14 May 2003
Mawchi is a township in
The latest and the most severe economic crisis in
Mawchi is the result of the regime's 1996 forced relocation campaign. This
program led to the total collapse of agricultural production in the area and the
subsequent collapse of the rest of the economy. All the
villagers from the surrounding areas were forced to move into the town of
The economic situation in Mawchi is not addressed by
neo-classical (orthodox) economics, with its focus upon the set of prices that
brings about an efficient allocation of resources. Put simply, neo-classical economics 'assumes
away' an economy in which there are no
resources that the price system can allocate. However, because of the
Economics mostly focuses its attention on ways to increase output, even in situations where economic output is otherwise stagnant. In Mawchi, however, output has been in long-term decline. This is due to the destruction of productive capacity coupled with large-scale human rights abuses by the central military regime. There is no off-the-shelf economic policy that will solve this problem.
The economic situation in Mawchi, and the surrounding areas, means that there are only two resolutions possible for the inhabitants:
i) self-production, that is, output not offered for sale
to leave the town and surrounding areas and move to other areas in
There have been dramatic increases in the price of
basic commodities in Mawchi as in other areas of
There was no slash and burn farming in the Mawchi area prior to the relocation campaign, but afterwards, slash and burn agriculture (mostly for rice), began to take place on the outskirts of the town. However, the acreage under cultivation is very small and the yields much lower, than before the relocation campaign. The people involved in slash and burn agriculture are experiencing severe financial difficulties, because of high interest rates on loans for seed and fertilizer. When the debt is repaid there is hardly any rice left for the family to eat. The extremely high cost of inputs and credit is making it increasingly difficult for people to continue to engage (even) in this most basic form of agricultural production.
Meat is now very rare in Mawchi and is virtually never offered for sale. In fact, the only meat that is readily available for people are cats and dogs. On the rare occasions that meat is offered for sale, it is more than nearly everyone can afford, with prices for chicken, beef and pork now similar to those in Rangoon – 2,000 kyat for a viss of chicken, 1,500 kyat for viss a of beef and pork.
The shortages of meat and rice have come about for the same reasons. The last ‘four-cuts’ and relocation campaign exacerbated the following problems,
i) lack of production because of the destruction of productive capital (the forced removal of people from agricultural land)
ii) the resulting lack of employment or production opportunities in the town and surrounding areas, ensures that no-one has any goods to exchange or income to buy food or other goods
iii) the high price of inputs induced by reductions in supply to the area
This has not only ensured a dramatic decrease in absolute output levels, but also created a situation where increases in output are extremely difficult.
The lack of shops or markets in the town is also
evidence of a non-viable economy. Most of the shops in Mawchi closed down
quickly after the forced relocation began in the area. The only 'shops'
operating are three small stalls that sell only dried goods, such as MSG, MaMa,
oil, dried fish, very occasionally eggs, but mostly soap. These shops are
smaller than those in the Karenni refugee camps in
In addition to the forced relocation program there are other factors induced by SPDC policy which have exacerbated the food crisis in the township. One of the big employers of labour in the area was once the government mines, but technological destruction and the migration of skilled labour out of the town means that any production is now highly inefficient. Any ‘mining’ that is now happening is done by hand. There is no longer any mining equipment left in Mawchi, as it was moved out by the government, along with all the officials and engineers who used to run the mines. The government no longer has any resources to pay for the equipment and the infrastructure necessary to operate the mines.
The mines are now run by the local military, rather than the central government's mining department. There are now only about 20 ‘holes’ operating in the area, all of which are being ‘mined’ by military families. The local military sells contracts to these ‘holes’ to military families, who not surprisingly do not, have any mining skills. Any output that is scavenged from these ‘holes’ must be sold to the military, who in turn have to sell it to the government. The low level of technology means that very little tungsten can be extracted from the mine.
The inefficient nature of production in the mines (which amounts to little more than scrounging around in the dirt) means that the wage rate that can be offered is very low. A labourer employed at the mine would receive about 400 kyat per day (& about 300 kyat/day for farm labouring or clearing land), but this is not enough to cover the cost of food for the day. In addition, those who labour for the mines do not get paid until the tungsten is sold to the government. This makes it impossible to pay for food between the time of commencing work and the time of being paid. As the market wage rate is lower than the biological subsistence wage, very few people are willing to offer their labour to the mine or for any other employment. The low wage coupled with the high price of food, means that it is better to spend the day scavenging in the forest looking for food than take on employment. However, the market wage, though less than the subsistence wage, is too high for the mine contractors to be able to make a profit.
