destroyed and never rebuilt. gation Department from the main and branch canals Continued difficulty with the upper end of the canal and distributaries only. The distribution system to the because of the large drainage courses through which individual farm plots has been constructed and is the canal runs has been a factor in the delay in re¬ maintained by the farmers themselves. Assistance is establishing the system to its original use. Many of the given by the canal inspectors of the Department so canal gate, control and drainage structures are main¬ that the supply of water wUl be economically and fairly tained, and lands are irrigated from the canal and from distributed. Most of the farm services are uncon¬ the tank at the southerly end of the canal. The present trolled openings, the supply maintained by holding 200 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA the water in the canal at a constant level. Turnout fallow and abandoned because of lack of water, other structures to these farm areas may release as much as lands suitable for agriculture are not cultivated 15 c.f.s. for distribution by the group under the turn¬ because of the lack of moisture, and crops are not out. All canal structures down to and including those grown during the dry season on a significant scale. supplying such services are of masonry or concrete This loss in full utilization of the land potential is a construction with steel fabricated or iron gates. The tremendous factor in the economic life of the country. operation of all gates is by hand and quite efficient in most instances except for time required in opening and TABLE IX - 3 closing them. The falling shutters at some of the weirs STATUS OF AGRICULTURAL LAND are raised by hand, a procedure in which the operator stands in water behind a raised shutter preceding the Acres Suitable shutter he is raising or lowering. Quite often the District Acres, Acres, for Agriculture Irrigated Dry Crop not Cultivated sluice gates must be opened ahead of time to reheve the flow over the weir so that the shutters may be Lower Chindwin 110,400 804,300 343,000 raised or lowered. None of the main, branch or dis¬ Sagaing 55,100 796,500 141,000 Pakokku 116,500 762,600 452,000 tributary canals is lined. Several of the canals Shwebo 628,300 491,400 350,000 inspected are in need of realignment, reconstruction Magwe 116,000 1,010,900 208,000 and lining. Many canal bank slopes are too steep and Myingyan 58,200 1,131,200 157,000 Meiktila 20,800 684,400 226,000 the berms too narrow. Yamethin 302,200 335,400 769,000 The distribution systems serving individual plots Kyaukse 140,200 134,700 65,000 and ownerships are essentially a series of hand dug Minbu 150,500 331,600 120,000 canals and water courses maintained and modified from time to time by the farmers to fit their needs. Most of the structures are of stakes and mud with an occasional permanent structure in the more impor¬ It is evident that a liberal use of the available water tant laterals. It is not uncommon to see excess water supphes for irrigation in the lower Delta during the adjacent to the fields since the supply is dependent on dry period would add materially to the welfare of the rainfall and therefore usually too plentiful at the area through increased production, a wider variety of wrong time. products for home consimaption, more diversified Maintenance equipment of the Irrigation Depart¬ crops, and a fuller utilization of labor during the slack ment for irrigation works consists principally of periods caused by a one-crop economy. cement mixers, dump trucks, welding units, com¬ The Preliminary Report proposed pump irrigation pressors, pumps, workshop equipment, jeeps and in the Delta area for the dry season only. Due to the inspection cars. Most work is by hand, materials excessive moisture during the rainy season, rice is the being hauled in head baskets or trays and by buUock- only crop that can be grown. During the dry period cart. A large force is maintained for this purpose. from December to May, the land is so hard that it is Within the last two years, heavy construction equip¬ impossible to cultivate for any production without ment has been purchased, and it is understood that water. Location for pimip installations and irrigation more is on order. The heavy equipment on hand at development will depend on experimental instal¬ this time consists of two Tournadozers, four Terra lations, ground-water tests for supply, water table Cobra scrapers and four dozers, two of which are D8 elevation and sahnity, stream tests for saUnity, and and two of which are TDIO. soil tests for pH and crop capabihties. Only those areas best suited and satisfactorily passing the require¬ 3. FUTURE IRRIGATION DEVELOPMENTS ments in the before-named tests should be developed. The water resources from stream flow are abundant A program of land