Historically, Myanmar was an important nexus in the trade network that connected China with the Middle East and Europe, and coastal cities brimmed with religious and ethnic diversity. During the colonial period, the British administration did not interfere in the religious life of its subjects as long as they did not jeopardize British economic and political power, thereby encouraging this diversity. With the opening of the Suez Canal, Europe grew into a major market for Burmese rice and the Irrawaddy Delta region became the “world’s rice basket.” By WWII, Burma was the largest global exporter of rice.
Nonetheless, the global depression of the 1930s led to plummeting rice prices and shook Burma’s economy, triggering widespread protests with strong anti-colonial and anti-Indian overtones. Indigenous Burmese held the British responsible for their economic woes, and they resented the population of cheaper Indian laborers that was increasing under colonial rule. With the deepening associations connecting Burmese nationalism to Buddhism, this resentment took on religious overtones against the predominately Muslim Indian immigrants.
Under the British, Burma’s resources and trade were almost entirely controlled by foreigners, typically Europeans, but also some Chinese, Indians, Baghdadi Jews, and others. Post-independence, Prime Minister U Nu enacted socialism with the intention of reasserting state control over what nationalists perceived had been taken from them. U Nu articulated a specifically Buddhist vision of socialism to remedy the widespread poverty throughout the country. He invoked the legend of the Mahathammada, a prince who appeared to relieve social unrest when the advent of private property destroyed the mythical Padeytha tree—a tree that had provided people with all material means for survival.1 He advocated common ownership of property in an egalitarian society—a utopian nirvana. However, U Nu’s government failed to successfully stimulate economic development and the standard of living drastically deteriorated. As a result, skilled professionals left Myanmar and there was little investment in infrastructure. Non-Burman and non-Buddhist regions received the least amount of economic support from the government, which in turn fueled periods of armed resistance against the state.
Corruption became endemic in the years following independence and worsened during the military period when an extensive black market flourished. In a supposed effort to stem corruption, the government demonetized the kyat—Myanmar’s currency—three times. The third demonetization occurred in 1987 and the ensuing economic crisis helped spark the protests of 1988. That same year, the military government, which owned large sharesin all major industries, enacted a foreign investment law intended to encourage investors by protecting their businesses from nationalization. Investors were drawn to Myanmar for its abundant natural resources and its strictly controlled, cheap labor force. In 1997 and again in 2003 the United States imposed sanctions in response to international outcry over labor conditions, including the targeting of Christian minority groups for forced labor. Though the current civilian-led, military-backed democratic government is improving labor conditions, Myanmar continues to be ranked among the world’s most corrupt countries, and labor laws are not uniformly enforced.2
1 Manuel Sarkisyanz, “On the Place of U Nu’s Buddhist Socialism in Burma’s History of Ideas,” Studies on Asia, Series 1. Vol. 2 (1961): 53-62.
2 “2012 Corruption Perceptions Index,” Transparency International, 2012, accessed June 21, 2013, http://www.transparency.org/cpi2012/results.