Asia’s middle class swells, Burma left behind

Asia’s middle class “is rapidly increasing its size”, according to an Asian Development Bank (ADB) report that analysts have criticised for omitting the issue of mass economic stagnation in Burma.

An annual report published by the Bank includes a chapter on ‘The Rise of Asia’s Middle Class’, which claims that poverty reduction and economic growth across the continent over the past two decades has pushed more households into the middle class.

It defines middle class “as those consuming between US$2 and US$20 per day”, and adds that the middle class population had risen from a fifth of Asia’s total in 1990 to 56 percent in 2008.  “Through its sheer size and dynamism, [the rising middle class] will present a huge opportunity for the region and for the world,” it said.

Asia is the world’s largest and most populous continent, and its traditional boundaries stretch from the Red Sea to Japan, and China to Indonesia. But within this huge landmass, home to more than four million people – around 60 percent of the world’s total population – is Burma, which according to Australia-based economist, Sean Turnell, “doesn’t fit in [to the report’s findings] at all”.

“This is all based around the narrative that somehow business and economic openings will generate a middle class and space for activity, and demand of more property rights,” he told DVB.

“But if you look at Burma it doesn’t follow the standard Southeast Asia package – it doesn’t have the export-oriented manufacturing firms that were the recipients of aid budgets in South Korea and Thailand and Hong Kong, etc.”

Burma remains one of Asia’s poorest countries, with average annual salaries at little more than US$200 per person. The CIA World Factbook ranks Burma 174 out of 191 countries in GDP per capita – aside from Afghanistan, which ranks at 185, it is the only country outside of Africa to feature in the bottom 21.

Around Burma, however, a number of neighbouring economies have swelled, making the pariah’s condition all the more stark. China is recording the world’s fourth fastest economic growth rates, while four East Asian countries – South Korea, Taiwan, Singapore and Hong Kong – were awarded the title of ‘tiger economies’ after maintaining exceptionally high growth rates and rapid industrialisation between the early 1960s and 1990s.

India’s economy is also boasting growth rates of more than seven percent, and is hungrily eyeing Burma’s lucrative gas sector to feed its swelling population. But despite substantial energy reserves in Burma, the country is still crippled by cronyism and corruption that has seen multi-billion dollar foreign investments disappear into overseas accounts or the military, an apparent waste given that Burma has no external enemies.

“What we’re really dealing with [in Burma] is overt criminal enterprises, such as drugs trade and firms whose whole raison d’etre depends on rent-seeking,” said Turnell. “[These companies are] about getting the import concessions against the regime’s restrictions, not about getting special access to exports.”

Burmese civilians are acutely distrustful of the banking sector, which is famed for money laundering enterprises and cash deposits from the country’s sizeable drugs export market, and instead tend to horde money and gold. The issue of land rights is also highly contentious, with the army frequently appropriating farmland and property left at the mercy of corrupt local officials.

“The whole issue of property rights is massive, and you need [these rights] – no one is going to invest in productive enterprise in Burma when you face the situation that your productive assets could at anytime be taken over by the local authorities or the regional [military] commander or whatever, or if the rules suddenly change,” Turnell said.

The elections slated for 7 November appear set to cement military rule and the status quo in Burma, with the military apparently eyeing a long future after selling off swathes of previously state-owned enterprise to its close friends.

“Privatisation enshrines the present status quo,” added Turnell. “It’s the people with power and connections who’ve benefitted, and we’ve not seen a parcelling out of Burma’s profitable assets to people outside of the system.”

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