Economic liberalization in Myanmar

The US embassy in Rangoon has reported that the living conditions of peasants have increased as a result of the liberalization since the late 1980s, with rise in the farm incomes and access to a range of technologies including generator power and diesel fueled irrigation pumps that can replace animal powered alternatives.[11] Consequently, farmers do not need to secure food for their cattle and get less livelihood dependency on them (potential issues are feeding and treating animals).

Ikuko Okamoto analyses the effect of the second rice liberalization: "In the liberalization process... the private rice marketing sector was able to achieve self-sustaining development. The government’s policy to promote rice production and cut-backs in the volume of rice procurement increased the amount of rice sold in the market, which induced more traders to enter the rice-marketing business".[12] Liberalization was thus beneficial for the expansion of a private market in which new kind of jobs such as rice traders, gave new opportunities and livelihoods characteristic of market economies, outside traditional agricultural production.

The liberalization also implied the freedom for farmers to crop what they want and consequently to practice multiple cropping, eventually being less reliant on the growth of only one crop and the variations in the market prices of those ones.[13] Farmers are more likely to secure their income and consequently gain access to food and other basic necessities.

The most frequently denounced collateral effect of liberalization on the livelihoods of Burmese people is the environmental degradation due to the multiplication of energy exploitation projects by foreign companies. A number of environmental issues critical to livelihoods are not tackled within the liberalization process. "Pressing environmental issues include public health, sanitation, clean drinking water, soil erosion, agricultural technological development, assessing the impact of importing foreign seeds and proper designs for irrigation projects".[14] The construction of pipelines is denounced by NGOs as a threat to livelihoods throughout the destruction farming lands and fishing grounds, which can also be classified as restricted access zones.[15] The simple consequence is the making of jobless populations in those areas where pipeline projects are pursued. The loss of farming land is not the only consequence: the example of construction of tourist resorts (tourism being the other activity expanding thanks to the FDIs reforms) destroying forests leaves no wood and bamboo to local population, making the construction of houses impossible.[16]

The development of the energy industry requires the employment of skilled workers. Foreign companies exploiting Burmese gas thus tend to import their employed workforce.[17] The Foreign Investment Law has been initially criticized for not prioritizing the human local development and employment enough.[18] It does not bring a new alternative to the third of the rural population that does not possess lands to secure a subsistence production. The lack of FDIs in other industrial sectors also causes employment issues in urban areas.[19][20]

The marketization of agriculture is portrayed as being beneficial mainly to large-scale exploitation involved in agribusiness, more than to small landowners relying to subsistence farming. Large exploitation establishments threaten local farmers through their cheap production capacity and do not provide landless people livelihood alternatives: the mechanization of large scale plantations implies a limited number of job opportunities, and consequently lowers wage rates of rural workers.[21][22]

Khin Maung Kyi et al. have also argued that macroeconomic policies inappropriate to the process of liberalization have caused high inflation.[23] The inflation rate between 1988 and 1996 is estimated at 1000%.[24] The purchasing power has consequently gone down, making the ability of poor Burmese to secure access to food and other primary commodities weaker, despite their progress in securing incomes. The liberalization of the market also has a wrong impact on the ability of farmers to grow crops because the free market system implies an "increase in the prices of fertilizer and other agricultural inputs".[25] The regularity of farming production is thus threatened.

Another point on which liberalization process in Burma has been denounced as misled is that it is incomplete. Market reforms often need to be tied to property law reforms. In Myanmar, despite liberalization, farmers are not protected from land confiscation when they are demarcated as wasteland, threatening the livelihood of subsistence farmers.[26]

The study of living standards indicator in Myanmar can also suggest that over the time, the situation has not progressed. Both the Central Statical Organization (CSO) in 1999 and the IHLCA Project Technical Unit in 2010 state that one-quarter of Burmese households spend 70% of their income on food.[27][28] Accessing food security is thus still a problem despite the liberalization efforts.[29]

The liberalization impact can be summarized by Sean Turnell view, stating that the industries favored by the shift to market economy "create relatively few jobs and impose large environmental costs on the local population, so that they are doing little to create “the foundations for future growth”".[30]