classification surveys such as throughout most of Burma, as shown in Chapter I. proposed in Chapter VIII is prerequisite to the proper Most of the supply is wasted, however, because it determination of suitable lands. occurs in the rainy season of the year, and the storage Future irrigation development planning may be facihties are sufficient for only a very minor per¬ evaluated on the basis of benefits that would accrue centage of the total. from increased production by supplying water for The status of agricultural land in the Dry Zone in crops in areas of low rainfall and low incomes because regard to acres under irrigation and cultivation is of dry farming; for a second crop during the dry shown in Table IX-3. Other data included under season in geographically suited areas; for supple¬ Agriculture in Chapter VIII show that present pro¬ mental moisture as needed for crops in certain areas duction is low, much land in the Dry Zone is left during the rainy season; and for stabilizing the water IRRIGATION 201 supplies by the construction of storage reservoirs to TABLE IX - 4 store the water now uncontrolled and wasted. FUTURE IRRIGATION DEVELOPMENTS Future irrigation development projects proposed herein have been predicated on use of the underground Early Implementation Location by Districts water resources by pumping from wells, gravity Mu River Irrigation Project Shwebo, Sagaing, diversion from streams, or by pumping, or gravity Lower Chindwin, diversion from streams regulated by storage dams Myingyan, Pakokku proposed solely for irrigation purposes or in con¬ and Minbu junction with hydroelectric power generation. Yamethin District Irrigation Yamethin and Project Toungoo a. The Program Kandaw Village Irrigation Pakokku Project The planning of the future irrigation developments Loikaw Area Irrigation Project Kayah State includes classification of the projects into a develop¬ ment program for Early Implementation, Near Near Future Consideration Future Consideration, and Far Future Consideration Thongwa Island Irrigation Ma-Ubin as shown in Table IX-4. The location of the projects Project is shown on the Location Maps, Plates 3 and 4. The Meiktila Lake Meiktila hsting in Table IX-4 is in order of priority. Although Pakokku Pump Irrigation from Pakokku other irrigation developments may be feasible after a Wells period of economic development, those hsted and Far Future Consideration discussed here are considered most worthy at this time. Pegu Area Irrigation Develop¬ Pegu The last four under "Far Future Consideration" are ment discussed very briefly. Ma-Ubin Pump Irrigation Ma-Ubin Development (1) Early Implementation Buthidaung Area Irrigation Arakan Projects hsted for early implementation are those Development deemed most suitable for construction within the next Yandoon Island Irrigation Ma-Ubin ten years. The classification is based on the benefits Development from increased production to the country and the Henzada-Zulun Pump Irriga¬ Henzada particular area, and the economic feasibility and tion Development Prome Area Irrigation Develop¬ Prome correlation in the over-all development plan for ment Burma. Estimated capital cost, annual charges, and Mon River Irrigation Project Minbu benefits are discussed in Section C of this chapter Yanbe and Yin River Irriga¬ Magwe and shown in Table IX-19. The individual projects are tion Development discussed in detail under "Specific Projects," briefly Myitnge, Myittha, Shweli and Kyaukse, Lower summarized as follows: Irrawaddy Rivers Develop¬ Chindwin, Bhamo (a) Mu River irrigation project. The development of this river for irrigation was recommended for future study in the Prehminary Report, and was low on the season plus total requirements for a second crop in the priority list for construction. Studies which followed dry season. Installation of power generation equip¬ disclosed this project to be the most outstanding of all ment in conjunction with the irrigation development developments considered. will produce low-cost power for pumping from the The area lying in the triangle formed by the Chindwin and Irrawaddy Rivers south as far as Chindwin and Irrawaddy Rivers, from their con¬ Seikpyu. This pump irrigation is also included as a fluence north to Wetto, is a vast acreage suitable for unit of the Mu River Project, adding an additional agriculture, nearly all of which is accessible for 330,000 acres. irrigation from the Mu River. Approximately 265,000 (b) Yamethin District irrigation project. This project acres of the area are irrigated now under the Shwebo is the outgrowth of a project report prepared by the and Ye-U Canals, but only by river-run diversion and Department of Irrigation, for the development of as a supplement during the rainy season. Lands are the Sinthe Chaung in the Yamethin District. It was also irrigated under the old Mu Canal but only from