for the European Commission




January 2005






Based on a recent mission to Myanmar, backed by more than 30 years of research experience on the country, Professor Robert Taylor and Mr. Morten Pedersen advance an alternative approach for the EU and its member states to the issue of achieving national reconciliation in Myanmar.  Recognising both the failure of the current EU position to achieve any of its stated aims and the negative effects of isolation and sanctions on the Myanmar people and society, the report highlights the vital importance of governance and economic factors in generating the conditions for a sustainable political opening toward a more democratic society. 




Despite the lack of progress toward a more democratic regime in Myanmar, many aspects of governance and life in general have changed.  Owing to the government’s extensive infrastructure development programme and the cessation of armed hostilities in most of the country, Myanmar is now much more physically and psychologically integrated than at any time in its past.  Ceasefire agreements between the government and a large number of former insurgent groups have given leaders on all sides an interest in the maintaining peace and stability.  The country is also far more open to foreign influence than previously and positive relationships have been established with all of its neighbours. 


Despite of the replacement of Prime Minister General Khin Nyunt and his military intelligence coterie, the government has not abandoned its “road map” to a new constitutional order.  New, inexperienced ministers are now working to implement those plans.  The opposition National League for Democracy (NLD) has been marginalised not only by the continuing detention of its leader, Daw Aung San Suu Kyi, but also because of the party’s unwillingness to participate in the constitutional convention now underway.  Internal tensions within the armed forces, while undermining the government’s administrative capacity, provide no opportunity for the creation of political change.




The Myanmar economy grew significantly following the introduction of limited market reforms in the early 1990s, but more recently growth has slowed, if not halted.  This is a consequence primarily of weak economic management and government security-driven investment priorities, but Western sanctions and boycotts have compounded the situation.  Although the government has been given much advice on how to reform the economy, without the participation of international financial institutions (IFIs), including the provision of adequate resources, its ability to address macro-economic issue, such as exchange rate rectification, remains extremely limited.


The social implications of the country’s economic malaise are extremely worrying and greatly weaken the prospects of a sustainable democratisation process.  UN agencies in 2001 described the situation as an “emerging humanitarian crisis”.  There are numerous indications that large segments of the population are caught in deep-rooted, structural poverty, and that the situation of many families is worsening.  Caught in a web of high inflation and massive un- and under-employment, families in both urban and rural areas are resorting to a variety of coping mechanisms with long term effects undermining the society’s educational standards and health prospects.


Malnutrition, especially amongst pregnant women and children, is becoming more prevalent.  Communicable diseases such as malaria, HIV/AIDS and tuberculosis are major health problems.  Though the government is addressing some of these issues, their limited resources are dwarfed by the magnitude of the problem.  Low educational attainment is also an increasingly serious social, economic and political problem.  More than half of children do not complete five years of basic schooling.  While these problems are endemic in the country, they are particularly acute in border areas which have suffered from decades of armed conflict and underinvestment.


The underlying structural weaknesses of the economy are a major contributor to the society’s health and educational crises.  These include a traditional agricultural economy, weak linkages to the global economy, weak state finances, a rudimentary banking system, a declining natural resource base and growing ecological problems, a multiple exchange rate regime, chronic high inflation, widespread un- and underemployment, and weak education and health systems.  The government has been trying to address some of these issues, but lacking policy formulation and implementation capacity, it tends to do so piecemeal and without a coordinated and well resourced strategy.  Current economic trends threaten to undermine most of the positive achievements.




Although there is no certain prescription for managing transitions from authoritarian single-party or military regimes to multiparty elected governments, global experience including that of Myanmar’s Asian neighbours, demonstrates that the presence of certain precursors creates the conditions for easier and more assured change.  Comparative studies show that countries which are riven with ethnic and religious conflict, where the sense of national unity and identity is weak, have fraught prospects for developing and sustaining democracy.  Myanmar’s 50 years of civil war and ethnic conflict provide infertile soil for the development of a sustainable democracy.  Civil society needs to be nurtured and developed to create the social capital for democratic institutions to thrive.


Education and economic development are prerequisites for a vibrant civil society.  While this may not be essential, there is a strong relationship between democratisation and a healthy and educated population.  Also essential for institutionalising democratic practices and establishing a framework for rational economic policy making is the integration of a society’s polity and economy into international institutional networks and linkages.  Myanmar today is one of the two or three least globally integrated economies in Asia with low levels of international trade and no active relations with international financial institutions.  The current policies of the West, directed at isolating and undermining the government, have in reality isolated and undermined the social and economic institutions which the country requires if it is to become a viable democracy.





The existing EU policy framework was established in the late 1980s and early 1990s at a time when Myanmar was widely perceived to have entered a “democratic transition zone”.  Subsequent developments, however, have revealed a number of fallacies in this reasoning and suggest the need for fundamental rethinking. 




The military government of Myanmar is strongly nationalistic and can justify its concerns about the fragile sovereignty of the nation by pointing to numerous examples of foreign meddling in the domestic politics of the country.  Thus Western sanctions have largely served to reinforce the belief of the officer corps that their strategy for the country is the only viable option.  While censure and sanctions may have helped induce some limited cooperation on sensitive human rights issues, the refusal of Western governments to reward or effectively recognise positive steps by the regime has undermined those within it who have been working for change and accommodation. 


The military controls almost every lever of power and has a strong sense of its authority.  The pro-democracy forces, meanwhile, have failed to build a truly national movement for change and do not appear to have any effective response to the regime.  Moreover, the failure to help promote economic reform has slowed down important processes of social and economic change which are necessary to build an effective alternative to military rule, including not only a viable middle class, but also an effective civilian bureaucracy. 


While it is true that the macro-economic effects of sanctions are overshadowed by other constraints, including the regime’s weak and inconsistent economic policies, they have increased the sense of threat within the government, thus directly contributing to significant allocations of scarce resources for defence and security.  By reinforcing the political deadlock and making the search for domestic compromise more difficult, sanctions also contribute to maintaining a situation where no one in authority pays any serious attention to governance issues.  As a result, the capacity for establishing a civilian government is weakening year by year, natural resources are plundered, the ability of the land to sustain a growing population is declining, and another generation is being lost in the education system. 


In sum, seventeen years of potential change has been lost and the prospects for transformation arguable are more difficult now than in 1988.




The EU must recognise that achieving democracy in Myanmar is a long term process, not a one off event, and revise its aims and strategic objectives accordingly.  Whether we like it or not, the military regime in Myanmar is part of the solution as well as part of the problem, and the failure to effectively understand and work with the government undermines the EU’s strategic and humanitarian objectives.  Developing a long term, evolutionary approach to reform is needed to move the country forward to civilian government and economic strength.


It is proposed that the EU should undertake the following steps to achieve national reconciliation in Myanmar:

On the diplomatic side:

1.  Adopt the official name of the country.

2. Resume regular EU high level visits at a sufficiently senior level to ensure access to the upper levels of government.

3. Revise the use of sanctions, making them clearer with realistic benchmarks and obvious reciprocity.

4. Encourage the establishment of new institutions which, overtime, may become independent agents of change.

On the assistance side:

5. The Commission and Member States should develop an assistance strategy with associated funding.

6. Appoint a senior EU representative tasked with ensuring that the assistance strategy is appropriately implemented according to EU guidelines.

7.  Lift the remaining political constraints on aid.

In implementing assistance, it is necessary to prioritise with attention to macro-economic reform as well as key sectors vital to poverty alleviation and broad-based growth.

8. Encourage a normalisation of the role of IFIs and UN agencies in the country in order to promote economic and governance reforms.

9. Assist a comprehensive study by government officials and local economists to establish a national economic reform programme and identify assistance needs.

10. Re-establish the Myanmar Aid Group and secure financial support for structural adjustments, including exchange rate unification and privatisation.

11. Give technical and financial aid for capacity building in economic ministries and institutions, supported by scholarships to European and Asian universities.

12. Initiate direct policy dialogue with the government and civil society in EU assistance priority areas including small scale agriculture, basic education, and community development


The European Union has a unique opportunity now to lead in a renewed and effective effort to help the people of Myanmar fulfil their aspiration for a freer and better life.




for the European Commission




January 2005




Since the 1988 uprising and 1990 election, Western governments including the EU and its member states, have sought to promote human rights in Burma/Myanmar primarily by pushing for a democratic transition. Although the exact objectives and methods differ somewhat and have changed over time, a regime change has been seen as a precondition for progress in other spheres such as peace-building and socio-economic development. A variety of coercive means have been applied to pressure the military to hand over power to a democratically elected government, but with no positive result.


Fifteen years of Western censure and sanctions have had no visible impact on the will or the capacity of the military rulers to maintain power. UN-led diplomatic efforts to broker a dialogue between the ruling State, Peace and Development Council (SPDC) and the main opposition party, the National League for Democracy (NLD), have also reached a dead end with the failure to secure the NLD’s participation in the National Convention which reconvened in May 2004 to finish work on a new constitution.  Pro-democracy groups continue to call for further sanctions, but there is little prospect that either the UN Security Council or Burma/Myanmar’s neighbours and main trading partners will take decisive action or, indeed, that more pressure would accomplish its objectives.  Renewed pressure is more likely to disrupt any domestic process of change and further punish the general population.  They have already paid a high price as a result of the denial of foreign aid, trade and investment.  A fundamental reassessment of the situation and of the policy options of the EU (and other international actors) is thus long overdue.


The terms of reference for this independent assessment mission were three-fold:


  • to analyse the challenges and prospects for national reconciliation in light of recent political and economic developments, as well as comparative experiences from other transitional countries in the region and elsewhere;
  • to assess whether there is a need for further changing, amending, or complementing the EU’s approach; and
  • to discuss how EU assistance can be used to support both national reconciliation and human development.


