House of Commons - Democracy and Development in Burma - International Development Committee

Democracy and Development in Burma - International Development Committee Contents

6 Economy

157. Burma has huge economic potential:

· it has rich natural resources— land, water, minerals and gas,

· there is huge potential for trade by virtue of its location between China and India, and

· it has a large working age population.

DFID's aim is "to help the Burmese people and Government harness the country's great potential."[184] The Minister, Rt Hon Alan Duncan MP told us:

185

158. Burma's GDP grew 5.3% in 2010-11 and 6.2% in 2012-13 and local and foreign investment is reported to have increased fivefold in 2012-13.[186] However, growth has come largely from the extractive industries,[187] mainly minerals including jade and gems as well as oil and gas. Although these industries can generate finance for public spending if tax systems, public financial management and transparency can be improved, they create few jobs and bring considerable risks in relation to corruption, to the environment and in exposure to commodity price shocks.[188] Most of the jade mines are owned by Chinese companies working with Burmese military companies and armed ethnic groups.[189] Burma currently ranks 172 out of 176 countries in the Transparency Corruption Perceptions Index 2012 and is ranked 182 of 189 in the Doing Business Survey.

159. Human Rights Watch said it had serious concerns about the effective management of the country's natural resource wealth for the benefit of Burma's people.[190] Dr Adam Burke warned that natural resource extraction had already contributed to violence in Burma's border regions.[191] Christian Aid reported that the construction of dams on the Salween River in Shan State, Kayah State and Karen State by Chinese, Thai and Burmese corporations had led to an increased militarisation of the area by the Burmese Army with large scale displacement of people as well as human rights abuses such as forced labour, illegal taxation and rape.[192] The Karen Human Rights Group has been collating incidences of human rights abuses accompanying natural resource extraction, plantation construction and infrastructure development and it is "deeply concerned" that many development projects are being implemented without consulting, compensating, or, often, notifying project affected communities. It documented cases of uncompensated damage to farms, contaminated water, loss of jobs, land confiscation and forced displacement.[193]

160. There is also concern for Burma's forest areas and natural environments.[194] Burma is home to Southeast Asia's largest remaining tropical forest. Pact highlighted that timber harvesting, mining, and large infrastructure projects were already changing the face of the landscape and affecting the livelihoods of the people who depended on it. [195] The Karen Women's Organisation said:

196

161. Oxfam recommended that DFID should encourage the Burmese to implement land policies in line with the UN Voluntary Guidelines on the Responsible Governance of Tenure and that DFID should support civil society and farmers to participate in a national implementation plan to roll the policies out.[197] Pact recommended that clear and equitable land policies were essential for Burma's ability to attract foreign direct investment and for its economic development.[198]

162. DFID is funding Burma's effort to become a signatory of the Extractive Industries Transparency Initiative (EITI), providing just over £1 million to the key implementing agency and to support civil society engagement. President Thein Sein made a commitment on his visit to UK in July 2013 that Burma would become a signatory and on 10 December he met with Clare Short, the EITI Chair. In a statement afterwards she said she was impressed by the commitment of the Government, civil society and industry to work together for better management of the country's resources and commended "the openness of the discussions as a reflection that the transition to democracy has come a long way".[199] The Minister thought that it was "a matter of when not a matter of if" Burma would sign up to the EITI and he hoped it was "sooner rather than later."[200]

163. DFID believes there is an opportunity to help change the pattern of growth and reduce the reliance on extractive industries by doing more to help Burma develop good and inclusive growth policies, reform its business climate and rebuild its banking and financial sector.[201] DFID has a number of investment programmes. It is funding:

· the World Bank to conduct Burma's first investment climate assessment;

· the International Growth Centre to advise Government on inclusive growth policy including natural resource management;

· the Business Innovation Facility to advise companies on how to develop their businesses to create more jobs and opportunities for the poor in the textiles, tourism and fisheries sectors; and

· the Myanmar Centre for Responsible Business to provide practical information to businesses, civil society and Government on improving business standards.[202]

164. DFID can assist the development of the Burmese economy not only through its own programmes, but also through its influence on multilaterals. Dan Collinson of Save the Children said:

203

165. However, some witnesses were concerned that DFID was giving too much emphasis to the economy and too little to governance. Lord Williams thought there were more pressing issues to deal with. He told us:

204

Ben Rogers highlighted:

205

166. The Minister told us:

206

He went on to say:

207

167. Burma's extractive industries should benefit the people of Burma and make a major contribution to taxation. We welcome DFID's encouragement and support for Burma to join the Extractive Industries Transparency Initiative. We hope it signs in the near future. We support DFID's responsible business initiatives helping to set standards for Burma's economic development.

Livelihoods

168. Seventy percent of people in Burma rely on agriculture for their income[208] and 26% of people live below the poverty line. Dan Collison of Save the Children told the Committee of the 'incredibly high levels of rural poverty' in Burma where the per capita income, relative to its neighbours, is very small. Per capita income in Myanmar is 15% of what it is in Thailand.[209] He said there was a need to try:

210

169. DFID contributes to The Livelihoods and Food Security Trust Fund (LIFT), which works to increase food availability and income generation opportunities for two million rural people. It does this by funding NGOs to deliver programmes such as cash for work, skills training to increase agricultural production, micro-credit and natural resource management.[211]DFID chairs the LIFT Donor Consortium and is the second largest donor. The Minister said of the fund:

212

He also said it was an important part of DFID's work with women and improving their prospects in Burma.[213] Ninety percent of loans go to women.[214]

170. On our visit we saw a number of LIFT programmes near to Mandalay. There we witnessed first-hand the significant advantages brought by small loans to women working in handicrafts such as weaving and to small farms growing rice and flowers for market production.

184 DFID Burma Operational Plan 2011-15 updated June 2013 Back

185 Q 111 Back

186 Christian Aid BUR 0006, para 3.6 Back

187 Q165 Back

188 DFID briefing for the Committee visit to Burma Back

189 DFID briefing for the Committee visit to Burma Back

190 Human Rights Watch (BUR 0012) Back

191 Dr Adam Burke (BUR 0005), para 5 Back

192 Christian Aid BUR 0006,para 4.1 Back

193 Karen Human Rights Group (BUR 0022), appendix Back

194 Dr Adam Burke (BUR 0005), para 12BBC Natural World Documentary on Burma Back

195 Pact Inc (BUR 0008), para 3.9 Back