"Reforms will help reduce poverty and bring broad-based economic development."
Wrong. That the current economic reform program will bring broad-based development is the greatest myth of them all. The reforms to date are a mixed bag, with positive ones such as currency liberalization mixed with poorly designed moves like the new land laws. Reforms of limited benefit for broad-based development, such as the new laws on foreign direct investment or Special Economic Zones (SEZ), are crowding out debate on more important issues.
Burma's leaders have yet to adequately address the most pressing concern for the countryside, which is that most farmers, in this overwhelmingly rural country, can't make money farming. The cost of inputs has risen with inflation while prices have dropped due to an appreciating exchange rate. The result is widespread indebtedness. The public goods needed to improve productivity and farm gate prices, such as good roads, ports, irrigation, and communication, are lacking. Instead of fixing the core problems, the government is allowing elites to set the agenda. Contract farming is on the rise, which allows companies with privileged access to lend credit and inputs to farmers, who have no recourse to any alternatives. The fact that some agricultural businesses reap big profits while farmer's lose money vividly illustrates the distortions that affect Burma's economy.
Fixing the problems of the rural economy requires a long-term strategy to increase worker productivity, build a viable manufacturing sector, and direct resource revenues into productive investments (especially infrastructure). This should not entail offering foreign investors myriad tax breaks, which will only starve the government of revenue. Broad-based development will come only by understanding and addressing the problems that affect Burma's masses. There's still a very long way to go.
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