The mission team was also requested to provide input to the preparation of Burma/Myanmar Day 2005 in the form of a draft agenda and suggestions for speakers and stakeholders to be invited. This report will serve as background for the event.


The team, which consisted of Professor Robert Taylor and Mr. Morten Pedersen, spent thirteen days in Yangon in December 2004 with a three day follow-up in January 2005. Due to the uncertain political situation after the purge of former Prime Minister Khin Nyunt, the team did not on these occasions meet with the main political actors (i.e. the SPDC, the NLD, and the ceasefire groups), although such meetings have been held in the past. However, it conducted more than seventy interviews with government ministers and officials, foreign diplomats, aid agencies, businesspersons, and other observers. Further meetings were held with the European Commission in Brussels and Bangkok. A full list of people met during the mission is annexed.


This report presents the main conclusions of the team based on the recent mission, as well as their wider experiences of living and working in Burma/Myanmar over the past thirty years. The first part provides a general analysis of the present political and socio-economic situation, together with a comparative assessment of regional experiences with transitions from military/authoritarian to civilian/democratic government. The second part offers a critical assessment of existing EU policy, including recommendations for significant changes in the Common Position and, particularly, in its operationalisation and execution. Particular attention is paid to ways that EU assistance may be used to promote the twin objectives of national reconciliation and human development. A draft agenda for Burma/Myanmar Day 2005 is also attached, together with suggestions for speakers.




A. Political Situation


Burma/Myanmar is often described by external observers as unchanging due to the failure since 1988 to find an accommodation among the country’s diverse political forces on the nature of a political transition from military to civilian rule. Yet, this view overlooks other important developments. The agreement by the military government and some twenty former ethnic insurgent groups to halt fighting after half a century of continuous warfare constitutes a political watershed, and the outlook for establishing a constitutional, though only nominally democratic, government in the near future is positive. The government’s foreign, economic, and other policies have also changed dramatically since the socialist period with significant effect on daily life, particularly but not exclusively in the main cities.


Delayed transition


The State Law and Order Council (SLORC) – renamed the State, Peace and Development Council (SPDC) – in 1990 presided over a relatively free and fair multiparty election. The military rulers, however, subsequently refused to hand over power to the elected parliament, arguing that a new constitution would have to be put in place before the transfer could take place. Work on a new constitution got underway at a tightly controlled National Convention in 1993, but was abandoned three years later when the National League for Democracy (NLD), which won the 1990 election by a landslide, withdrew from the proceedings. This sparked several years of intense confrontations between the military government and the main political party.


The release of opposition leader Daw Aung San Suu Kyi from house arrest in May 2002 under conditions which allowed the NLD to resume some political party activities at first seemed to provide another opportunity for political reconciliation. Yet, deep-seated disagreements continued to hamper dialogue between the two sides and escalating tensions eventually led to another clampdown on the NLD in May 2003 and the re-detention of Aung San Suu Kyi. The government has since reconvened the National Convention as part of a seven-step roadmap to constitutional government, which also includes plans for a popular referendum on the constitution and fresh multiparty elections. The NLD was invited to participate in the proceedings, but after a period of intense negotiations opted to boycott them when it failed to secure the release of Aung San Suu Kyi and the reopening of party offices. The government argued that releasing the opposition leader at that time might ‘excite’ the population and disrupt the constitutional assembly.


In the border areas, the cessation of hostilities between the central government and some twenty ethnic nationalist armies since the late 1980s has increased communication and confidence among long-standing enemies. The ceasefire agreements, however, are primarily military accords concerned with troop movements and a temporary division of authority. While the former insurgent groups have been accorded varying degrees of autonomy within ‘special regions’, no real progress has been made on resolving the underlying political issues and large areas, particularly in a ribbon along the Thai border, have remained mired in low-level armed conflict and subject to brutal counter-insurgency campaigns. Ongoing peace talks between the government and the Karen National Union (KNU), the largest of the remaining insurgent armies, could pave the way for a halt to significant fighting across the country. Yet, the sustainability of this embryonic peace will remain open to question unless long-standing grievances of ethnic nationalists concerning local autonomy, economic equality, and cultural rights are dealt with effectively.


Broader developments


While the past 16 years have seen little progress toward creating a more politically open and representative government, many other aspects of governance and life in general have changed dramatically. The current military regime, for example, has undertaken an unprecedented range of infrastructure development projects, including numerous new roads, bridges, and dams.  As a result of these efforts, the country is now physically far more integrated than in any time in the past. Journeys from the capital to nearby cities which once involved day-long ordeals by boat can now be achieved by car in a few hours. Communication links with the border regions and neighbouring countries have also vastly improved.


The country is also far more open to foreign influence today than previously and positive relationships have been established with all of its neighbours.  The increased exposure of senior officials to the outside world has helped overcome the worst fears and misconceptions about foreigners, and many are now genuinely committed to expanding links with the international community. In joining the Association of Southeast Asian Nations (ASEAN), the government accepted the basic proposition that Burma/Myanmar should bring its administrative, economic and social arrangements into conformity with the group. It has also accepted, at least in principle, the obligations that flow from normative conventions on human rights, transnational crime and the environment (though implementation leaves much to be desired). That the government in recent years have been actively trying to ward off regional condemnation rather than simply withdrawing into its shell is a notable result. 

The increased exchanges with the outside world, among other things, have changed the information environment dramatically as well. Many people now enjoy virtually unrestricted access to international short-wave radio and satellite television. Since the beginning of 2003, they have also been able to access the World Wide Web at new cyber cafes in Yangon. Restrictions on foreigners travelling around the country have been relaxed, and exchanges between locals and foreigners have greatly increased, particularly in the cities where they no longer attract government attention. Increasing numbers of Burmese/Myanmar citizens are travelling overseas for business, tourism, and study.

The government continues to tightly control information.  International exchanges remain embryonic and limited.  For many villagers in rural areas, life has changed little. However, these are all notable steps that are changing the country and expanding the universe of perceived solutions to problems among government and civil society actors alike, thus laying the basis for further reform.

Recent changes and the road ahead


The sudden and largely unexpected removal in October 2004 of the Prime Minister, General Khin Nyunt, and his Military Intelligence coterie, as well as several prominent cabinet ministers identified with him, generated widespread speculation outside the country that the regime might turn inward again and abandon the political transition underway. That, however, has not been borne out by subsequent developments.


The commitment by the SPDC to its political ‘road map’ to constitutional government, whether formed collectively or at the behest of its Chairman, Senior General Than Shwe, seems to remain firm. Indeed, there are hints that in some areas, the implementation of it may be handled more expeditiously than in the past as the need to balance conflicting interests among the top members of the regime has lessened. The government’s foreign policy also remains unchanged and the new team formed by Prime Minister Soe Win and Foreign Minister Nyan Win, despite their limited international experience, is performing well. The main impact of the purge has been at the working level where significant hesitancy in policy implementation is evident while the new ministers are ‘finding their feet’ and their subordinates are looking for direction, but this is likely to dissipate over time.


The national convention is set to resume on 17 February 2005, and is likely to conclude discussion on the remaining, substantive issues for a new power sharing constitution by April. Only a few symbolic and decorative constitutional issues may then remain to be resolved in a possible session in May or June. While there will be tensions in the convention, particularly over demands by the ethnic ceasefire and peace groups for greater autonomy and ethnic rights, the ultimate compliance of these groups with the constitutional process seems assured as they have no other viable options and little appetite for resuming armed struggle.

The ceasefire talks between the government and the KNU are scheduled to resume in early 2005 as well.  The KNU remains divided on the issue, but the expansion of government control in the border areas, together with the termination of Thai support for the ethnic armies, suggests that this time a successful conclusion will be reached to nearly six decades of bitter conflict. An end to the KNU’s armed struggle would most likely also shift the balance towards peace in other conflict areas, although much depends on the ability of the government to curtail human rights abuses by the army and help develop local areas. This raises the prospect of the eventual resettlement of over 100,000 refugees from Thailand, as well as an unknown number of internally displaced persons, when conditions in their home areas are made secure and the livelihoods of those who return can be ensured.


While the end of major strife between the ethnic minorities and the central government now looks to be confirmed in a new constitution and ratified in late 2005 or early 2006 through a referendum, the conflict between the government and its civilian opponents looks set to resolve itself through a process of attrition rather than reconciliation. The detention of Aung San Suu Kyi, compounded by the decision by the NLD not to participate in the National Convention, has left the party marginalised and in serious disarray. The opposition leader is likely to remain under house arrest, at least until the constitutional referendum has taken place.  Whether she will be able to resurrect the NLD in time for a future national election is a moot point.  


The only real threat to the military regime, as has been the case for the past decade, is internal tensions. The recent changes in personnel and structure have given the army, and particularly its regional commanders, even more autonomy in the administration of local affairs without the oversight of Military Intelligence. The purge has also left many hundred former intelligence personnel unemployed and may have raised concern among other parts of the regime that the same could happen to them, thus creating a new element of instability. The top leaderships will have to find ways of ensuring that its policies are implemented and internal regime unity maintained. Whereas the government is likely to be back on track policy wise within a year, the tension between the centre and the regions is bound to persist.  This poses the biggest challenge to the military leadership as it pursues its policy of a constitutional process prior to Myanmar assuming the chair of ASEAN in mid-2006.


