FEER: The Road To Mandalay

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Far Eastern Economic Review
Editorial

April 14, 1994

THE ROAD TO MANDALAY
Lead Burma Along the Taiwanese Path

If ever a country was bent on ejecting itself  from the ranks of
civilised nations, it's Burma.  In scarcely a generation, the
"Burmese Way of Socialism" adopted by Gen Ne Win reduced what had
once been among the most prosperous nations in Asia to ruin.  More
recently, the ruling State Law and Order Restoration Council
(SLORC) has topped even that sorry record: firing on unarmed
demonstrators in 1988; invalidating the results of the 1990
elections; and keeping under house arrest one of the nation's few
authentic leaders, Nobel Prize winner Aung San Suu Kyi.  And all of
this comes on top of a savage war against its various ethnic
minorities.

The question today is what to do with such a brutish anachronism in
an increasingly affluent and progressive Asia.  If Goh Chok Tong's
just-ended visit to Rangoon is any clue, Asean has given its
answer.  Nothing that Burma's junta has now opened the door to
foreign investment after almost three decades of self-imposed
isolation, Singapore's prime minister urged the region to take
advantage of the opportunity.  "To further isolate it will not
bring results," he said.  Indeed, Thailand may invite Burma to the
annual Asean ministerial meeting in July.

Mr. Goh's visit to Rangoon was significant if only because it made
him the first non-communist head of state to visit the country
since the 1988 shootings.  Doubtless part of the impetus for Mr.
Goh's trip was Singapore's increasing investments in Burma; the
city-state is Burma's largest trading partner after China and among
its top 10 foreign investors.  But there is more at stake here than
the profits of a few businessmen.  Mr. Goh's trip comes on the
heels of a visit by Indonesian Foreign Minister Ali Alatas in
February and is in sharp contrast to the rebuff given by Rangoon to
Raul Manglapus, the Philippines' then-foreign secretary, two years
ago.  As the Asean governments realise, if Burma is to progress on
the political front, it will need a solid and prosperous middle
class on which to build.

Critics will likely object that Asean's "constructive engagement"
will only prop up an illegitimate and repressive government.  We
would be the last to wish legitimacy for a regime such as Slorc,
but as a tactic isolation has not worked.  Isolation did not force
Saddam Hussein to back down and has not toppled Kim Il Sung in
North Korea; it might even be argued that it simply made them more
belligerent.  True enough, more active measures can be effective,
but no one suggests the outside world orchestrate a coup in Burma.

At least part of the opposition to investment in Burma has to do
with a tendency to confuse trade with moral approval.  As we have
argued in the case of China, if the free world wishes to express
its  disapproval, it has many more effective options than trade. 
Just as China desires the legitimacy and benefits that would come
with s successful readmission to Gatt, a likely goal for Burma
would be membership in Asean.  But this, as Mr. Goh pointed out, is
unlikely under the existing political arrangements.  "If Myanmar
[Burma] wants to be integrated with other countries in the region,"
he says, "it must be more like them."

The first step must be to bring Burma some of the stability that
comes from genuine economic development.  If we have learned
anything from the East Asian miracle, it is the pacifying role that
prosperity plays.  We doubt very much whether South Korea's Park
Chung Hee or Taiwan's Chiang Kai-shek were themselves committed to
the clear-cut democratic path taken by their successors.  But their
decision to open up their economies and bring development to the
people put in motion the first real checks on their regimes'
political power and set in motion the liberalisations that came
later.

It is through trade and commerce that developing nations learn the
important virtues required for civil society and the rule of law:
the importance of due process, the value of hard work, and the
primacy of contracts.  With outside investment and participation,
even Slorc will find, over the long run, that trade and the middle
class that it nurtures are irresistible forces for change.