Burma in 1982: Incomplete Transitions

Author(s): David I. Steinberg

Source: Asian Survey, Vol. 23, No. 2, A Survey of Asia in 1982: Part II (Feb., 1983), pp. 165-171
Published by: University of California Press
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 BURMA IN 1982: INCOMPLETE
TRANSITIONS

David 1. Steinberg*

BURMA IS IN the midst of a series of transitions, whose

ultimate resolutions will in large part shape the nature of the political,
economic, and internal structure of the nation over the next two decades.
These changes, no matter how slow their movement may seem to outside
observers, are profound in their implications, for they concern the future
leadership of the state, its economic progress and direction, and the na-
ture of its internal ethnic problems.
When in August 1981 President Ne Win announced his plans to
retire from that largely ceremonial position in the following November,
he explicitly did so to ensure the measured movement toward a peaceful
succession. Yet by retaining the chairmanship of the Burma Socialist Pro-
gramme Party (BSPP), Ne Win has begun, but not completed, the still-
unfinished transition to new national leadership. The party controls the
political process and, by virtue of its status as the only legal political
entity, relegates the Pyithu Hluttaw (Peoples' Assembly) to a mere ex-
pression of BSPP's will.
Burma's Third Four-Year Plan came to an end on March 31, 1982.
Its close marks the virtual midpoint between the economic liberalization
mandated at the First BSPP Congress in 1971, approved by the party's
Central Committee in 1972, and the close of the Twenty-Year Plan in
1993/94, when Burma is projected to achieve the status of an indus-
trialized, socialist state. The Third Four-Year Plan, although impressive
in its aggregate accomplishments and the most successful of Burma's eco-

*The views in this article are solely those of the author and do not necessarily repre-
sent the Agency for International Development or the Department of State.

165

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1983 by The Regents of the University of California

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166 ASIAN SURVEY, Vol. XXIII,No. 2, February 1983
nomic performances, is also an incomplete attainment of the stated eco-
nomic goals in certain sectors.
The passage of the Burma Citizenship Law (Pyithu Hluttaw Law
No. 4 of 1982) in October 1982 signifies a third type of transition:
changes in status of certain minorities resident in Burma. This started
with the military coup of March 2, 1962, which began the dismantling of
the traditional, quasi-autonomous relationships existing between the con-
stituent states and the central government. This process was formalized
when the constitution of 1974 came into effect and with the convocation
of the Pyithu Hluttaw twelve years to the day following the coup. The
constitution stipulated a unitary state, thus redefining the institutional
association between the Burman majority, which has exercised political
power, and the other ethnic and linguistic groups indigenous to the na-
tion. The new law defines the citizenship rights of other ethnic groups.
This transition is somewhat different from the previous two, for although
the formal structure is now complete, the problems have yet to be re-
solved.
Burma is thus midway in its political, economic, and social transfor-
mation. The three are interdependent, for continued economic progress is
one important, determining factor in how easily the political process will
generate an effective successor to Ne Win, and the political leadership
will no doubt influence the type of economic system and its accomplish-
ments. The ultimate future of the state will in large part also depend on
the sensitivity with which the Burmans resolve their indigenous and for-
eign minority issues.
Ne Win, with the carefully cultivated and assiduously massaged im-
age as successor to Aung San, the father of independent Burma, is a
member of that same pre-war nationalist movement that emerged from
University of Rangoon student activism and the Burma military of World
War II. San Yu, the new president chosen under the constitution by the
Council of State of the Pyithu Hluttaw-and thus ultimately by the party
and Ne Win-is now sixty-four and only seven years younger than his
predecessor. Both emerged from the pre-independence elite. The critical
transition that must come is that between the pre- and post-independence
elites. With effective control of the party in the hands of the military, it is
likely that this transition will be more generational than institutional-
that is, the military will continue to dominate positions of authority
within the state, but they will be from the generation that gained promi-
nence after 1948. This control will be exercised by Burmans, not mem-
bers of any minority.
This transformation will be all the more difficult in part because of
the successful network of personal loyalties that Ne Win has been able to
establish and maintain since assuming military leadership in 1949. With
Ne Win's eventual retirement as party chairman, the Burmese military is
even less likely to be a cohesive unit. Burmese politics since the 1930s has
been marked by factional disputes more personal than they have been