proposed in the Preliminary Report for the irrigation a limited water supply stored from small drainage area of approximately 78,000 acres froiu a storage reservoir runoff. at a high elevation to reach lands in the vicinity of The Mu River irrigation project will irrigate over Yamethin. Detailed studies of the project resulted in a 1,100,000 gross acres for supplement during the rainy much more feasible project based on the development 202 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA of all the water resources in the upper valley of the (d) Loikaw Area irrigation project. Lack of detailed Sittang River of which the Sinthe Chaung is a maps and field surveys has limited the study of areas tributary. for irrigation in the States outside of Burma proper. The over-all project contemplates the development The lower part of the Yaunghwe Valley, in which and economical use of the water supply from the Loikaw is the principal town, was visited and found Thitson, Shweda, Sinthe, Yezin, Ngalaik, Saing to be topographically suited for irrigation. The pro¬ and Swa Chaungs, the Paunglaung River, and the ject was not included in the Preliminary Report, but Myaungmadaw Canal-Kyeni Tank installations. Each studies carried out since that time have placed it high development may initially be considered as an on the priority for development. independent unit for stage construction with final The Balu Chaung flows nearly the full length of the interconnection of several of the stages for distri¬ valley from Inle Lake at the north end. This natural bution of total costs over a larger area. Of the 609,450 resource presents excellent possibilities for irrigation gross acres to be supphed with irrigation water from development. Small systems are now in operation in reservoirs on each of the units listed above, 400,250 the valley so that cultivators with the water supply acres are in the Yamethin District and 209,200 are in realize the use of irrigation. The water supply in the the Toungoo District. river is sufficient the year round if regulation and the The basic characteristics of the general layout are means of raising it to the land are provided. the location of supply canals at the foot of the hills on each side of the plains area and dams where the (2) Near Future Consideration streams emerge on the plain so that high reservoirs Projects listed for near future consideration are can serve the canals. Although the main source of those which would be considered economically water supply is from these surface streams, the project feasible after advance has been made in operation and includes the tapping of the underground water supply construction techniques, the country is more settled, from which the water will be pumped to the land. The individual incentives demand more development, and underground supply is to serve an area near the other project developments have been completed. In extreme northerly headwaters of the Sittang River some instances the development of hydroelectric east of the Nawin Chaung from Tatkon Village north installations to provide cheap power would be a to the Shweda Chaung. factor in establishing the economic justification of the Irrigation from minor works now operating in the project under this classification. area and installations to conserve and use the water Estimated capital cost, annual charges and benefits supply as it is now available will be improved and are discussed in Section C of this chapter and shown incorporated in the project. The plains area between in Table IX-19. the Shan Hills on the east and the Pegu Yomas on the (a) Thongwa Island irrigation project. This project west will be benefited by an assured supply, not only is a unit of the Lower Delta pump irrigation develop¬ supplemental during the rainy season crop period, but ment listed in the Preliminary Report. Its location is also for a second crop during the dry season. shown in Plate 5 and a general plan of the project is (c) Kandaw Village irrigation project. This project shown on Plate 6. The area to be benefited is sur¬ was not considered in the Preliminary Report, but the rounded entirely by streams and protected by levees area that will be benefited was a part of the total area on all but the southerly side. The project includes the of the Pakokku pump irrigation proposal. The addition of 12 miles of levee to close the ring, instal¬ reconstruction of an old embankment, which dates lation of drainage and flood gates at the upper and back to the same period as the original Meiktila Lake lower sides of the island, construction of a drainage construction, will form storage facilities for all the canal through the low area and irrigation canals on the runoff from a small stream drainage area. The tank high perimeter, and installation of pumps for irri¬ thus formed will be near the north edge of Kandaw gation from