"Dramatic reforms are happening, and more are inevitable."
Not as much as you might think.Naypyidaw has taken some important steps to liberalize the economy, such as exchange rate reforms and loosening import regulations. But on the whole, it's the political reforms that have been more dramatic. New legislation on the economy has left much to be desired.
The battle over the economy is not between "hardliners" and "reformers." Very few people in Burma, even those that benefited from the previous system, look back on the past with nostalgia. Instead, the conflict is over the shape of the new economic order. On one side are businesses that would benefit from opening up to international markets, and consumers who have long been limited to overpriced and substandard goods. On the other are those who built their businesses under the previous economic order, and who could lose them if the country opens up too much or too quickly. The battle isn't over whether to reform but how to do it and who will benefit.
The debate over a new foreign investment law, which was passed earlier this month by parliament but appears unlikely to be approved by President Thein Sein, shows the contending forces at work. As part of the government's bid to attract foreign investment quickly and in large amounts, preliminary drafts of the law contained numerous concessions. As debate progressed, local businesses pushed back. They demanded numerous restrictions, including a $5 million minimum for investors, restrictions on "low technology industries," and a limit of 49 percent ownership for many foreign partners in joint ventures. The final version of the law represented a hard-fought compromise that met with little approval from foreign investors.
Missing from the agenda are some of the most urgently needed economic reforms, especially in agriculture, where 70 percent of Burma's people work. Two of the most prominent agricultural reforms, both relating to land, have been widely criticized for facilitating corporate land grabs and creating politicized land management committees. This legislation has done to little help Burma's average farmers.
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