Pacific Affairs: An International Review of Asia and the Pacific

Volume 73, No. 2

 

Ten Years Of Chaos In Burma: Foreign Investment And Economic Liberalization Under The SLORC-SPDC 1988-1998
By Stephen McCarthy

 

Abstract

In 1988 Burma's military generals embarked upon a program of economic liberalization and the reversal of years of isolationism. Through a series of sweeping laws aimed at encouraging foreign investment and economic prosperity, the State Law and Order Restoration Council attempted to address a popular uprising while reinforcing the military's legitimizing role of economic stewardship. This paper will examine the nature of the SLORC's economic liberalization program over its ten year life, from 1988 to 1998, when the Tatmadaw reasserted its direct control over the economy. While focusing primarily upon foreign direct investment, the paper will also address the peripherals of engagement policy, the impact of the Asian financial crisis, and the effectiveness of U.S. sanctions. It will show that the Tatmadaw's economic liberalization policies failed because they were either short-sighted or expedient, and that the bulk of foreign direct investment was attracted towards short-term profit- making ventures. Burma's economy will continue to stagnate without the assistance of international funding and China's influence will continue to play a major role in addressing Burma's poor relations with the West.