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 BURMA 167

ideological. It is unlikely that the army, which has been subject to such
disputes in the past, will remain immune from the infectious nature of
personalized power, a traditional characteristic of Burma's leadership
from the pre-colonial era. Whether such splits may occur between those
in the military who have been engaged in actively fighting against the
numerous insurgencies that have plagued the periphery and those who
wielded administrative power, or whether (a la Korea) from different
class factions at the military academy, or from other less obvious personal
causes, is obscure. There will, however, be a need for greater political
legitimization to solidify the role of the next party chairman, for Ne Win
as a colleague of Aung San and a fellow-member of the "Thirty Com-
rades" has had a special place in Burmese history. San Yu, by virtue of
his close public association with Ne Win since the coup-he was deputy
prime minister and chairman of the State Constitution Drafting Commis-
sion in 1969 and held critical posts thereafter-may inherit some of Ne
Win's aura, especially as long as the latter can oversee the process from
the sidelines. New leadership, however, may have a more difficult time.
The political transition is still indistinct.
Burma's Third Four-Year Plan (fiscal years 1978/79-1981/82)
overall has been remarkably successful, the best Burmese economic effort
to date.' Completed at the end of March 1982, it overfulfilled its target of
6.6% annual growth by marking a 6.7% increase, thus indicating that the
economic reforms mandated at the first party Congress are continuing to
spur economic progress. Yet the optimism that such growth has generated
in both the internal and external press must be treated with some circum-
spection. An examination of the plan's accomplishments by sector as well
as the plan's relationship to the overall goals of the Twenty-Year Plan
indicate that there are still major problems in the economy and that some
of the longer-range targets will be difficult to achieve.
Agricultural progress has been the chief accomplishment of the plan.
As the primary national priority development sector, its planned annual
growth was set at 5.8% with an investment of 13.6% of public funds. Its
execution was, however, far better: annual growth of 8.6% with a public
investment of only 9.18%.
The causes for this success may be found in the introduction and
spread, with constant government exhortation and supervision, of the
high-yielding varieties of paddy. Only two trial areas were included in
the "whole township cultivation program" in 1977/78, but by 1981/82
there were 78 townships in it. In that latter year, 6.4 million acres (51%
of all paddy land) was under these varieties. The results have been star-
tling. Paddy yields averaged 36.8 baskets (of 46 lbs. each) in 1976/77, not
much better than the 30.5 baskets of 1940/41; by 1981/82 they reached a
national average of 57.06 baskets, but 67.98 baskets for the high-yielding
varieties alone. This resulted in aggregate yields of 13.92 million tons in
1981/82, with government procurement of about 30% of the crop for ex-
port and internal sale in rice deficit areas.

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168 ASIAN SURVEY, Vol. XXIII,No. 2, February 1983
The remarkable growth of paddy production, although an achieve-
ment of considerable magnitude, is not without its concerns. It is an ac-
complishment brought about by both agronomic progress and political
supervision. Fertilizer use has almost doubled during the plan, and politi-
cal suasion, peasant mobilization, and implicit coercion are all present in
the program. With the right to cultivation determined by the government,
peasants have been warned that conformity to state programs is required
or they face forfeiture of farming rights.
Although paddy production has increased, rice exports are estimated
at 905,000 tons in 1981/82-the highest since the military coup-but
well below the 1.676 million ton figure of 1961/62. No government has
yet equalled the pre-war (1940/41) figure of 3.123 million tons. The
causes are complex and may relate more to an inefficient government mo-
nopoly than to increases in population and consumption.
Over the next four-year plan, the government will not be able to rely
on paddy production increases to meet its overall plan targets. The agri-
cultural base is already so high and the most important areas already
included in the program that increased yields must come from more dou-
ble-cropping and improved water management. Yet only about 15% of the
land is irrigated, so that the paddy economy is still subject to the vagaries
of nature.
If agriculture was a success, mining performance was a severe disap-
pointment. The plan called for annual increases of 12.2%, but the actual
level was 8.2% in spite of a doubling (to 12.43%) of planned public ex-
penditures in this field, which is 86.5% under government control. Oil
and natural gas dominate this sector, and many of the hopes for progress
in this plan were predicated on high crude oil production. The target was
set for 17.084 million barrels by the end of the plan, but production was
only 10.110 million barrels in 1980/81 and an estimated 12.001 million
barrels in 1981/82. The reasons for this failure are not clear, and the
discovery of three new fields onshore, announced in November 1981,
seems to have had little positive result. Domestic consumption of fuel is
severely curtailed and shortages have been reported. Burma may have to
import crude oil to keep its refineries operating efficiently if production
does not increase. The natural gas target for 1981/82 was 23,468 million
cubic feet; although provisional figures for that year indicate the goal will
be reached, the total the previous year was only 14,837 million cubic feet.
Provisional figures must always be treated with caution for they are often
revised downward the following year.
Even more disturbing, since the figures may indicate systemic rather
than technical problems associated with oil production, is the field of pro-
cessing and manufacturing. Here the government set a target of 12.2%
annual growth, but achieved increases in production of only 6.6%, al-
though figures for the final year of the plan provisionally indicate a 9.0%
increase. Growth in processing and manufacturing is particularly disap-
pointing because the largest share of public investment (36.1%), is ab-

