COUNTRY REPORT Myanmar (Burma) 3rd quarter 1996 The Economist Intelligence Unit 15 Regent Street, London SW1Y 4LR United Kingdom The Economist Intelligence Unit The Economist Intelligence Unit is a specialist publisher serving companies establishing and managing operations across national borders. For over 40 years it has been a source of information on business developments, economic and political trends, government regulations and corporate practice worldwide. The EIU delivers its information in four ways: through subscription products ranging from newsletters to annual reference works; through specific research reports, whether for general release or for particular clients; through electronic publishing; and by organising conferences and roundtables. The firm is a member of The Economist Group. 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All rights reserved. Neither this publication nor any part of it may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of The Economist Intelligence Unit Limited. All information in this report is verified to the best of the author’s and the publisher’s ability. However, the EIU does not accept responsibility for any loss arising from reliance on it. ISSN 1361-1445 Symbols for tables “n/a” means not available; “–” means not applicable Printed and distributed by Redhouse Press Ltd, Unit 151, Dartford Trade Park, Dartford, Kent DA1 1QB, UK Myanmar (Burma) 1 Summary Myanmar (Burma) 3rd quarter 1996 September 12, 1996 Political and economic structures pages 2-3 Outlook: The failure of the international community, particularly the refusal of ASEAN, to come together in coordinated sanctions against the SLORC guarantees its continuance in power. But the fact that the SLORC will be denied access to significant capital inflows will prevent economic take-off. The currently poor economic prospects, manifest in sharply higher food prices, will heighten the SLORC’s fear of the NLD and stiffen its resolve to clamp down on its activities. No negotiation is in prospect. pages 4-5 The political scene: The increased assertiveness of the opposition NLD prompted another crackdown on its members from May onwards. This was at first muted by the ASEAN meetings due to take place in Jakarta in late July. Once these were over, the SLORC resorted to arrests, chiefly of the NLD’s second-tier leadership, with a view to weakening its organisational base before any fresh elections. New controls on the flow of information have been brought in. Increasing spending on the military has not prevented hardship for the army. Attempts by the USA and the EU to initiate more decisive action against the SLORC before and during the ASEAN meetings failed to evoke a response. ASEAN’s policy of “constructive engagement” won the day, despite doubts among some of its members. These are not shared by Malaysia, whose prime minister is anxious to hasten Myanmar’s accession to ASEAN, possibly to 1997. Ethnic minorities inside the borders have continued to face severe pres- sure. Talks with the KNU have failed to produce a ceasefire. pages 5-19 Economic policy and the economy: Aung San Suu Kyi has denied charges that the NLD is “anti-business”. The US embassy has reported on Myanmar’s many economic woes. Foreign investment continues to be modest and to be concentrated in oil and gas and tourism. The budget deficit has risen above 8% of GDP, because of heavy expenditure. Food prices have been rising in 1996, according to unofficial estimates, and rice production is a key concern. Although production was officially up in 1995/96, the export target was not met. Peasants are subjected to a variety of levies, in cash and in kind. Total has been defending its presence in Myanmar, from which the SLORC will profit in earnest when the Yadana gasfield comes on stream. There has been interest in mining prospects from foreign companies, and tourist arrivals are up. Joint ventures will be sought in the banking sector and the government has moved to calm fears after a run on a local bank. Insurance will be open to the private sector. The free-market value of the kyat tumbled in July. The officially recorded current-account deficit virtually doubled in 1995/96. pages 19-26 Statistical appendices pages 27-28 Editor: