Burma bends its rigid isolation and socialism

Burma, one of Asia's most isolated countries, shows new signs of looking outward. The latest evidence is the signing Aug. 29 of a two-year, $5 million aid package from the United States. The program, designated to improve Burma's primary health care system, renews American aid after a lapse of 17 years.

The resumption of American aid is one part of the effort by Burma's leader, General Ne Win, to rethink the rigid isolation and socialism he enforced after seizing power in 1962.

The general has begun a modest degree of political relaxation this year by cautiously releasing political opponents from prison. This summer U Nu, the man overthrown by Ne Win, was also allowed to return to Burma.

Since winning power, General Ne Win had sought to keep his country out of power politics and Asian rivalries by a policy of rigid isolation.

He also set up a system called the "Burmese route to socialism," under which much of the economy was nationalized and there were rigid import controls.

The new policies led to some social advances, especially in fields like rural literacy and education. But exports dwindled, making it difficult to finance imports. For example, Burma, the world's largest rice exporter in the early 1960s with annual sales of 1.5 million tons, slumped to 10th place, with only 200,000 tons per year.

Oil exports were slow to be developed, as were the wide range of minerals and woods that Burma could sell abroad. Suspicion that foreign aid could threaten the country's interest also slowed development.

But by 1973 General Ne Win began to rethink his policies. Between 1973 and 1976 Burma reestablished ties with the World Bank, accepting at times its economic advice, and rejoined the Asian Development Bank.

Fiscal and Banking reforms were introduced, and some foreign aid was accepted.

The Burmese government followed the recommendations of the International Monetary Fund.

It wiped out the country's budget deficit in 1976.

Last year rice exports reached 650,000 tons, below the 1.5 million ton peak, but well above the 200,000-ton low.

Few observers expect Ne Win's changes to produce quick progress. The country suffers from a managerial skill. Bureaucratic bottlenecks hamper efforts to develop the country's exportable resources.

In addition, General Ne Win is known for his frequent changes of mind. This induces caution and indecisiveness among those with economic responsibility.

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