Speech of Dr Sein Win, National Coalition Government of the Union of Burma

On the special occasion of peace rally organized by the Burmese communities around the world New York, Tokyo, Brussels – March 31, 2006

My dear fellow Burmese, Today is a very special day for peace in Burma, as we gather here to show our solidarity with the National League for Democracy (NLD) in their call for the process of national reconciliation in Burma. As you know, the National League for Democracy (NLD) has taken flexibility to the next level when it announced that it is willing to extend de jure recognition to the State Peace and Development Council as a "transitional government," the term of which is to be negotiated between the two sides, if the SPDC agrees to convene the Parliament in accordance with the results of the 1990 elections.

I sincerely believe that the NLD proposal is the only realistic option to begin the process of national reconciliation in Burma. This offer of mutual recognition—the military regime honoring the results of the 1990 elections and the election-winning parties recognizing the role of the military in national politics—can overcome decades-long political crisis in our beloved country. Once such basic initiatives are taken, the detailed arrangements about democratic transition can be negotiated through a tri-partite dialogue process.

As the NLD has announced their proposal symbolically on February 12th Union Day and also consulted and received the support of the Committee Representing People’s Parliament (CRPP), the process of reconciliation will surely benefit all our people including the armed forces and the ethnic nationalities. The first initiative to reconciliation, as envisaged by the NLD, needs an urgent attention from the leaders of the armed forces. Reconciliation is critical to overcome political crisis of our time. More importantly, reconciliation is also critical to address the multiple crises of the country. At this juncture, Burma is dangerously sliding to a myriad of deeper crises—the crisis of legitimacy stemming from the political crisis, the crisis of international isolation as the whole world is very much against the SPDC, the crisis of humanitarian emergencies including HIV/AIDS epidemics, drug menace, refugee outflows and many other cross-border problems affecting the stability of the ASEAN, and the latest one facing the pandemic Avian influenza that is spreading like wildfire in Burma. The most dangerous of all is the chronic decline of socio-economic conditions of our fifty two million populations who now face several economic shocks of misguided SDPC policies that are now pushing Burma into an explosive setting. Since last year, the SPDC introduced the most absurd economic policies that fueled hyperinflation and destabilized the entire economy instead of alleviating the welfare and livelihood of the population. Last September, the SPDC increased official price of gasoline nine folds without proper consideration on how such a sudden and ill-transparent undertaking could affect the livelihood of the population. Supposedly a cure against black-market trading of gasoline resulted in higher profit margins for the black-market run by the close associates of the SPDC.

Worse still, the cost of transportation around the country went up dramatically, pushing all the consumer prices and driving the impoverished population further into deeper poverty. The SPDC’s decision in November 2005 to move its administration to Pyinmana only worsened the macroeconomic situation. From the economic point of view, it is a very ludicrous decision to place the country’s capital in the middle of nowhere. More importantly, the cost of moving capital to Pyinmana could be very substantial. We could compare this with other countrys’ experiences of relocating their capitals. Malaysians moved their administrative capital from Kuala Lumpur to a nearby Putra Jaya a few years ago. That move did not disrupt any of government functions because the new capital is in a short distance to the old one. But it costs nearly 10 billion US dollars for the whole project. Take another example. Germans moved back to their old capital of Berlin in late 1990s from Bonn. This project involves only relocation, not the construction of a completely new capital like the way the SPDC is doing right now. It gave the Germans a huge bill of US$ 8 billion. How could we afford to pay for the most outrageous decision of our modern history?

The cost of moving to Pyinmana will undermine the whole economy, put the burden on younger generations of Burmese, and we will see a rapid deterioration of inflation and productive economies in the next six months. Lately this week, the SPDC announced to increase six to ten times the salaries of civil servants and armed forces personnel. It is a very short-sighted and temporary measure to relieve the discontent within the civil service and the armed forces. Although the measure may neutralize the dissidents within the government institutions, the impact is already very negative. All the consumer prices went up, in some places, they doubled. This March-madness will add more troubles to the already struggling population to meet their ends. There is a strong reason to be concerned about the worsening economic situation in the country because our recent history has told us about how collapsed economy in 1988 could result in people’s uprisings followed by violent repressions. People lost their jobs and homes, the armed forces were goaded along the military rule that tarnished their dignified role. I must urge the leaders of the armed forces to recognize the harsh reality of Burma and address the situation before it is too late. Just a few days ago, Senior General Than Shwe mentioned in his Armed Forces Day speech that the SPDC has accomplished a prosperous economy. I would like to highlight a number of economic issues that the SPDC has been misleading our people and the world. There is a huge gap between the reality and the dream world of SPDC’s economic thinking, and I am alerting all of us to be aware of the real Burma. According to the SPDC, Burma has experienced double digit economic growth rate of more than 10% for the last seven years. It means we have beaten not only the most dynamic economy in our region, China, but also any other records in modern economic history. This is impossible. Prof. Sean Turnell yesterday testified and explained this nonsense at the US Senate; he confirmed that the growth rate could be possible only at an average of 2-3%. Alarming enough, he analyzed a painful reality of Burmese economy that the country is still stuck at the ancient economic structure where more than fifty per cent of our GDP is dependent on subsistence agriculture and natural resources. This is exactly the same economic structure we had in 1960, and after nearly fifty years of military rule, nothing has changed in our economic structure. In 1950s, our economy is at par with South Korea or Thailand.

