10.06.2007
Anecdote on Free Market in Burma
_ By Ko Sala
The Burmese military junta is neither proponent of free market nor supports the interventionist economic policies. My armature knowledge in economics leads me to believe that any market oriented governments cannot run an economy in absence of both the economic instruments; the supply side or monetary policies and fiscal policies.
A fortnight or so ago, the Burma Digest (BD) had a dedicated section on future economic policies of the country. The writers cogently contributed their arguments on how the regime is failing to run the economy in a free market fashion. I salute their effort in suggesting the market oriented policy prescriptions for Burma.
Though, my constructive critique of their policy prescriptions; it lacked empirical evidence and it was almost read like an academic text book.
A definitive introduction of free market policies without state intervention is a recipe for disaster in any developing economies. The most notable example of such a disaster is experienced by Africa, Russia and former East European governments.
No doubt, the military junta is evidently controlling the economy and the apparent rise in poverty is not due to the lack of free market policies but it axiomatically suggests that the state is failing to act responsibly. In absence of coherent data on government spending on health, education and other social and economic developmental activities, one cannot decisively determine if free market policies would cure the deteriorating economic conditions in Burma.
A quarterly economic data produced by the junta does not provide sufficient economic information and international institutions such the Asia Development Bank (ADB) has notably questioned the credibility of junta’s claim on economic success story. There is a case for the Burmese exile government to establish an independent credible economic monitoring organisation with facts and figures.
The existence of export and import sector and presence of foreign investment implicitly suggests that the military government no longer practices command economy. The Union of Myanmar Economic Holding Ltd is arguably a privileged pseudo government owned enterprise but no doubt it can be used as an institutional instrument to build economy which reaps the benefit to citizens. The Malaysian government’s heavy involvement with the Proton car manufacturing company prior to its privatisation is a noteworthy example of government’s control over market in promoting national output.
My opinionated anecdote; our obsession with introduction of unmanaged free market policies in Burma transcends from our past experience of upbringing under command economy. But the problems for any upcoming democratic government of Burma or NLD will not be freeing up the market but freeing Burma up from her over reliance on China and the rent seeking oligarchs and inflation. So, at least, it is healthy to have debate on future economy of Burma and I personally encourage the Burma Digest (BD) to keep the dialogue alive.
Comments:
Myo Thu said _
The most disappointing point for Burma economy is command economy or bully economy controlled by junta instead of free (open) market economy.
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