Not Financing Health and Aid for the Reconstruction of 'Hospitals' and 'Clinics'

In response to the destruction the regime has called for more than $US10.7 billion for reconstruction, of which $US42.52 million is for the reconstruction of the 110 hospitals and 288 rural health clinics destroyed or damaged. Burma, despite being a very poor country has an enormous amount of government provided hospitals and health clinics. In fact prior to the cyclone there were 839 hospitals, 1473 rural health clinics, 86 primary and secondary health centres, 348 maternal and child health centers, 14 traditional medicine hospitals and 237 traditional medicine clinics. This is quite remarkable, especially since the government spends considerably less than the other ASEAN governments on healthcare on a per capita basis. The regime in 2006 spent only nine cents per person, which compares with the government of Laos that managed to spend $US1.91. If expenditure on social security is not excluded then the Laos government would have spent around $US15, compared with Burma’s $US0.15.

ASEAN GOVERNMENT EXPENDITURE ON HEALTH 2006
	% Government Health Expenditure Financed by Aid	Government Expenditure without Aid/ Total Health Expenditure (%)	Per Capita Government Expenditure without Aid & Social Security Expenditure $US
Burma	82.03	3.0	0.09
Cambodia	41.30	15.3	4.59
Indonesia	2.24	49.29	12.54
Laos	41.3	21.04	1.91
Malaysia	0.0	45.2	114.33
Philippines	5.46	37.44	12.01
Singapore	0.0	45.2	288.72
Thailand	0.0	64.4	63.71
Vietnam	6.33	30.32	8.17

In total the regime in 2006 spent only $US4.6 million dollars on healthcare, which means that if nothing was spent on administration, officialdom and all the revenue was distributed (an unlikely scenario) then each government hospital and clinic in the country received from the ‘government’ on average about $US1,500. This includes the salaries of any doctors, nurses and all other staff. This paltry sum might go someway towards explaining the near absence of beds, sheets, clothes, medical equipment and drugs within the government hospitals and clinics. Burma might have lots of hospitals and clinics, but there is nothing in most of them.

This paltry allocation of resources to a system that is nearly all empty buildings is from a ‘government’ that earns around $US100m each month in revenue from its gas sales to Thailand. Theoretically, the regime could increase the country’s aggregate expenditure on healthcare by nearly 50 percent, if it bothered to allocate to healthcare, only one month of the revenue its receives from gas sales. Mind you the revenue does not end up in the government’s budget. Instead, the money from gas sales disappears into the private bank accounts of the generals or is wasted on totalitarian extravagances such as the building of a new capital city, purchasing nuclear reactors (for medical research) and weaponry for an army whose enemy is its population.

Moreover, the people of Burma can not afford to use the large number of buildings that constitute the health infrastructure of Burma with the lowest per capita expenditure on healthcare, at $US4, of the ASEAN countries. The people of Laos have the second lowest per capita expenditure on healthcare, though it much higher than the people of Burma, at around $US22. Burma’s per capita expenditure compares even more poorly with Cambodia, Indonesia and the Philippines, whose per capita expenditure on healthcare are around $US30, $US34 and $US45, respectively.

TOTAL EXPENDITURE ON HEALTH 2006
	Per Capita Expenditure $US
Burma	$US4
Cambodia	$US30
Indonesia	$US34
Laos	$US22
Malaysia	$US255
Philippines	$US45
Singapore	$US1035
Thailand	$US113
Vietnam	$US46

Source: www.who.int/nha/en/

Giving the regime money to build new hospitals and clinics, even if they were to be built is simply a waste of resources. There are already too many empty hospitals and clinics. More buildings are not needed. Rather the people of Burma need a health system that is properly financed and administered. Presently the country has neither, and simply throwing resources at the regime to erect more empty hospitals and clinics will only contribute to a mentality that sees infrastructure building as equivalent to the provision of healthcare.

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Than Shwe giving more useless advice, this time to the doctors

GENERALS AS THE AXE HANDLES OF

THE NEO-COLONALISTS:

Revisiting the Financing Health in Burma

Burma comes last again in a game that most in the country don’t want to play. A re-examination of the financing of healthcare shows that Burma has the lowest per capita expenditure on healthcare in ASEAN at only $US4. This means that a country with an estimated population of 55 million spends in aggregate around $US220 million each year on healthcare. This very low expenditure is coupled with a ‘government’ that only bothers to spend around nine cents a year on the health of each person in the country. This is from a ‘government’ that earns around $US100m each month in revenue from its gas sales to Thailand. Theoretically, the ‘government’ could increase the country’s aggregate expenditure on healthcare by nearly 50 percent if it allocated only month of this revenue to health. The expenditure on healthcare in Burma is primarily very low because the country is so poor due to economic mismanagement, and because the government is utterly negligent, utilizing the apparatus of the state to further private returns, rather than enhancing the public good. In spite of its xenophobic, nationalist, self-sufficiency rhetoric, its healthcare system (if that’s what it can be called) is propped-up by foreign funds. Burma’s public healthcare system is more reliant on foreign funds than any other country in ASEAN. The situation regarding the financing of health in Burma is not only appalling in absolute terms, but on all reasonable measures is behind all the other ASEAN countries.

