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Sunday, 1 April 2012

Burma, Globalisation and Automation

Yesterday by-elections were held in Burma for fewer than 5% of the seats in the parliament that is still under the absolute control of the military junta. Reports that the government was determined to permit [if not to 'manage'] the election of leading democrats appeared highly credible, and appropriate results - thought genuinely to represent the votes cast - are likely to lead quickly to some reduction in sanctions against trade with Burma and investment in Burma.

China and other south-Asian countries have ignored the sanctions in making their significant investments in the country: mostly in infrastructure [ports and highways] and in exploiting natural resources, but some factories are also appearing. The po-faced powers that have enforced the sanctions have exempted themselves from taking part in such activities: they have passively supported the cause of democracy, which gives their Grauniadistas a feelgood factor but adds nothing to their national balance of trade. By giving the democracies the opportunity to withdraw the sanctions the junta has given itself a wider range of firms who will tender for major contracts and bid for licences to export timber and minerals. A wider range of firms will also offer to open factories, providing employment for the increasing population. New factories have the highest productivity: after a century of 'automation' computer-controlled mass production can be planted anywhere in the world, and firms locate their newest plant where rents are low, where planning and pollution controls are minimal, and where labour is both adaptable and cheap. Burma can easily meet these desiderata: and so long as the regime is basically unchanged, so that alien investors can be sure of the security of their plant, the investment will come.

This paradox needs carefully to be noticed: the token acceptance of movement towards democracy will reduce the external sanctions, while the continuity of governance internally gives confidence to investors. Any move towards a socialist democracy would deter the investors. The junta have seen how China has delivered growth and prosperity without democracy; they have also experienced pressure from the democracies to allow limited access to the political process for essentially conservative indigenous campaigners for liberal ideals. The junta hope to achieve their own balance for Burma, which will enable employment and wealth to grow - making the regime less unpopular - without any lurch towards what the generals perceive as a threat of anarchy. It will be interesting to see how far the currently recognised advocates of democracy feel able to co-operate in the junta's aims without risking the loss of younger and less patient supporters.

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