Wednesday, October 03, 2007

Oil, economics and Burma

I have talked before about the impact of the household economy on election outcomes, now I’ve been surprised to find the same underlying issue as a trigger for the protests in Burma.

Bear in mind, the heavy handed military dictatorship has been in place since 1962, with a handful of violent protest suppressions in that time. What has been emerging over the past few is that the latest wave or protests began after the Burmese government removed fuel subsidies.

Burma is rich in natural recourses, including oil. Both China and India are hungry for the oil part of the deal, giving the junta their only external support, albeit a powerful one. But despite the resource wealth Burma is an economic basket case.

Although Burma exports natural gas and crude oil, the country lacks the capacity to refine them. Rising prices are the key force driving opposition protests, and the reduction in fuel subsidies has exacerbated the situation.

“Higher diesel prices have raised the cost of everything from commuting to work to transporting livestock and agricultural produce to market -- a significant burden in a country where the U.N. estimates the per capita income at $200 a year.” WSJ

The only bright spot for the future is China’s current need to court world opinion, which could lead to a rift in their support for the junta. It shouldn’t be such a great risk in the medium term. Under a civilian administration Burma would still need to sell its oil and other resources, and China could put themselves in the box seat by helping to end the military dictatorship.


Free Burma! said...

Free Burma!
International Bloggers' Day for Burma on the 4th of October

International bloggers are preparing an action to support the peaceful revolution in Burma. We want to set a sign for freedom and show our sympathy for these people who are fighting their cruel regime without weapons. These Bloggers are planning to refrain from posting to their blogs on October 4 and just put up one Banner then, underlined with the words „Free Burma!“.

enigma4ever said...

I wish that would happen...about China...but I don't know if it will or would...

Cartledge said...

China is the only country with any real influence on Burma. China is, increasingly, a different animal, relying more on world opinion to ensure their economic drive.
They have little to lose and a lot to gain by moving on the military junta.