Myanmar Business Guide: History

An short history of Myanmar


Since the 10th century, Myanmar has been populated by a diverse range of ethnic groups, including the Burmans, the Shan and the Mon, of which the Burmans are the most numerous and the most powerful. During the next 800 years the Burmans succeeded in unifying Burma on three separate occasions under a series of short lived dynasties - the Pagan, the Toungoo and the Konbaung. However, Burmese supremacy ended during the last dynasty when conflict over territory between the Burmese and the British culminated in three wars between 1824 and 1885. On January 1, 1886 the last part of the Burmese Empire was annexed by the British.

The British ruled Burma from 1896 to 1948 during which the administrative system changed and political parties developed. Burma became a province of India and in 1937 was granted a separate administration and its own constitution under which four popular governments served until the Second World War when Burma was occupied by the Japanese. The Second World War marked the end of British rule in Burma.

In the lead up to independence, in July 1947, Aung San, the leader of the Anti-Fascist People's Freedom League (AFPFL), chief of the Executive Council and therefore candidate for first prime minister of Burma, was assassinated on the orders of a group of disgruntled pre-war politicians. U Nu, a friend and colleague of Aung San, was quickly appointed in time for Burma to gain independence on January 4, 1948.

After independence Burma's major task lay in the restoration of peace and unity among the diverse ethnic minorities and solutions to the country’s chronic economic problems. Attempts to address these issues were largely unsuccessful and the period was one of political strife and turmoil. From 1948-62 the economy languished while the population grew and expectations of improved conditions increased, and little or no progress was made in developing an industrial sector.

The 1947 constitution had provided for a nominal form of federalism, which implied that the ethnic groups would finally be given some power. However, the ethnic groups alleged this was only "in theory" and not "in fact". The reality was that the prime minister had the final say in the selection of state heads and, through a variety of Burmanisation policies, the central government held all the power over the states. For this reason guerrilla movements led by communist and ethnic minority leaders rose in protest, seeking to overthrow the newly independent government. Their fight for democracy was only strengthened by the fact that economic conditions were not improving. In the period 1948-52 the conflicts between the army and the insurgent movement amounted to a civil war.

Although the governing party, the AFPFL, held an overwhelming majority of seats, there were serious divisions within the party and, in 1958 it split into two rival factions. To avoid an open revolt the Prime Minister invited General Ne Win, the army commander, to form a 'caretaker' government and prepare the country for new elections. For the first time in Burma's independent history the military government under General Ne Win was able to achieve some degree of stability.

In 1960 the elections were held and U Nu's faction of the AFPFL returned to power with an overwhelming majority. Prime Minister U Nu promised to restore public confidence by offering greater autonomy to the minorities. However, internal troubles within the party, together with increased demands from the Shan and Kachin, prevented U Nu from attaining his goals.

In March 1962, suspecting that Prime Minister U Nu may put the nation at risk by giving too many concessions to the minorities, General Ne Win and the armed forces took power again; this time by a military coup. The civilian government was replaced by a Revolutionary Council (RC) which ruled by decree.

The new leaders devoted themselves to abolishing and sweeping away the liberal reforms of their predecessors, replacing them with a rigid centrally imposed system which sought to organize and maintain control over the populace. To mobilize the people under its leadership, the RC created a new political party, the Burma Socialist Program Party (BSPP), also known as Lansin, which in 1964 became the only legal political party. Throughout the period from 1962 to 1974, there was remarkable stability in the nation's leadership. The underlying ideas of the new government were incorporated into an ideological manifesto entitled The Burmese Way to Socialism. While Burma remained a federal state in theory, in fact, it became a highly centralized bureaucracy. As part of the process of socialism, all foreign owned companies, and the trade sector, largely dominated by Indians, were nationalized. This had severe repercussions on the economy as many every-day commodities immediately became available only on the black market, and many shop owners were forced out of their businesses. Whilst unofficial political opposition existed, they were never able to unite and consolidate their position so as to become a challenge to the government.

In 1974, military rule was terminated and the Socialist Republic of the Union of Burma formally came into existence under a new constitution. Despite the institutional changes, serious economic problems persisted and a wave of unrest in protest of the food shortages and poor distribution began in 1974 and continued for the next two years. In the face of this continuing political unrest during 1977, the BSPP purged the party by expelling more than 50,000 members who had failed to live up to the ideals and directives of the party. The economy was administered by twenty three state corporations run by military appointees and the black market (colloquially nick named "State Corporation No. 24") continued to flourish. However, the government eased off some economic controls by allowing local private enterprise to operate in those areas not taken over by the State.

