Testimony before the Senate Foreign Relations Subcommittee on East Asian and Pacific Affairs, 29 March 2006...According to official statistics released by Burma?s ruling military regime, the self-styled ‘State Peace and Development Council? (SPDC), Burma?s economy grew by an astonishing 12.2 per cent in 2005. Beating even the previous year?s stellar performance of 12.0 per cent, and coupled with double-digit growth all the way back to 1999, by these measures Burma is the fastest-growing economy in the world. What?s more, Burma achieved this astonishing growth using less energy, less material resources and, in the middle of it all, while negotiating a banking and financial crisis that was as serious as any in history. Truly, a miracle economy indeed. It is, alas, also a fantasy economy. Under the SPDC, the real Burma is a wasteland of missed opportunity, exploitation and direst poverty. More realistic numbers of Burma?s economic performance calculated by Burma Economic Watch show that far from stellar growth, Burma?s economy actually shrank in 2003 and 2004. In 2005 Burma will likely have returned to growth, but at a rather more modest 2 to 3 per cent. Similar growth can be expected for the coming year. None of this growth, however, has anything to do with improved economic fundamentals, but with the windfall gains accruing to the state from the rising demand for Burma?s exports of natural gas. The real Burma is one of the poorest countries in Southeast Asia. Only 50 years ago, it was one of the wealthiest. The dramatic turnaround of Burma?s fortunes is the product of a state apparatus that for decades has claimed the largest portion of the country?s output, while simultaneously and deliberately dismantling, blocking and undermining basic market institutions. The excessive hand of the state, which for many years was wedded to 2 a peculiar form of socialism, has manifested itself in a number of maladies that are the direct cause of Burma?s current disarray..."