The international implications of the political situation in Burma/Myanmar are unchanged. The security and economic fundamentals that have shaped the policies of India and China toward their joint neighbour determine a continuation of their cooperation with the military government.  While they may like to see significant reforms in economic policy and programme implementation, they are unwilling to cooperate with each other to force change upon the regime. The member states of ASEAN, while they will continue publicly to express concern in regard to the lack of national reconciliation and particularly the detention of Aung San Suu Kyi, will do nothing substantial to violate the principle of non-interference in the domestic affairs of a member state as long as the SPDC sticks to its announced constitutional roadmap.


B. Socio-Economic Situation


While the political deadlock may be nearing a resolution, the socio-economic situation gives little cause for optimism. Burma/Myanmar has made some modest economic progress since 1988, mainly as a result of the shift towards a more market-oriented, open-door economy. However, gains in the early 1990s proved unsustainable as the reform drive faltered, and the benefits have accrued primarily to a small urban elite. Since the 1997 Asian Economic Crisis, the government has reverted to crisis management and policy-making has become increasingly ad-hoc and erratic, while conditions for the general population have continued to deteriorate. Western trade and investment sanctions have worsened the situation, and the denial of international assistance, by constraining reforms aimed at broad-based economic development, weakens the prospects for national reconciliation and improving the lot of the poor.


Statistical Pitfalls


Any description of the economy must necessarily remain sketchy. We simply do not know how big it is, how fast it is growing,[3] or how it is distributed across sectors, regions, and households. In some cases, this is due to wilful manipulation or suppression of data by the authorities at different levels who are keen to present a positive picture. However, technical weaknesses in the collection and analysis of information, together with the existence of a large ‘black’ or ‘informal’ economy, also make it difficult to make reliable estimates. Although the IMF and the Economist Intelligence Unit, among others, have attempted to fill the gap, they too often lack the ‘raw data’ necessary to provide anything more than “guess-estimates”.


The politicisation of data is evident for GDP growth figures, which are out of sync both with other figures and with a general sense of how the economy is developing.[4] Big question marks exist also regarding inflation rates, external trade data, and government budget figures. Similarly, reliable estimates are not available for the size of the population or labour force, or the literacy rate.  Rather, for many years these have been simply multiplied annually by a set factor that may or may not reflect actual trends. There are few systematic and no countrywide surveys available either of socio-economic conditions at the household level, and no credible time series data for any of the primary social indicators. General speaking, statistical coverage is better for urban areas than for rural areas, while remote or conflict-affected areas are rarely included at all. All figures used later in the report are based on limited surveys and are indicative only.


General Economic Trends


Despite data limitations, general economic trends and patterns can be discerned with a fair degree of confidence. Most independent economists agree that the economy made some progress in the early 1990s, fuelled by the market-oriented economic reforms of the new regime, which saw a large expansion in the domestic private sector and foreign direct investment. Although the primary beneficiaries were a small urban elite (mainly those with government connections or access to investment capital from outside the country), many poorer households also benefited from new income opportunities, particularly in the construction, service (particularly tourism), and agricultural sectors.[5] The upswing proved to be unsustainable however. Denied support from the international community and lacking sufficient political will and technical knowledge, the government was unable to carry through with a comprehensive reform agenda that addressed more fundamental macro-economic, structural, and governance issues, and by 1994-95, growth was slowing.


Any hope that the new government and policy regime could put the economy on a growth path similar to those in neighbouring countries was squashed in the mid 1990s. The much publicised Visit Myanmar Year 1996 fell far short of achieving its objectives due, among other things, to consumer boycott campaigns in the West, adversely affecting the hotel and tourism industry and hurting overall business confidence. It was followed in short order, first, by a ban on all new US investments and then, by the Asian Economic Crisis, which caused a sharp drop in intra-regional trade and foreign direct investment. These shocks not only undercut foreign economic engagement, but also caused the death knell of the embryonic reform programme as the government reverted to a policy of self-reliance and stepped up its interventions in the economy overall. 


The start up of gas exports from the Yadana and Yetagun gas fields in 1999-2000 provided a temporary reprieve, boosting the government’s financial position. This period also saw a major expansion in the garment export industry, which created a large number of attractive new job opportunities, especially for unskilled young women, many of whom came from the impoverished rural areas to work in the new factories in the cities. The economic fundamentals, however, remained weak and a major run on the private banks in February 2003, sparked off a downward spiral, which, compounded by the new US sanctions introduced in July that year, disrupted trade across the country, caused widespread job losses, and resulted in a significant contraction in overall economic activity. Many companies went bankrupt or were forced to down-size as the crisis-hit private banks cut their credit lines, while the emerging garment sector was decimated by the loss of its main export market.[6] The rising world oil prices also hit the country hard as domestic production only covers 25 percent of requirements, creating an inflationary effect across the whole economy.[7]


The rural areas were relatively less affected by these developments than the cities and towns. Indeed, many farmers benefited when the government in April 2003 liberalised the rice trade and abolished the long-standing policy of compulsory rice sales to the state at far below market prices. However, six months later, the authorities suddenly banned the export of rice (together with five other agricultural products), causing a collapse in farmgate prices to below production costs. Farmers have been unable to recuperate their investment the past two harvests and some are reported to have lost their land, while others are said to have cut back on inputs with detrimental effects on production. The result could be a shortage of rice in a future rainy season (June-July), which would push prices back up, providing relief to rice farmers but bringing hardships to other vulnerable segments of the population, such as the landless and the urban poor.





Social Implications


Burma/Myanmar is a natural resource rich country. However, current economic policies and trends are failing to build the foundation for a modern economy and broad-based growth. The past several years inflation has outpaced increases in wages and other incomes for the general population, while government expenditure on health and education has fallen, shifting the burden to individual households and communities. This is forcing many families to adopt coping strategies, such as selling off assets, borrowing from local moneylenders, cutting meals, or taking their children out of school, which are further eroding household security and deepening poverty.  


While reliable social indicators are generally lacking, the UN agencies in 2001 described the situation as an “emerging humanitarian crisis”.[8] Several case studies by INGOs from different parts of the country reach similar conclusions, indicating that large segments of the population are caught in deep-rooted, structural poverty, and that the situation for many families is worsening. Some aid workers describe conditions in remote rural areas such as northern Rakhine and eastern Shan states as more similar to those found in Sub-Saharan Africa than elsewhere in Asia.


According to a government survey from 1997, about one fourth of the popu­lation, or 13 million people, were living below minimum subsistence level, with another 5 million living preca­riously just above it.[9] In 2001, the average household was spending 72 percent of its budget on food,[10] much more than in any other Asian country,[11] leaving very little to cover the cost of health, education, and so on. No recent figures are available, but the situation is likely to have deteriorated for many households. According to a UN official, “more than sixty percent of the population may now be living below the poverty line, or have been forced to adopt negative coping mechanisms that are rapidly undermining their livelihoods”.

Food security is a major problem in many parts of the country. Although Burma/Myanmar is self-sufficient at the national level, many people do not have sustain­able access to safe food of suffi­cient quality and quantity, including energy foods, proteins, and micro-nutrients. Official figures from 1997 show that only about 40 percent of house­holds were consuming calories at or above recom­mended daily requirement, and only 55 percent were con­suming enough protein.[12] Other government and UN surveys have found moderate to high iodine, vitamin A, and iron deficiencies; 70 percent of pregnant women and 75 percent of children under five have anaemia. According to a UN report from 1999, the situation is worsening:


Widely scattered reports of spontaneous emergency feedings, purchase of rice water for food, and reliance on infe­rior cereals such as millet all suggest increasing stress... The conclusion must be that consump­tion of many families is less than usual, less than needed, and under increasing pressure.[13]


The lack of food security, compounded by bad maternal health and limited knowledge about nutrition, is evident in the high levels of malnutrition, particularly among children. One quarter of Burmese babies are born underweight, with long-term nutritional and health implications. At the age of five, one in three is moderately to severely malnourished. These conditions appear to have worsened over the past decade and contribute to an under-five mortality of over 100 per 1,000 live births, the 15th highest in the world. A recent study reports frequent cases of beriberi, an illness usually associated with newly established refugee camps.[14]


Communicable diseases are another major health problem. The morbidity and morality rates for malaria are very high.  Seventy percent of the population live in endemic areas with growing resistance to regular treatment. HIV/AIDS is spreading rapidly throughout the country, fuelled by population mobility, poverty and frustration that breeds risky sexual activity and drug-taking, and has become firmly established in the general population. Unofficial figures, accepted internally by the government, suggest that 340,000 people are living with HIV/AIDS,[15] but most sources quote significantly higher figures. This translates into at least 1.3 cent of the most productive age bracket of 15 to 49 and results in tens of thousands new deaths each year, many of them fathers and mothers, the income earners in their families. Tuberculosis is widespread as well, particularly among people with HIV/AIDS.


Low educational attainment is also an increasingly serious social, economic, and political problem. More than fifty percent of children do not complete five years of basic schooling, and many of those who do take ten or more years to finish; even then, they may not be able to read and write. The official literacy rate is 84.4 per cent, but a 1999 UN survey found the functional literacy rate to be only 53 per cent and case studies from remote areas show figures as low as 10-20 percent. Secondary and tertiary education is also suffering from falling standards.


While poverty is endemic in the country, conditions are worst in the border areas which have suffered from decades of armed conflict and neglect. According to UNICEF’s Child Risk Index, which measures the relative status of children and women in the 14 states and divisions based on official data from 1997-2000, most of the border regions fall significantly below the national average on twelve socio-economic indicators of household income, health status, and access to health care, education and safe water and sanitation. That is the case even though these surveys exclude the most remote areas, as well as ongoing conflict zones in Kayah, Kayin, and southern Shan states, and Tanintharyi division which, judging from the limited information available, are particularly vulnerable.


