26 November 2012

Downtown Yangon (Khiri Travel).

It was not too long ago that Burma’s crumbling former capital seemed frozen in the past. That’s no longer the case, as the military-led government has begun to rehabilitate its image internationally and attract foreign investment. But while things superficially appear to be improving, Burma’s transition to prosperity and normalcy is far from a foregone conclusion. The contrasts of present-day Yangon are a telling example of why.

I was last in Yangon in 2007, a few weeks before the start of the largest anti-government demonstrations this country had seen in nearly 20 years. Yangon then felt like a city mired in stagnation but also on the edge of major upheaval – which, unbeknownst to me at the time, was exactly what it was. There was a palpable sense of dissatisfaction and fear in the air. Afraid of omnipresent spies and security services, talking politics was a risky game for the locals, who were wise enough not to do so with foreigners.

Moribund infrastructure and crumbling colonial architecture left the impression of a city marooned in another age. The near-total absence of cell phones – costing an estimated US$1,500 meant they were only for the elite – or reliable Internet access only served to compound this sense of isolation. The country’s repressive and xenophobic rulers, wary of cheap cell phones and social media as potential agents of their own demise, seemed happy to maintain their country’s isolation so long as they were able to collect natural resource rents and enrich themselves at the people’s expense.

Returning five years later, I feel as though I’m in a markedly different place, albeit one haunted by the ghosts of the past at every turn. Perhaps the most striking change is seeing Aung San Suu Kyi’s portrait everywhere in the city, unthinkable a couple of years ago, with people wearing t-shirts bearing her party’s logo and talking opposition politics openly without fear of reprisal.

Leaving the airport, one of the first changes I noticed was the sheer number of brand-new cars on the road. In May of this year, the government formally abolished the requirement that private citizens purchase autos through an import monopoly directly linked to the military, which has caused the price of cars to plummet and traffic to become much more congested. Due to the limited number of cars allowed on the roads in the past, a late ‘80s Toyota Corolla station wagon that would have long been scrapped anywhere else in the world would have cost up to US$20,000 not too long ago.

But as of May, things are different. While import taxes remain astronomical and prices are still high compared to neighbouring countries, business is booming with countless dealerships springing up all over the city. Interestingly, most cars appear to be imported from Japan, which drives on the left, whereas in Burma people drive on the right. Aside from a number of domestically produced cars and ultra-high-end models imported from the United States, the steering wheels of 90% of the cars on the road are on the wrong side.

While SIM cards are still prohibitively expensive for most Burmese – around US$250 – cell phones are now accessible to a broader segment of the population than before, and mobile phone shops selling the latest iPhones and Androids are flourishing. When foreign telecom firms are allowed to establish their own networks, as they will likely be able to soon, cell phone penetration will increase exponentially, as occurred in Vietnam and Indonesia in the not-too-distant past. A crop of private banks owned by regime cronies has also sprouted up almost overnight, and the novelty of using the country’s first ATMs – introduced in March – hasn’t worn off yet. In what should be a boon for foreign investors and tourists, the first ATM accepting international cards went online in Yangon this week.

But while Yangon’s chattering classes are becoming less isolated as the drum of liberalization beats on, the benefits of this new economic openness are much less clear-cut for the majority of Burmese. The satellite towns ringing Yangon remain deeply impoverished, and the prices of everyday goods have skyrocketed as the newly floated Kyat has appreciated in value. There is no sizeable middle class in Burma, which means that people are beginning to fall on one side or the other of an increasingly large economic divide.

And as is often the case in highly stratified societies, property crime – of the non-crony-capitalist kind – is on the rise. Land grabs – which have become endemic in recent months as the government seeks to modernize agriculture and exploit natural resources – have already forced thousands off their land, indicating that the “rule of law” provided by newly introduced investment laws is selectively upheld to serve the interests of big capital, both foreign and domestic.

With legitimation of the government’s agenda being awarded a major symbolic boost on Monday –Barack Obama and Hillary Clinton are here! – it is important to acknowledge that Burma’s recent changes are far from resoundingly positive.

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