Lowest Per Capita Expenditure on Health

The people of Burma have by far the lowest per capita expenditure on health of the ASEAN grouping, at a very low $US4 according to WHO’s national health accounts.¹ The WHO in its 2006 World Health Report seemingly provides quite a different picture of per capita expenditure, reported as being between $US134 and $US394 between 1999 and 2003. This is because the regime’s kyat figures were converted into $US at the official exchange of K6/$US, rather than the market exchange rate. When these figures are adjusted at the market exchange rate, per capita expenditure is around $US1-2.30, somewhat similar to figures reported elsewhere.²

The very low per capita expenditure in Burma compares with Laos, whose per capita expenditure is the second lowest of the ASEAN countries, at around $US22 per capita. Burma’s per capita expenditure compares even more poorly with Cambodia, Indonesia and the Philippines, whose per capita expenditure on healthcare are around $US30, $US34 and $US45, respectively.

TOTAL EXPENDITURE ON HEALTH 2006
	Per Capita Expenditure $US	Expenditure % GDP
Burma	$US4	2.3%
Cambodia	$US30	6.0%
Indonesia	$US34	2.2%
Laos	$US22	3.6%
Malaysia	$US255	4.3%
Philippines	$US45	3.3%
Singapore	$US1035	3.4%
Thailand	$US113	3.5%
Vietnam	$US46	6.6%

Source: www.who.int/nha/en/

Burma’s low per capita expenditure is reflected in a related figure – the percentage of GDP expended on health. Burma allocates around 2.3 percent of its GDP to healthcare. This is similar to the percentage of GDP allocated in Indonesia, except in Indonesia per capita expenditure is $US34, compared with Burma’s $US4. This illustrates the relationship between economic performance and health expenditure. It is Burma’s very poor economic record that is mostly to blame for the countries appalling low per capita healthcare expenditure.

PRIVATE EXPENDITURE ON HEALTH 2006 (%)
	Private Exp/Total Health Expenditure	NGO Exp/Private Health Expenditure	Local Private Exp/Total Health Expenditure
Burma	83.2	0.20	83.198
Cambodia	73.9	15.61	73.78
Indonesia	49.6	2.30	48.454
Laos	79.2	5.95	74.486
Malaysia	54.8	0.067 (0.52)3	54.797
Philippines	60.4	1.94	60.388
Singapore	66.4	0.00	66.4
Thailand	35.6	0.88 (1.22)	35.596
Vietnam	67.6	0.27	67.597

Source: www.who.int/nha/en/

The Philippines is the runner-up with 3.3 percent of GDP allocated to healthcare, though per capita expenditure on health is much larger at $US45, again due to better economic performance. And the Philippines is hardly an economic success story. Laos, Thailand, Malaysia, and Singapore allocate between 3 and 4 percent of GDP to healthcare, though the per capita expenditure varies greatly between $US22 and $US994. Both Cambodia and Vietnam allocate a greater proportion of their GDP to health, at around 6 percent each.

Not all private health expenditure comes from local sources, as some proportion is provided by NGOs that obtain their funds outside the country. Most of this expenditure is foreign aid is channeled through NGOs, typically to bypass the local government. Cambodia with NGOs providing 16 percent of private expenditure on healthcare is the only country where NGOs contribute a significant percentage to a healthcare system in ASEAN. In Laos, NGOs provide nearly 6 percent of private health expenditure. NGOs provide even a smaller proportion of private healthcare expenditure in the Philippines and Indonesia at around 2 percent. Surprisingly given the rhetoric of those supporting aid to Burma, most (recorded) aid funds are not channeled via NGOs, recorded as only 0.2 percent of private healthcare expenditure, a similar proportion as that provided in Thailand and Vietnam. In fact, as discussed below most aid funds are channeled via the regime.

Importance of Private Expenditure on Healthcare

The very poor economic policies of the regime are prime reason for the low per capita expenditure on healthcare in Burma. Healthcare for most people in most countries is substantially funded by private expenditure, whether through private health insurance or by simply purchasing healthcare when the need arises. This means that the GDP/capita is an important determinant of the amount that individuals and families can spend on their own health. Since, the economy in Burma is so moribund people on average can only afford to spend around $US3.32 each on healthcare. The ineptitude of the regime in terms of economic management is responsible for such a dismal figure.

Not only is the amount spent on healthcare very small in Burma, but people in Burma have to provide the highest percentage of their healthcare from their own pockets, with personal private expenditure in 2006 accounting for nearly 83.4 percent of total health expenditure. This compares with Laos and Cambodia, where personal private expenditure accounted for around 74% of total health expenditure. Third place went to Vietnam with individuals and families providing around 67 percent of the country’s expenditure of healthcare. Whereas, people in Indonesia only provide around 48 percent of healthcare expenditure; whilst in Thailand only 35 percent of expenditure came directly from personal expenditure.⁴ Note that Cambodians, Laotians, Indonesians, Thais and Vietnamese not only provide a smaller proportion of the funds for their healthcare, but are also able to spend significantly more than their Burmese counterparts.