The government has shown increased commitment in recent years to addressing the HIV/AIDS epidemic. There has also been significant progress in combating some diseases, reflecting improvements in the delivery of vaccinations and nutritional supplements, as well as wider access to safe water and sanitation, much of it supported by the UN and other aid agencies. The prospect for further progress is limited, however, by minimal and falling social sector investments, compounded by insufficient external assistance, and current economic trends threaten to erase past achievements.


Structural weaknesses


It is not possible to provide a comprehensive assessment of the economy here, but a list of some of the main structural weaknesses may serve to emphasise the deep-rooted problems the country faces.  These will pose a serious challenge to any future government and could take decades to overcome.


A traditional, agricultural economy. Burma/Myanmar has the highest share of agriculture in GDP terms of any country in Asia, and its exports are heavily dominated by primary commodities. According to official figures, there has been little structural change since before independence in 1948.


Weak linkages to the global economy. The economy, despite the post-1988 opening to foreign trade and investment, remains inward-looking and only weakly connected to the regional and world economies. The past seven years there has been almost no new foreign direct investment, and even the mid 1990s actual FDI per capita was less than one-sixth of Vietnam’s. Foreign trade flows, although growing, remain a fraction of those of its neighbours. The country also has only very limited access to the international capital market.


Weak state finances. The current government for most of its time in office has been running high budget deficits, due primarily to high defence spending, loss-making state economic enterprises, and weak revenue mobilisation. The deficit has been reduced in recent years, but mainly through dramatic cuts in government expenditure.  These are unsustainable in the longer-term. The share of taxes to GDP is half the level of Thailand, Indonesia and the Philippines, and falling. Low foreign exchange reserves, covering only a few months of imports, further limit the government’s ability to ensure an adequate supply of essential inputs and increase its vulnerability to both external and domestic economic shocks.


A rudimentary banking system. The Central Bank is under the Ministry of Finance and Revenue and therefore unable to impose fiscal discipline or provide support and guidance for a properly functioning financial system. A weak banking sector, compounded by negative real interest rates, contributes to low savings levels. Bank deposits per capita are one third of Vietnam’s and one-tenth of India’s. Limited availability of credit and lack of a capital market is a major constraint on the development of the private sector, not least in the agricultural sector where small-scale farmers receive less than one-tenth of the normal bank credit available to farmers in neighbouring countries.  This forces them to rely on informal moneylenders who charges exorbitant interest rates.


A weak manufacturing base. The manufacturing sector is dominated by state-economic enterprises, a legacy of the socialist period. These run at half or less of their capacity due to a combination of weak management, dated machinery, and a lack of incentives. Private companies are generally more efficient, but lack access to credit, power, technology and other inputs. Complex rules and regulations and a lack of transparency and consistency in their application inhibit the growth of the private manufacturing sector, hence being unable to attract significant foreign investment.


Agricultural concentration. A few larger farmers are controlling increasing amounts of land, irrigation, machinery, and credit, while many small-holders are losing their land due to indebtedness or inability to fulfil production targets. This process of concentration is opposite to that of successful economies such as South Korea and Taiwan and instead resembles the situation in Bangladesh, the Philippines and Latin America, which have much less dynamic agricultural sectors.


A declining natural resource base. Many agricultural areas are facing growing ecological problems, particularly in the form of deteriorating soil quality arising from overuse or misuse of the land, compounded by widespread deforestation. Other natural resources are also coming under increasing pressure as people seek to complement their income by gathering wood and other ‘free’ resources. Infrastructure development without adequate attention to environmental consequences has added to the problems.


A multiple exchange rate regime. The gap between the official and parallel market exchange rates is one of the highest in the world. Although more and more prices are set at, or closer to, the latter, there are still subsidies in the public sector. This distorts prices and the allocation of capital, and makes it difficult to gain a clear picture of key macro-economic variables.


Chronic high inflation. Burma/Myanmar is the most inflation prone country in Asia, mainly due to the persistent budget deficits, which are funded almost entirely by the Central Bank (i.e. through money expansion). Large expenditures on non-productive sectors such as defence, ceremonies and, to some extent, infrastructure, compound the problem, as do cost-push factors, such as inefficient management, antiquated machinery, systemic corruption, and the depreciation in the external value of the kyat.


Widespread un- and underemployment. Almost two-thirds of the country’s farmers cultivate less land than the five acres considered necessary to maintain subsistence levels under average conditions, and one-third of rural households are land­less.[16] With few opportunities for non-agricultural employment in rural areas, more and more people are migrating to the cities and towns. Yet, in the absence of any significant industrial base, most enter the informal sector, which offers limited income security.


Weak education and health systems. The current regime has built a significant number of new schools, hospitals and other health facilities, including in the border areas which were previously outside central government control. It has also trained and employed a larger number of teachers, doctors, and health workers. However, under heavy budget pressures, total government social spending has fallen significantly since 1988 from an already low level and today is less than 60 US cents per capita annually on education, and less than 20 cents on health.[17] With increa­sing outlays on physical and human infrastructure under dwind­ling recurrent budgets, the quality of services has deteriorated and user pay­ments have increased.




The solutions to many of Burma/Myanmar’s economic and social problem are generally known from experience elsewhere in the world and, in some respects, it should not be difficult to redress the situation. However, without the political will and necessary external support to carry through with comprehensive macro-economic and structural reforms, the outlook is bleak and longer-term social stability in danger. 


C. Transitional Challenges in Comparative Perspective


Comparative experience may help to understand, if not fully explain, why Burma/Myanmar remains under military rule and what needs to change in order to facilitate a transition to more participatory and efficient government.


Although there is no certain prescription for managing transitions from authoritarian single-party or military regimes to multiparty, elected government, research on the political transitions of 88 countries over the past 25 years demonstrates that the presence of certain precursors creates the conditions for easier and more assured change. In at least twelve cases where these precursors were not present in sufficient strength, there have been reversions to authoritarian regimes.[18]


The validity of these global findings is supported by the historical experience of Burma/Myanmar’s regional neighbours in Asia. In several countries the holding of multiparty elections regularly takes place but with little chance of significant change in the personnel of the prevailing regime because of the manner in which these elections are conducted. In other governments in the region, the prospect of multiparty elections is not even under serious consideration, let alone held forth as a regime goal as it is in Burma/Myanmar. In any case, the holding of frequent multiparty elections establishes no certainty of regime responsiveness to the needs and desires of the majority of the population. Indeed, some single party regimes, such as Vietnam, appear to be developing more appropriate response mechanisms to popular demands for programmatic and policy changes, than are outwardly democratic regimes such as the Philippines.


Burma/Myanmar today has none of the markers of a country likely to make an easy and permanent transition to a democratic regime. The country’s brief and fragile democratic experience during the final years of colonialism and the first decade of independence has left no enduring legacy.  Indeed, there are few in the society who has any memory of those experiences.  Sadly, for the few who do, the negative excesses of the democratic period, including high crime rates and factional infighting among politicians, have underscored the necessity of having a strong government.


Most comparative studies demonstrate that countries which are rife with ethnic and religious conflict and where the sense of national unity and identity is weak, have more fraught prospects for developing and sustaining democracy than have those with more socially cohesive societies.  This is highly pertinent to Burma/Myanmar which has experienced more than 50 years of ethnic and ideological conflict.  Unity among the country’s more than 100 linguistic communities remains fragile and is hampered by deep mutual suspicions


History also shows that transitional regimes have a greater capacity for success when internal stability is not disrupted by neighbouring countries for their own purposes.  This, again, does not bode well for Burma/Myanmar, whose neighbours have frequently intervened in the country’s political processes, thus undermining the coherence of both democratic and authoritarian governments.  The various definitions of democracy and the international rivalries which currently exist at the cross roads of South, East and Southeast Asia suggest that the temptations to do so again may be significant.


What is perhaps most evident in the studies of successful transitions from authoritarian to more democratic and elected regimes in Asia is the crucial role of education and economic development. During the Cold War, when it was perceived that the best defence against communism was a well educated and politically competent citizenry, Western governments provided significant support for the educational development of societies such as South Korea, Taiwan and Thailand.  The result was the development of vibrant political classes and electorates which were capable of understanding and supporting their programmes on the basis of more than mere name appeal. Widespread literacy, which was once a hallmark of Burma/Myanmar society, but which now appears to be receding, is essential for potential voters and participants in civil society organisations to successfully take advantage of the opportunities and challenges that democracy poses to them. 


Economic development, and its corollary, industrialisation, may not be essential for establishing a democratic state, but there is a strong correlation between the two. Widely recognised as helpful, for example, is the existence of a middle class which is economically independent of the state and capable to supporting the growth of viable civil society institutions able to stand apart from and in dialogue with the government.  Such a class does not exist in Burma/Myanmar today and its development is dependent on the growth of the private sector of the economy.  As long as Burma/Myanmar remains an essentially rural society with an agrarian economy, with approximately 25 per cent of the population living in cities which are in reality merely enormous villages, expecting the military to concede power, respect the law, or moderate its rent seeking activities is likely to remain a pipe dream.


Essential for institutionalising democratic practices and establishing a framework for rational economic policy making is the integration of a society’s polity and economy into international institutional networks and linkages.  At the time at which Burma/Myanmar attempted to abandon socialist autarky and began to rejoin the global market economy, it was one of the least internationally linked nations on the globe, with a mere 13 per cent of GDP derived from foreign trade.  This figure is now perhaps only 20 per cent, depending upon your statistics.  The most significant change in Burma/Myanmar’s international position, in addition to joining or rejoining a number of international organisations which establish standards and share information, has been its membership of ASEAN.  This has provided the regime with a window on a different way of organising economic and political affairs while reminding it of the need to “catch up” with their more advanced neighbours.


