The root of military in Myanmar has been associated with the struggle for independence. Myanmar gained its independence on January 4, 1948 from British Empire under the leadership of General Aung San under Burma National Army. The Army in Myanmar had gained respect in independent Myanmar at the initial stage and was perceived as protector of the country. The military claimed itself as the founder of the Union of Burma, and the main force that held the country together during the civil war and also claimed that it has prevented the country from disintegrating. The first military rule began in 1958 and direct military rule started when General Ne Win captured power through a military coup in 1962 lasted for 12 years, in the claim to save the country from disintegration.
Burma’s pre-colonial economy in Burma was essentially a subsistence economy, with the majority of the population involved in rice production and other forms of agriculture. All land was technically owned by the Burmese monarch. Exports, along with oil wells, gem mining and teak production were controlled by the monarch. Burma was vitally involved in the Indian Ocean trade. Logged teak was a prized export that was used in European shipbuilding, because of its durability, and became the focal point of the Burmese export trade from the 1700s to the 1800s. During British occupation, Burma was the second wealthiest country in Southeast Asia after the Philippines. It was also once the world’s largest exporter of rice. During British administration, Burma supplied oil through the Burmah Oil Company. Burma also had a wealth of natural and labor resources. It produced 75% of the world’s teak and had a highly literate population. The country was believed to be on the fast track to development.
After the Independence from British rule and a parliamentary government was formed in 1948, Prime Minister U Nu attempted to make Burma a welfare state and adopted central planning. Rice exports fell by two thirds and mineral exports by over 96%. Plans were partly financed by printing money, which led to inflation. This was followed by the 1962 coup d’état under General Ne Win who introduced an economic scheme called the ‘Burmese Way to Socialism’, a plan to nationalize all industries, with the exception of agriculture. The catastrophic program turned Burma into one of the world’s most impoverished countries. Burma’s admittance to least developed country status by the United Nations in 1987 highlighted its economic bankruptcy. The military’s involvement in the direct management of economic enterprises was an outgrowth of its conception of its own self-perceived role as the essential positive social force and guardian of the state, as well as its distinct mistrust of civilian politicians and their competence. The military had come to recognize that the continuation of their power is directly related to the economy. The military’s intervention into the economy was thus in part to ensure no untoward, uncontrollable economic discontent developed, as in 1988, that could lead to political chaos. The natural endowment of the country, one of the few before World War II that was an exporter of food and fuel, had lulled its leadership into a belief that the well being of the people could be attained, if necessary, through autarchic self-reliance. In the latter period, under the leadership of the military-mandated Burma Socialist Programme Party (BSPP, 1962-1988), the military managed to transform what, in natural resources and population/land ratio, should have been the wealthiest country in Southeast Asia to one of the poorest.
The socialist era, the policies of which were a direct result of the whims of the military rulers of that time, was an unmitigated economic disaster. It was supposed to be a particular Burmese brand, the so-called ‘Burmese Way to Socialism,’ and not simply a foreign import. It was clearly an element in an exaggerated nationalism, which, as noted above, was the basis of the legitimacy of the socialist approach. The state was intent on building an industrial proletariat (in a state that had little industry) and in controlling virtually all economic activity of any significance. At the same time it purged the administration of the civilian meritocratic bureaucratic elite who were the only civil servants capable of even attempting to run a centrally planned economy. In their place, the military substituted its own officer corps who was high on enthusiasm and in ordering activities, but low on economic competence. The result was a disaster in which even the leader of the country, General Ne Win, complained to his commanders that Burma in 1967, after only a few years into the rigid socialist era, could not feed itself–this in a country that had been the leading rice exporter in the world before World War II.
Even after the first Burma Socialist Programme Party (BSPP) congress in 1971, in which decisions were reached to abandon stress on industrial production and concentrate on agriculture, forest resources, fisheries, and mining (especially oil), the concept of socialism was not abandoned and the military did not slacken in their attempts to control the economy of the state. Multilateral and bilateral foreign aid agencies were invited in, but the basic economic control of the economy by the military did not abate. Foreign aid agencies were welcomed to choose from approved projects, but the government admitted that it could not coordinate assistance to projects involving more than one ministry; thus leading to fragmentation of effort. There was no questioning of the socialist orientation policy of the government by foreign aid organizations at that time. Significant policy dialogue did not exist.
After 1988, the regime retreated from totalitarian socialism. Its opening to foreign investment in 1988 in the most important reform since 1962 was to redress that problem. It permitted modest expansion of the private sector, allowed some foreign investment, and received much needed foreign exchange. However, the economy was rated in 2009 as the least free in Asia. In reality, all fundamental market institutions were suppressed and private enterprises were often co-owned or indirectly owned by state. A special fillip to investment development, and legitimacy was also to come in July 1997, when Myanmar joined ASEAN (Association of Southeast Asian Nations–the ten countries of that region), and a major lift to the Burmese economy was expected from investment from such sources. Disappointment ensued. The Asian financial crisis of 1997 that blossomed the same month that Myanmar joined ASEAN, United States sanctions on new investments that same year, alternative and more alluring sites for foreign direct investment, and a drop in expected tourist arrivals helped truncate the expectations that economic liberalization and the abandonment of ‘The Burmese Way to Socialism’ was to bring. Despite these external factors, internal military mismanagement of the economy ultimately and greatly contributed to its poor state.
Myanmar is an example of deeply entrenched military rule. It is argued that the retreat from direct rule has brought with it a further institutionalization of military rule in politics, since the military was able to safeguard its interests and design the new electoral authoritarian regime according to its own purposes. The ground reality of Myanmar is that a large section of population of the country is facing economic crisis. Humanitarian situation is serious; Myanmar, a naturally rich country, is today the poorest in Asia. A lot of people are living below the poverty line with scarce access to the basic essentials like nutrition, education, health care and employment. All these reveal that Myanmar has a long path to tread for becoming developed.