The collapse in production has forced people to just leave their land and houses when they left the town, as it became impossible to sell property after 1996. Mawchi now looks like a ghost town, with many of the houses without occupants. People who left the area could not sell their property, as there is no demand for housing or land, as everyone wants to leave. There is no demand for the property by outside speculators, because the houses and land in the area (under present policies) have no productive value. It appears that even the local SPDC military does not want the property, even for free.
The non-viable economy in the Mawchi area means that there is very little opportunity for the military to be able to extract resources from the local population. There are limited opportunities for theft or taxation in the area, because there is no surplus to steal, limiting the capacity of military units to be self-sustaining, let alone enrich their commanders. These limited opportunities are, probably at least, one of the reasons colonels are moved out of the area every 5 months and relocated to different parts of Karenni. This rotation of colonels provides each of them with opportunities to extract a surplus from the local population. If the economic situation in Mawchi were mirrored in other parts of Karenni it would be hardly surprising to see the military and other armed groups involved in ‘extra-legal’ production.
The collapse of the economy has created a social crisis in the township. There is no medicine very little health care or schooling in Mawchi anymore. Most children are not going to school because they are too busy looking for food. Even the small numbers of children who attend school usually find that there is no teacher present. The teachers like everyone else in the town are also hungry, having to spend their days scrounging around for food. Despite the lack of teaching at the school and the limited attendance of even a small number of children, all the children registered each year are passed by the remnants of the school authorities. In effect, no child in the township has received any reasonable level of education for more than 20 years. No student, even with the assistance of the automatic passing system, has finished more than 6 years of schooling. Everyone in the town, even the children, have to work to survive.
There is no doctor or medicine in Mawchi and the hospital only operates as a ‘guest-house’ for patients before they die. The nurses because of their low salaries have opened small businesses in their homes. If you have any money at all you don’t go to die in the hospital, but call the nurse to come to your house.
The number of people going to church is also declining, with people having to spend all their time foraging and scrounging for food. The pastor/ministers of the churches no longer ask for donations because they know that people do not have any money to spare. The social structure in Mawchi is under great pressure with civility on the decline and crime on the increase. Social relations are deteriorating as the daily scramble for food becomes harder. Most people, especially women are no longer willing to talk about what they had to do in order to obtain money. The young men from the township are increasingly joining the cease-fire groups because this is the only way for them to obtain food and ensure their survival.
The first migration out of Mawchi into other areas in
Prior to the forced relocation campaign in 1996, the population of Mawchi had dwindled to around 2,000. However, the relocation campaign doubles the population, but only for a short period. After the initial movement into the town people slowly begin to leave. The rate at which people left the town was slower than previous exoduses, as there was nowhere to move, as the Tatmadaw controlled nearly all the areas surrounding the town. In spite of the increased difficulty in leaving the town, many people were desperate to get away because of the shortage of food.
In the earlier years after 1996, the richer people in
Mawchi went either to Loikaw or Mong Hsu. Many of the other people went to the
refugee camps, while others began to live in the forests. Others from the town
went to live in the area controlled by the Shan State Nationalities Liberation
Organisation (SSNPLO) that had entered into a cease-fire agreement in 1994. There
are now about 500 families from
In 2003, people are still moving out of Mawchi, but
they no longer go to Loikaw because they believe it to be as bad as Mawchi.
People are also no longer going to Mong Hsu because of the lack of employment
in the mines. Some people are still moving to the SSNPLO area, but more people
are now going to the Karenni National Progressive Liberation Front (KNLPF)
areas. About 70% of the people now leaving Mawchi are going to these areas,
before they move onto
Most of the people in the last few years do not go
directly to Thailand, as they now have quite a bit of information about the
situation there. The option chosen is usually determined by connections with
family and friends. One option is for the men to go and see if the situation is
better in the cease-fire areas, then call their family to join them. The men
look for work, moving cattle between the
Another option for people leaving Mawchi is to go and
live in the jungle before they make the next step to move out of the area. Usually, about 1-2 families leave Mawchi
together and go to the jungle for about a month, sometimes getting together
with other families also living in the jungle. The largest group to leave
Mawchi at one time to go to the jungle was 10 families. In the jungle people
try and make contact with friends or family in
There is no economic policy that will halt the decline in production, but are there other possible solutions. A new cease-fire group believes that it can improve the situation for the people in Mawchi. A recent breakaway group from the Karenni army led by Ten Ah and Saw Richard has apparently been given control of Mawchi, after entering into a cease-fire with the SPDC. 
