Myanmar President announces economic reforms

Myanmar President announces economic reforms

President Thein Sein of Myanmar announced a “second wave of reforms” on Tuesday aimed at rolling back decades of state control over the country’s sheltered and dysfunctional economy. The changes seek to improve public welfare, he said in a nationally televised address.

In his 15 months in power, Mr. Thein Sein has focused on political reconciliation, including peace talks with ethnic minorities and détente with the democracy movement led by Daw Aung San Suu Kyi. But few tangible changes have been made to the country’s economy, which has stagnated for decades despite the dynamism of neighboring countries like China and Thailand.

Mr. Thein Sein’s speech, delivered as a sort of state of the nation address, appeared to reflect confidence that he could confront vested interests in the country, including businesses that could suffer in a more liberalized and competitive environment.

He vowed to reduce the state’s role in an ambitious list of sectors: education, energy, forestry, health care, finance and telecommunications.

He also appeared to signal a desire for more foreign participation in the economy, saying that alleviating poverty would require “international grants, aid, loans and technical expertise.”

Largely because of state control, cellphones remain prohibitively expensive for most of the country’s 55 million people, and the banking system, largely based on cash transactions, is primitive. The country has no lending for terms longer than one year, and no home mortgages, said Sean Turnell, an expert on Myanmar’s economy at Macquarie University in Sydney, Australia.

“Economic reform has really lagged political reform,” Mr. Turnell said. The program announced on Tuesday may help “convince the average person that they will benefit,” he said.

Mr. Turnell, who recently returned from Myanmar with an Australian business delegation, said the government should seek to avoid the pitfalls of the Arab Spring, in which “there was no dividend for the average person.”

Mr. Thein Sein has sought to reconcile with the democracy movement, but he is also competing with Ms. Aung San Suu Kyi for the hearts and minds of citizens. This mix of partner and adversary has caused frictions in recent weeks, with Ms. Aung San Suu Kyi stealing the spotlight during her trips abroad. On Tuesday, she arrived in London, where she was greeted with a rapturous welcome, as she was in the other European cities she visited in recent days.

Two years ago, during the military junta’s reign, Myanmar secretly privatized industries and sold off state property, a process that benefited tycoons and other people linked to the military. Mr. Thein Sein on Tuesday signaled a more open procedure for the wider category of assets under consideration. A foreign investment law will be passed during the next session of Parliament, scheduled to begin next month, Mr. Thein Sein said.

The government’s reforms — including freedom for hundreds of political prisoners, the loosening of news media controls and gestures of reconciliation toward Ms. Aung San Suu Kyi — have persuaded Western countries to suspend or rescind sanctions imposed on the country. Australia has lifted all of its sanctions, and Secretary of State Hillary Rodham Clinton recently encouraged United States companies to invest.

Icons of American capitalism like Coca-Cola and General Electric have announced plans to do business in the country.

While shifting his focus toward the economy, Mr. Thein Sein said he would continue to work on “national reconciliation, national peace and stability and the rule of law, and the safety of the public.”

The government has signed cease-fire agreements with a handful of ethnic groups, but a comprehensive peace remains elusive. Fighting continues between government troops and ethnic Kachin rebels along the border with China, and sectarian riots have killed 50 people and displaced about 30,000 in western Myanmar along the border with Bangladesh.

A court in Rakhine State, a scene of sectarian fighting, sentenced two Muslim men to death on Monday for the rape and murder of a Buddhist woman, an event that appeared to have incited the violence.

The New York Times