Anthony Goldstone All queries: Tel: (44.171) 830 1007 Fax: (44.171) 830 1023 EIU Country Report 3rd quarter 1996 © The Economist Intelligence Unit Limited 1996 2 Myanmar (Burma) Political structure Official name: Union of Myanmar Form of state: military council The executive: since the military coup of September 1988, the State Law and Order Restoration Council (SLORC; last major reshuffle September 1992) has held all executive power Head of state: chairman of the SLORC, Senior General Than Shwe National legislature: the Pyithu Hluttaw (People’s Assembly) was abolished after the military coup in 1988; an election was held for a new People’s Assembly in May 1990, resulting in an overwhelming victory for the opposition National League for Democracy. The SLORC refused to allow this assembly to meet Last national elections: May 27, 1990 Next elections due: unknown National government: the SLORC controls all the organs of state power Main political organisations: since the military coup political parties have been permitted to operate provided they are officially registered. A number of organisations, mostly ethnically based, were in armed conflict with the government for many years. In the past two years, most have either reached an accommodation with the government or have suffered serious military setbacks Main political organisations: National League for Democracy (NLD); Union Solidarity Development Association (USDA); National Unity Party (NUP); Democracy Party (DP); United Nationals Development Party Main members of the State Law and Order Restoration Council Chairman & minister of defence Senior General Than Shwe Secretary 1 Lieutenant-General Khin Nyunt Secretary 2 Lieutenant-General Tin U Deputy prime ministers Vice-Admiral Maung Maung Khin Lieutenant-General Tin Tun Key ministers agriculture Lieutenant-General Myint Aung border areas & national races Lieutenant-General Maung Thint education Colonel Pe Thein energy U Khin Maung Thein finance & revenue Brigadier-General Win Tin foreign affairs U Ohn Gyaw health U Saw Tun home & religious affairs Lieutenant-General Phone Myint hotels & tourism Lieutenant-General Kyaw Ba information Major-General Aye Kyaw light & heavy industry Lieutenant-General Sein Aung mines Lieutenant-General Kyaw Min national planning & economic development Brigadier-General David Oliver Abel trade Lieutenant-General Tun Kyi transport Lieutenant-General Thein Win Central Bank governor U Kyi Aye EIU Country Report 3rd quarter 1996 © The Economist Intelligence Unit Limited 1996 Myanmar (Burma) 3 Economic structure Latest available figures Economic indicators 1991 1992 1993 1994a 1995a GDP at current pricesb Kt bn 186.8 249.4 360.3 473.1 613.2 Real GDP growthb % –0.6 9.7 6.0 7.5 9.8 Consumer price inflation % 32.3 21.9 31.8 24.1 25.2c Population m 42.7 43.7 44.6 45.4 46.2 Exports fobb $ m 464 591 692 879 963 Imports fobb $ m 851 879 1,297 1,547 2,166 Current accountb $ m –344 –275 –292 –339 –630 Reserves excl goldd $ m 258.4 280.1 302.9 422.0c 561.1c Total external debtd $ m 4,853 5,326 5,481 5,518 n/a Debt-service ratioe % 50.9 40.8 34.3 31.8 n/a Exchange ratef (av) Kt:$ 6.28 6.10 6.15 5.97d 5.67d September 6, 1996 Kt5.85:$1 Origins of gross domestic product 1995b % of total Components of gross domestic product 1995b % of total Agriculture 53.7 Total consumption 88.7 Manufacturing & mining 7.3 Total investment 11.7 Livestock, fishing & forestry 7.0 Increase in stocks 0.2 Transport & communications 2.7 Exports of goods & services 1.0 Construction & utilities 2.3 Imports of goods & services –1.6 Banking & finance 0.1 GDP at producer prices 100.0 Wholesale & retail trade 23.4 Other services 3.5 GDP 100.0 Principal exports 1994b $ m Principal imports 1993b $ m Rice & rice products 197.1 Raw materials 297.5 Pulses & beans 133.3 Transport equipment 223.3 Teak 123.5 Foodstuffs 137.7 Rubber 20.5 Machinery & equipment 134.9 Total incl others 878.8 Construction materials 83.1 Total incl others 1,297.1 Main destinations of exports 1993b % of total Main origins of imports 1992b % of total Singapore 19.4 Japan 25.5 Thailand 17.4 China 15.9 India 15.0 Thailand 10.9 Hong Kong 10.7 Singapore 10.3 China 5.0 Malaysia 7.2 Japan 4.4 EU 5.7 USA 3.7 Indonesia 4.1 a EIU and official estimates.