the streams. Village. The old system has been out of operation The sluice gates will be closed when the surrounding longer than anyone can remember, the embankment streams are too high for gravity flow, and the drainage having breached soon after the original construction. pumps win discharge over the levee. The exact amount The area to be irrigated under the project is adjacent of the drainage that wiU require pumping cannot be to the village on the east and extends south to the determined without more data but it is estimated that Irrawaddy River. The soil is well suited for growing it will amount to about 30 % of the annual rainfall. groundnuts, but because of the low rainfall, pro¬ The balance wih run out by gravity, be used for duction is low and uncertain. The water stored in the irrigation or lost by evaporation, transpiration, and tank will also be of great benefit for domestic use to percolation. several small villages around the tank perimeter. The irrigation pumps will be installed to pump IRRIGATION 203 either from the drainage canals or the surrounding Some of the area is under cultivation which no doubt streams to the high land which cannot be reached by adds to the heavy silt content of the inflow. The spill¬ gravity flow. Gravity flow irrigation will be possible way facihties have been increased from time to time under certain conditions from the drainage canal with because of the decrease in storage capacity of the lake, the upper sluice gate open. Control structures will be and the dependabihty of the irrigation has been constructed in the drainage canal for this operation. reduced by the decrease in water supply. It is estimated that pmnping will be necessary for only The capacity (Table IX-5) for the years 1896, 1923 one third of the water supply reqxiired for irrigation, and 1936 shows the amount of silting at various (b) Meiktila Lake. Meiktila Lake has been silting water levels in the two divisions of the lake. Reports in at a rapid rate. The inflow is from a drainage area on the rate of silting after 1936 show 8 million cubic made up of broken low hills with sparse vegetation. feet annually.

TABLE IX- 5 MEIKIILA LAKE CAPACITY {in acre feet ) SHOWING RAIL OF SILTING {Drainage Area 240-5 sq. miles) 1 2 3 4 1 5 1 6 7 8 1 9 South Lake North Lake Combined LBVCI 1896 1923 and 1936 1896 1923 1936 1896 1923 1936

725 1 7 1 1 1 730 90 90 — — — 90 90 90 735 315 315 — — — 315 315 315 740 1,055 1,055 — — — 1,055 1,055 1,055 745 2,510 2,510 195 2 — 2,705 2,512 2,510 141 3,310 3,310 556 43 10 3,876 3,353 3,320 748 3,755 3,755 - 838 130 55 4,593 3,885 3,810 749 4,240 4,235 1,220 280 145 5,460 4,515 4,380 750 4,760 4,745 1,747 525 300 6,507 5,260 5,045 751 5,325 5,295 2,433 875 530 7,758 6,170 5,825 752 5,935 5,885 3,248 1,415 885 9,183 7,300 6,740 753 6,592 6,520 4,178 2,110 1,285 10,770 8,630 7,805 754 7,301 7,205 5,213 2,910 1,830 12,514 10,115 9,035 755 8,063 7,950 6,353 3,810 2,500 14,416 11,760 10,450 756 8,888 8,775 7,588 4,728 3,300 16,476 13,503 12,075 757 9,803 9,690 8,902 5,744 4,200 18,705 15,434 13,800 758 10,823 10,710 10,377 6,906 5,195 21,200 17,616 15,905 759 11,970 11,840 11,992 8,186 6,270 23,962 20,026 18,110 760 13,238 13,090 13,752 9,616 7,440 26,990 22,706 20,530 761 14,634 14,470 15,667 11,136 8,740 30,301 25,606 23,210 762 16,169 15,970 17,732 12,916 10,210 33,901 28,886 26,180 763 17,791 17,580 19,937 14,861 11,900 37,728 32,441 29,480 764 19,496 19,285 22,280 16,917 13,840 41,776 36,202 33,125 765 21,301 21,080 24,765 19,167 16,020 46,066 40,247 37,100 766 23,201 22,950 27,388 21,562 18,370 50,589 44,512 41,320 767 25,181 24,880 30,143 24,092 20,975 55,324 48,972 45,755 768 27,231 26,870 33,043 26,772 23,535 60,274 53,642 50,405 769 29,351 28,930 36,083 29,602 26,355 65,434 58,532 55,285 770 31,545 31,070 39,258 32,582 29,335 70,803 63,652 60,405 771 33,801 33,290 42,571 35,727 32,480 76,372 69,017 65,770 772 36,129 35,595 46,016 39,032 35,785 82,145 74,627 71,380 773 38,539 37,995 49,601 42,497 39,250 88,140 80,492 77,245 774 41,031 40,485 53,326 46,127 42,880 94,357 86,612 83,365

Note: The above capacities have been entirely recalculated from the original surveys 204 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA The embankments and the control structures have for the years 1926-27 to 1939-40 and 1946-47 to been in use for many years. The investment would be 1951-52. It may be noted from these records that the of greater value with the silt removed to increase the acreage irrigated increases with the rainfall. This is storage capacity of the lake and permit an increase in substantiated by reports from the Department of the acreage irrigated. The increase in stored water Irrigation which state that the increases result from would also stabilize the annual supply over a period favorable rains. The time of year of the rainfall would of several years by a