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2 Fuel price policy explodes in
Myanmar By Larry Jagan
BANGKOK - Public protests have broken out
across Myanmar's old capital Yangon after the
military government unexpectedly removed
fuel-price subsidies, resulting in a 500% spike in
rationed fuel prices.
The shock policy is
part of the government's emerging economic and
financial reform program and notably coincided
with a high-level mission to the country of
International Monetary Fund (IMF)
and
World Bank officials, who have long pressed the
junta to reduce or abolish a range of price
subsidies.
The move has shocked the
country's already fragile economy and, depending
on the eventual scale of the protests and severity
of the government's response, could have grave
implications for political stability.
Significantly, the spiraling acts of civil
disobedience have been led by former political
prisoners known as the 88 Generation Students
Group, who nearly 20 years ago as student leaders
led the pro-democracy demonstrations the junta
cracked down on with an iron fist in 1988.
Myanmar's ruling junta, known as the State
Peace and Development Council (SPDC), has for
decades maintained strict social controls - though
security forces have loosened their grip in
certain areas of Yangon since abruptly moving the
national capital to a newly built city known as
Naypyidaw in November 2005. The numbers joining
the marches has grown since. More than a hundred
people joined the first demonstration on Sunday
demanding that the government intervene to lower
fast-rising fuel and food prices.
More
than 300 people took to the streets to protest on
Wednesday, according to witnesses, and news
reports indicate the rallies continued on
Thursday. The junta has responded through
stick-wielding vigilantes, including members of
the pro-government Union Solidarity and
Development Association. Some protesters have been
beaten and whisked away in unmarked cars,
according to witnesses who spoke with Asia Times
Online.
"The government has raised fuel
prices without giving any prior notice, and due to
this hike, all the people are suffering," said one
protester at Sunday's march. "Therefore we, the 88
Generation students, [National League for
Democracy] members, university students,
high-school students and civilians are protesting
and demanding an immediate rollback in the prices
of fuel."
The police have arrested more
than a dozen key 88 Generation Student Group
leaders in recent days, including renowned
activist Min Ko Naing and poet Ko Ko Gyi.
"The junta is not scared of public
statements or press releases by opposition groups,
but they really do not want the public to come out
to the streets, for this type of movement can get
out of hand," Ko Ko Gyi told Asia Times Online
before his arrest. The junta has also detained
protest organizers from the recently formed
Myanmar Development Committee.
In a
statement released on state-run media, protesters
were detained for "undermining stability and the
security of the nation". But the crackdown and
arrests, some on-the-ground observers say, have
acted to fuel public anger.
"More
demonstrations are likely to follow, as [Yangon's]
residents are already fuming at the increase in
fuel prices," said a Western diplomat based in the
country's capital.
Economic
meltdown There are preliminary indications
that the subsidy policy is seizing up the economy.
Prices for compressed natural gas, which the
government had in recent years promoted for use in
commercial vehicles, have increased fivefold,
while the price of basic commodities has
skyrocketed in line with the higher transportation
costs. Bus fares and taxi charges doubled almost
immediately in urban centers such as Yangon,
Mandalay and Moulmein, resulting in drastically
reduced passenger loads.
According to a
Yangon-based financial analyst who requested
anonymity over concerns of possible government
reprisals, the increase in bus fares will
disproportionately affect the urban poor. Manual
workers and day-laborers in the country' main
cities, who earn less than 2,000 kyat (US$2 at the
unofficial exchange rate, which is much closer to
the real world than the official rate) a day,
will, because of higher prices, have to pay more
than half their wage in travel costs, he
estimated. In certain instances, it may even be as
much as three-quarters of their daily income.
Win Min, an independent Myanmar analyst
based at Chiang Mai University in northern
Thailand, estimates that inflation was already
running at nearly 40% annually, and with the
recent removal of fuel-price subsidies that rate
could double to 80%. "There will be an increase in
layoffs as businesses are forced to close, and we
are likely to see a significant rise in the price
of food, clothing and basic commodities," he said.
Indeed, Yangon food prices have already
risen steeply. Since last week, rice has risen by
nearly 10%, edible oils by 20%, meat by about 15%
and garlic and eggs by 50%, according to aid
workers based in the city who monitor local market
prices. A standard plate of Burmese noodles has
nearly tripled in the past week, one aid worker
said.
"These price rises are crippling for
most residents in Rangoon," a Myanmar economist
told Asia Times Online, using the old name for
Yangon (the junta officially renamed both the city
and the country, long known as Burma, in 1989).
"They could hardly afford food before. Now their
weekly budget for essential foodstuffs is going to
buy even less - their purchasing power has been
reduced by more than 25% virtually overnight."
Crucially, the policy could cause a
backlash among one of the junta's key political
support groups: the civil service. One elderly
retired office worker who spoke by telephone with
Asia Times Online complained that her pension now
barely covers the taxi fare she pays to retrieve
it from government offices. Inflationary
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