As the institutional framework in Burma is so poor, private health insurance does not exist. Cambodia is the only other ASEAN country sharing the stage with Burma in this regard. Private health insurance, though typically only available to the wealthy and middle class in poor countries is nevertheless an important component of private health expenditure, as it provides a safety net, especially when the state is remiss. Of those countries with private health insurance Vietnam and Indonesia have the lowest proportion of private health expenditure covered by private insurance at 3 and 5 percent, respectively. Private health insurance in the Philippines and Laos accounts for 10 percent of private expenditure on health. Malaysia and Thailand with better institutional structures have created a system where private health insurance accounts for 14 percent of private expenditure on health. Hence, even the middle class (as small as it is) in Burma have to fund all their expenditure on healthcare out of their pocket, when any emergency arises.

SPDC Spends Nothing on Healthcare

Burma’s state managed healthcare system contributes around 17 percent of the country’s total health expenditure, which is a smaller percentage than any of the other countries in ASEAN. Even the Laos and Cambodian state managed healthcare systems contribute more, providing around 21 and 26 percent of the country’s healthcare expenditure, respectively. This spending is even much less than the other poor countries in ASEAN with the governments of Vietnam, Philippines and Indonesia contributing 32, 40 and 50 percent, respectively.

However, these figures do not reflect the state’s contribution to their own healthcare system, as they include aid funds (or loans) channeled via the state. In the case of Burma, aid provides 82 percent of the regime’s expenditure on healthcare, which mean that the ‘government’ provides only 3.0 percent of the country’s healthcare expenditure. The proportion of funds provided by foreign donors to the state’s health system is considerably higher than that provided to any other of the governments in ASEAN. Foreign donors only provide the state managed healthcare system in Cambodian and Laos with 40 percent of their expenditure, whilst the Philippines and the Vietnamese public healthcare systems receive only 5 percent of their funds from foreign donors.

GOVERNMENT EXPENDITURE ON HEALTH 2006
	Total Govt. Health Exp/Total Health Expend (%)	% Govt. Health Exp Financed by Aid	Govt. Exp Minus Aid/ Total Health Exp (%)
Burma	16.77	82.03	3.0
Cambodia	26.1	41.30	15.3
Indonesia	50.4	2.24	49.29
Laos	20.8	41.3	21.04
Malaysia	45.2	0.0	45.2
Philippines	39.6	5.46	37.44
Singapore	45.2	0.0	45.2
Thailand	64.4	0.0	64.4
Vietnam	32.4	6.33	30.32

Source: www.who.int/nha

The lack of healthcare expenditure by the state again differentiates Burma from the other ASEAN countries, as all the other governments contribute some funds to providing healthcare for their citizens. The winning place is accorded to a ‘government’, (not an appropriate term for SPDC) that has the money to spend on healthcare and other services, accumulating around $US100m each month from the sales of the country’s gas reserves.

GOVERNMENT EXPENDITURE ON HEALTH 2006
	% Govt. Health Exp to Social Security	Govt. Exp Minus Aid & Social Security/ Total Health Exp (%)	Per Capita Govt Exp. Minus Aid & Social Security Exp $US
Burma	8.88	2.2	$US 0.09
Cambodia	0.00	15.3	$US 4.59
Indonesia	21.57	36.87	$US 12.54
Laos	23.65	0.087	$US 1.91
Malaysia	0.84	44.84	$US 114.33
Philippines	28.72	26.69	$US 12.01
Singapore	17.11	27.9	$US 288.72
Thailand	12.44	56.38	$US 63.71
Vietnam	63.47	17.75	$US 8.17

Source: www.who.int/nha

Some of the governments in ASEAN allocate a sizeable proportion of their healthcare expenditure to social security, typically to public servants and war veterans.⁵ As this expenditure is typically centred on a small proportion of the population these funds are also deducted from each government’s expenditure on healthcare in order to provide a better understanding of the size of the expenditure on the majority of the population.⁶ In this regard, Burma’s regime allocates less than 10 percent of government health expenditure to social security, a smaller proportion than other governments in ASEAN. The highest proportion of government health expenditure allocated to social security, at nearly 65 percent is in Vietnam, most of which is allocated to veterans of the North Vietnamese army. Other governments in ASEAN, including Laos, Indonesia and the Philippines allocate 20 or more percent of their healthcare budgets to the privileged in the public service.⁷

Once aid funds and government expenditure on social security have been removed from each government’s healthcare budget, the actual amounts provided by the governments in ASEAN for health care can be calculated. This again illustrates the paucity of funds allocated by the regime to healthcare, with the state only providing around 9 cents each year for each person in the country. Even the Laos government with its considerably higher proportion of expenditure allocated to social security managed to spend another $US1.90 on each of the country’s citizens in 2006. Cambodia, which does not have to support the healthcare of its public servants managed to spend double that of the Laos government at around $US4.50 and conversely, Vietnam that does spend a sizeable proportion of its healthcare budget on war veterans still to managed to spend an additional $US8 on each member of its population. All the other governments in ASEAN managed to spend considerably more on each of their citizens.