carry-over of stored water to also be a factor, but an increase in storage capacity of balance out the dry year cycle. the lake would provide regulation for all conditions The removal of the existing silt deposit in Mei¬ over a period of years. The record after 1947-48 is ktila Lake is only one part of the plan for the unreliable because of the unrest in the area. development. A program for the relocation of culti¬ Several methods may be used in removing the silt vators from the drainage area, and a system of re¬ from the lake. Large earth-moving wheel machines, placing the vegetable cover must be diligently imple¬ drag lines and trucks could work in the dry area, mented so that the land erosion and silt movement bullock-carts and hand labor could assist in silt into the reservoir will be virtually eliminated. As was removal in both the dry and semi-dry areas, and a mentioned previously regarding the lake, under the small dredger could complete the work in the wet Burmese kings cultivation in the area area. A plan of procedure using any one or all of these was prohibited, and it was not until after settlement methods could be developed for immediate imple¬ was allowed in the area that silt was deposited in the mentation. The removed silt could be deposited on the reservoir in such quantity. Continual removal of the land outside the embankments and existing water in silt deposited at the present rate would involve a the lake could be held out of the excavation area by great annual expense. leaving a portion of the silt for a dike or ring embank¬ The acreage irrigated annually from Meiktila Lake ment. The work would be done on the North Lake and the total annual rainfall are shown in Table IX-6 only, programming the operation over a period of years. Further study and explorations are required to TABLE IX - 6 finally determine the most advantageous solution. ACREAGE IRRIGATED ANNUALLY Such studies should include determinations of silt location and degree of saturation and should include MEIKTILA LAKE SUPPLY an examination of the possibility of raising the embankments instead of removing the silt. Area Annual (c) Pakokku pump irrigation from wells. This Year Irrigated Rainfall {acres) {inches) project has not been adequately studied for technical feasibility because of insufficient data on the under¬ 1926-27 46,893 55-37 ground water resources in the area. Tests made on 27-28 43,024 43-81 the soil, however, indicate it to be above average for 28-29 24,002 30-51 oil crop production. The provision of supplemental 29-30 30,920 27-43 moisture and nitrogen fertihzer is all that is necessary 30-31 33,172 45-40 to obtain high production in groundnuts and sesamum. The topography of the area is not suited to a large 31-32 30,516 2641 32-33 32,925 28-90 single project, but if the underground water resources 33-34 38,401 38-38 are found to be adequate, small well installations can 34-35 28,201 34-43 be made at each of the areas that are now under 35-36 32,891 49-18 cultivation on the ridges. Cheap power should be available for this development, but exploratory 36-37 29,433 26-63 investigations and test wells could be started imme¬ 37-38 46,137 51-07 38-39 41,640 36-93 diately, using diesel power for the first installations. 39-40 42,437 — The estunated capital cost, annual charges and 46-47 31,101 30-37* benefits shown in Table IX-I9 are based on one installation for each 40 acres; the well 300 feet deep, 47^8 32,595 41-22 cased and perforated as required; the pumping head 48-49 29,587 27-75 20 feet; and benefits from one crop per year. 49-50 29,547 26-20 50-51 29,191 46-04 (3) Far Future Consideration The existence of the necessary physical requirements *From 1st June. such as natural water resources and agricultural lands IRRIGATION 205 topographically suited to irrigation, made the pro¬ development reservoir during the dry season. Existing jects under this classification worthy of future study water courses on both sides of the Mayu River just and survey for the total irrigation development south of the mouth of the Saingdin Chaung furnish program. Any of those listed could provide pro¬ excellent storage and supply canals. The development duction increases by supplying water for crops or proposes the construction of gated dams at the mouth providing drainage and reclamation facilities. Since of these chaungs with pumping installations from the not all projects can be constructed at one time, these Saingdin Chaung and Mayu River for the water have been scheduled for the time when development supply. Water may be supplied to the land on both in other areas more in need will have been completed sides of the storage canals either by low pump lifts or and greater production is desired. Estimated capital gravity flow. Pumping heads are estimated to be from cost, annual charges and benefits are discussed in two feet to eight