3 - Socialist Period under Military Rule, 1962–88: Macroeconomic and External Sector Performance

Summary

“When we plan our economy, do not let us confuse issues by bringing in politics. I appreciate that economics and politics are intimately connected, but let us keep politics out for the moment. Let us not indulge in attacks on imperialism, let us not look for excuses.”

Aung San, 1947, in Aung San's Family (Aung Than 1970)

When President Park Chung Hee took power through a military coup in 1961, he was said to have enshrined economic growth near the top of the regimes value hierarchy; economics took priority over politics.

A. Introduction

During the eighteen months of its rule from May 1958 to January 1960, the caretaker government of the military gained some experience in the administration of the country. It established law and order, cleaned up the cities by removing squatters and relocating them in new towns, abandoned unnecessary state projects, and encouraged the creation of joint ventures between the government and foreign firms. Prior to that, it had created the Defence Services Institute, and gradually expanded its activities into all economic fields of the state, from international shipping to internal trade and production. In fact, it fashioned a sort of self-reliant enclave economy of its own within the larger economy of the country. All of this may have given them confidence that they could have greater success than the squabbling politicians could in dealing with the longer-term problems of development. As events were to prove most sadly, they could not be more wrong.

Two reasons were given for the second military takeover. They were, one, that the Union of Myanmar was in danger of disintegrating; and two, that the political regime of the civilian government of U Nu has strayed away from the socialist path laid down by the nation's founder, General Aung San.

Immediately following the coup in 1962, three major documents were produced: The Burmese Way to Socialism, 30 April 1962; The Constitution of the Burma Socialist Programme Party, 4 July 1962; and The System of Correlation of Man and His Environment, 17 January 1963. The main thrusts of these documents and of the government's policies were “Burmanization”, centrally planned socialist system, and an inward-looking strategy of self-reliance. Faithfully adhering to that policy mix, the government proceeded with great haste to lay the foundations for transition to a self-reliant socialist economy of Myanmar.