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A History of Modern Burma

By Bertil Lintner

A History of Modern Burma, by Michael W. Charney. Cambridge University Press, 2009. 241 pages. $78.40

Fiery Dragons: Banks, Moneylenders and Microfinance in Burma, by Sean Turnell. Nordic Institute of Asian Studies, Copenhagen. 387 pages. $80

At the dawn of the 20th century, Burma was the richest country in Southeast Asia. At the dawn of the 21st century, it was one of the poorest. Those are the opening lines in Sean Turnell’s detailed study of Burma’s political economy from the British colonial era to the present. In order to understand the events that in 1988 and 2007 brought the Burmese out onto the streets of Rangoon and elsewhere to demand change, this book is a must-read. Together with Michael Charney’s history of modern Burma, it gives a clear and complete picture of misrule and mismanagement of the once thriving Burmese economy.

Mr. Turnell, an academic at the Department of Economics at the Macquarie University in Sydney, is one of the founders of Burma Economic Watch, which for years has been providing reliable data, analysis and commentary on the country’s economy. Mr. Charney is a senior lecturer in the Department of History at the School of Oriental and African Studies in London, and one of his previous books includes a study of the relationship between the Buddhist clergy and the Konbaung dynasty, Burma’s last, which ruled the country before the British deposed it in the late 19th century.

Mr. Charney examines 122 years of modern Burmese history, from the completion of the British conquest in 1886 to the monk-led protests in late 2007 and the devastation of Cyclone Nargis in 2008. Although he does not cover the precolonial era and the fall of the Burmese monarchy, his book could be regarded as the first general history of Burma since John F. Cady wrote a book with the same title in 1958, and D.G.E. Hall’s classic /History of Southeast Asia/, which was first published in 1955. Mr. Charney explores the forces that have made Burma what it is today: the colonial era, which saw the then-capital Rangoon dominated by foreigners, mainly Indians who had been brought in by the British to run the economy and public services; the Japanese occupation during World War II; ethnic conflicts before and after independence in 1948; and the disastrous “Burmese Way to Socialism,” which was introduced when the military seized power in 1962 and Burma began its descent into isolation and economic ruin.

The last two chapters cover the upheavals from the 1988 prodemocracy uprising—when millions of people across the country took to the streets not only in Rangoon but across the country demanding an end to military rule and Burma’s unique brand of socialism—to a similar, but somewhat smaller but equally failed uprising in 2007. While the military has remained firmly in power, the turbulent events of 1988 led to the introduction of what was supposed to be a market-oriented economic system. But, as Mr. Turnell points out, those reforms have turned out to be severely flawed, especially in the banking sector. According to him, a number of banks were “essentially moribund from the start—their creation reflecting primarily a desire amongst their entrepreneurial owners to enjoy the prestige of possessing ‘a bank’ as much as anything else.” Some were led by shadowy figures who emerged from the frontier areas and whose “financial institutions” United States authorities accused of being involved in large-scale money laundering for various drug lords.

On the more positive side, United Nations-initiated microfinance schemes have proven quite successful even though their operations are limited to only three distinct geographic regions: the Irrawaddy Delta, the “Dry Zone” in the central parts of the country and the Shan State in the northeast. And, as Mr. Turnell points out in his detailed and excellent study, “in the opaque world of Burma’s political economy few things are entirely clear-cut … [microfinance institutions] could transform into sustainable financial institutions. Alternatively, microfinance could fail to make this leap, and continue in the dismal tradition of Burma’s financial sector—of just another idea, well-intentioned and sound in theory, gone wrong in application.”

In 2002, Burma began to experience what became a prolonged banking and financial crisis, triggered by the collapse of informal finance companies, which Mr. Turnell calls mostly “Ponzi” and “pyramid” schemes. The crisis quickly spread to the country’s fledgling, private banking sector and Mr. Turnell puts the blame on mismanagement by the country’s central bank, an institution that in Burma’s military-dominated environment does not enjoy operational autonomy. He concludes that “solving the essential problem of creating a viable financial system in Burma will require fundamental institutional reform of the country’s political economy.” Although officially committed to free-market principles, the mindset of Burma’s military rulers is still stuck in their old ways of controlling and regulating everything in sight. Burma, Mr. Turnell argues, needs “a government of laws rather than of men” to achieve even a modicum of macroeconomic stability.

Political stability is also needed, judging from Mr. Charney’s account of Burma’s modern history, rife as it is with political and ethnic conflicts, failed uprisings in the urban areas and severe repression of any kind of dissent. In view of recent revisionist interpretations of a general election that was held in May 1990 resulting in a landslide victory for the National League for Democracy, it is also refreshing to read Mr. Charney’s statement that the regime indeed did step back from its promises. The 485 elected members of the national assembly were never allowed to meet; instead, 100 of them were handpicked to sit together with more than 600 other handpicked delegates to draft a new constitution.

That was not what the regime promised before the election was held, but several Western observers seem to believe that the election was not for a Pyithu Hluttaw, i.e. a legislative assembly, which the government had stated over and over again, but for only a constitution-drafting body. Quoting press reports at the time, these observers confuse what the government has promised with what we, journalists who covered events at the time, suspected would be the case: the lack of a constitution, since the old one had been abolished in 1988, could be used as an excuse for not convening the national assembly in case of an NLD victory. Which is exactly what happened.

As Mr. Charney points out, the election result came as a shock to the ruling junta. Evidently, the “wrong” party won, so the rules had to be changed—for no one believes that the elected assembly would not have been convened if the military-ruled National Unity Party had won. An nup victory would hardly have led to the arrest and exile of dozens of its mps elect, and a 20-year wait for a new constitution to be drafted. The assembly would have been convened within days, and, among other duties, empowered with the task of drafting a new constitution, as the military had promised before the election was held.

At the same time, Mr. Charney points out that the failure of the democratic opposition to prevent the entrenchment of military control, particularly during and immediately after the August-September 1988 uprising, “meant that it has lost its best and perhaps only real opportunity to establish a civilian government.” And, being cowed into submission before the 1990 election, the prodemocracy movement was unable to mobilize popular support to claim its victory at the polls. And when tens of thousands of monks led renewed protests in late 2007, there was no political movement that could lead the rest of the population and give it a sense of direction. As in 1988, the army was sent in and violently suppressed the protests. The military once again demonstrated its penchant for brutality as well as its remarkable staying power.

Between 1962 and 1974, there were 64 military takeovers throughout the world, most of them entailing the overthrow of civilian governments. Only two of these takeover military governments remain today: Libya, where Col. Moammar Gadhafi seized power in 1969, and Burma, where the military has been in power under various guises since 1962. The survival of successive military regimes in Burma is one of the enigmas of Southeast Asian politics. These two books help us understand why this was possible—and how a once prosperous country has become a tragic, economic wreck.

This review first appeared in the Far Eastern Economic Review, April 2009

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