There is yet another factor to be considered with regard to these figures, as they include expenditure not only by the Ministry of Health, but also other ministries including expenditure on health provided for the armed forces, prisons, schools and universities (WHO 2006:160). Some of the countries in ASEAN, notably Thailand, Laos, Vietnam, the Philippines, Cambodia and Indonesia spend a considerable proportion of their health budget outside of the Ministry of Health, but unfortunately WHO’s national health accounts do not specify the ministries, which control this expenditure. The allocation of this expenditure is worthy of further analysis, but outside the parameters here. WHO’s national health accounts indicate that most of Burma’s government’s healthcare expenditure is located in the Ministry of Health, but as with the other countries in ASEAN the proportion spent on the military is unknown.

Begging for Healthcare

The health expenditure of all the countries in ASEAN except for Thailand, Malaysia and Singapore are partially funded by foreign aid and loans. The largest proportion of health expenditure funded by aid is in Cambodia, Laos and Burma. In 2006, aid funding contributed 22 percent of total expenditure within the Cambodian health care system; whilst in Laos aid funding was 14 percent. Burma not quite the winner here as in 2006, aid provided around 14 percent of total health expenditure. This does however mean that foreign donors are contributing substantially more to the healthcare of Burma’s population than its own government. This is the government that prides itself on self-reliance and fosters xenophobia, but refuses to allocate resources to the health of its own people. Instead the regime relies on funds from the despised foreigner, so it can spend on its ludicrous fascist style new capital and other absurdities including a nuclear reactor. Showing they share the same refined aesthetic sense as another of the world’s tumors, the government of North Korea. If the regime believed its own nationalist rhetoric, why does it allow foreigners to prop-up healthcare expenditure, even though it has the resources to support its own system.

TOTAL AID/TOTAL HEALTH EXPENDITURE (%)
	2000	2001	2002	2003	2004	2005	2006
Burma	1.1	6.15	6.88	6.1	11.2	10.9	13.9
Cambodia	9.4	18.65	19.43	28.4	26.7	25.7	22.3
Indonesia	10.8	4.44	3.30	3.5	3.0	4.6	2.3
Laos	30.3	12.63	15.00	20.00	10.3	11.3	14.1
Philippines	3.5	3.7	2.8	3.8	4.0	5.1	3.3
Vietnam	2.7	2.8	3.5	2.6	1.9	2.0	2.2

Source: www.who.int/nha

Expenditure on Immunization

All the governments of ASEAN provide at least some funds for basic immunization programs, except for the ‘governments’ of Burma and Laos (WHO 2005). All the funding for the program in Burma is provided by foreign donors, notably the government of Japan and the Western democracies. The immunization program in Burma is overseen by UNICEF, but implemented by the Myanmar Maternal Child and Welfare Association (MMCWA), a fascist style mass organisation controlled by the wives of the senior generals. This is their special contribution to the country, using the resources of taxpayers from foreign countries, whilst pretending to being loyal daughters of the nation.

% EXPENDITURE PROVIDED BY GOVERNMENT IMMUNIZATION PROGRAM 2003
Burma	0
Cambodia	7
Indonesia	90
Laos	0
Malaysia	100
Philippines	3
Singapore	100
Thailand	100
Vietnam	55

Source: World Health Report (2005)

The Philippines also shows an unimpressive commitment to their country’s immunization program contributing only 3 percent of total expenditure. Even the Cambodian government has managed to provide 7 percent of the funds for its country’s basic immunization program. All these governments compare to Vietnam’s that provides 55 percent of the funds for its young population to be vaccinated. Thailand, Burma’s old enemy having implemented rational economic policies can afford and chooses to allocate enough resources, such that it does not have to depend on the largesse of foreigners to protect its young population.

We do not begrudge the people of Burma our assistance. We do however, object to a ‘government’ that steals the revenue from gas sales, which rightly should be allocated to the state’s budget where it can be used to improve the situation for ordinary Burmese. We also object, to the irrational, wooly-headed, muddled economic policy making of a regime that has stifled economic growth. The ridiculous lame-brained policy making of the regime has impoverished the country meaning that on average Burmese people can only spend around $US3.32 each on their own healthcare. We also object to the deceit of a regime that pretends that it has taken responsibility for immunizing the young of the country. Healthcare and immunization programs should not be the plaything of the over-adorned wives of the generals (via the Myanmar Maternal and Child Welfare Association), most of whom, as with their husbands have little expertise in anything, except lauding themselves over the population. All in all the regime and its hypocritical nationalist rhetoric and lame-brained economic policies are objectionable.

Ministry of Health (Burma) Health Statistics – www.moh.mm/

World Health Organisation National Health Accounts – www.who.int/nha

World Health Organisation (WHO) (2003) Guide to Producing National Health Accounts with Special Applications for Low-income and Middle-income Countries, World Health Organisation.

World Health Organisation (WHO) (2005) World Health Report 2005: Making Every Mother and Child Count, World Health Organisation, Geneva.