Now the size of South Korean economy is nearly at US$ 700 billion, the fourth largest in Asia, and Thailand’s economy stands at an impressive size of US$ 160 billion. Burmese economy now is only US$ 8.6 billion last year. In terms of per capita GDP, Burmese people have become the poorest people in Southeast Asia, even poorer than the least endowed and landlocked economy of Laos in this regard. This is a very alarming picture for every Burmese to be concerned about. Other poor economies have found how to improve their economic standings by diversifying their way of running economy. One very good comparison can be made with one of our neighbors with similar economic structure and size, Viet Nam, which also began their reforms in 1987—the same period that SPDC also declared “open door” economic policy. Nowadays, Viet Nam has transformed from a rice-deficit economy to the world’s third largest exporter of rice. The opposite has happened to Burma, once known as the “rice bowl of Asia,” which is now facing acute shortages of rice in certain parts of the country. The open door policy in Viet Nam received 30 billion worth of foreign investment by 1997, but Burma received only 6 billion during the same period. It was well before the Clinton Administration imposed a ban on new investments in Burma, therefore, low investment flow into the country was more to do with poor policy framework and adverse macroeconomic conditions inside Burma than any other external factors. The SPDC leaders may have been wrongly optimistic about our economic futures as they found large natural gas reserves in the Bay of Bangal. They may have expected that the income from the sale of gas could lift our economy from the depth of problems. The revenue from gas has shot up our export value to over two billion in 2004, but such a figure is a fraction of what Thailand nowadays is exporting its goods worth of 96 billion in the same year. We used to export the similar amount of export in 1960s. The reason that the value of Thailand’s export is fifty times higher than that of Burma has to do with the industrial development of Thailand where manufacturing goods constitute the bulk of the export. Certainly, Burma has become a resource pit of the whole region. We sell natural resources and supply energy for our booming neighbors, who use these resources to develop their economy. While our neighbors became the world’s largest economy on a fast track, we have become the least developed country. I do not see any way that we could get out of this vicious cycle from selling resources and impoverishing the population unless we can fundamentally reform the underlying economic structure of Burma. Speech of Dr Sein Win, 31 March 2006 5Since income from the sale of natural resources is not earned through hard work, they are also being spent easily. The relocation from Pyinmana was possible because the money for the project is earned through the sale of resources. The SPDC is also neglecting social welfare of the people, as they spent less than $ 1 per capita on health and education. No wonder, our social indicators are now the worst in Southeast Asia – the highest level of primary school drop-out rate, the highest number of refugee outflows and illegal immigration to neighboring countries, and the most vulnerable to infectious diseases such as HIV/AIDS and malaria. While Burma is suffering from “resource curse,” our neighbors including India is now taking off to a new knowledge economy. What does this economic crisis mean to our armed forces?

Although the military gets the highest percentage of government spending, they could never become effective armed forces because it is basically a poor army of a very poor country. Senior General Than Shwe has inspired his troops on March 27 to have a modern army in Burma. I seriously doubt that Burma could ever achieve this goal under this economic setting. The basic answer is that only when a country becomes prosperous and the living standards of the population increases, then, the armed forces borne out of the people can become a modern, effective and dignified institution. We are bound in a common fate; and if the armed forces fail the people, then, they fail themselves. At this juncture, our armed forces very unfortunately have become a repressive institution that exploits the people’s livelihood, a corrupt institution that runs illicit trade, a predatory institution that plunders the country’s rich natural resources, a factious institution where many factions fight only for power. Meanwhile the country is boiling up under the latest economic miscalculations and mismanagement. Burma is at the brink of collapse, and we must avoid it. Under these circumstances, national reconciliation is the only antidote for the failing state in Burma. Only national reconciliation can bring all the forces of the country to work jointly to save the country. We cannot wait any more to see the country going down a spiral path of crisis, collapse and violence. April 17 is going to be our Burmese New Year, and I hope that we can hear the good news from Rangoon that the SPDC accepts the NLD’s offer for reconciliation.

Thank you!