Saturday, November 22, 2008

Economic crisis as a force for change

Myat Soe

ၿမန္မာလုိ ဖတ္ရွဳ႕ လုိလွ်င္ ဒီေနရာ ကို ႏွိပ္ၿပီး ၾကည္႔ ပါ။

Some economic watchers have been saying that ‘when Uncle Sam sneezes the whole world catches a cold’. And now as Uncle Sam finally catches a bad cold in the face of severe economic downturn, its investment and trading partners are scrambling to stop the deterioration of their own economy.

As early as May 2007, sharp increase in fuel prices forced many factories out of business, and many Blue collar workers in automobile and other manufacturing industries lost their jobs in the United States. In addition to escalating oil prices, sinking American dollar also led to a significant loss of investment in local industries, including travel businesses that depend on fuel oil. By September 2007, in Fort Wayne, Indiana is an alone, over twenty large manufacturing companies closed their doors and many workers lost their jobs.

Another sign of troubles appeared when oil producing countries such as Russia, Venezuela, and Iran began using petro dollars to influence international politics. Control of oil pipelines to Europe became a political game for Russia, and confident of its political prowess from oil wealth, Russia soon invaded Georgia, a new democracy. During the past few years, media outlets in Japan, Malaysia, and Thailand, have mainly focused on rapid economic rise of China and the rest of Asia, but ignored the United States.

As trade between EU and Asia steadily increased many financial analysts came to believe that the US economic crisis would not affect them. Just like other trading partners, Europeans ignored Uncle Sam’s worsening economic problems. As long as the price of Euro continued to climb against American dollar everyone was content to think of crisis in the US as a cyclical phenomenon. But when the US financial crisis began spinning out of control, and spreading panic among investors to a level not seen since the Great Depression; fallout from the US economic crisis swept across the globe like waves from a tsunami; thanks to the borderless world of people and culture in the age of globalization.

During recent stock market free falls, Russia and China even resorted to temporary halting of stock trades altogether. Economic trouble forced many factories in South Korea, China, India, Brazil, and Thailand, to be closed. Ireland which was doing well until now struggled to stabilize its banks. And Pakistan, with a large population had to ask for billion dollars emergency loan from International Monetary Fund. The IMF also put aside 30 billion dollars rescue package for financial institutions in Hungary, Ukraine, and Ireland. Japan agreed to contribute another 100 billion dollars to IMF, to help stabilize the world’s financial system.

World’s second largest economy, Japan, with one trillion dollar economy admitted last Sunday that it too now has officially entered recession, as did Germany last week. And Japan announced 105.8 billion dollars stimulus plan to prevent further economic deterioration. The United States government approved 700 billion dollars financial rescue bill and German Chancellor Angela Merkel signed twelve billion dollars rescue package in addition to fifty billion Euros stimulus plan. China also announced 586 billion dollars stimulus plan to shore up its own economy. And last Saturday, an emergency G-20 economic summit was convened in Washington, DC, to end the global credit crunch, and worldwide financial downturn.

Sadly, the impact of latest financial crisis will be quite severe on the people of Burma. First, there are millions of Burmese workers in Thailand, Singapore, Malaysia, India, China and Japan. And their livelihood will be greatly diminished by worldwide economic downturn. Cross border trade is already on the decline, and hard time of those families depending on Burmese workers will only get harder. Secondly, even temporary price decline from global slowdown will not benefit the people who are without social or economic safety net provided by their own government. The situation in Burma will be becoming more and more tense after each passing day.

Thirdly, price increase during global economic recovery will also be disastrous for the Burmese people as Burma exports cheap raw materials, and imports more expensive finished products, including toothpaste and soap. The majority of the people in the country are suffering. Finally, while Burmese currency continues to lose value and imports prices climb higher; Burmese people already burdened with unemployment, inflation, real estate and investment losses, on top of iron clad repression of the military junta, will suffer even more.

But while the world deals with economic tsunami, Burmese junta has been busy handing down sixty five years prison terms to brave political leaders and monks who protested against severe economic conditions and commodity price increases on behalf of their people in Burma last year. Unfortunately, as army generals continue to rule Burma without apparent legitimacy instead of working to solve economic and political crisis; only the scheme for 2010 forced elections under the guns is paramount in the mind of junta leaders. Instead of looking toward rapid economic adjustment and finding a solution to the country’s economic malaise, the regime is trying to escalate tension with opposition groups and civilian population.

Since an average Burmese will live only to fifty three year of age, by sentencing the activist leaders sixty five years in prison, military generals in Burma have mocked the world by openly brutalizing the people they have sworn to protect. Burma cannot wait another sixty five years to be free from the tyrannical power. Economic crisis can become a force for change as it almost did in 1988 in Burma. And during such crisis the world must make sure to stand with the people of Burma not with their oppressors.

(The writer is a former Central Executive Committee member of the All Burma Federation of Student Unions (1988) and currently serves as the Research Director of Justice for Human Rights in Burma. He graduated from Indiana University, and earned his MBA from Indiana Wesleyan University.)

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