World Health Organisation (WHO) (2006) World Health Report 2006: Working Together for Health, World Health Organisation, Geneva.

1 www.who.int/nha/en/

2 This was done simply, by assuming that the market exchange rate in 1999 was on average K800/$US and the market exchange rate in 2003 was on average K1,000/$US. The original figure was simply multiplied by the official exchange rate (K6/$US) and adjusted for the average market exchange rate.

3 The figures in brackets for Malaysia and Thailand include local funds provided to NGOs to supplement the healthcare of others within their country.

4 The proportion of private healthcare expenditure has dropped significantly in the last 10 year particularly with the introduction of under Thaksin of the 30 baht health card scheme, which has its own financing problems.

5 Strictly these should not be included in government expenditure, but many of the ASEAN countries do so.

6 Of course the proportion covered under these schemes no doubt varies, but any analysis in this regard is outside the scope of this note.

7 It is not clear from the data whether this expenditure covers healthcare payments for those in the military.

Strange world of post-Nargis numbers

At the ASEAN-UN International Pledging Conference in Rangoon on 25/5/08, the regime presented this assessment of damages and reconstruction costs:

http://docs.google.com/Doc?id=ddpzz666_3c95mc9f3

which has, apparently, been accepted at face value by ASEAN.

This is strange as there are a number of peculiar aspects to this report, not least of which the astonishing accuracy with which it was possible to count lamp posts, chickens etc while not being able to provide relief for the cyclone victims.

Specifically, consider the following:

http://spreadsheets.google.com/pub?key=pJWWao3_GUfDU4J__6HkeJw

This shows a breakdown of the claimed damage to buildings in the State and 'private' industrial sectors (where categories overlap). The first tables show the raw numbers extracted from the report, with percentages of total buildings affected in the margins. The extra numbers next to the 'private table' show the ratios of private shares to State shares (e.g. the 9.17 is the 17.6% of private buildings collapsed divided by the 1.9% for State buildings and so on). The second set of tables show the breakdown of damage type by building type. The set of numbers next to the private table here is the set of ratios of private/State cell values. The final set of tables shows the breakdown of building type by damage type. The set of numbers next to the private table has the same interpretation as above.

What is immediately obvious is the extreme non-uniformity of the pattern of destruction. Apparently Nature is no respecter of persons, but she is a respecter of ownership status. Although affected 'private' factories outnumber State-owned factories by around 4:1, over 50 times as many private factories were destroyed by cyclone Nargis as were state-owned ones! For workshops the numbers show around 10:1 private:State-owned, but the private destruction factor is a whopping 124 times the size - the private workshop numbers are somewhat strange as around 80% of those damaged fall into the 'other' category, which means not destroyed, generically damaged or 'roof-toppled'. Any guidance on what that actually means/could mean would be welcome! In the case of warehouses, despite there being less private warehouses affected, the collapsed ratio is still of the order of 12:1. State-owned factories and workshops appear to have been disproportionately affected by generic 'damage' compared to private equivalents, but State-owned warehouses escaped that fate, being much more susceptible to roof-toppling, but to the same extent as State-owned workshops.

Overall it is hard to recognise this as the effect of a large-scale destructive force. Certainly some natural disasters such as fires can be almost bizarrely selective on a small (e.g. street by street) scale, but it is reasonable to expect that a catastrophe on the scale of Nargis would produce an approximately uniform pattern of destruction with respect to building types. A wildly disproportionate pattern like the one reported (with regard to an essentially irrelevant dimension such as ownership status) is as surprising on the surface as would be the finding that the flu epidemic of 1918 was disproportionately lethal to left-handed people, or redheads, or people born in the Year of the Monkey. In other words, it's the kind of thing that doesn't appear to make sense.

Perhaps the explanation is geographical. Perhaps somehow the State-owned buildings just happened to be concentrated on the periphery of the affect area (whatever that means in relation to Nargis) while the private buildings bore the brunt. That is prima facie less than credible, and in any case does not explain the other patterns of non-collapse damage. Perhaps the State has in the past appropriated the best materials when constructing buildings, thus leading to inherently superior structural characteristics (except for roofs in some cases). Perhaps the numbers have been cooked, with the numbers inflated on the private side to avoid the impression that the world was being asked to pay directly for the SPDC to rebuild its own structures. And perhaps the numbers were made up, with little attention paid to details like internal consistency or whether they could withstand even basic comparisons with commonsense. After all, their primary purpose is to get the rest of the world to get their chequebooks out, and ASEAN for one is quite used to putting their telescope to its blind eye when the crimes of the SPDC hove into view.

Turning to another curious aspect of the claim, consider this:

http://spreadsheets.google.com/pub?key=pJWWao3_GUfB3tPoTtyARUg

This sheet compares the kyat values attributed to various components of the overall damage (and thus the amount of reconstruction aid claimed) to the equivalent $US amounts according to the report. The table shows all instances in tables and text where two currency values are quoted (there several instances in which only values in one currency are quoted, for no apparent reason). This allows us to see the exchange rate employed, which is shown in the 4th column, labelled 'er'.

