Officials hedge on junta’s future with hidden funds

Wednesday, 25 August 2010 00:48 Bern Smith

Sydney (Mizzima) – Senior Burmese government officials are salting away assets of all kinds and stashing funds in offshore banks in a sure sign the insiders are beginning to hedge their bets on the ruling military junta’s future, a prominent Australian analyst of the Burmese economy has said.

Professor Sean Turnell of Sydney’s Macquarie University said the officials were looking to guarantee their families’ futures in Burma’s ruling class.

The Burma Economic Watch principal has addressed the US Senate committee on foreign relations about the effectiveness of US sanctions, of which he is a firm believer.

Also a former Reserve Bank of Australia senior analyst, he said little could be expected from Asean, India, nor China when it came to pushing for reforms from the junta, but there was some hope from within the military clique.

“Some developments are quite dramatic at the moment,” he said. “There are sizeable holes in the regime, but that’s really it on the upside.”

Turnell, who will next month travel to Washington to meet members of Congress, believed senior figures within Burma’s military administration were “running scared”.

“With the election coming, it’s obvious that it will be the farce that everyone says it’s going to be, and the most senior [generals] will still have everything,” he said from his home in Sydney.

He said some elements of the international community saw these key figures as rising “robber barons” in Burmese society, comparable with the American phenomenon of the 1900s. In the United States, such businessmen amassed great personal fortunes, but national institutions such as libraries and foundations and infrastructure such as railways, were a positive by-product of the era.

But the Burmese reality was far bleaker, Turnell said: “In the last six months what we’re really seeing is the rising of a criminal business class, with the privatisation push it’s really a rapid criminalisation of the economy.”

“They’re protecting themselves more in the manner of the mafia,” he said. “It’s morphing from this nationalistic, quasi-Stalinist state into a criminal economy”, where the individual played a more prominent role than was healthy for a developing economy, he said.

And with the focus turned to the “connected” individual capable of securing a concession or privilege from the junta had come greater disparity.

“We’re not going to get a Hyundai or Daewoo out of this,” Turnell said, dismissing the argument of economic liberalists that democracy and human rights evolved with economic development. “These people [with privileges granted by the junta] are not innovators, nor manufacturers, this is simply rent-seeking.”

There was no new middle class coming to the fore and demanding their rights and exercising newfound power as consumers, he said.

A classic example of what Turnell described as the “madness” of the generals was a recent decision to ban onion exports to combat a domestic shortage.

“Farmers had entered into contracts, they had contractual obligations,” he said. But those obligations would now be breached because of the generals’ actions. And so a promising industry had been cut off at the knees, he added.

He compared the current onion ban with that of beans and pulses a few years ago. Once the bean and pulse export industry had been ruined by export bans, the generals left it alone – in the past few years it had been making something of a comeback.

“There is no path to anything [for producers] other than mere survival,” he said.

Turnell bemoaned the argument that development would lead to greater rights for the people of Burma and a more equitable system would bloom with time. “If it was genuinely developing then you would have to say ‘well, that’s better than nothing’, but it’s just not happening,” he said.