Global Economics

Myanmar's Junta Hangs Tough


The military regime appears intent on holding a referendum despite as many as 22,000 dead in the wake of a May 3 cyclone

The news from Myanmar is grim indeed. Estimates for the number left dead in the wake of a cyclone with 120-mph winds that ripped through the southern part of the country on May 3 continue to rise. According to the U.N. disaster office in Bangkok, Thailand, as many as 22,000 people have perished and hundreds of thousands have been left without shelter, fresh water, or medicine.

Yet the military junta that rules Myanmar isn't about to let the worst natural disaster to hit Asia since the devastating 2005 tsunami spoil its plans to turn the screws on the country's struggling democracy movement. Even as at least 4 million residents of Rangoon, Myanmar's largest city and former capital, are coping without electricity, water, or roofs over their heads, the generals who rule the impoverished Southeast Asian country appear intent on holding a constitutional referendum on May 10 designed to justify their continued suppression of Nobel Peace Prize winner Aung San Suu Kyi and her followers. The regime has said it will postpone the vote in some areas until May 24 but will go ahead in the rest of the country also known as Burma.

Burmese exiles point to the junta's determination to go ahead with the referendum as a sign of how out of touch the regime is with the situation beyond the barracks. "Assistance coming from the military was slow, making people wonder why," says Aung Zaw, editor of the Irrawaddy news magazine in Bangkok. "The government needs to tackle the humanitarian crisis. People need water, not a military referendum."

More Economic Hardship

Strongman General Than Shwe and his fellow generals are unlikely to budge, though. One reason: They are ensconced in the capital, Nay Pyi Daw, 180 miles north of Rangoon in a remote part of the country untouched by the storm. That isolation was just why Than Shwe began relocating the government from Rangoon in 2005, since he and the other members of the regime believed its remote location would protect them from any attempts to overthrow the junta. The move helped them last year, when the military killed dozens of Buddhist monks and other pro-democracy protesters who took to the streets of Rangoon to call for the release of Suu Kyi, who has spent 12 of the past 18 years under house arrest or detention.

The storm's aftermath is likely to present further economic challenges to the regime. Protesters in September were frustrated over high fuel prices and accused the government of indifference to the economic hardships throughout the country. Now, with global rice prices already soaring (BusinessWeek.com, 4/28/08), inflation is likely to become a bigger problem. Even before the cyclone hit, rice productivity in the country had fallen because many farmers simply could not afford the price of fertilizer, which has skyrocketed along with fuel prices.

In the countryside, Burmese target their anger and frustration over economic hardship at the army, which suspends rice trade during January and February of each year to ensure it can buy rice when prices are lowest. Myanmar's military is about 400,000 strong, in a country of 53 million. The plight of farmers "is quite a crisis," said one foreign agricultural aid worker based in Rangoon last month. "Yet the government is so focused on the referendum, there is not an economist in the house thinking about this. In any other country this would show up in papers."

Worn-Out Infrastructure Hampers Aid Distribution

Last September's crackdown further isolated the regime internationally. However, since May 3 the government has begun to mobilize relief efforts and has shown an uncharacteristic eagerness to accept international assistance. "There have been no excessive delays," says Richard Horsey, spokesperson for the U.N. disaster response office in Bangkok.

Still, the country's tattered infrastructure—the result of decades of economic mismanagement and neglect—would make getting the aid to those who need it difficult in the best of situations. Now much of the worst affected area along the Irrawaddy delta is still flooded, bridges are destroyed, and roads washed out. "It's one thing to get things onto the [Rangoon] tarmac, it's another thing getting assistance to areas where it's needed," says Horsey. The most pressing needs for survivors are drinking water, shelter, mosquito netting, and cooking utensils.

The willingness of the government to enlist international help reflects just how bad the disaster is rather than any sign the regime is becoming more open. The present regime has refused to relinquish power since seizing it in 1988, despite nationwide elections held in 1990 in which National League for Democracy leader Suu Kyi won an overwhelming majority of the vote. The referendum on a new constitution is meant to pave the way for elections in 2010, but will ensure the military maintains its grip on power.

The regime issued a statement saying the constitutional referendum would be held as planned on May 10. The May 5 issue of the official government newspaper, The New Light of Myanmar, carried the statement, together with an attack on the May 2 pronouncement by the U.N. Security Council urging a free and fair referendum. The government was "much surprised" by the U.N. statement, the newspaper said. The referendum would be held as planned, the newspaper said, "and the entire people of the country are eagerly looking forward to that."

Balfour is Asia Correspondent for BusinessWeek based in Hong Kong.

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