JOSEPH STIGLITZ: Myanmar in transition needs the world’s support

‘Whenever we impose sanctions, we need to think about who bears the burden in bringing about changes’

JOSEPH STIGLITZ

Published: 2012/03/09 07:37:53 AM

Joseph Stiglitz. Picture: SUNDAY TIMES

HERE in Myanmar, where political change has been numbingly slow for half a century, a new leadership is trying to embrace rapid transition from within.
The government has freed political prisoners, held elections, begun economic reform and is intensively courting foreign investment.



The international community, which has long punished Myanmar’s authoritarian regime with sanctions, remains cautious. Reforms are being introduced so fast that even experts on the country are uncertain about what to make of them. But it is clear that this moment in Myanmar’s history represents a real opportunity for permanent change. It is time for the world to move the agenda for Myanmar forward, not just by offering assistance but by removing the sanctions that have now become an impediment to the country’s transformation.



So far, that transformation, initiated following legislative elections in November 2010, has been breathtaking. With the military, which had held exclusive power from 1962, retaining 25% of the seats, there was fear that the election would be a fac ade. But the government that emerged has turned out to reflect the concerns of Myanmar’s citizens far better than was expected.



Under the leadership of the new president, Thein Sein, the authorities have responded to calls for a political and economic opening. Progress has been made on peace agreements with ethnic-minority insurgents — conflicts rooted in the divide-and-rule strategy of colonialism. Nobel laureate Aung San Suu Kyi was not only released from house arrest but is now campaigning for a parliamentary seat in April’s by-elections.



On the economic front, unprecedented transparency has been introduced into the budgetary process. Spending on healthcare and education has been doubled, albeit from a low base. Licensing restrictions in a number of key areas have been loosened. The government has even committed itself to moving towards unifying its complicated exchange-rate system.



Most citizens sense that if changes are managed well, the country will have embarked on an irreversible course.



In February, I participated in seminars in Yangon and the recently constructed capital, Naypyidaw, organised by one of the country’s leading economists, U Myint. The events were momentous, owing to large and actively engaged audiences, and to the thoughtful and moving presentations by two world-famous Burmese economists who had left the country in the 1960s and were back for their first visit in more than 40 years. One of them, 91-year-old Hla Myint, who held a professorship at the London School of Economics, was the father of the most successful development strategy ever devised, that of an open economy and export-led growth. That blueprint has been used throughout Asia in recent decades, most notably in China. Now, perhaps, it has finally come home.



I delivered a lecture in Myanmar in December 2009. At that time, one had to be careful even about how one framed the country’s problems — its poverty, lack of rural productivity and unskilled workforce. Now caution has been replaced by a sense of urgency in dealing with these and other challenges and by awareness of the need for technical and other forms of assistance.



There is much debate about what explains the rapidity of Myanmar’s current pace of change. Perhaps its leaders recognised that the country, once the world’s largest rice exporter, was falling far behind its neighbours. Perhaps they heard the message of the "Arab Spring", or simply understood that, with more than 3-million citizens living abroad, it was impossible to isolate the country from the rest of the world. Whatever the reason, change is occurring, and the opportunity it represents is undeniable.



But many of the international sanctions, whatever their role in the past, now seem counterproductive. Financial sanctions discourage the development of a modern and transparent financial system, integrated with the rest of the world. The resulting cash-based economy is an invitation to corruption. Likewise, restrictions that prevent socially responsible companies based in advanced industrial countries from doing business in Myanmar have left the field open to less scrupulous firms.



Whenever we withhold assistance or impose sanctions, we need to think carefully about who bears the burden in bringing about the changes that we seek. The wealthy and powerful can circumvent financial sanctions, though at a cost; ordinary citizens cannot so easily escape the effects of international pariah status.



We have seen the "Arab Spring" blossom haltingly in a few countries; in others, it is still uncertain whether it will bear fruit.




Myanmar’s transition is in some ways quieter but it is no less real — and no less deserving of support. © Project Syndicate, 2012. www.project-syndicate.org



• Stiglitz is a Nobel laureate in economics.

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