feet. Amount of land to be irrigated section C of this chapter and shown in Table lX-19. would be at least 100,000 acres, the actual amount The details of costs and benefits are for the first five depending on the distance south the development projects only. The others are considered to be too area would be extended. far in the future for such detailed planning. Continued study will determine more exact details (a) Pegu Area irrigation development. This deve¬ of the project and the economic benefits that may be lopment may be considered as another of the units of derived therefrom. General details are shown on the Delta pump irrigation project proposed in the Plate 8. Prehminary Report. The General Location Plan is (d) Yandoon Island irrigation development. This shown on Plate 7. This project would benefit an area development is another unit of the Delta pump in the vicinity of Pegu by pumping from the Pegu irrigation development. The area is an isolated piece River into a distribution system starting approxi¬ of land surrounded entirely by streams and pro¬ mately ten miles above Pegu. The provision of pump¬ tected by levees on all but the extreme southerly and ing rather than gravity diversion is determined by the easterly sides. A large part of the area is swampy low initial cost and the freedom from log rafting with elevations below sea level at some locations. A requirements. Sufficient flow will be assured in the part of the area is now being cleared, and gates have river at all times by the construction of the proposed been installed at the upper end for silt recharging by hydroelectric project approximately 30 miles upstream flooding from the Irrawaddy. from the diversion works. Low-cost power will also This development proposal is to extend levees on be available from the hydroelectric project for the both sides of the horse-shoe easterly to high ground, pump power. and install pumps for irrigation and drainage as (b) Ma-Ubin pump irrigation development. This required. It is estimated that all the water for irri¬ development is another unit of the Delta pump gation will need to be pumped from the river because irrigation development, the over-all general plan of of the high rim around the area. It is difficult to which is shown on Plate 5. Map studies of the area estimate the drainage requirements at this time, but indicate it to be geographically suited for such a for preliminary design the amount of drainage pump¬ development. Pumping is proposed from the Irra¬ ing has been assumed as the water remaining after waddy River. Although the tests enumerated hereto¬ evaporation, transpiration and percolation, and fore as necessary for Delta pump irrigation develop¬ gravity flow. This amount is estimated at approxi¬ ment have not been made, it is reasonably safe to mately 30% of the rainfall. assume that the water supply for this unit is suffic¬ By instalhng the irrigation pumps to lift water iently fresh for use on the land. Drainage conditions either from the river or from the island drainage appear to be excellent. The area lies in the triangle canal, extra capacity added to the irrigation instal¬ between the Irrawaddy and China Bakir Rivers and is lation will also handle all the drainage. General plan well protected from overflow. is shown on Plate 5. (c) Buthidaung Area irrigation development. Studies (e) Henzada-Zalun pump irrigation development. in conjunction with the Saingdin River Falls hydro¬ This development is also another unit of the Delta electric project have resulted in a feasible proposal for pump irrigation development. It proposes irrigation irrigation development in the Mayu River valley in the Zalun and Henzada vicinity with water pumped south of Buthidaung. Preliminary designs and layouts from the Irrawaddy River above Henzada and from map study indicate that the possibilities of the Zalun. The pump locations being above tide water development are well established. Field surveys have assures a water supply free of salt. These instahations not been made. will provide the entire pumping requirements, supply¬ It is estimated that approximately 600,000 acre ing a canal constructed from the pump sites down feet of water will be released from the hydroelectric through the entire area. The connection and cleaning 206 ECONOMIC AND ENGINEERING DEVELOPMENT OF BURMA of incomplete existing chaung courses will form the construction of a storage reservoir dam under the supply canals for dry season irrigation as well as hydroelectric development, making possible the provide drainage in the wet season. Excavation costs storing of water now wasted. The storage would be would be reduced to a minimum. available for irrigation use on second cropping Only the area lying west of the Irrawaddy River and during the dry season and cropping on areas flooded south from Henzada to the highway linking in the