As the voice rises, economic problems remain Myanmar

For the first time in 20 years, people will vote for a new government in Myanmar. But with the ruling military's political wing virtually guaranteed a victory, critics say there is little hope the country to escape what was described as a legacy of mismanagement.

"In many ways it is the civilianization of military rule," said Danny Richards, a senior economist at the Economist Intelligence Unit (EIU). "They have very poor conditions in the management of the economy in recent decades. I think this is probably the case for the next few years."


The two main political parties supported by the junta Union Solidarity and Development Party (USDP) and the National Unity Party (NUP). Both are stacked with former military officers and businessmen with ties to the military regime. The country best known opposition party National League for Democracy, was dissolved by the government. Its famous leader, Aung San Suu Kyi remains under house arrest.

Myanmar, also known as Burma, has been ruled by the military since a coup in 1962. Under his reign the country was transformed from one of Southeast Asia's largest and richest to the poorest in the region.

"Burma has no economic problems, apart from political ones, hold it," said Sean Turnell, a specialist in Myanmar economy at Macquarie University in Sydney. "Burma began in the 20th century the richest country in Southeast Asia.

What happened in 100 years is bad governance."
Analysts say "bad governance" has led to the development of two parallel economies: A so-called above-ground economy and a thriving underground market is, by some estimates, the same size.
"The average person produces food for their own use," said Turnell. "Always trade with one another at a local market or something, and do not interact in the formal economy."

Most of the officials or above ground economy is driven by the country rich in natural resources.

China's chess game with Myanmar
"There's a lot of energy, petroleum and mining," said Richards. "There is huge demand from Myanmar to benefit from China, Thailand and other countries in the region," he said.

Myanmar has managed to grow that part of the economy, despite the presence of economic sanctions by many Western countries including the United States.

The sanctions block companies and investors from the business relationship with the Government of Myanmar and prohibit the sale of goods from Myanmar. But not everyone believes that the sanctions to work.

"The penalties in respect of purchases of goods in Burma such as clothing, manufactured wood products and what have you prevent just that the Burmese from the business relationship with the outside world," said Dominic Faulder, a journalist and Myanmar expert.

"These sanctions are not to India or in the ASEAN (Association of Southeast Asian Nations) and South Korea and China are. So, is basically Burma with the people around him who are willing to do a certain amount of trade and who now Meeting Gas and energy from the country. "

Natural gas has become Myanmar's biggest export, according to the EIU. He says natural gas accounts for more than 38 percent of total sales export revenues. Most of it goes to Thailand.

China is also building pipelines to ship oil and gas from Myanmar, Yunnan Province. The project is expected to be completed by 2013. India has also invested in Myanmar energy sector as it seeks to secure future energy supplies.

Other important exports are pulses, like chickpeas and red beans, and teak and hardwood products.

Myanmar official GDP figures are not considered to be reliable, or more, analysts said, interviewed by CNN. But the EIU forecasts real GDP growth by 3.1 percent in 2010 and expand by 4 percent in 2011. These include energy and oil industries, to attract much foreign investment.

Strip those, "said Richards, and you are with an economy will continue to remain weak.

"The business environment is extremely tough still," said Richards. "You need good contacts within the military to set up new projects."

It's believed the ties between business and the military will extend beyond the election. Military rulers reportedly have been quietly selling many of the state's largest assets as they prepare for political transition.

"They have put an enormous amount of the government holdings in the hands now of private business," said Priscilla Clapp, former U.S. chargé d'affaires for Myanmar between 1999 and 2002. The secretive regime has not commented on the reports.

Clapp believes many of the country's senior generals, who are retiring from the military to join the new government, want to bring these assets with them as they transfer to civilian life.

"It's pretty crass," said Clapp. But she also says the transfer could improve conditions "to the extent that marketization brings a different set of incentives to bear on the way business and economic decisions are made," she said.

"All of these guys retiring and going into politics, they're going to develop a different set of interests. They're going to have to do different things to keep themselves in power," said Clapp. "That is going to change the economic landscape somewhat after the elections.It's difficult to say how it's going to change it, but that process has started."
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