National League for Democracy
No. 97 (B) West Shwegondine Street
Bahan Township, Rangoon
January 4, 2011
An Analysis on Burma Economy
The economic situation of Burma, on analysis, proves to be grim. The people are suffering from the effects of rampant inflation, lack of economic opportunities and increasing unemployment due to uneven distribution of wealth.
The major cause of inflation is the excessive issue of paper currency to meet government spending. The currency in circulation in the country rose from 18 billion kyats in December 1988 to 4259.83 billion kyats in December 2009.
Although Burma is said to be practising an open market economy, only the private monopolies have prospered as the privileged class has been given special access to economic opportunities. Peasants and farmers have been adversely affected by forced transactions of agriculture land at unreasonably low prices. The construction of innumerable dams, canals, weirs and bridges without reference to long term ecological and social consequences has gravely damaged the quality and availability of cultivable land. Agriculture planning should accord with climate, water resources, soil types and the natural environment but in Burma, the cultivation of dry season paddy and government planned crops are forced on peasants causing unsustainable financial losses.
Long term vision has been neglected in favour of short term benefits and present investments do not promote job creation. State expenditure on health and education has been very low over the years. According to the International Financial Statistics issued by the International Monetary Fund in 2010, only 1% of the GDP of Burma was spent on education and 0.5% on health. Thus human resources are inadequately developed and the need for skilled workers cannot be met while at the same time there is a wastage of labour resources. Moreover, the demand for labour in the main economic sectors of the country (e.g. agriculture, fishery and tourism ) is subject to seasonal variations and the job market is constantly unstable. The lack of resources also causes underdevelopment in the small and medium enterprises sectors which in turn undermines job creation.
Budget deficits should be met through the issue of government bonds rather than the printing of more money. Appropriate taxes should be collected more efficiently and government expenditure managed more effectively.
In inviting investments, policies should be adopted that take into consideration environmental and social factors, protect the rights of workers and emphasize job creation and the prioritization of high technology. The NLD recognizes the need to review the effects of economic sanctions and will look into ways of modifying sanctions so as to promote the kind of investments outlined above. Interest rates should be adjusted to a level that promotes domestic savings and investments. Financial and technical support should be provided to small and medium enterprises and farmers’ field schools should be established.
Expenditure on health and education should be increased. Incentives should be provided to encourage private sector investment in education and health enterprises for the development of human resources. Social service enterprises (e.g. basic health care, renewable energy etc. ) which are not profit oriented should also be assisted. Tax incentives should be granted for research, development, education and social assistance schemes.
The rule of law and good governance based on transparency, accountability effectiveness, efficiency, equitability and inclusiveness are essential to the construction of an economically well developed nation. The economic and political conditions of a nation are indissolubly linked. An appropriate political process is essential for economic development. Sound economic policies will lead to the alleviation of poverty.
The achievement of national reconciliation based on the unity of all ethnic nationalities would be promoted by correct economic policies such as equal job opportunities, income elevation and poverty alleviation for all ethnic nationalities and the reduction of social and economic inequalities between regions and nationalities.
By resolution of the meeting of the CEC of the NLD held on 3-1-11.