wet season, for stabilization of the supply for and Thaunggyi has been considered for the develop¬ supplemental water in the rainy season, and for ment because of its topographical suitability to an expansion of irrigation to areas not now served. The improvement of this kind. A general plan is shown on three projects should be connected into a single Plate 5. system, however, to benefit all three areas and (f) Prome Area irrigation development. This project economically use the available water supply. This is in a very early study stage but its apparent physical would require costly revising and rebuilding of por¬ possibilities as regards natural water resources avail¬ tions of the existing works because the existing Mon able and agricultural lands topographically suited to River diversion is lower in elevation than either of irrigation make it worthy of inclusion in an over-all the other two. program for Burma. From cursory study of available In addition, a storage reservoir on the Mon River maps, water supply may be from the Nawin Chaung, of capacity for sufficient annual runoff to supply the a river with a drainage area of over 500 square miles, acreage to be benefited by irrigation and for opera¬ and the Shwele Chaung with a drainage area of 200 tion of the proposed hydroelectric installation, will square miles, or by pumping from the Irrawaddy inundate many acres now cultivated and numerous River near Prome. The annual rainfall is not always small villages. The entire development area is also sufficient for present crops but with an irrigation in the hands of insurgents. It has seemed advisable to supply a second crop could be raised in the dry defer further study on this development to a later season as weU as furnishing supplemental water for priority. Developments in other areas more in need crops in the rainy season. will have been completed, and refinements in present The one objectionable feature known about the installations will then be open for consideration. area is the heavy silt surcharge of the rivers draining Location of the existing works and the area served is the Pegu Yomas from which the Nawin and Shwele shown on Plate 3. Improvements to existing works Chaungs flow. Continued studies will determine the would improve operation efficiency, but these must economic benefits from developing the area and the wait for settled conditions to return to the area. details of the proposed works. A general plan is (h) Yanbe and Yin Rivers. Irrigation from these shown on Plate 9. rivers was listed in the Preluninary Report. A cursory (g) Mon River irrigation project. Detailed map study of maps available in the area of Taungdwingyi studies of the area hsted in the Preliminary Report to shows the area to be rather rough, and the rivers be irrigated under the Mon River multi-purpose heavily sih-laden. Detailed field data would be needed project have disclosed only a part of the acreage for analysis of the area for irrigation. It has been geographically suited for services from the Mon concluded that these projects should be deferred River. Most of this acreage is presently irrigated by until future needs require expansion of irrigation to systems receiving river-run supply by diversion from less feasible areas in present economic conditions. three sources. These systems—the Mon River, the (i) Myitnge, Myittha, ShweU and Irrawaddy Rivers. Man River and the Salin River—were discussed in Developments on these rivers were Usted as possi¬ Paragraph A-2-b of this chapter. bihties in the PreUminary Report. Further study has A weir at MezaU diverts water from the Mon shown httle need for storage reservoirs on these River into a system of canals on both sides of the rivers for irrigation. Each source yields an abundance river for service to 119,800 gross acres. A weir on the of water but the demand will be far in the future, Salin River, north of the Mon, diverts water for and the investment required excessive for present service to 29,700 gross acres. A weir on the Man needs. No further study is recommended for the River, south of the Mon, diverts water for service to present. 28,630 gross acres. Of this 178,130 gross acres, 122,090 acres are irrigated annually. The loss in acreage is due b. Assumptions and Criteria for Planning to unequal distribution of periods of water supply, Except in cases where design is based on actual inadequacies in the distribution system, and flooding known data, assumptions and criteria for the parti¬ by the Irrawaddy River of land adjacent thereto. cular conditions are estabhshed from similar situa¬ Additional benefits would accrue to the area by the tions on which information is available. IRRIGATION 207 (1) Consumptive Use of Water Therefore, water service requirements have been Consumptive use of water is the quantity of water determined for each crop period as a complete