The transitions of other Asian governments have involved not only significant bilateral foreign assistance but also frequent and meaningful exchanges with international financial institutions such as the Asian Development Bank, the IMF and the World Bank.  The creation of a policy dialogue, reinforced with meaningful and not insignificant amounts of assistance, has had the effect of tying governments and economies into an international web of transactions which in itself creates standards and expectations while demonstrating the positive consequences for both regimes and their populations of rational economic planning and implementation. Creating economic stability in Burma/Myanmar, as demonstrated by the experience of neighbouring countries, is essential for creating the political stability and confidence which is required to ensure a persisting democratic transition based on institutional rather than charismatic foundations.





Developments in Burma/Myanmar over the past year underline the failure and counter-productivity of the ‘democracy paradigm’, based on misleading models from South Africa and Eastern Europe, which has guided EU policy on the country since 1988. The purge of Khin Nyunt’s group has not only confirmed the marginalisation of the pro-democratic opposition, but also increased the risk that governance and economic structure could further unravel, at great costs to the population at large and the future of the country. This strongly suggests a need to refocus current international efforts at effecting change by working towards a more gradual and stable transition that maintains and indeed strengthens the capacity of the state and society to deal with the country’s broader development needs.


A. The Fallacies of Current Policy Thinking 


The existing EU policy framework was established in the late 1980s and early 1990s during a time of great drama and is based on a number of fallacies or misleading notions about the situation both inside and outside Burma/Myanmar.


The military perspective. Burma/Myanmar is a strongly nationalistic society where the memory of the loss of independence in the 19th century is still strongly felt, especially within the armed forces.  The country’s post-independence experience with externally-backed Communist and separatist ethnic armies has underscored the fragility of its sovereignty. While foreign observers may opine that fears about excessive foreign interference are self-serving exaggerations, many of the military leaders genuinely believe that the armed forces are the only institution that can keep centrifugal forces in check, and that unfettered democratic government would, under the current conditions, be bad for the country. When adding the obvious corporate and personal interests that they have in maintaining power, this perspective leaves very little room for negotiating political reform, at least not in any form that might undermine the military’s ultimate control of the government.


The military regime, however, does have a national agenda and by entering into ceasefires with most of its former foes and developing the country’s physical infrastructure, has taken some important though clearly insufficient steps towards the official goal of building a “modern, developed nation”. Its broader failures in this regard, generally speaking, are not due to ill will, but security imperatives, fear of social instability, limited understanding of economic processes, and the poverty of the state. Thus, there is more space for cooperation on a social and economic development agenda than commonly acknowledged by the opposition and Western governments alike.


International censure and sanctions may have helped induce some limited cooperation by the military government on sensitive human rights issues. However, the potential benefits of this remain untapped due to the rigidity of Western governments, which have consistently refused to reward or effectively recognise positive steps by the regime. The generals have now clearly decided simply to ignore the West and rely on their growing links with countries in the region. Meanwhile, Western pressure and open support for Aung San Suu Kyi have only reinforced the military leaders’ siege mentality and deepened their hostility to the opposition. It may also have contributed to their backtracking since the mid 1990s on market-oriented, open-door economic reforms which would have left the regime more vulnerable to foreign influences. Certainly, denying the government international technical and financial assistance to help implement and improve those reforms, which would not only have had significant social benefits but could also have led to greater pluralism, was extremely counter-productive.


The balance of power. Western governments are also guilty of greatly underestimating the strength of the military regime and overestimating the strength of the opposition. The conventional view that the regime is brittle or even close to collapsing under intense popular pressure for democracy is wishful thinking, and has created highly unrealistic expectations about how change is going to come about. The military controls almost every lever of power in the country and is therefore virtually unbeatable unless the army splits, something which has not happened since the earliest days of independence and unlikely to happen today. The pro-democratic forces enjoy widespread support both inside and outside the country, but have failed to build a truly national movement for change and do not appear to have any effective responses to the regime.


Economic sanctions, by limiting the military’s access to foreign exchange, may have curtailed its arms purchases, but this has primarily affected its conventional defence capabilities. It has had little effect on the regime’s ability to suppress internal dissent, which relies largely on political and social controls backed by a proven commitment to use violence to suppress dissent, not on high-tech weapon systems or even on large numbers of troops. International attention may have helped protect Aung San Suu Kyi and her party; however, the failure to help promote economic reform has slowed down the all-important process of social and economic change which is necessary to build an effective alternative to military rule. Fifteen years of potential change has thus been lost and the prospects for transformation arguably are more difficult now than in 1990. Without a more creative approach, the current stalemate between a powerful army government and an underdeveloped civil society will persist indefinitely, to the great loss of the population at large.


The international context. In theory, the lack of progress toward democracy and human rights could be due to the failure by the international community to agree on comprehensive sanctions and raise the stakes for the regime high enough. In reality, however, global sanctions are not, and never were, a realistic option given the interests of Burma/Myanmar’s regional neighbours. Instead, by seeking to force regional countries to adopt a strategy which runs counter to their own interests, Western governments have undermined any chance of developing a common platform and hence influence regional dynamics in a positive direction.


Transitional challenges. The push for a regime change not only disregards realistic scenarios for change, but also ignores the many inter-linked and highly complex challenges Burma/Myanmar must overcome in order to break the present, self-reinforcing pattern of conflict, repression and poverty. The installation of an elected government would be an important step forward, but it could not function properly suspended from social realities; nor would it provide a panacea for the country’s deep-seated development problems.


The central state has neither the authority, nor the institutional capacity or financial strength, to implement policies effectively across its realm. The expansion of stable, modern governance structures and the rule of law into areas currently under control of local army commanders or former insurgent groups will be a particularly difficult and extended process. Meanwhile, the low level of development and the deepening humanitarian crisis leaves the general population disempowered and unable to play a meaningful political role, even under a freer political system. Significant doubts also remain about the viability of the opposition as an alternative government. The NLD is in serious need of rejuvenation (the average age of the members of the Central Executive Committee is nearly 80) and has shown little capacity for internal debate. It will also need to develop a proper policy platform and improve its capacity to deal with the technical aspects of governance in order to maintain its relevance.


This is not to deny that more open government could improve the policy environment, but it is questionable whether a civilian government would have the capacity to deal with the immense structural obstacles to peace and development, even with international support. Instead, the establishment of a more democratic regime without first creating conditions for administrative stability, particularly if accompanied by major economic reforms, which invariably will hurt many of the most vulnerable. Unless more is done to prepare the ground, democracy is likely ultimately to disappoint and could all too easily result in a return of authoritarianism.


The social costs of sanctions. Many proponents of sanctions, while admitting their limitations, nonetheless maintain that the benefits outweigh the costs, and that the harm done is insignificant. This is a serious misreading of the situation. While it is certainly true that the macro-economic effects of the sanctions are overshadowed by other constraints, including the regime’s weak and inconsistent economic policies, they have increased the sense of threat within the government, thus directly contributing to the increased allocation of scarce resources for defence and other security matters. By reinforcing the political deadlock and making the all-important search for domestic compromises more difficult, sanctions also contribute to maintaining a situation where no one in authority pays sufficient attention to governance and development issues.


For the past fifteen years most actors both inside and outside Burma/Myanmar have been ignoring the crisis of governance and the complex emergencies that flow from it. This problem is evident even within the NLD and other political parties, which apart from sacrificing international assistance, have totally failed to engage the government on socio-economic policy issues or develop a coherent policy position themselves. Yet, the capacity for development in the country is weakening year by year; the natural resources are being plundered; the ability of the land to sustain a growing population is declining; and another generation is being lost in the education system. Both the natural and human resources are withering away.


Direct, negative social effects arise from the denial of foreign aid, investments and trade.  These have significantly diminished opportunities for the general population to improve their livelihoods.


The potential of aid. While opponents of development aid are correct in arguing that the security priorities and economic policies of the military regime currently limit the sustainability of aid, the true potential of assistance has never been tested. It is hardly surprising that the military government has flatly refused sweeping calls for structural adjustment reforms when they are denied support from the international financial institutions which usually provide the necessary technical and financial assistance and encouragement of such reforms in low income countries. It is no wonder either that the current leadership is generally suspicious of the activities of aid agencies when the rhetoric and conditionalities of major donors are so blatantly partisan and show little concern for the overall development needs of the country.


There is no doubt that the military is hostile to economic and administrative reforms that would directly weaken its hold on power, and less than enthusiastic about community development and other programmes that contravene their notions of development.  Meanwhile, their concept of the development process lags several decades behind current international development thinking. There is no doubt either that the state and society both lack the capacity to absorb and effectively apply large amounts of assistance, and that this capacity will have to be built up gradually ahead of any major new financial commitments. However, the international aid community is hardly unfamiliar with such obstacles. On the contrary, it has a range of strategies and tools available that have proven effective in other countries with arguably less government commitment to development and certainly less potential for long-term progress.

Importantly, the future is not without prospects. The next generation of military leaders, which is likely to take over within the next few years, has quite different educational and military career backgrounds than the current leadership and has experienced at close hand the economic progress made by their neighbours. Once in charge, like all new governments, they will want to make their mark and improve on the performance of their predecessors. Thus there will be an important window of opportunity for reviving the reform drive – at least if the international community is prepared to offer the necessary technical and financial assistance. 


