Black Market Booms : Burma: An Exotic Face Hides Decay

“This city,” the expatriate muttered, “used to be advanced. People would come up from Bangkok for medical care and recreation. This was the place.”

Outside his window, Rangoon’s buildings were blotched with tropical mold, their bases lapped by the dirt of the streets and the sidewalks. The Burmese hurried by, hustling to make ends meet.

Nearly a quarter of a century after the military took over and Gen. Ne Win introduced “the Burmese way to socialism,” the country is on a treadmill in the race for development.

“The people cannot be ground down much further,” a well-informed Burmese declared.

Regime Appears Stable

But despite long-running insurgencies that have made much of its border territory off limits to outsiders, Burma’s government appears stable. Ne Win is retired from the military and government, but as chairman of the Burma Socialist Program Party he continues to be the country’s unquestioned leader.

And the burgeoning black market provides, at a price, what the state-run economy cannot. Working and trading on the black market have become national necessities.

“It’s how we eat,” the Burmese said.

A foreign resident of this Texas-sized country of 37 million people said, “The thing to remember is that everything has value here.”

He offered this advice in warning a visitor not to mail picture postcards from Burma; they could be of irresistible value to some postal clerk.

With its golden temples (a saying has it that there is more gold on the exterior of Rangoon’s Shwedagon Pagoda than in the Bank of England), Buddhist Burma is a picture-postcard country. The people seem gentle and fun-loving. Men and women alike wear the longyi (pronounced lawn-ji), an ankle-length skirt made of a tube of cotton, which they disconcertingly untie and retie as they walk the streets.

Women Favor Cheroots

The men smoke short cigars; peasant women favor enormous cheroots. Women of every class daub their cheeks with a yellowish powder, supposedly to prevent darkening of the skin.

To visitors, Burma is endlessly exotic: Where but in the bar of Rangoon’s old Strand Hotel could you see a man wearing a plaid skirt and an embroidered handbag put a foot on the rail, draw on his cigar and order a shot of Scotch?

But the very things that make Burma picturesque--ox carts and World War II-era jeeps, for instance--are evidence of the backward economy. For now, the black market seems the way out. And life “on the black,” nominally illegal, takes many forms:

--State stores offer little in the way of merchandise, and what is available is shoddy if low-priced. Buyers with the persistence or good fortune to be in a state store for the frenzy of an unannounced sale will often take their low-cost purchases to the sidewalk outside, spread them out on a cloth and peddle them at a 200% to 300% markup. “Sometimes it’s just a single light bulb,” said a foreigner who lives here.

--Government workers, after a day’s labor at low pay (teachers are paid $35 a month), moonlight as private tutors or language instructors. Home construction work is often done with government tools on “overnight loan.”

--Trading in foreign currency is strictly illegal but is practiced openly. In the markets of Rangoon, Burmese hustlers passing a foreigner will whisper furtively, “Change money? Change money?” The U.S. dollar will get 30 to 40 Burmese kyats (pronounced chats) on the illegal market. The official rate is 7 to 1.

Insurgents Control Borders

Smuggling is the major source of black market goods. Most of Burma’s borders are controlled by insurgents who describe themselves as autonomy-seeking nationalists but almost all are dedicated smugglers.

The Shan States bordering Thailand, Laos and China are a hotbed of illegal commerce. What goes out is primarily opium, gems and logs. Coming in is a department-store inventory of consumer goods, from Chinese blankets and tools to Thai toothpaste and American sunglasses, all hauled over the opium trails on horseback or on foot.

Big-ticket items come through the port of Rangoon, some smuggled, others legally. A Burmese merchant seaman is allowed to bring in capital goods on a scale graduated according to his time at sea, with an automobile authorized for a year away.

“It’s the best job in Burma,” a resident foreigner remarked. “If you could raise your son to be a doctor or a sailor, the choice would be easy.”

‘Disastrous Planning’

Diplomats and non-government economists lay the debacle of Burmese socialism to what one called “disastrous planning.” An example: A cement plant is built, but the production materials must be trucked in. No trucks. A request goes to another government department. No action.