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 BURMA 169

sorbed by this sector. In spite of the progress that has occurred because of
the 1971 dictum that the state economic enterprises were to operate along
commercial lines with incentives provided for fulfillment of quotas, there
still seem to be problems with coordination of industries and the importa-
tion or local supply of raw materials.
The Twenty-Year Plan, of which the Third Four-Year Plan is a
component, has set ambitious targets for achieving the politico-economic
goal of industrialization and socialism. At the start of the plan, the state-
controlled portion of the economy was 36%, the cooperatives 3%, and the
private sector 61%. The targets were to increase state control to 48%, and
have equal shares of 26% in both the cooperative and private sectors.
Since agriculture is the dominant field in Burma and at the start of the
plan 99% of it (in spite of the state's ultimate ownership of the land) was
considered private, marked changes will have to take place in this area if
goals are to be achieved. The plan stipulated that 50% of agricultural
production was to be under the cooperatives, 10% in the state sector, and
only 40% private. The plan was also designed to achieve an annual
growth rate of 5.9% in real terms and to double living standards, which
were still below pre-1940 levels.
At the close of the Third Four-Year Plan in 1981/82, the movement
toward the planned tripartite split in the overall economy was still slow.
At that time, the state sector accounted for 38.2% of the ecomomy, while
the private sector was 58.0% and the cooperatives lagged far behind with
3.8%. Sectorally, in addition to virtual complete domination of agriculture
(97.8%), the private sector controlled livestock and fisheries (96.3%), for-
estry (56.5%), transport (56.4%), and a healthy share of trade (45.4%).
Although the state operated only 1,742 factories and establishments, com-
pared to 714 for the cooperatives and 36,301 in the private sector, of all
680 factories employing over 50 people, 562 were state controlled, 73
cooperative operated, and only 45 private. Overall in this field the public
sector had a 58.9% share of the economy.
The cooperatives in Burma are a form of governmentally supervised
and controlled enterprises, but they seem to be the weakest link in the
overall planning process. In 1981/82 there were 20,915 cooperatives with
7,332,086 members and a turnover of 412 million kyats. Yet there were
only 706 industrial producer cooperatives and 101 agricultural producer
cooperatives, the latter figure down from 423 in 1977/78. To achieve
state-articulated goals, there may be a forced move to convert village tract
cooperatives, of which there are 12,478 or basically one in each village
controlled by the government, into producer cooperatives. This might sat-
isfy planners and ideologues in the party, but probably would not in-
crease production and might even lower current levels. It is impossible to
predict whether the state might find such an effort ideologically neces-
sary. It is clear, however, that the transition envisaged by the BSPP for
an industrialized, socialist state by 1993/94 is still far off, and indeed is
unlikely to be attained at the present rate of growth.