B. An Alternative Approach


Any effective EU policy must recognise that the challenges of transition in Burma/Myanmar, as one of the poorest, most heterogeneous and conflict-prone societies in Asia, are more difficult than in most of the countries which in the past few decades have made the transition to some form of sustainable democratic rule. The path to the creation of a government and society capable of realising Burma/Myanmar’s great potential necessarily will be long and torturous.  Anyone who genuinely wishes to help the general population needs to match commitment to principles with a more pragmatic search for solutions that take into account the configuration of power and interests within the country, as well as the structural obstacles to political change and economic development. This requires a much longer time perspective, and more humility regarding the prospects for reform and the influence of external interventions.


BROADEN THE AIMS. The EU’s definition of democracy as the primary aim of its foreign policy in Burma/Myanmar should be revised. However laudable, this singular pursuit does not provide an effective strategy for change; nor does it serve EU’s broader interests. First, the probability of a transition from military to genuine civilian rule in the foreseeable future is close to zero. The military will remain in power into the indefinite future and any transition, including important governance and economic reforms, will have to be negotiated and implemented in cooperation with the officer corps. Secondly, democratisation is a long and difficult process, not an event. The establishment and maturation of genuinely democratic institutions in any country, not least one as poor and inexperienced with democratic practices as Burma/Myanmar, requires fundamental changes in attitudes and behaviour at all levels of society.  This will take decades, if not generations, to occur. Finally, the association between democratic governance and human security is imperfect and not necessarily positive, at least in the short- to medium-term. To push for a revolutionary transformation of the formal political system without paying attention to important underlying or complementary development processes is short-sighted and could do more harm than good.


Instead of pushing for a regime change at this stage, the international community should work to promote three longer-term processes of change – political liberalisation, peace-building, and socio-economic development – which not only would produce immediate benefits for the general population, but also could begin to lay the ground for an internally driven and thus more meaningful and sustainable reform process. This approach would also create wider space for working with domestic actors who, with the exception of the NLD and a relatively small number of exiled political activists, do not see democracy as the immediate or even the primary goal for society, but are working, for example, to strengthen national unity, to promote local autonomy and ethnic rights, or simply to re-establish their fields or businesses after decades of armed conflict. These three processes, of course, are closely inter-related and mutually reinforcing.  This is another reason why they need to be pursued simultaneously.


REVISE THE STRATEGIC OBJECTIVES. The EU and its member states also need to reconsider their strategic objectives. Instead of helping Burma/Myanmar move forward, past measures to weaken the military regime have simply deepened the siege mentality of the top leadership and widened the divisions in society, provoking further reactionary measures by an institution whose knee-jerk response to any perceived threat has always been to strengthen its control over the state and society. Further isolation will undermine whatever limited government capacity and economic activity remains and will reinforce repressive, predatory and corrupt tendencies, thus making it much more difficult for any future government to reform the economy and political system.


To avoid such a scenario and to support the three overarching processes of change outlined above, the international community should work instead to establish the conditions for a gradual transfer of power to a stable and competent civilian government. This requires less focus on weakening the military regime and more on encouraging new thinking within the officer corps, building capacity across the state and society to deal with the country’s development needs, and strengthening the democratic infrastructure.


(C) GET THE POLICY MIX RIGHT. The framework set out here does not rule out the use of coercive or punitive measures per se, but the policy implications of taking a longer-term, evolutionary approach to reform are clear. Current EU policy has the unfortunate effect of closing minds and undermining positive social developments. This contradicts the overriding need to build stronger local support and capacity for participatory government and the rule of law. It encourages only defensive measures by the regime, not genuine reforms, which depend on fundamental shifts in the perceptions of the officer corps as well as the empowerment of civilian institutions. In order to contribute to social change processes, international actors need to be engaged on the ground in close proximity with the people and institutions they are trying to influence. This requires a shift away from censure and sanctions toward ‘critical engagement’ at all levels of the state and society. In other words, public condemnation and overt pressure should be downplayed in favour of more constructive efforts to foster policy dialogue and capacity-building.


Diplomacy. While maintaining pressure on Burma/Myanmar’s current and future governments to improve their human rights record, the overarching aim of EU diplomacy should be to improve communication with the military leaders and lay the basis for constructive dialogue about core international concerns. It is crucially important to draw the generals out of their shell, lessen their suspicions about the ultimate intentions of Western governments, and help them embrace international cooperation and interaction. Although this will be a long-term process, it is the only way to make them see the value and prudence of complying with contemporary international norms of behaviour.


§         Adopt the official name of the country. The insistence by foreigners on using ‘Burma’ when the official name of the country is ‘Myanmar’ is an insult to the national pride of the military leaders and only reinforces their perception that European governments lack respect for Burma/Myanmar and its people. (It also seems petty given the more serious issues at stake).


§         Resume regular EU high level visits at a sufficiently senior level to ensure access to the upper levels of government. The denial or downgrading of such visits is of no consequence to the generals, but denies European governments the chance to increase their understanding of the military regime and effectively communicate their concerns.


§         Revise the use of sanctions. There is a need for much clearer, more realistic benchmarks for progress towards EU objectives, together with a firm commitment by the EU to reciprocate with concrete, valuable gestures when positive steps are taken. In order to avoid disagreements in one area becoming an obstacle to progress in all other areas, there should be distinct roadmaps for progress towards political liberalization, basic human rights, and economic reform. The incentives associated with each of these roadmaps should be relevant to the particular issue in question, as this would facilitate dialogue also at the working level of the government where officials may not always see the bigger picture. For example, since the worst human rights abuses are committed by local army units, reciprocal gestures for improvements should have value to active army commanders and therefore may focus on military exchanges and training. Similarly, concrete improvements in the access for international aid agencies to remote/conflict-affected areas could be acknowledged by releasing assistance for road or other infrastructure building, which may not take priority from a developmental point of view, but serve the national development agenda. Any such assistance should be additional to existing aid programmes, which should be provided according to technical criteria alone (see below). 


§         Encourage the establishment of new institutions which, over time, may become independent agents of change. The ongoing process of drawing up a new constitution, for example, however flawed, is preferable to the alternative, which would see the military continue to govern essentially unconstrained by legal institutions. The formation of a parliamentary system, even if initially constrained and largely pro forma, would establish a platform for policy discussions which so far have been ignored by all sides in the ongoing power struggle. It would also provide more space for political party activities and thus over time help to build a more credible alternative to military rule. Similarly, the government’s establishment of a Human Rights Committee and the ratification of core human rights instruments such as the Geneva Conventions have provided new access points for dialogue and capacity-building. Even if such instruments are weak at first, the mere fact of their existence begins to build a constituency for change within the state which is currently lacking. Conversely, rejecting them as irrelevant easily becomes a self-fulfilling prophecy as the new structures are left inactive, and their domestic supporters abandoned and isolated.


Foreign aid. Although the EU has increased its assistance to Burma/Myanmar, it remains an appendix only to the core strategy of coercive diplomacy. This order of priorities should be reversed and assistance made the ‘lead tool’ in a new strategy for engaging the regime and society in a process of change. While the military leaders, by and large, respond negatively to coercive pressure, experience over the past fifteen years show that policy dialogue linked to operational programmes can be effective in changing attitudes and behaviours at all levels of the state. Further, by stimulating broad-based growth and supporting the most disadvantaged groups, aid can be an important ‘equaliser’ with the potential to help stabilise and unite a long-divided country and strengthen the basis for a future democracy. The amendments to the EU Common Position of 25 October 2004, which are open for more strategic use of assistance is an important first step, but these need to be given substance and further revision and clarification is necessary to maximise their contribution to national reconciliation and human development.


§         The European Commission (EC) and EU Member States should develop an assistance strategy for Burma/Myanmar with associated funding.


§         Appoint a senior EU representative tasked with ensuring that the assistance strategy is appropriately implemented according to EU guidelines.  This would also have an important symbolic value in helping to emphasise a new development focus and establish the EU’s independence from the hard-line American position, an essential step in regaining influence with the military regime.


§         Lift the remaining political constraints on aid. The political as well as the humanitarian value of international assistances depends on the ability of aid agencies to promote broad-based development as effectively as they know how. This requires that assistance is implemented according to technical criteria of efficacy established and evaluated by aid officials with relevant knowledge and experience on the ground in Burma/Myanmar. If politicians are concerned that normal aid programming will undermine their objectives, they should monitor the implementation rather than try to determine a priori what can and cannot be done. This may also be a role for the proposed EU envoy.


(D) PRIORITISE ASSISTANCE. Any realistic expansion of EU assistance will necessarily be small compared to Burma/Myanmar’s needs. It is therefore important that it is used strategically to help overcome critical bottlenecks and create broader spin-off effects by focusing on a few core areas. Considering the overarching aims outlined above, as well as existing activities by European and other donors and aid agencies, four ‘sectors’ are strong candidates for increased EU assistance over the next five to ten years:


Macro-Economic reform. Weak economic fundamentals and the absence of broad-based economic growth constrains political and social change, while also limiting the impact of sectoral assistance. Any serious attempt to lay the ground for a stable and meaningful democratic transition and improve the situation for the general population must therefore address the weaknesses of current macro-economic and structural policies as a first priority.


Opponents of the military government argue that it lacks commitment to developing the economy; some have even suggested that it is deliberately keeping the people poor to ensure control.  This is not borne out by observations on the ground. The military leaders are proud nationalists who wish to see their country catch up with its neighbours in the region. They also understand fully from the 1988 uprising, which resulted in large part from the economic stagnation of the socialist period, the importance of economic development for national security and unity. Indeed, many of them spend more time travelling around the country to oversee development projects than they do attending to military affairs. Fear of social unrest, compounded by ideological biases, weak understanding of the market economy, and limited financial resources, has weakened the government’s taste for reforms over time. However, many military officers and government officials, particularly among the younger generations, are becoming increasingly aware of the serious difficulties and challenges facing the nation and, with the right encouragement and support, might well return to the path of reform.