Two things are apparent. First, the regime appears to be willing to abandon its own official kyat/$US exchange rate nad stand before an international audience and present conversions based on what are, in effect, black market exchange rates. The exchange rate premium is usually an indicator of the degree of economic malaise and not flaunted so openly (one wonders how many delegates to the pledging conference got 1100 kyat per $US on their way in?). Second, the authors of the report did not use a common exchange rate for conversions. In fact, it is more correct to say that they used unique rates case-by-case! There does not seem to be any reasonable explanation for this, consistent that is with this report having any credibility whatever.

The outliers are the health and education sectors, where the implied exchange rates are 1/4 to 1/5 of what was typically used elsewhere. The drastic inflation of the $US value of reconstruction requirements here could reflect two things. One, an overall attempt to fleece donors that is concentrated on two items in the whole package. Or that the value in kyat was the value in situ and the value in $US represents replacement costs, which happen to be substantially higher. Now if Burma were a market economy, and the sectors in question part of the private sphere, the fact that the market values of the assets destroyed fell way below their replacement cost would be an indicator that the sectors were economically very sick indeed. But Burma is not a market economy, and since the assets involved are predominantly State-owned (according to the report) the reported kyat values could not have been market values. It is usual practice to value such public assets at replacement cost. But this would mean (using the exchange rates used elsewhere) that the $US amounts should be as little as 1/5 of what is actually claimed. So either the regime is trying to misappropriate reconstruction funds via exchange rate manipulation, or by simply asking for 5 times what is actually needed based on the stated kyat values of degraded and lost assets.

The overall effect of the exchange rate shenanigans is shown in the final column. The average exchange rate used is 1100.31 kyat/$US (excluding the extremely low figures for health and education, and the low figure for public religious buildings). If all kyat figures are converted at this rate, we can determine the difference in $US between what was claimed (given the myriad of rates) and what is consistent with the use of a single rate. The final column shows this for each case - the sum of this column shows that the net effect of using varying rates is that the regime claims an extra $US152+ million from the international community. The primary drivers of this outcome are the anomalies associated with health and education.

Would you give these people $US10 billion based on this report?

Derek Tonkin: Further response on sanctions

Derek Tonkin (author of the response to our opendemocracy.net piece published earlier) has responded to our response (in a comment). As usual, our response follows in a comment to this post.

------------

It may surprise you that I agree generally with the logic of almost everything you say. But you concentrate too much on the theoretical aspects of economic and financial sanctions and overlook both the reality in Burma today and the psychological and political effects.

The reality is that the generals are not suffering, but the ordinary people are. What the US and EU didn’t and perhaps couldn’t reasonably have been expected to take into account when they first imposed sanctions was the emergence of a tremendous bonanza in the shape of revenues from natural gas, which has eclipsed other export earnings and goes straight into the pockets of the generals. Already touching US$ 3 billion annually, they are likely to touch US$ 6 billion when the pipeline to China is opened. So the punitive role to which you refer is mitigated to the point of insignificance. Another reality is that Burma’s neighbours, including those two powerful and dynamic economies China and India, cocoon the Burmese economy from the effects of trading sanctions. You cannot conduct an effective sanctions policy against a country when all the countries within a radius of 2,000 miles are opposed to the policies you advocate. Finally, if you have been to Burma recently, you might have found that the people grumbling most genuinely about the actual the effects of sanctions are not the generals (though they grumble like hell and use sanctions as an excuse to argue away their own incompetence), but the burgeoning private business community who feel they are being forced into “cronyism” in order to survive. They are also increasingly deprived of the added-value from manufactures while the State sells off its raw materials. The most dotty recent example of sanctions has been the targeting by the EU of some 1,207 private businesses, and if you extract the few which are State or crony, you are still left with over 1,000 mostly small to medium-sized enterprises whose sole misfortune is to be involved in the furniture (timber), jewellery (gems) and metals (private foundries) businesses even though most of the families concerned would have voted for pro-democracy parties in the 1990 Elections. Whose side, after all, are we on?

As regards the psychological and political effects of sanctions, these have been so negative that any responsible overall assessment would in my view conclude that the damage of sanctions generally to Western interests and to the humanitarian welfare of the Burmese people has negated the theoretical "benefits" of sanctions which you adduce. A very clear reflection of the growing isolation and eccentricity of the Burmese leadership may be found in their denial of US, British and French offers of humanitarian aid when their warships appeared off the coast of Burma. Defense Secretary Robert Gates has called this denial "criminal neglect", but a number of commentators have recently asked some very pertinent questions about the extent of Western responsibility, however unwitting, in inducing a state of mind in Burmese leaders which has undoubtedly cost so many lives through delays in the provision of aid and logistics. When warships appear off the coast of Burma from countries already engaged in economic warfare against you, should we be surprised that the Burmese leaders are perhaps likely to doubt their motives?

So long as we ostracize the military regime and deny them the expertise, tools and facilities to reform their economy, so long will they continue to retreat into their shells. The window of opportunity afforded by Cyclone Nargis for a more open relationship is closing fast. We should be doing everything we can in our own interests as well as those of the Burmese people to establish critical contact.

