Burma

My students have difficulty imagining this: half a century ago, Burma was among the most prosperous countries in the region.

Rich in natural resources, led by a robust intelligentsia and well positioned for trade, Burma might have emerged the dominant Southeast Asian nation. Her diplomats shone on the global stage. Her artists and writers dazzled the world.

In a word, Burma was a very different country then. Today, it is mired in poverty. Its educational system is a fossil of its old self. Young Burmese are well away from the trends in technology that will define the future.

Hundreds of thousands of Burmese are economic refugees or political exiles. There is a low-intensity civil war between the ethnic groups. A democratic movement endured brutal repression for decades and persisted through it all.

How could a dynamic and prosperous national community shrivel so much? How could such and impressive society, such a talented people, become a virtual black hole, consuming its own energies in internal struggle, eschewing the rest of the civilized world?

Burma is a cautionary tale about nationalism gone mad, about institutions that ended up feeding on its own people rather than feeding them.

After the country won its independence from British rule, Burma, like its neighbors Thailand and Malaysia, faced domestic insurgencies. The insurgencies tended to deepen ethnic tensions and prevent the newly independent government from fully controlling the country.

In a climate of uncertainty, the military seized power for itself and put democracy on hold. Having seized political power, the dictatorship took economic control of the country. That, in turn, created an inward-looking dynamic akin to similarly disposed regimes such as China’s during the Maoist period and North Korea under the Kim dynasty.

The Burmese military began evolving a corporate interest in maintaining control of the economy. That corporate interest in monopolizing economic activity was, by its very nature, adverse to the free market and free trade.

A corporatist state constantly feared market forces it could not fully control, especially the large market forces that shape the global economy. Because of that fear, Burma moved away from the mainstream of global trade — as well as global culture.

The military regime was opposed in the countryside by ethnic armed groups and in the cities by a democratic movement led by what is left of the country’s intelligentsia. The internal war against the armed insurgencies, largely undocumented, created a large group of internally displaced people, some of them spilling over the border to Thailand.

In the cities, protests led by students and monks were always dealt with harshly. Anti-regime forces might have been annihilated had it not been for the high international profile of Aung San Suu Kyi, daughter of Burma’s founding father and Nobel Peace Prize awardee.

When elections were called two decades ago, the democrats led by Suu Kyi won heavily. The results of the elections were voided and Suu Kyi was kept under house arrest for decades. Burma remained a pariah in the global community and a society kept in a state of suspended animation to suit the needs of the military elite.

On the economic map, Burma almost literally appears a black hole. Her three closest neighbors — China, India and Thailand — are all booming economies driven by trade engagement with the rest of the world. Burma alone, the pariah economy, stagnated. Her population is kept trapped in a previous age.

Last year, however, a reform minded general rose to power. Although he represented the military elite that controlled the country economically as it did politically, he also embodied that elite’s realization that the old regime could not possibly be sustainable.

In this country so comprehensively subdued by a military dictatorship, viable change can only come from the very womb of the repressive regime.

Since last year, Burma embarked on a dramatic program of political and economic reform. Repression eased. The economy gradually opened to investments. A legal framework governing property, contracts and corporations is now being quickly developed.

Ironically, the reform process can only be credible if the democratic opposition participates in it. The military rulers of Burma realized the world will be convinced of the genuineness of their reform program only if they are able to first convince Suu Kyi and the democratic movement she leads. That means the democratic reform must happen before economic reform can take off.

So it was that elections were called to signal the start of the reform process. Suu Kyi’s democratic party won a large portion of the seats as expected.

The democrats hesitated taking their oaths of office under a constitution featuring a parliament where the military assigned a quarter of the seats. This was a feature obviously introduced by the military elite to conserve their dominance in the nation’s affairs.

Eventually, Suu Kyi realized the reform program was far more important. If the reforms push forward and democratization of both the economy and politics happened, constitutional renovation will be a mere technical matter.

Suu Kyi and the democratic movement she leads are now effectively full partners of the military elite in the great enterprise of reform that will reshape Burmese society and alter its path to the future. The world appreciates this collaboration. It is unique experiment that combines the energies of former sworn enemies to achieve national salvation.

From here onwards, things will be very different in Burma. That country could quickly emerge as Vietnam did after a long war and a brief romance with central planning.

The regional economy of Southeast Asia will be very different too because of the dramatic developments happening in what was formerly a pariah nation.