Second wave economic crisis in Myanmar
By Larry Jagan
BANGKOK - While Myanmar counts the cost of the Cyclone Nargis disaster and
international aid agencies struggle to get relief supplies to an estimated 2.4
million homeless and desperate victims, time is running out for the country's
rice farmers to plant new crops and help the country stave off famine.
If seeds are not sewn within the next 30 days in the worst-hit Irrawaddy Delta
- Myanmar's rice bowl - rice production will be dangerously reduced, United
Nations food and agriculture specialists warn. Meanwhile, analysts specializing
in Myanmar's economy say that other food sectors have also been decimated,
raising the risk of food shortages at a time the ruling military junta
for political purposes continues to obstruct aid shipments and distribution.
Myanmar's economy was already one of Asia's worst performers, due to decades of
economic mismanagement by successive military-run governments. After the
cyclone disaster, the risk is rising of a full-blown economic collapse, some
contend. "The damage to the economy is serious indeed, both in the short and
longer term," said Sean Turnell, a specialist on Myanmar's economy at Macquarie
University in Australia. "Rice and agriculture is only part of the picture," he
said.
Agricultural experts warn that the cyclone disaster could soon shift the
country from being a net rice exporter to importer, which will put new
pressures on the country's already strained balance of payments. One week after
the cyclone hit and the extent of the devastation was not yet known, Myanmar
continued to export rice. Because of the damage "food stores have been lost,
seeds have been destroyed, and other assets needed have all been swept away",
said Diderik de Vleeschauwer, a spokesman for the UN's Food and Agriculture
Organization.
"Farmers have until the end of June to replant their seedlings, otherwise food
production will be sorely reduced," he said. "In the lower [Irrawaddy] Delta,
they just do not have the capital to replace the seeds, livestock and tools
needed to start replanting rice in the next few months."
The usual planting season starts now in the Irrawaddy Delta, which usually
produces as much as two-thirds of Myanmar's annual rice crop. About a quarter
of the rice paddy in this area is still flooded with salty sea water carried
inland by the cyclone and is littered with decaying animal carcasses and human
corpses, which experts say will have to be cleared before planting can begin.
Meanwhile, irrigation channels need to be repaired, paddy walls restored and
water pumps replaced to restore what was already an extremely low level of
production efficiency, say food and agriculture experts. More than half of the
delta's livestock, much of which was used for plowing, reportedly perished in
the storm or has since starved.
"This is going to prove a very high opportunity cost for the government in the
coming months, particularly given the present and likely future international
demand and high prices for rice," said Turnell.
As relief efforts focus primarily on saving human lives, so far little if any
agricultural rehabilitation has taken place. "They've got to put their houses
back together first," said Paul Risely, a regional spokesman for the
UN-affiliated World Food Program (WFP). "Even then the farmers will need to be
supported with food supplies until their crops are harvested." The WFP expects
to have food-for-work programs in place in the delta area for at least the next
six months.
Even if a limited amount of rice is planted this year, the quality and yield is
likely to be severely reduced, experts say. "We can certainly count on very
meager crops for an indefinite future. The next two harvests will be greatly
affected," said Turnell. "Before the cyclone this area was performing way below
potential, mainly because of the regime's willful neglect and terrible policies
towards agriculture."
Forced rehabilitation
Now there is a risk the military regime aggravates the humanitarian and
economic crisis by forcing farmers prematurely back onto their land. UN
officials warned the government on Friday that the forced resettlement of
thousands of victims could launch a second wave of deaths, through disease
outbreaks and deprivation in areas that lack proper drinking water and food
supplies.
Myanmar-based aid workers and relief volunteers who had worked in the delta
areas in recent weeks doubt that many rice farmers will be able to plant their
monsoon crops on time - despite the government's forced resettlement policies.
"They are more concerned about surviving and getting food for their families
than returning to their farms," said a Thai volunteer, who has just spent a
week in the worst-affected areas of the delta. "Everywhere outside the towns,
the fields and waterways were full of rotting animal carcasses and bloated
bodies."
Other food sectors have similarly been affected, including the crucial fishing
industry, which was largely based in the delta area. More than half of the
fishing industry has been wiped out by the cyclone, according to a government
official in the Agriculture Ministry. More than 20,000 fishermen are reportedly
dead and another 6,000 are missing in the delta, he estimated.
Most of the country's fishing fleet has been destroyed or is missing, according
to local government officials. There were an estimated 26,000 small- and 2,000
medium-sized fishing vessels that operated off-shore before the cyclone hit,
according to official statistics. Meanwhile thousands of fish ponds, which
helped supplement farmers' food and incomes, have also been rendered useless by
the salt water.
Many of the shrimp and prawn farms near Yangon and in the Irrawaddy Delta have
been destroyed or badly damaged by the cyclone, a businessman involved in the
export of prawns to Thailand said on condition of anonymity. "The cyclone is
likely to have reduced this to a fraction of last year's output and will
severely dent the country's export trade," said the Burmese fisheries exporter.
Marine fisheries in the area produce more than half of the country's fish
supply, while coastal aquaculture, including shrimp, crab and grouper farms,
accounts for nearly 20% of production. Both of these sectors generated
significant export earnings in recent years and represented one of the few
viable growth industries in the country.
The Myanmar government on May 25 requested US$11.7 billion from international
donors for purposes of reconstruction and rehabilitation. So far, it's not
clear the international community is willing to foot that huge bill. The
junta's request included an estimated $243 million to restore the rice industry
and an additional $25 million to replace livestock production. The
rehabilitation bill for the fishing industry, if fully restored, will be much
higher, experts say.
All told, the economic impact of the cyclone disaster could prove to be even
more devastating than the loss of lives, officially estimated now at around
133,000, though some estimate that figure much higher. The cyclone will
compound the country's already deep economic woes and put further pressure on
government coffers.
"Imports of basic commodities and foodstuffs, all at very high international
prices, will certainly increase and exports will fall dramatically, especially
from the fisheries sector, putting increased pressure on the country's foreign
exchange reserves," said Turnell.
While energy exports, including to Thailand, India and China, are expected to
be unaffected by the cyclone disaster, the revenues they previously provided
for government coffers will in future be swallowed up by the cost of
rehabilitation-related imports, he said. Expensive imports will inevitably add
inflationary pressures to a dire humanitarian crisis, raising the economic risk
of more human suffering in the months ahead.
Larry Jagan previously covered Myanmar politics for the British
Broadcasting Corp. He is currently a freelance journalist based in Bangkok.
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