Myanmar: Regional Relationships and Internal Concerns

Summary

To the military State Law and Order Restoration Council (SLORC), renamed the State Peace and Development Council (SPDC) on 15 November, 1997 was probably viewed as a year of significant achievements even as it encountered some set-backs. Internationally, Myanmar entered the Association of Southeast Asian Nations (ASEAN), much to the chagrin of the regime's internal and external opposition, thereby conferring on the government an important added degree of international legitimacy it badly wanted and needed. Ethnic insurgencies continued to decline, removing a serious military drain on, if not threat to, the Yangon regime; only the Karen rebellion remained active, but it also was in increasing disarray. In these two areas SLORC was significantly strengthened.

Yet there were serious internal and external problems that were exacerbated during this same period. A monetary crisis occurred when the exchange rate temporarily collapsed by almost one-half in June–July, but whether this reflected the general financial crisis in Southeast Asia or incessant internal economic anomalies, or both, is a matter of some dispute. This was followed by a devastating flood in lower Myanmar that was said to be the worst in fifty years and that destroyed a significant portion, some estimates say up to 20 per cent, of the total national rice crop. Rice in Myanmar is not simply the staple and a major traditional source of foreign exchange; its price is a critical indicator of political stability or crisis. SLORC internally seemed to underplay the severity of the losses, apparently for this reason.

Although urban economic expansion was evident, the opposition claimed that the economy was in an emergency. The government asserted that foreign investment of over US$6.3 billion had been approved, but only perhaps onethird had actually been invested. Political stasis seemed evident internally, with the military-mandated Constitutional Convention in recess from approving the principles of a new Constitution mandated by the military, and no dialogue between SLORC and the leader of the opposition National League for Democracy (NLD), Aung San Suu Kyi, a process advocated by the latter.