Obviously, any solution to the crisis in Mawchi would have to involve people being able to return to their land. Some reports indicate that farming has already started just outside the town, but there was no indication of the extent of the cultivation. Any reasonable increase in cultivation can only occur if the new cease-fire group is powerful enough to ensure the safety of local villages. That is, people are not only allowed to return to their villages by the SPDC, but that the cease-fire group is strong enough to satisfy people that their families, property and investment, will be safe from attack and plunder. There will also be the question of the impact of the regime's two-crop policy, as well as their program of forced procurement and their ongoing forced labour practices.
Even if, an increase in acreage under cultivation does occur, the increased output may not be enough to solve the problem of hunger let, alone cause an increase in the rate of output and the creation of a surplus. Not everyone will have access to land or will be able to afford the inputs necessary to resume farming. The cease-fire agreement, even if it ensures the safety of people, will have a limited, if any, impact on the supply and price of inputs necessary for farming. Any production in this sector will initially be very small scale and mostly for home consumption. If production is mostly for home consumption, the lack of demand for labour will continue. Even if, work becomes available, the daily wage may still continue to be below the biological subsistence level. The costs of production may still be greater than the price the goods can command in the market. This problem with prices may not be resolvable by some people simply moving back to their land and attempting cultivation. The foundations of a viable economy, in short, will remain absent.
The cease-fire group apparently has a number of ideas to
improve the economic situation in Mawchi. It has, for example, plans to fell
hardwood in the area, which would be sold into
The cease-fire is unlikely to lead to any significant shift in the prices of both inputs and output that would allow production to dramatically increase, at least in the short-run. In the unlikely, event that the cease-fire does lead to the conditions, necessary for the production of a surplus, there is the on-ongoing problem of any surplus being stolen by the military (or any other armed group). This ‘extracted’ or stolen surplus, given past history is more likely to be consumed, rather than invested in productive activity, ensuring that no economic growth occurs and no improvement in the material well being of the local population.
 Most of the information obtained in this commentary came from interviews. The author has tried to ensure that the information is correct, but given the obvious difficulties, there may be some inaccuracies. Even if some of the details are incorrect, the author believes that the main arguments remain valid.
 For more information on forced relocation in Karenni see Vicky Bamforth, Steven Lankouw & Graham Mortimer (2000) “Conflict and Displacement in Karenni: The Need for Considered Responses” Burma Ethnic Research Group, Chiang Mai, Thailand. http://www.ibiblio.org/obl/docs/responses.htm
For more information on food crisis in
 If rice were the only commodity, then money income would have had to increase by more than 37 times for people’s standard of living to be unchanged. If money income has remained stagnant, then people are 37 times worse off than they were in the early 1980s.
 There has also been a change in the standard of measurement, with sellers increasingly reducing the size of a viss. A viss is now smaller than it was before the 1996 forced relocation campaign.
 It is not possible to know how viable the mines would be if improved production techniques were utilized.
 The teachers are only paid 4,000 kyat per month and a headmaster 6,000 kyat per month.
 Nurses are also only paid 4,000 kyat per month.
 Mong Hsu mine in
 People go to the area controlled by Shan State Nationalities Liberation Organization because this group is composed of Pao, Shan and Kayan. Tha Kalei is a Karen from Toungoo and knows many people from the Mawchi area. The Pao Nationalist movement was, in the beginning, assisted by a number of Karens, including Tha Kalei, who had been sent by the Karen National Union.
 Apparently the KNPLF conducted the negotiations
between the breakaway group and the SPDC. Tun Kyaw, who is in control of border post 14, is supposed
to have negotiated the cease-fire between SPDC and breakaway group led by
Colonel Ten Ah and Saw Richard. Tun Kyaw was once a Sergeant in the KNPP,
serving under Ten Ah, when the latter was a Captain. Colonel Ten Ah and Saw
Richard were given control of
 We could not find the English word for 'pala'.
 Though the obvious question of whether anyone would be interested in taking up a contract, particularly if it involved a sizable investment in such a politically unstable area remains.