Shedding its economic coccoon, Burma making steady strides

For years Burma was the economic recluse of Asia, determinedly turning its back on the world to follow a unique "Burmese way to socialism" that turned out to be the route to economic disaster.

Now, building on economic reforms of the mid and late '70s, Burma is gingerly moving toward modernization and is recording respectable and steady gains.

The gross domestic product of Burma's centrally planned economy grew 5.6 percent in 1979-80, according to government figures. When the results are tallied for the fiscal year ending this March 31, the government of President U Ne Win hopes to meet or top a 6.9 percent growth target.

Foreign aid, which the government refused to touch for fear of foreign contamination only a decade ago, is reaching an annual level of $500 million. It is a sign of donor confidence in Burmese economic development and a mark of Burma's gradual emergence from self-imposed isolation since 1973.

But for Burma, modernization is no headlong rush to embrace conventional Western recipes for economic success, such as rapid buildup of export-oriented industries or an open door for foreign firms and investments.

"We do take assistance, but we only take it as necessary," a Burmese diplomat explains. "We have to make our own efforts first. We believe in the policy of breathing through your own nose."

That policy has emphasized the development of agriculture, the economic mainstay accounting for 51 percent of gross domestic product, along with simultaneous moves to build up agro-linked industry and construct needed public works such as roads and bridges.

Outside experts rate Burma's agricultural potential as enormous. Self-sufficient in rice, the Burmese dietary staple, the country has plenty of leeway for expanding acreage under rice cultivation, double-cropping through irrigation, and increased use of high-yielding seeds.

Burma was once Asia's leading rice exporter, before the demands of a growing population and incentive-killing government procurement policies sent surpluses tumbling. Last year the country exported 600,000 tons of rice -- about a third of its peak exports in the early '60s but triple its export sales in the early ' 70s.

Although Burma's 33 million people are poor by world standards -- average per capita income is only $150 -- the Socialist government in power since 1962 has seen to it that they have plenty of rice to eat. By some common social indicators, they are better off than other countries in the region. For example , Burma's life expectancy, adult literacy, and daily calorie supply per capita exceed those of richer India and Pakistan.

Burma is also self-sufficient in oil, with surpluses available for export sales. One reason for the surplus, observers point out, is that there are few motor vehicles and industries to drive up domestic consumption. On the positive side is a virtual absence of pollution -- and a considerable financial advantage over other South Asian nations whose economies are being knocked ajar by rising oil import bills.

Virtually all of Burma's business and industry was nationalized when the self-styled military "revolutionary" government took over in 1962 and was kept under state control after a switch to constitutional government in 1974.

The outlet for private enterprise has been large-scale smuggling and a flourishing black market. With few goods available in state shops, Burmese consumers turn to the black market for up to 80 percent of their needs, international observers estimate. Goods produced by state enterprises are of poor quality and in short supply. But the government has set a capitalist-style requirement as part of its modernization effort: The state industries now must earn enough to finance their own operations or borrow from the state bank at fixed interest rates rather than depend on the government budget to cover their losses.

Smuggling is likely to remain a problem, because communist and ethnic insurgencies in northern and eastern Burma make it virtually impossible for the government to control those boarders. The cost of army operations against the insurgents also drains a third of the country's budget.