Burma: Nobel Laureate Stiglitz to Advise Junta on Poverty

The list of high-profile foreigners heading to Burma to engage and advise the country’s military regime is about to get longer. The latest due to join that flow is Nobel economics laureate Joseph Stiglitz.

The former chief economist of the World Bank will fly into Burma, or Myanmar as it is also known, on Dec. 14 for a mission aimed to examine and improve the South-east Asian nation’s rural economy, says Noeleen Heyzer, head of a United Nations regional body based in Bangkok.

“He will share his ideas on what kind of economic decision making is critical for growth in the rural economy and poverty reduction,” adds the executive secretary of the Economic and Social Commission for Asia and the Pacific (ESCAP). “He will be there for a couple of days.”

“We hope that this mission will be able to open up a new space in economic decision-making and policy formulations,” Heyzer tells IPS. “The focus is on how do we reach the poorest people in Myanmar.”

Stiglitz, who has engaged with poorer countries to offer development models through the Initiative for Policy Dialogue, a think tank he founded, will meet Burma’s Agriculture and Rural Development Minister Maj Gen Htay Oo and National Development Minister Soe Tha during this visit.

Both ministers are reportedly close to Burma’s strongman, Senior Gen Than Shwe, who presides over a regime notorious for its oppression and secrecy.

Stiglitz is due to deliver a lecture on ‘Economic Policies and Decision Making for Poverty Reduction: Reaching the Bottom Half’ in the afternoon of Dec. 15. The two ministers and Heyzer have also been billed as speakers during this ‘development forum’ under the theme ‘Policies for Poverty Reduction— Effecting Change in Myanmar’s Rural Economy’.

This forum, to be held in Naypidaw, the administrative capital, is one of a series of talks Stigliz will be involved in. Others will include an exchange of ideas with leading Burmese economists, U.N. experts, the diplomatic community and speakers from the local and international non-governmental groups.

Field visits to Burma’s dry zone are also on the cards, confirms Heyzer, who has been instrumental in the visit of the globally renowned economist. “It should be for two or three days to bring him into contact with the issues of the rural economy and the problems of trading, the banking system and the commodity prices.”

ESCAP’s foray into Burma is part of a broader programme to reach out to countries with “special needs” among its over 50 member states. The foundation for this engagement with Burma’s rural economy was laid in August when Heyzer visited the military-ruled country. The initial talks she had at that time touched on issues like the need for farmers to gain greater access to rural credit and concerns over the state fixing of rice prices at rates that condemned farmers into permanent poverty.

Currently, some 7.8 million hectares are under paddy cultivation, producing an estimated 30.5 million tonnes of rice during the 2008-2009 harvest period, states the Food and Agriculture Organisation.

Such rice production has come at a heavy price for Burmese rice farmers. Most of them, who are small farmers, have had difficulty accessing rural credit, according to Sean Turnell, an Australian academic who publishes the ‘Burma Economic Watch’, in an interview with IPS.

“The policies of the Burmese government have been anything but helpful,” he says. “They have, in essence, stood by while Burma’s rural credit scheme has collapsed.”

Burmese economists wonder how open the junta will be to Stiglitz’s policy prescriptions given previous foreign attempts to suggest improvements to the country’s beleaguered economy, which were initially received with much fanfare but then ignored by the regime.

A Japanese initiative in 2002 is illustrative. Tokyo, with early support from the regime, conducted a macro-economic and structural reform study. Researchers reportedly had access to sensitive economic data for this project.

But the implementation of the results, which the Japanese government was willing to back, found little takers within the regime.

“This research that was conducted by top Japanese and Burmese economist was rejected by the military government,” says a Burmese economist based in northern Thailand, who spoke on condition of anonymity. “This was after the Japanese made every effort to offer a feasible programme that the regime could undertake according to its comfort level.”

“Other efforts can face a similar fate,” he adds. “They will fall on deaf ears.”

Such reluctance for change has been attributed to the new wealth the regime has amassed since the discovery of huge offshore natural gas fields in the 1990s. Gas exports to neighbouring Thailand has resulted in Burma’s foreign exchange reserves reaching a record 3.6 billion U.S. dollars.

That figure is expected to increase with Chinese investments in a new offshore natural gas project.

Yet 75 percent of the country’s estimated 57 million people who live in rural areas and make up the largest slice of the country’s poor have hardly benefited from such financial bounty. Malnutrition is rampant, affecting over a third of the country’s children. It is ranked by the U.N. as one of the hunger hotspots of the world.

The junta’s public spending offers some clues for this dire picture. Nearly 40 percent of the gross domestic percent goes to support of its over 400,000- strong army while only 0.3 percent is set aside for health, placing it just above the lowest ranked Sierra Leone, at 191st, on a World Health Organisation list.

Stiglitz’s solutions to help Burma’s rural poor will have to grapple with other numbers, too. Inflation is at 30 percent and the annual growth rate— estimated at four to five percent by independent analysts—is far lower than the 10 percent rate that the regime claims it to be.