At Rangoon’s chaotic Mingaladon Airport, the young Burmese man approached a traveller carrying a duty-free shopping bag. “You sell whisky?” the Burmese youth demanded. “Cigarettes?” With that, he swiftly produced a handful of kyat (pronounced chat ), the national currency, which he had hidden in a carved-out hollow in the pages of an old book. The tourist agreed to a transaction, pocketing about $45 for a bottle of Johnny Walker Red Label scotch whisky and a carton of British cigarettes. The Burmese man may have kept those items for his own use. But they may have been resold on the Burmese black market, where they would fetch as much as $65.
It was a typical encounter in Burma, where widespread poverty and a shortage of consumer goods have forced many of the country’s 37 million citizens to augment their meagre resources by trading on the black market. With an estimated annual per-capita income of $240, Burma is among the poorest countries in the world. In spite of its rich soil, plentiful oil, precious gems and
teak forests, Burma has never fulfilled the promise that many saw when the country gained its independence from Britain in 1948. A quarter of a century after Gen. Ne Win entrenched his military rule and closed the country’s borders to foreigners, his militia re-
The government's policy of isolation undermined the economy and resulted in the growth of a vigorous black market
mains unable to quell the many disparate guerrilla movements now active in the country. And with its stunted economy exacerbated by strict government restrictions against foreign investment, the country has now turned to a reluctant but increased reliance on a fledgling industry: tourism.
Since the early 1970s, when the Marxist government began to allow seven-
day visits by foreigners, tourism has grown rapidly. More than 32,000 foreign visitors entered Burma last year, nearly a 16-per-cent increase from 1984. Burma is an inexpensive holiday at black-market rates: although $100 is officially worth about 550 kyat, on the street it will fetch at least twice as much. Historic cities such as Rangoon and Mandalay are part of the government-sanctioned tourist route in the country’s heartland, away from the country’s borders with China and Thailand, where fighting between government troops and ethnic insurgent groups is most intense. Despite 39 years of independence, the stamp of Burma’s 63 years under British rule is still visible in Rangoon’s crumbling mansions and sidewalks.
The tourists have been a boon to the black-market trade. One Rangoon taxi driver has a legally registered 1950s car for regular fares through the streets that are dotted with horsecarts. For tourist day trips, he uses a new, illegally owned Toyota bought on the black market. He is also among a number of young urban Burmese who spurn the longyi, the men’s traditional wraparound garb, for trousers. And like many taxi drivers, his car is where his most lucrative deals are made: the sale of gems such as rubies to visitors.
According to some observers, the 76year-old Ne Win may not even be aware of such activities. As chairman of the Burma Socialist Program Party, Ne Win lives a reclusive life within government headquarters in Rangoon. And he is largely shielded from the disastrous results of his 25-year-old political aim: to establish a Marxist-Leninist regime where strict laws would prevent Burma’s exploitation by other nations while protecting the traditional Buddhist-
centred Burmese life. But his policy of isolation undermined the economy—and led to the growth of a vigorous black market to meet consumers’ needs.
Burma’s economy has also suffered because of the government’s high military expenditures against the diverse guerrilla factions—estimated to be as many as 20—in the country’s troubled hill and border regions. Rebels such as
the ethnically distinct Karens, on the Thailand-Burma border, have battled the military since independence. The conflict, a legacy of the British amalgamation of many small principalities to form one country in the late 1800s, has resulted in the death of hundreds of villagers. Now, one-quarter of the country’s annual budget of about $1.5 billion goes to fighting—with negligible results—the rebels, some of whom finance their activities by smuggling opium.
The state’s attempts at economic reform have also proven disastrous. In November, 1985, in an effort to curb the increasingly powerful black-market economy, the government ordered all Burmese to exchange their money for new currency—to a limit of 25 per cent of a person’s holdings until the money was proven to have come from legal sources. The government’s intention was to prevent laundering of black-market money and render it worthless. But the move had adverse effects for many ordinary Burmese, whose carefully saved nest eggs from dabbling in the black market were suddenly worthless. Still, some Burmese have developed a bitter sense of humor. One man said in an interview that he had burned his own surplus of 20,000 kyat. “At least I used the money to keep me warm,” he said.
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