Burma Should Prioritize Agricultural Reforms, Says Retired Official

By Thit Nay Moe 10 June 2014

RANGOON — Thein Swe is a retired director of the foreign economic relations department at Burma’s Ministry of Planning and Finance who once served as an associate executive director at the World Bank.

He also lectured at Payap University in Thailand in international studies, and currently works as a consultant and technical assistance coordinator for the Asian Development Bank (ADB).

In an interview with The Irrawaddy’s economics reporter Thit Nay Moe, he said he thinks the agricultural sector should be prioritized in Burma’s ongoing economic reforms.

Question: The current Burmese government has been instituting reforms, but changes in the agricultural sector appear to be few, would you agree?

Answer: That’s right. Despite a lot of talk about small and medium-sized enterprises, the reform process can only really benefit the general public if it includes agriculture. The economy should be upgraded focusing on reforms in the agricultural sector, which employs 70 percent of the whole population. As long as we don’t address this sector, the reforms will not succeed.

Q: Burma is no longer a top rice-exporting country, while the extractives sector has risen. What’s your opinion on this?

A: According to the statistics of the World Bank, the percentage of GDP from agricultural products decreased from 57.3 percent to 30.4 percent between 1990 and 2010. In the industrial sector, 7.9 percent has increased to 20.3 percent in the same period, and in the services sector, the share has gone from 7.2 percent to 19.5 percent.

So, the waning of the agricultural sector compared to the industrial sector seems to be true. Theoretically, the decrease of the agricultural sector and the rise of mechanized farming will bring farmers into factories in urban areas. But, here in Burma, there is also the rise in the extraction of natural resources like petroleum and natural gas at the same time as the fall in the value of agricultural products. Selling off resources may lead to failure because, in the long term, these natural resources are not renewable and may one day run out.

In most countries, a reform process is done systematically, step by step: agriculture, then industrialization and then service provision. In this process, basic agricultural production must rise in both quality and quantity before it leads to industrialization. But here, the agricultural sector has decreased, and while our rice is still top quality, we are not exporting as much as we used to.

Monetary institutions like the World Band and the ADB have come to Burma, but they have not provided effective assistance to the agricultural sector, while just focusing on sectors that are less difficult. Most of the assistance is focused on energy or electricity. They are also important sectors, but the possession of land for farmers, production and distribution of good quality crops and the free growth of a market for crops are more critical. The government needs to prioritize this. It is critical to create job opportunities for our citizens, without only making jobs in urban areas or having people go abroad.

In the reform process, laws proving for the possession of land should be accurate and justifiable. If good and fair management cannot be implemented or if good reforms in the agricultural sector are not done, undesirable results will follow.

Q: What reforms does Burma need make in order to compete in with other countries in the region?

A: From the start, agriculture is the first step to take prior to industrialization. Gradually, the quality of products will rise and a surplus workforce will move to urban areas. One worrisome issue is the “Middle Income Trap,” which threatens mid-developed countries. Currently in Thailand, workers’ incomes have increased but the quality of the products has not, leading to less buying in the market. Income and the quality of products should be counterbalanced.

Singapore, on the other hand, is enjoying the fruit of producing electronic devices. Thailand and Vietnam cannot compare with Singapore in such businesses, producing mostly rice and rubber. This situation is not good enough, they have to go forward to industrialization and Burma should also take this into consideration.

Q: In which sectors should Burma use international assistance?

A: The World Bank and the ADB have provided loans for projects like electricity and road construction, which make sense and can be completed quickly. But to eliminate poverty, the World Bank should provide techniques and supervision on how to make quality tea leafs and how to get high-quality fertilizers to tea leaf farmers, but instead, with the involvement of cronies, road and school construction has been implemented, benefiting cement and tar dealers. Locals are still poor and it is ineffective.