All I would argue is that the West should back-pedal on the sanctions issue for the present. Clearly, it would be politically impossible to remove them just like that, but to ratchet them at the present time makes absolutely no sense in terms of furthering the interests of the international community and the welfare of the Burmese people.

Derek Tonkin

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Who is Mad? Is it Than Shwe?

Waving to the People of Burma

Which of us is mad? Is it Than Shwe? Or has listening to the stories of policy being determined by numbers, astrological charts, reincarnated kings and entrails finally affected our thinking?


We were all amazed here that the regime did not receive a larger percentage of the vote at the recent referendum. We always note the precision of the regime's figures, especially for a country that often simply makes them up. So we laughed at the 92.4% win, noting that they must have learnt something, avoiding the absurdity of announcing a 99% vote for their constitution. Then a friend pointed out that Than Shwe came to power, after ousting Saw Maung on the 23 April 1992. What is the connection you may wonder? Well April is the 4th month of the year, so if we transpose 4.92 we get surprisingly 92.4. Is this Than Shwe's lucky number? Is it the number that the Senior General believes denotes his win over Saw Maung and his ascendancy to the throne, now that the country has a new constitution designed to allows him to rule in perpetuity?


Can this be another example of policy making that would miraculously improve, if sanctions were removed. Surely, the Senior General is not as backward as we are making out!

Response to our article on sanctions and the cyclone

The following is an email in response to the piece on opendemocracy.net. Our response is posted as a comment. Further input welcomed!

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Though I agree wholeheartedly with much of what you say in your recent article in "Open Democracy" about the responsibility of the military regime in Burma for the appalling state of the Burmese economy, the problem I have with sanctions, as a political scientist is that in the case of Burma, as so often elsewhere, they have totally failed to achieve their objective. The regime is not responsive in ways which we might naively expect. They are eccentric, ruthless and uncompromising. The more sanctions are "tightened", the more counterproductive they become. Sanctions have indeed been an unmitigated disaster in inducing the regime to mend its ways and institute political reform. They have made them more entrenched, more recalcitrant and more removed from Western influences. Why continue with policies which have so manifestly failed? At least, put them quietly on the back-burner until we can think of something better.

The only sensible, indeed the only known study of the effect of sanctions on Burma in recent years has been by the House of Lords Economic Affairs Committee which concluded that they were frankly a waste of time. The reason why the US and EU have not published any assessment is that any independent report would be a sustained criticism, and this is not what the US and EU want. The European Parliament repeatedly calls on the European Council for an analysis of why sanctions are failing, never secures any response, but goes on to demand more. The medicine isn't working, indeed, it is making the patient worse, but nonetheless increase the dose.

The ability of the dictatorial regime to pass down to the long suffering population any "measures" supposedly directed at them, in a situation where they are totally cocooned from serious trouble by the dynamic, economies of China and India and are now earning some US$ 2.7 billion annually (Calendar Year ended 31 December 2007), likely to double when the gas pipeline to China is completed, frankly means that they are immune to significant deleterious effects. They are intensely irritated by them, but that is the extent of their problems. The effects all get passed down the ladder to the people, whose economy has stagnated as a result. You will be aware of Morten Pederson's views on how the population at large is affected by sanctions supposedly directed at the regime and their cronies. I agree with him.

I would like to wave a magic wand and see the SPDC gone. But the reality is that the military are bound to have a major influence on the body politic in Burma for the foreseeable future. So let us use the succession to Than Shwe to seek a more rewarding relationship, rather than expecting his successors to buckle and bend under Western pressures, which they will never do.

I thought the wedding of Than Shwe's daughter compared rather poorly with society weddings I have attended in Bangkok and Phnom Penh. Only some 150 guests, the champagne flowing less freely than I have seen even at my son's wedding in Tokyo a few years ago, and apart from those appalling baubles and contrived photographs, frankly nothing out of the ordinary in SE Asian terms, however inappropriate for long-suffering Burma. All in the eye of the beholder!

U Kyaw Nyein

U Kyaw Nyein

by
Dr. Hlaing Myint

His name is U Kyaw Nyein and he is 84 years old. He was arrested for helping the KNU (Karen National Union) in 1971. During this period the Ne Win controlled regime was crushing the KNU with its four cuts program. The commander of the KNU in the Irrawaddy Division, Carbine Chit Lay Maung was very famous and a KNU hero. He had killed two Lieutenant Colonels and many Majors in the military. He would approach the soldiers and their navy boats at night and aim to shoot the officers. He was an excellent sniper, with his carbine. His shots never missed their target.

The army and navy attempted to corner him for more than a year. Finally, he was surrounded on Tha-mee-Hla Island. The army company that was in-charge of the final assault was led by my eldest brother, Captain Kyi Maung. My brother was ordered to catch him alive, but on approach to his hide-out, he and other soldiers were shot by single sniper fire. My brother was shot in the left arm. The army company finally bombed his hide-out with mortars and Chit Lay Maung and all the other KNU soldiers were killed.