Around this period the government also sought western aid to alleviate the economic hardship. However, foreign aid was only able to help the economy temporarily. A decline in earnings due to low trade coupled with a mounting budget deficit and growing inflation brought the economy to the brink of collapse. In 1987, Burma, once one of the most prosperous countries in Southeast Asia, was declared a Least Developed Country (LDC) by the United Nations. Discontent continued to grow and the government attempted to combat the black market by demonetizing the currency. This action provoked university students in Rangoon and elsewhere to protest, and resulted in the temporary closure of the universities. In March 1987 a small student riot eventually led to mass public demonstrations which gathered in strength until August when thousands of demonstrators died in clashes with the armed forces.

Finally, in July 1988 after holding power for more than two decades General Ne Win resigned as chairman of the BSPP. The subsequent election of General Sein Lwin to the chairmanship only provoked further discontent among the students, as it was General Sein Lwin who was in charge of the military during the August clashes when thousands of demonstrators died. Continuing demonstrations and the calling of a general strike forced General Sein Lwin to resign after only seventeen days in office. He was replaced briefly by the more moderate Dr. Maung Maung, a lawyer, who had served General Ne Win for many years. Dr. Maung Maung pledged an end to the single party system but this did not bring demonstrations to a halt.

In September 1988, the military under their commander, General Saw Maung, seized power, banned all demonstrations and imposed a curfew. All state organs were abolished and their place was taken by the military run State Law and Order Restoration Council (SLORC). While General Ne Win was no longer officially in power many believed that he was and still has considerable influence behind the scenes.

SLORC consented to some of the demands of the demonstrators by legalizing political parties but refused requests for power to be handed over to an interim civilian government. General Saw Maung also promised to hold democratic elections in May 1989, which were to be the first free elections to be held in the country in thirty years. SLORC also changed the name of the country from the Union of Burma to the Union of Myanmar as a way of indicating that Burma was no longer a part of European colonialism. The new name also avoided the racial connotations of the former name which ignored the fact that there are many other ethnic groups in addition to the Burmans.

The elections were held in May 1990 and 235 separate political parties were registered. The main contenders were the National Union Party (NUP) (BSPP renamed), U Nu's Liberal Democratic Party (LDP) and the National League for Democracy (NLD). The NLD's leaders included two former close associates of General Ne Win, Generals Tin U and Aung Gyi, as well as Daw Aung San Suu Kyi, the daughter of the assassinated independence hero Aung San. Campaigning was made very difficult and many of the leaders of the various political parties were arrested, including Daw Aung San Suu Kyi and General Tin U, who were placed under house arrest in December 1989.

Despite these strictures the election results showed that the NLD had won over 60% of the popular vote and over 80% (392) of the seats in the 485 seat legislature. The government's NUP won only ten seats. SLORC refused to accept this result or to arrange a new legislature. SLORC barred the elected members of parliament from assuming power and decreed that a State-approved constitution had first to be passed by national referendum.

In late 1990 several more leaders and members of the NLD were arrested after attempts by the NLD to oppose SLORC. Subsequently monks took part in a peaceful protest by announcing a boycott on performing religious ceremonies for military families. By early 1991, reliable sources indicated that more than 500 NLD activists had been detained and the party was barred from any political activity. SLORC has maintained a tight grip on the country despite increasing international pressure. For example, even in October 1991 when Daw Aung San Suu Kyi was awarded the Nobel Peace Prize and students rallied in her support, SLORC counter-acted by tightening its grip, closing the universities and abolishing more political parties.

Whilst continuing reported abuses of human rights is the major issue for the international community, a number of local and international commentators do acknowledge that SLORC appears to have made some positive progress in a number of important areas such as pursuing agreements with the ethnic groups such as the Shan and Karen. In addition, SLORC appears increasingly prepared to engage some of its international critics in dialogue and there appears to be less likelihood of the country retreating into isolationism.

Many believe major changes in government policy will only be possible after General Ne Win dies. Others hope that increased economic liberalization of the economy - including foreign investment and trade - will result in a loosening of controls over political freedom and reduce human rights abuses. Many of those who argue this point believe that SLORC is seeking to follow the current Chinese example of political and economic development rather than the Soviet model and it would also appear that there is more than a passing similarity between the proposed role of the Army in Myanmar and that of the military in Indonesia.