§         Encourage a normalisation of the role of the international financial institutions and UN agencies in the country in order to promote economic and governance reforms.


§         Fund and assist a comprehensive study by government officials and independent, local economists aimed at developing a national economic reform programme and identifying assistance needs. Previous studies by the international financial institutions and the Japanese government have been stranded because of a lack of government ownership of the recommendations. An internal study would help commit the authorities to particular reforms provided that the assistance needs identified could subsequently be covered, or at least provide a better platform for participatory policy dialogue.


§         Take initiative to re-establish the Burma/Myanmar Aid Group and secure financial support for key structural adjustments, including exchange rate unification and privatisation of state economic enterprises. The amounts needed to put in place the social safety nets required to protect the poor can be significantly reduced by phasing in the necessary reform measures. However, the government’s motivation to plan for such a process depends on its confidence that international support and the necessary financial cushion will be available. 


§         Provide technical and financial assistance for selective capacity-building in the economic ministries and other relevant institutions, supported by scholarships for young economists to European and Asian universities.


§         Initiate direct policy dialogue with the government and civil society in EU assistance priority sectors discussed below.


Small-scale agriculture. Agriculture contributes more than 40 percent of GDP and employs nearly two-thirds of the labour force.[19] The sector is therefore of paramount concern in meeting Burma/Myanmar’s overall growth objectives, as well as alleviating poverty. Assistance for the country’s millions of small farmers and rural landless is the most effective and direct way to increase incomes, improve food security, and generally lessen the vulnerability of the poor also to illnesses and exploitation. It also has significant down-stream effects, strengthening overall consumer demand and feeding agro-based industries. Further, it supports longer-term, sustainable development by reducing pressure on the forests and other ‘free’ resources, and by preventing poverty-stricken people from the rural areas from flocking into the cities before the industrial and service sectors are sufficiently developed to absorb them. Both deforestation and premature urbanisation arising from rural poverty is clearly evident today and inevitably leads to conflicts over scarce resources and social instability.


The government recognises the importance of agriculture as a growth engine for the overall economy and has significantly expanded the amount of land under cultivation, as well as irrigation. However, current macro-economic, trade, tax, and other regulatory policies limit the profitability of agricultural and thus constrain production. Moreover, government investments in agriculture consistently favour large-scale, commercial agriculture and plantations. This is not only of questionable efficiency, but also reduces the resources available for small-scale agriculture, and contributes directly to deepening poverty by displacing small cultivators. Further constraints on agriculture arise from government interventions in production decisions and the low level of technology. While some of these obstacles are associated with particular political priorities and ideologies, which will take years to modify, many others can be alleviated through targeted technical and financial assistance. In either case, dialogue and sharing of experiences is vital for any progress and best accomplished within the context of operational assistance programmes that bring national and international specialists together with government official and local farmers in a practical setting.


§         Discuss with the government the need for liberalising cropping decisions, freeing markets for agricultural inputs as well as produce, expanding access to credit and appropriate technology, securing land rights, and shifting government investment priorities from commercial to small-scale agriculture and from land expansion to improvements in yields. This will have to be done within the framework of significant programme assistance and be supported by concrete experiences of development constraints on the ground. The dialogue should involve officials at all levels, keeping in mind that today’s district agricultural officer in Sagaing division is tomorrow’s director general in Yangon, and that policy is more likely to shift the more widespread the understanding of the need for reform.


§         Support agricultural research inside the country to develop optimal technology for different local environments and train a cadre of national specialists. Additional funds for exchanges and study trips within the region will help Burma/Myanmar learn from regional experiences and get integrated into existing institutional networks of intra-regional cooperation.


§         Assist in developing national systems for the distribution of key inputs, including credit and technology. Internationally funded and managed ‘pilot projects’ can be effective in demonstrating new methods and establishing sub-systems which can later be integrated into a broader national framework. However, they must be planned with this in mind and involve government officials and relevant civil society actors, as well as the beneficiaries, in all aspects of project planning and implementation.


§         Develop and support programmes to halt and reverse the decline in the natural resource base. This should include efforts to rehabilitate agricultural land that has been exhausted by overuse, as well as protecting existing resources through sustainable agricultural practices and replanting of lost forest cover.


Basic education. The weaknesses and deteriorating standards of Burma/Myanmar’s education system are a major constraint to progress in most other areas, including overall growth, poverty alleviation, food security, and health. Assistance is needed at all levels of the education system. However, in the first phase, priority should be given to basic education, including early childhood development, primary schooling, and non-formal youth and adult education, which is of primary concern in any efforts to alleviate poverty, counter growing inequality, build civil society, and prepare the people at large for participation in a future democratic system. Also, it logically precedes secondary and tertiary education for which it constitutes the necessary base.


Education is identified by almost everyone in the country, including government officials, as a top priority and some positive programmes have been developed, including the Education for All Plan, which covers many of the most urgent issues. The poverty of the state, however, means that implementation is lagging far behind. As in other areas, most of the limited budget is spent on salaries and physical infrastructure, while resources for teacher’s training and other quality issues are unavailable. Meanwhile, falling government investments in education per capita is placing a growing burden on local communities and households, which themselves are facing serious economic strain. EU assistance in the education sector will have to deal with both of these issues of quality and access, and therefore is closely linked with efforts to promote economic reform and small-scale agriculture.


·        Discuss with the government the need to revitalise the basic education system through substantially increased budget allocations, improved teacher training and methodologies, and revised curricula.  As with agriculture, this will have to be done within the framework of significant programme assistance and should involve officials at all levels.


·        Provide financial assistance for the government’s national plan for Education for All, with attention to strengthening the accessibility of basic education for children, adolescents and adults alike, as well as its quality and relevance.  This will require support for new schools and learning centres, as well as rehabilitation of existing ones, including provision of basic teaching and learning aids for all children in all schools to improve the educational environment and bring down the costs for families.  There is also a need to assist teachers training and develop teaching methods which provide students with crucial life skills.


·        Provide ‘bridging’ assistance for teachers sent to remote areas to ensure their livelihood and motivation, while investigating options for training teachers locally. The current system of sending teachers from central parts of the country to remote border areas where they cannot survive on their salaries and often do not speak the language places the children in those areas at a disadvantage as the teachers will often leave their posts or are unmotivated to carry out their duties.


·        Promote the use of at least some of the more common minority languages in the early years of schooling. While proficiency in Myanmar helps minority people access official systems, including higher education, and helps to alleviate conflict by facilitating dialogue, the use of only one official language of instruction is negatively impacting on the educational attainments of non-Burmese native speakers and thus putting them at a lasting disadvantage in the socio-economic development process. 


Community development. Each of the three sectors outlined above involve long-term processes of change and, even then, experience from other countries show that the weakest and most isolated members of society are likely to be left out. These are the same people likely to remain disempowered in any future democratic system. Assistance for national level reform should therefore be supplemented by support for grassroots interventions which aim to improve the livelihoods and social capacities of the poorest of the poor. The kind of comprehensive community development programmes currently undertaken by the UNDP and some of the bigger INGOs help, and indeed are vital for, linking up the most vulnerable communities and households to the broader development processes. They also have some success in empowering the poor more directly by helping improve their confidence and position in their communities.





Whatever policies and attitudes the outside world adopts toward Burma/Myanmar, the military will remain in power for the foreseeable future. Indeed, in many ways the current situation ensures the perpetuation of military rule. The negative attitudes of the West engender a siege mentality which is reinforced by the army’s understanding of their country’s national and international history.  The absence of economic growth and development, meanwhile, inhibits the growth of civilian institutions that can present a viable alternative to military government.   An uneducated, ill-informed, fractured and querulous civilian population cannot build and sustain a democratic political system through mere good intentions. They need the tools and the time to create the conditions for a lasting political transition. 


Nor can such a transition take place in an administrative vacuum. Whatever happens, the state is not about to wither away. A democratic society requires a viable administrative system capable of successfully implementing its will. It also requires that administration to be backed by effective and proportionate force in the form of police and armed forces for use in extremis. To recognise the political reality of the situation now and in the future is not to pander or kowtow to the interests of the generals.  It is to acknowledge that meaningful democratic change depends on local capacities to bring it about and make it work for the benefit of the population at large.


 The armed forces will remain an isolated state within the state, feeding off civil society, until such time as the society in which it exists becomes capable of fending for itself. That requires a strategy which not only develops the economic and political capacity of civil society but also reveals to the military the advantages of opening up the political process. Sustained political change in the direction of democratisation will not occur simply because the people, or even the military, wish it.  Drivers of change are needed, and the most accessible one, and the most likely to succeed, on the basis of comparable historical cases of political transitions in modern Asian history, is the economy.


The European Union has a unique opportunity now to lead in a renewed and more effective effort to help the people of Burma/Myanmar fulfil their aspiration for a freer and better life.  The United States government is incapable of generating political and economic influence in Burma/Myanmar because of the constraints imposed upon it by the Congress. India and China, gripped with their own development issues, unwilling for strategic competitive reasons to be seen to be influencing developments in a neighbouring country, and perhaps are actually content with the current situation, will not act.  The countries of the Association of Southeast Asian Nations also each has its own reasons for avoiding active involvement, and probably lack the resources to do so. They are likely, however, to prove willing allies of a European lead initiative.




