burmese economics

extracts from a great UPI column article:

If you are among those fretting about the global financial slump that has taken up so much news time in recent days, spare a thought for the people in Burma. On Aug. 15 the military regime there, which holds a monopoly on the sale of vehicle and generator fuels, multiplied prices without prior announcement. The cost of diesel was doubled. Ordinary petroleum was raised by two-thirds. Compressed natural gas was increased five-fold.

A lot of buses just didn't run that day. Where they did, fares were immediately increased in line with the new tariffs. Millions of folk who ordinarily venture out with just enough money to arrive at work or school and perhaps get back again were left with a stark alternative: go home or walk...

When asked about the unexpected hike, economists were at a loss. Some put it down to sheer incompetence. Most pointed out that it will obviously affect other basic commodities; and jumps in rice, oil and salt prices have already been confirmed. An analyst in Bangkok said the move was in the opposite direction to the rest of the world, and didn't make sense given that Burma exports natural gas.

Economists cannot and will not be able to explain adequately what happened last Wednesday because their science is rational. It attributes a type of reasoning to the making of choices that is largely absent from policymaking in Burma.

In fact, this absence has characterized the behavior of the state there throughout its modern history... A banknote anywhere is a slip of paper. Unlike a coin, it has no intrinsic worth. It obtains value from the promise of an issuing agency to pay the amount shown on its face, which is made legally binding by a signature, seal or other acknowledgement of an authorized representative. Money in Burma has none of these features. It consists of no more than a number and design, not even the state seal. The central bank offers no guarantee to the user of any sort. Its notes are literally just slips of paper.

The regime prints currency that has no legal underpinning because it has no sense of liability toward anyone other than is necessary to protect the personal affairs of its senior members. The notion of a social contract--be it in the European tradition of Rousseau or in the much older Buddhist notion of the original ruler, the Mahajana Sammata--is what above all is missing from its outlook.

Unlike other Asian ruling groups, the army in Burma has refused to accommodate the interests of those from outside its own circle. Successive ruling cliques have, in the words of historian Mary Callahan, "been made up of war fighters who never mastered the art of politics." In contrast to the generals in Thailand and Indonesia, who have sought to recast themselves as soldiers-cum-politicians, they have for the most part had neither the talent nor propensity to be anything other than soldiers. And soldiers find it easier to make enemies than citizens...