By Amy Kazmin
Financial Times- October 23 2002
In Rangoon, it is often said that the long-suffering Burmese people can
bear almost any hardship, as long as they still have enough rice to eat.
Such endurance stems from an acute awareness of the price to be paid for open
expression of discontent. In 1988, the army slaughtered thousands of
pro-democracy protesters, who took to the streets after months of skyrocketing
food prices and shortages.But 14 years on, Burmese patience again appears to
be wearing thin, as the spiralling price of rice, cooking oil, and medicine
puts basic necessities out of the reach of many common people, including the
country's growing number of landless labourers and urban poor.
Since last October, the price of a 46lb (20kg) bag of low-grade rice - the
most commonly eaten in Burma - has risen more than 200 per cent - from Kt1,470
(£0.76) to Kt 4,480, straining even middle-class pocketbooks in a country
where the average monthly government salary is just Kt 13,000.
Prices of other essentials have also risen significantly - thought not as fast
as rice - driven by Burma's persistent inflation, due to the junta's reliance
on printing money to cover chronic budget deficits.
With most Burmese spending around 70 per cent of their household income on
food, there are signs of growing public frustration at the lack of affordable
Western diplomats say they have received reports of mobs attacking a rice
storage warehouse in the Mudon district in Mon state and in several other
rural provinces, though such incidents are nearly impossible to verify due to
the tight control of information and the movement of foreign observers.
Residents of the normally tranquil capital have been unnerved by an
unprecedented crime wave, including a rash of break-ins and daytime muggings
of pedestrians, a development that many link to increasing public
desperation.As a hedge against further price increases, speculators - and many
people with a bit of cash to spare - are hoarding rice, which has made it even
tougher for the rest to meet their daily needs.
One western diplomat said everybody was expecting a shortage in November at
the next harvest. "That is leading to people speculating on rice."
Burma was once the rice bowl of Indochina, exporting as much as 3m tons of
rice a year in the decades before and after the second world war. But rural
conditions have deteriorated sharply since then, as a result of
under-investment in agriculture and misguided policies that have worsened soil
degradation and imposed punitive tax burdens on small farmers.
In a drive to boost rice production, Burma's military regime requires farmers
in the fertile delta region to grow two, and sometimes three, rice crops a
year, breaking from their traditional pattern of alternating rice in the wet
season with nitrogen-fixing legumes - which help rehabilitate the soil - in
the dry season.
At the same time, though, fertiliser use has plummeted - to almost none -
since few farmers can afford the expensive imports.In the absence of
fertiliser, and since irrigation and drainage systems are weak, the
intensifying cultivation has led to a sharp increase in soil salinity and
acidity - and worrying declines in rice yields.
Rural incomes are also under pressure from the junta's mandatory rice
procurement, which forces farmers to turn over a fixed amount of paddy each
year at less than half the market price. The cash-strapped regime then
distributes that rice to favoured groups - state employees and the army - and
uses it to barter for essential imports, like oil.
The annual procurement quota is based not on farmers' actual production, but
rather on what the junta estimates production should be. Farmers who fail to
meet the requirement are jailed, which forces families to scramble to secure
the required paddy at high prices in the market if their own production falls
Diplomats say that distressed farmers this year resisted the extraction of
their crops and local rice traders say the government failed to meet its
intended procurement target.
Burma's junta is acutely sensitive to the political implications of rice
prices, which it considers a matter of national security. With the stocks that
it has available, the government has begun to distribute subsidised rice -
particularly in urban areas - though people who wish to buy it must wait in
lengthy queues to buy tiny quantities.
But analysts said the government did not appear to have enough grain reserves
to quell the surging prices as they had done in the past by making more rice
available in the market.
Instead, the government appears to be waiting for what it hopes will be a
bountiful harvest.If the harvest disappoints, however, tensions are likely to
intensify. That concern is creating acute anxiety in Rangoon, where people are
already whispering about the potential for unrest if economic pressures do not
One Rangoon-based analyst said: "People have been wondering when is the
breaking point, and it does seem increasingly that there are certain areas
where we have reached the breaking point. There are all these little outbreaks
suggesting that we really are getting to the line here."
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