Myanmar’s Way Forward: Land, Labor and Capital Reforms

While economic reforms in Myanmar arrived more slowly than political reforms, foreign governments and investors are nipping at the government’s heals to gain access to the newest market in Asia. However, the Myanmar government must consider the implications of a more liberalized economy for the wellbeing of its vulnerable population.  Political reforms were necessary in order to gain legitimacy from the international community, stimulate foreign investment and have sanctions eased or removed.  Myanmar’s recent transformation from an almost pariah state that relied heavily on China’s financial support and backing in international arenas such as the United Nations to a state that the US now sees as a pet project for a democratic, market movement has affected more than the top government officials, military brass and opposition leaders.  Economic, labor and land reform will significantly alter processes of production and consumption in Myanmar given the country’s reliance on agriculture, lack of infrastructure and new foreign influences.   

Since military rule began in 1962, Myanmar (then Burma) has become one of the most impoverished and closed states in Asia.  Myanmar has had historical economic ties with several of its neighbors. But, to enable a wider field of influence and investment the government has begun implementing reforms on foreign investment. They have set the goal of reducing state control over education, energy, forestry, health care, finance and telecommunications sectors.

Over the past year, Myanmar has experienced an economic and political reemergence, with only (and it’s a big only) ethnic violence and abuses by the army in several regions still plaguing the government.  Additionally, strides have been made in correcting the problem of forced labor in Myanmar, leading to removal of trade barriers by the European Union.  The EU also reinstated the Generalised System of Preferences halted in 1997 due to national labor standards.  Over the summer American companies were allowed to start investing in the country. In step with President Obama’s visit to the region, the US government just last week began allowing the importation of products made in Myanmar excluding jadeite and rubies.  The removal of Western sanctions and continuous visits by business delegations to Myanmar over the past year gave Naypyidaw a renewed spirit toward achieving economic security.

Land reform in Myanmar will, according to Center for Strategic and International Studies Deputy Director Murray Hiebert “determine the role of farmers in the country’s reform process and lay the foundation for new realities between the government and the rural poor.” (2012)  With more than two-thirds of the population relying directly or indirectly on agriculture, how the government handles new legal frameworks (through Farmland Law and the Vacant, Fallow, and Virgin Land Management Law) will either give confidence to locals or to foreign investors seeking security for land use.  Currently the government of Myanmar is the “ultimate owner of all land,” and so is able to dictate land usage.  During military rule, the state confiscated land with meager or no compensation to farmers; new laws may now facilitate this expulsion of farmers and those who rely on subsistence agriculture, creating a landless working class simultaneously privatizing land and creating an easily exploitable labor force.

The US and other Western states see Myanmar as a country they can help build and shape in their image, while taking advantage of both lack of domestic private competition and the presence of government officials with ties to industries.  With foreign funding, new industry in Myanmar will create new consumers as well as producers.  The way people in Myanmar produce and exchange goods will change; and some industries will no longer be competitive due to cheaper imports and foreign-owned factories.  If Myanmar’s majority rural population is driven away from rural areas and subsistence agriculture, then it is likely that they will have to quickly convert to other sectors, for example, manufacturing textiles and finished goods.  We are yet to see if Myanmar will find a niche in particular industries.

The inability to freely sell precious gems, purchase weapons and halt the opium trade still haunt the leaders of Myanmar during the reform process.  Furthermore, human rights violations by the military, ethnic clashes and minority rights and concerns continue to hamper economic advancement.  Before Myanmar can become a fledgling capitalist economy – or even a controlled capitalist economy like several of its neighbors – there will likely be a protracted period of painful reforms.  The privatization of land and resources is not likely to be any more equitable than it has been under military rule over the past five decades. In their public appearance on November 19 in Rangoon, US President Barack Obama and Myanmar President Thein Sein warned against lingering in the past; rather, “We need to look forward to the future.” Hopefully the people of Myanmar will be able to define their own sense of progress and avoid some of the problems faced by their neighbors and eager business partners.   

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