Reality bites as junta officials horde cash, assets

Missing middle class leaves vaccum for rising ‘criminal class’

Mizzima

By Bern Smith

Sydney

Senior Burmese government officials are “salting down” assets of all sorts and stashing cash in offshore banks in a sure sign the insiders are beginning to hedge their bets on the ruling military junta’s future, an economics analyst has said.

Professor Sean Turnell, from Sydney’s Macquarie University, said the officials were looking to guarantee their families’ futures in Burma’s ruling class.

Prof Turnell is a principal of Burma Economic Watch and has addressed the United States’ Senate Sub-committee on Foreign Relations about the effectiveness of US sanctions.

He is a firm believer in sanctions.

Prof Turnell is also a former Reserve Bank of Australia senior analyst, and says little can be expected of ASEAN, India, nor China when it comes to pushing for reforms from the junta, but there is some hope from within the military clique.

“Some developments are quite dramatic at the moment,” he said.

“There are sizeable holes in the regime, but that’s really it on the upside.”

Prof Turnell, who will next month travel to Washington DC to meet with members of Congress, believes some senior figures within Burma’s military administration are “running scared”.

“With the election coming, it’s obvious that it will be the farce that everyone says it’s going to be, and the most senior [generals] will still have everything,” he said from his Sydney home.

He said some elements of the international community saw these key figures as rising “robber-barons” in Burmese society, comparable with the American phenomenon of the 1900s.

In America such businessmen, or “robber barons”, amassed great personal fortunes, but national institutions such as libraries and foundations and infrastructure such as railroads, were a positive byproduct of the era.

But in Burma, reality was far more bleak, said Prof Turnell.

“In the last six months what we’re really seeing is the rising of a criminal business class, with the privatisation push it’s really a rapid criminalisation of the economy,” he said.

“They’re protecting themselves more in the manner of the mafia,” he said.

“It’s morphing from this nationalistic, quasi-Stalinist state into a criminal economy”, where the individual plays a more prominent role than is healthy for a developing economy, he said.

And with the focus turned to the connected individual capable of securing a concession or privilege from the junta comes greater disparity.

“We’re not going to get a Hyundai or Daewoo out of this,” said Prof Turnell, dismissing the argument of economic liberalists that democracy and human rights evolve with economic development.

“These people [with privileges granted by the junta] are not innovators, nor manufacturers, this is simply rent seeking,” he said.

There was no new middle class coming to the fore and demanding their rights and exercising newfound power as consumers, he said.

A classic example of what Turnell describes as the “madness” of the generals is a recent decision to ban the export of onions to combat a domestic shortage.

“Farmers had entered into contracts, they had contractual obligations,” he said.

But those obligations will not be fulfilled now, because of the generals’ actions.

And so a promising industry has been cut off at the knees.

He compared the current onion ban with that of beans and pulses a few years ago.

Once the bean and pulse export industry had been ruined by export bans, the generals left it alone – in the past few years it has been making something of a comeback.

“There is no path to anything [for producers] other than mere survival,” he said.

Prof Turnell bemoans the argument that development will lead to greater rights for the people of Burma and a more equitable system will bloom with time.

“If it was genuinely developing then you would have to say ‘well, that’s better than nothing’, but it’s just not happening,” he said.