My brother was taken back to Bogalay hospital. He died after receiving his second bottle of blood. Three days later, my brother was buried with a state funeral. In the evening of the same day Chit Lay Maung was also buried. But before his burial his body was dragged by 6 dogs that soldiers had chained to his legs. The soldiers also forced people to urinate on his body along the way. His body was then buried upside down.

My uncle, U Kyaw Nyein was arrested just before that final assault on Carbine Chit Lay Maung. The military found evidence after taking some KNU posts that U Kyaw Nyein had contributed funds and a type writer to the KNU. He was arrested and tortured. He could not admit to contributing to the KNU, as it would have been his death sentence. He was tortured for a long time. Finally the soldiers tied his hands behind his back, and placed a rope around his neck, threatening to dump him in the river. The army commander that tortured my uncle was Thura Kyaw Swar. He became the commander of Sagaing Division. During the the 1988 uprisig he slaughterd more than 300 people, shooting them at close range after cornering them in a small street.

He was threatened, that if he did make an admission, he would be dragged from Bogalay to Myin-ka-kone, which is more than an hour drive and dumped in the local river. He was told “Only would only be luck, if he did not die.” He was dragged and he survived. After being dragged behind a vehicle for around an hour, he was repeatedly kicked, in public by the same soldiers. He was sentenced and served three years in jail. He suffered many physical traumas from his torture.

Between 1987 and 1991, I and U Kyaw Nyein traded sea food from the Bogalay and Labutta areas. We traveled even at night time by boat, going to any area, where even the locals would not go. It was hard to remember the routes, as there are so many. I know a lot of people from these areas, as friends and also as trading partners.

In September 1991, the military slaughtered many Karen people in these areas, after seizing some ammunition, from the KNU. U Kyaw Nyein and I lost two boats with five friends. They were traveling to the area where the slaughter occurred. The (10-horse powered) boats and all five people never returned. All would have been killed. The operation was carried out by No-11 Battalion, Brigadier Win Myint and Nyunt Tin. They slaughtered thousands of Karen from these areas. From that time onwards, they posted many army out-posts in these areas. So no-one could travel without permission from the military.

The military hate and are scared of the Karen in the Irrawaddy Division. They fear that the Karen may demand autonomy in this area. This is one reason the military would not allow overseas aid. They would want to prolong their plight, wanting the Karen to die. This is a way of cleansing the region of the Karen people. Many of the villages are Karen and some can not even speak Burmese. I saved four families from this area when the slaughter occurred and these four families still live with my relatives in a town near Rangoon.

I am worried for my uncle. I started this seafood business with his help, and without him I could not had established the business. All my siblings joined my business and have prospered. I have lots of gratitude to this uncle. I was arrested in 1996, for politics, and was released in December 2002. After my release, I did not visit him, as I feared the trouble this would cause him. Also, two of my friends, in Bogalay had been arrested several times for politics, so I dared not visit them either. So I have not seen my uncle since 1996, but we kept in touch, until I left Burma in December 2005. I could only send home $100 and some medicine in December 2007, after I arrived in Australia.

Neither, I or my family has been able to contact his family after the cyclone. I received an email, from Singapore that it is very hard to travel to Bogalay and enquire about his family. I have requested my brother to contact him, as soon as possible and to help financially with money I will send. U Kyaw Nyein and his family have never been afraid of the military. U Kyaw Nyein took on all the authorities in the Irrawaddy Division, including Lieutenant-General Tin Hla. He was threatened several times, but he did not care. His reply was, “You can kill me, but it will be on the radio, if you dare to touch me.”

I can not think about my friends in the villages in the Delta. The friends we traveled with, staying in their homes and eating their meals. I owe lots to these people - a very friendly and simple people. The villages in which we had roamed have been wiped from the map. Most of all, I really owe much to this uncle, not only my self, but the families of all my siblings, who still have this business.

Today I received news from Rangoon that my uncle U Kyaw Nyein had passed away about six months ago. My family did not want to tell me, as we are really attached to each other. Also I rarely have contact with my family, as my calls can cause trouble for them.


NOTE: Lieutenant-General Tin Hla was in charge of the LID 22 during the 1988 up-rising in Rangoon and is responsible for killing around 3000 unarmed protesters (out of 10,000 killed). He also gave the order for the shooting of about 70 children, who were mawned down by a power machine gun (G-3). They were shot by Captain Khin Maung Win, while they were sitting down begging with the their hands in the Buddhist prayer position, "Please, Uncle, Uncle do not kill us." Lieutenant-General Tin Hla was then posted in Karen State and subsequently the Irrawaddy Division. He later became Quartermaster General, Minister of Military Affairs and Deputy Prime Minister. He was sacked from these posts in November 2001 after his obnoxious behaviour and pride caused him to come in conflict with General Khin Nyunt and General Maung Aye.

Lt-General Tin Hla’s daughter (Ei Ei Tin), her husband (Moe Tin) and 2 children visited Australia about 3 months ago. This is in spite of visa bans and the imposition of financial sanctions on the regime. His granddaughter (Khine Tin Zar Thu) is enrolled at the University of NSW, to begin in 2nd Semester 2008.

More on General Tin Hla & the regime family members in Australian to come.