1.                  Able, David, Brigadier General, rtd. (former Minister for Finance and Planning, Yangon).

2.                  Aung Myat Kyaw, Dr., Managing Director, Orchestra Company Ltd., Yangon.

3.                  Bhatia, H. E. Rajiv Kumar, Ambassador of the Republic of India, Yangon.

4.                  Bowman, H. E. Victoria, Ambassador of the United Kingdom and Northern Ireland, Yangon.

5.                  Bragg, Raymond, Manager, Traders Hotel, Chair, Myanmar Tourism Committee, Yangon.

6.                  Briggle, David, Regional Director, UNICEF, Bangkok.

7.                  Bristow, Damon, Assistant for UN Special Envoy, Ismail Razali, Kuala Lumpur.

8.                  Dominice, Thierry, Administrator, Medecins Sans Frontiers – Switzerland, Yangon.

9.                  Dunford, Jack, Director, Burma/Myanmar Border Consortium, Bangkok.

10.              Dunkley, Ross, Managing Director, Myanmar Consolidated Media Co., Ltd., Yangon.

11.              Erisman, Hans-Peter, H. E. Ambassador of Switzerland, Bangkok.

12.              Goddard, Geoffrey, Editor, The Myanmar Times, Yangon.

13.              Gomez, H. E. Phoebe A., Ambassador of the Philippines, Yangon.

14.              Gowler, Carol, Hope International Development Agency, Yangon.

15.              Hkam Awng, Police Colonel, Joint Secretary, Central Committee for Drugs Abuse Control, Ministry of Home Affairs, Yangon.

16.              Horsey, Richard, Liaison Officer inter alia, International Labour Organisation, Yangon.

17.              Htay Oo, H. E. Major General, Minister for Agriculture and Irrigation, Yangon.

18.              Ivan, Dr., Networking Coordinator, World Vision Myanmar, Yangon.

19.              Iwaguchi Kenji, Chief Adviser, Myanmar-Japan Centre for Human Resources Development, Yangon Institute of Economics, Yangon.

20.              Jasudasen, H. E. T. Ambassador of Singapore, Yangon.

21.              Kan Zaw, Professor, Rector, Yangon Institute of Economics, Yangon.

22.              Kapur, Rajiv A., Representative in Myanmar, United Nations High Commission for Refugees, Yangon.

23.              Khin San Yee, Dr. Professor of Management Studies, Yangon Institute of Economics, Yangon.

24.              Koenig, Helena, Administrator, External Relations Directorate-General, European Commission, Brussels.

25.              Kramer, Tom, Consultant, Yangon and Amsterdam.

26.              Kulshreshth, Rahul, Councillor, Indian Embassy, Yangon.

27.              Kyaw Myint, H. E. Professor, Minister of Health, Yangon.

28.              Kyaw Win, H. E., Ambassador of Myanmar to the United Kingdom, London and Yangon.

29.              Lamberink, Jan, Country Director, ZOA Myanmar, Yangon.

30.              Lemahieu, Jean-Luc, Director, United Nations Office for Drugs and Crime, Yangon.

31.              List, Andreas, Counsellor, European Delegation, Bangkok.

32.              Long, Carroll C., Representative in Myanmar, UNICEF, Yangon.

33.              Lund, Ragne Birthe, Ambassador of Norway, Bangkok.

34.              McMahon, Alan J., Agency Project Manager, Community Development for Remote Townships, UNOPS/UNDP, Yangon.

35.              Marsden, Rurik, First Secretary, Department for International Development, British Embassy, Yangon.

36.              Maruyama, Ichiro, Political Counsellor, Japanese Embassy, Yangon.

37.              Maung Myint, U, Retired Economist and ESCAP Official.

38.              Maung Wei, U, European Division, Ministry of Foreign Affairs, Yangon.

39.              Menendez Bonilla, Javier, Desk Officer, Directorate-General for Humanitarian Aid (ECHO), European Commission, Brussels.

40.              Nishibata, Yoshiya, Project Coordinator, Myanmar-Japan Centre for Human Resources Development, Yangon Institute of Economics, Yangon.

41.              Nyan Win, H. E., Minister for Foreign Affairs, Yangon.

42.              Nyunt Tin, H. E. Ambassador, Director, Myanmar-ISIS, Ministry of Foreign Affairs, Yangon.

43.              Odano, H. E. Nobutake, Ambassador of Japan, Yangon.

44.              Pe Win, Bernard, The Forum, Yangon.

45.              Petit, Pierre, Conseiller, Ambassade de France, Yangon.

46.              Pike Tin, Prof. Dr., Rector, University of Computer Studies, Yangon.

47.              Pun, Martin, Chair, The Tuesday Club/Business Coalition on HIV/AIDS, Yangon.

48.              Riedmatten, Leon de, Humanitarian Dialogue, Yangon.

49.              Roberts, Margaretta, Country Coordinator, Burnet Institute, Yangon.

50.              Saw Lwin, U, Director-General, Higher Education, Lower Myanmar, Yangon.

51.              Smith, Alan, Friedrich Neuman Stiftung, Bangkok.

52.              Snowsill, Peter, Country Representative, World Concern, Yangon.

53.              South, Ashley, Consultant on Ethnic Minority Issues, Bangkok.

54.              Taylor, Debbie Aung Din, Agricultural Economist.

55.              Tegenfeld, David, Hope International Development Agency, Yangon.

56.              Thanegi, Myanmar writer and artist, Yangon.

57.              Than Aung, H. E. Dr., Minister of Education, Yangon.

58.              Than Nyunt, H. E. Dr., Chairman, Civil Service, Training and Selection Board, and member of the National Convention Steering Committee, Yangon.

59.              Than Shwe, Colonel, Director-General, Ministry for Border Development, Yangon.

60.              Than Tun, H. E. Brigadier General, Deputy Minister for Border Development, Yangon.

61.              Thaung, H. E. U, Minister for Science and Technology, and Labour and Chairman, National Investment Committee, Yangon.

62.              Thein Kyi, Police Colonel, Director, International Relations Department, Central Committee for Drugs Abuse Control, Ministry of Home Affairs, Yangon.

63.              Thet Tun, U, former Director-General, Central Statistical Office and former Director, UNESCO, Yangon

64.              Toe Hla, Dr., Director, Universities Historical Research Centre, Yangon.

65.              Tongkul, Hakan, Deputy Head, World Food Programme, Yangon.

66.              Vial, Patrick, Head of Delegation, International Committee of the Red Cross, Yangon.

67.              Yoichi Hara, Chief Consultant, UFJ Institute Ltd., Yangon.

68.              van Zügelen, Manon, gender consultant, Yangon.

69.              Walker, Roger J., National Director, World Vision Myanmar, Yangon.

70.              Wild, H. E. Dr. Klaus, Ambassador of Germany, Yangon.

71.              Wisch, Elke, Deputy Representative/Senior Programme Officer, United Nations Childrens Fund, Yangon.

72.              Wynn Lwin, Acting Secretary, Myanmar Red Cross and Myanmar Human Rights, Committee, Yangon.

[1] The views expressed in this report are based on an analysis of the situation in Myanmar by the authors and do not necessarily reflect those of the European Commission.


[2] The views expressed in this report are based on an analysis of the situation in Myanmar by the authors and do not necessarily reflect those of the European Commission.


[3] The government claims that the economy in 2003/04 grew by 12.6 percent. However, the IMF sets the figure at 0 percent and anecdotal evidence suggests that it may in fact have contracted.

[4] While the government, for example, reported an increase in GDP of 39 percent from 2000/01-2003/04 driven by a 91 percent rise in industrial output, industrial power consumption for the same period only increased by 28 percent and the import of capital goods fell by 33 percent. This would imply a totally implausible increase in productivity, particularly considering the lack of broader structural progress and technological change.

[5] This was evident, for example, in an increase in primary school attendance in many areas.

[6] The total job loss is not known, but probably reached 100,000, mainly affecting unskilled labour in the main cities.

[7] While the official subsidised price of petrol remains pegged at 180 kyat (about 20 US cents) per gallon, at great expense to the government, free market prices have more than doubled over the last 18 months from 800 kyat to over 2000 kyat per gallon.

[8] Unless otherwise indicated, this section relies on internal UN figures.

[9] See World Bank, Myanmar: An Economic and Social Assessment, 1999 [confidential draft], p. 15. Based on figures from the government’s Central Statistical Organisation. 

[10] Central Statistical Organisation, Statistical Yearbook, 2001.

[11] The average family in Singapore devotes 14% of household expenditure to food, in Thailand 32%, Malaysia 37%, Bangladesh 52%, Cambodia 57%, and Laos 61% (SSII, Asian Agrifood demand Trends to 2010).

[12] Central Statistical Organisation, Report on Household Income and Expenditure Survey 1997. Yangon, 1999.

[13] UN/Myanmar, Food Security in Myanmar: A Proposal to Deal with Natural Shocks, January 2000 [internal report].

[14] Women and Child Health Development Project, Overall and Cause Specific Under-5 Mortality Survey, 2002-03. Yangon, 2003.

[15] International Crisis Group, Myanmar: Update on HIV/AIDS Policy. Asia Briefing, Yangon/Brussels, 16 December 2004.

[16] World Bank, op.cit.

[17] UN/Myanmar, Country Paper, February 2001 [internal working draft].

[18] This is based on the conclusions of Larry Diamond, co-editor of the Journal of Democracy, most recently in Foreign Affairs, November/December 2004, p. 133.

[19] Ministry of National Planning and Economic Development, March 2004.