cycle in acre feet of cropped acre per year absorbed by the in itself rather than for the year as a whole. crop and transpired or used directly in the building of The irrigation demand used in the general planning plant tissue, together with evaporation from the soil. of the projects is as follows: The initial criterion to be established in the design of (a) Mu River irrigation project, Yamethin District an irrigation development is this consumptive use. irrigation project and Loikaw Area irrigation project. The amount of water supplied from the irrigation Based on consumptive use of water determined as system is the difference between the consumptive use described heretofore. by the crop per season and the natural rainfall Dry season crop, canal evaporation included: 36 moisture in the soil for the plant use. inches. Consumptive use of water can be accurately Rainy season crop, canal evaporation included: 12 determined if the soil has been classified and the crop inches. to be grown on each type of soil is known. This Canal seepage losses are assumed as remaining in procedure has been carried out to some degree the area. throughout the Yamethin District project area and explained in detail in the discussion under Section B Well Irrigation: of this chapter. Consumptive use requirements thus Both crop seasons: 36 inches total (on the assump¬ estabhshed are necessary in the detailed design of tion that crops requiring less water would be culti¬ a project and distribution allocations if the supply is vated under well irrigation). short. Maximum water requirement any month: 12 inches The prehminary designs in this Report have been (based on detailed studies made for Yamethin based on consumptive use data provided from records District irrigation project). of water used in irrigated areas, and rainfall utili¬ (b) All delta pump irrigation developments, including zation in non-irrigated areas determined from the Pegu and Buthidaung areas. Based on assumption difference between annual inflow and outflow. rather than method described heretofore, because Detailed studies of these records, and the area con¬ of the lack of specific data. ditions on which they were kept, established a Dry season crop irrigation only. definite relationship between consumptive use of 60 inches per season on 30 % of the area (rice crop). water and temperature. Moisture and plant food are 12 inches per season on 70% of the area (other required in proportion to the heat utilized. The curve crops). on Plate 10 for consumptive use of water based on effective heat, or the accumulation in day-degrees of (2) Data Used in Studies maximum daily temperatures above germinating Detailed field data and investigations necessary for temperature, taken as 32°F. during the growing design plans are not complete. Specific local data and season, was prepared from this knowledge and data. surveys used in the planning are as foUows: Maximum daily temperatures during the growing Settlement reports for data on economic conditions season, length of growing season, rainfall, and inflow in an area, general soil information, rainfall, and and outflow from the area must be known in addition crops raised. to using the curve to determine consumptive use of One inch per mile scale maps by Air Surveys of water for a locality. India for drainage areas and topographic char¬ Sufficient data, together with assumptions based on acteristics for canal location and dam locations, and knowledge of local conditions in Burma, have made it determination of reservoir capacity and area to be possible to estabhsh a reasonable value for annual irrigated. water requirements for irrigation planning. Con¬ Runoff factors for stream flow were obtained from sumptive use has been established by plotting day- existing reports, most of which are incomplete and degrees on the curve; the value thus indicated less serve only as a basis of assumptions. the average annual rainfall, less runoff, being the Crops yields and soil classification from report "An water service per acre. Economic Classification of Land in Burma" by J. T. Experience and observation have shown that there Sanders and U Ba Tin. is very little plant growth in the unirrigated areas Report of reconnaissance survey of dam and reser¬ during the dry season in Burma. Practically all of the voir sites on the Paunglaung River, Yezin and Thitson annual precipitation may be assumed as being used up Chaungs by the Burma Geological Department. during the rainy season and early part of the dry Geological data on the project areas from the same season by runoff, evaporation, and transpiration. Department. / 22 / / / / ; 20

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KNAPPEN TIPPETTS ABBETT ENGINEERING CO. NEW YORK RANGOON DR.BY:£".>^>f' DATE PLATE CK. BY :>9 /?/? JULY 53. NO. 10

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