Major industry was nationalized by the military in the early 1960s and has generally been a lackluster performer ever since. Most small businesses remain in private hands, as does agriculture, but farmers are required to meet a state quota.

“Most try to put away a few baskets of rice for the free (black) market,” a Burmese said, “but others run short and have to borrow to meet their quota.”

As everywhere in Asia, rice is the heart of the diet and the most politically explosive commodity. There are rumors in Rangoon that, by the end of the year, the government plans to squash the black market in rice, which provides better quality at three times the price charged in state stores.

A Clever Tactician

Diplomats and Burmese say a sudden action of this sort could provoke rioting, but they see the clever hand of Ne Win at work.

“He knows his people,” one diplomat said, noting that the rumors may be based on deliberate leaks that give the people time to rationalize change before it comes.

Further, he said, the old general knows how to turn the screw just enough. He will not provoke sectors important to the country’s stability.

“The chairman,” as Ne Win is universally called, is 76. He has had a slight stroke, insiders say, and sharply limits his public appearances. But by all accounts this man who was a postal clerk under British rule is firmly in control. He has chosen no successor, and he has derailed every colleague who showed signs of wanting to succeed him. But whatever the disasters of his government, Ne Win personally is not faulted by the people.

“Frankly, who else is there?” said a man who was imprisoned for six years by the military regime.

Has Government Backing

The chairman’s personal support is backed up by an extensive government apparatus.

“These aren’t East Bloc secret police, lurking beside lampposts in black trench coats,” a diplomat said. “They’re part and parcel of government.”

The administrative machinery is a descending network of councils, right down to the government’s man on the block. He sends intelligence up and dispenses favors down. It makes him an important man, and to those denied favors--say, a political recommendation for admission to a university--a hated one.

With problems at home, the government has tried to avoid foreign entanglements, and unlike its neighbors, it has avoided external wars since independence from Britain in 1948. It is so determinedly neutral that it withdrew from the Nonaligned Movement in 1979. All major countries have embassies here, the largest that of the Soviet Union, Burma’s largest trading partner.

Tourism Limited

Tourism has become a money earner, but only 36,000 tourists a year can be accommodated in the limited number of hotels (just 400 hotel rooms in Rangoon) and on the nationalized trains and planes. No tourists were permitted in the early years of military rule, which on paper gave way to constitutional government in 1974.

Tourists travel Burma in a diamond route, starting at Rangoon in the south. Each stop says something about the country.

In the west lies Pagan, beside the Irrawaddy River and site of the Golden Age of Burmese antiquity, in the 11th through the 13th centuries. At dawn and dusk, its hundreds of temples and pagodas, most of them crumbling now, would seem possible only on some Hollywood backlot. There is no movement except the shadows across the temple floors; the only sound the temple bells in the lightest of breezes.

The road to Mandalay, in the north, is punctured by potholes. It dips into dry riverbeds, where sand covers the pavement. And this is the main land route between two principal cities.

Looser Than Rangoon

Mandalay itself has been rebuilt from the fires of World War II, when the British bombed the Japanese occupation forces. The city seems somewhat looser than Rangoon, and a recent street festival showed the playful side of the Burmese. A group of showmen had erected a stage, and a series of skits, some clearly poking fun at the authorities of a different period, brought down the house.

To the east, at Taunggyi in the Shan States, the business is smuggling, and business looks good. The morning market is crowded with goods from across the border. Money is being made, and new houses are going up outside the town. The military presence seems heavy here and, according to a Rangoon diplomat, Shan rebels collect “taxes” just a few miles from Taunggyi.

The tour ends in Rangoon, a city of 2.3 million people, including large numbers of Chinese and Indians who came to Burma in British times. Upcountry, Shans, Karens, Mons, Kachins and other minorities tug at the central authority of the majority Burmese people. For now, the regime appears able to resist the strains, though it is not governing at the perimeter of its territory.

The government is building a new pagoda in Rangoon. The public thinks it is a memorial to Ne Win, built on his instructions, as with the kings of ancient Pagan. But few Burmese appear eager to contemplate what will happen when the old general leaves the scene.