Emergence From Isolation Reopens Burma to Sway of Powerful Neighbors

BURMA'S geography - wedged as the country is between the massive civilizations of India and China - has always required attempts to mitigate the influence of overbearing neighbors.

Even after independence, Chinese and Indian entrepreneurs and money lenders - along with British business interests - dominated the economy, leaving millions of Burmese living in poverty.

Burmese Gen. Ne Win sought to change that by nationalizing most large enterprises and expelling most foreigners soon after he came to power in a 1962 coup. He also pushed the country's traditional neutrality into isolationism to pursue his unique experiment in socialist autarky. But when that ran into serious trouble a few years later, he was forced to moderate his xenophobia and seek international assistance.

Among donors, Japan assumed a special place. Japan was considered the "least of many foreign evils," according to Donald M. Seekins, a political scientist who has studied Burmese-Japanese relations.

Through what amounted to war reparations, Japan had already been Burma's largest donor since the 1950s, but it maintained this lead as international assistance swelled to an estimated $400 million per year through the 1980s.

Japan accounted for approximately 70 percent of aid when all major donors cut off assistance in 1988 to protest the military crackdown following an opposition election victory.

Nearly a dozen Japanese trading companies were active in Burma in the 1980s - with virtually no other foreign commercial presence - but bilateral trade and private Japanese investment have never amounted to much. Burma needs cash

Desperate for foreign exchange, Burma was forced to open its economy again after the 1988 international aid cutoff.

Cross-border trade, formerly the domain of smugglers, was legalized, and it boomed with India, Thailand, and especially China.

But along with the new commerce came the old jockeying for influence.

Trade with China is estimated at $1 billion annually, and some analysts say China is on its way to establishing a kind of economic hegemony over at least northern Burma. Wary of potential backlash, India is taking a more gradual approach.

India and Southeast Asia are concerned about the Burmese-Chinese military relationship. China is Burma's largest arms supplier, and further cooperation will make it easier for China to flex its military muscle in the Indian Ocean, as it is already doing around the Spratley Islands in the South China Sea.

Also taking advantage of Japan's lessened influence in Burma are Singapore, Taiwan, and especially Korea, the source of Burma's largest non-oil investments. The Seoul-based industrial giant Daewoo has invested with the government in two textile factories and one producing consumer electronic goods. Koreans set up shop

"The Koreans are getting aggressive because they know the Japanese are coming, and they want to get their foot in the door in all sectors," says Joe Shein, a Burmese-American doing business here.

Korea is not part of the Western aid boycott, and though Japan is considered the weakest link in that informal arrangement, most observers do not expect the Japanese to break ranks until at least after elections expected here next year.

Although never closed off completely to the West - both the British Broadcasting Corporation and the Voice Of America have long had large audiences - Burma is now open for a larger dose of Western influence.

Hollywood movies now compete with films from India, Chinese action movies, and the impressively active local studios. The limited supply of Newsweek and Time magazines allowed in probably have one of the highest pass-along rates anywhere.

And the United States Information Service (USIS), housed in the former North Korean Embassy, provides another critical window on the outside world, especially when there is an international crisis. When Russian President Boris Yeltsin stood-down an attempted coup in 1991, hundreds of Burmese packed the USIS auditorium to watch CNN - bypassing censorship of the event in even the printed media.

Perhaps most subversive is the influence of American popular culture, especially on rebellious military children who sport skateboards, hip clothes, and rock bands. "They can afford it and they know they can only be punished by their parents," explains one keen social observer.