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170 ASIAN SURVEY, Vol. XXIII,No. 2, February 1983
To achieve its plans, Burma has already relied extensively on foreign
assistance, a factor that has begun to appear in Burma Communist Party
criticisms of the government. In 1975, Burma's external debt was $300
million, but by 1981/82 it was $1.78 billion.2 The debt service ratio that
year was 33% of exports, far above the 20% level at which donors usually
begin to be concerned. Because of Burma's natural endowment, there
have been few doubts expressed, at least publicly. Loan commitments to
Burma's development program were $283.3 million in 1977/78, but had
risen to $676.0 million in 1981/82. An additional $96.3 million was pro-
vided in grants.
What the constitution of 1974 did to restrict the institutional rights
of the individual ethnic states (even though there were additional ones
created), the Burma Citizenship Law does to the foreign community.
Like the constitution, the Burma Citizenship Law had a long gestation
period involving mass participation in its discussion. The process offi-
cially began in 1976.3 From that period until April 1982, when sug-
gestions were sought on the published version of the draft law,4 some 1.9
million persons were involved in meetings. There were significant dif-
ferences between the draft law as circulated in April 1982 and the ap-
proved text of October of that year.5
The draft law specified there would be citizens, including all ethnic
groups residing in Burma in 1823 (i.e., just before the First Anglo-Bur-
mese War, and thus excluding the Indians), and naturalized citizens.
Naturalized citizens could not be elected as People's Representatives or
serve as the head of Bodies of Public Services. Their rights could also be
restricted by law and by the Council of Ministers with the approval of the
Council of State.
The law itself as promulgated designates three classes of citizenship:
citizens, associate citizens, and naturalized citizens. As in the draft law,
all ethnic groups residing in Burma before 1823 qualify for citizenship,
but specified restrictions on opportunities for classes of citizens were re-
moved from the final act. However, the "Central Body," composed of the
Minister of Home Affairs as chairman, the Minister of Defense, and
Minister of Foreign Affairs, has the authority to decide who is what type
of citizen, terminate citizenship, revoke citizenship, and decide on ap-
plications. The only appeal that can be made is to the Council of Minis-
ters (which, in fact, the Central Body represents), from which there is no
appeal and for which no reasons for its decision have to be given.
There are complex regulations as to who can become what type of
citizen, depending on whether one registered for citizenship before 1948,
but the clear intent of the law is to discriminate against the Indian,
Pakistani, and Bangladeshi communities, and to a lesser degree the Chi-
nese. Although not specifically indicated in the law, it is likely that party
membership and thus election to the Pyithu Hluttaw may be restricted or
curtailed, thereby in effect barring associate or naturalized citizens from
key positions in the government. Since there is no separation of powers

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 BURMA 171
between the executive, legislative, and judiciary, and the party controls
directly all these functions, there can be no legal means by which pressure
for change can occur internally.
There may, however, be external protests in the Muslim community
abroad in the light of current Muslim activism, since this is the group
most affected.6 There is no question that the Burman majority has been
able to complete its legal-if not real-control over the minorities, both
internal and external. Thus, although the legal status of all groups and
ethnic institutions may be fixed, the problems that this situation may
create for the government will likely continue. The curtain is still far
from down on the minority issues.
Burma therefore faces a difficult period ahead, and one that will re-
quire sensitivity in dealing with its political transition, its economic devel-
opment program in light of its ideology, and its minority issues. It is a
delicate balancing act that will have to be managed with great skill, for
the continuing ethnic insurgencies and the rebellion of the Burma Com-
munist Party continue to drain the resources of the state-a state so com-
pletely mobilized toward its political objectives that it may become captive
to its own ideological needs. Its liberalization program has positively af-
fected its economy, but it is ironic that Burma's movement toward its
socialist goals is in large part dependent on the foreign donor community.
David I. Steinberg is with the Agency for International Development and is author of
Burma's Road Toward Development: Growth and Ideology Under Military Rule
(Westview Press, 1981) and Burma: A Socialist Nation of Southeast Asia (Westview
Press, 1982).

NOTES

1. All dates indicated with a slash are Burmese fiscal years. Targets are taken
from the Five-Year Development Programme 1980/81-1984/85 (Rangoon: Ministry
of Planning and Finance, March 1979). Accomplishments are from Report to the
Pyithu Hluttaw 1982/83 (Rangoon: Ministry of Planning and Finance, March 1982).
2. See the Journal of Commerce, April 26, 1982, and the Christian Science
Monitor of the same date.
3. Working People's Daily, Supplement April 21, 1982.
4. Ibid.
5. Working People's Daily, Special Supplement October 16, 1982.
6. Far Eastern Economic Review, November 5-11, 1982, p. 26, and also Octo-
ber 29-November 4, 1982, p. 8.

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