Yangon needs good government to reach its potential

Yangon needs good government to reach its potential

Most humanitarian interventions offer no more than an end to immediate suffering. Places like Sudan, Zimbabwe and Somalia offer little hope of rapid economic growth even if their humanitarian troubles are removed. Myanmar is different. Many of its South-East Asian neighbours are successful emerging markets, or becoming so, and it appears to offer similar potential. If humanitarian intervention could produce a decent government in Yangon, it could result in a major payoff for the world economy.

At first sight, the country formerly known as Burma looks like a classic basket case. Socialists ruled the country for the first 15 years after independence from Britain. Since then it has been ruled by the military; since 1988 by the State Law and Order Restoration Council (Slorc). Free elections in 1990 resulted in the election of opposition leader Aung San Suu Kyi; they were therefore annulled.

Slorc has followed the “Burmese way to Socialism" and restricts the private sector’s access to credit. Slorc is also corrupt; Myanmar was ranked bottom on Transparency International’s ranking, below such standouts as Belarus and Angola. Not surprisingly, the economy has stagnated in spite of a favourable balance of payments—Myanmar is as poor as North Korea.

However, with a decent government, Myanmar offers economic potential. Its population has a literacy rate of 91%, well above India’s 61%; and it’s growing at only 0.8%, slowly enough that economic growth can easily keep up with population growth and its infrastructure and education requirements. It has such substantial natural resources that it runs a payments surplus even under Slorc. Asian companies, not only from China, but also from genuinely capitalist South Korea, have substantial manufacturing operations in the country. Yet, it is only one-fifth as rich as its neighbour, Thailand.

All that being said, internationally feted Nobelist Suu Kyi does not look like the answer—her father, nationalist leader Aung San, was a 1939 founder and secretary general of the Communist Party of Burma. What’s needed is a Myanmarese version of Thailand’s Thaksin Shinawatra—a successful businessman who understands the needs of an emerging market. The greatest humanitarian intervention possible would be to find such a leader and assist him or her to power.