Country Report Myanmar February 2009

Outlook for 2009-10

• The State Peace and Development Council (SPDC, the ruling military junta) will focus on protecting its grip on power, and will continue its policy of using violence and intimidation to contain its opponents.
• There is little prospect that the junta will release Aung San Suu Kyi, the leader of the main opposition organisation, the National League for Democracy, ahead of the election planned for 2010.
• The UN will keep up its efforts to persuade the junta to implement genuine political reform, while the Association of South-East Asian Nations (ASEAN) will take a slightly tougher approach in its dealings with the junta.
• The government remains focused on spending heavily on the military, with few (if any) initiatives in the pipeline to support households and businesses or to stimulate the economy in the face of the global economic downturn.
• Official data may continue to show real GDP expanding at an implausibly rapid pace, but the Economist Intelligence Unit forecasts that growth will remain weak in 2009-10.
• Based on the official price series, inflation will fall in 2009-10 from the high reached in 2008, but it will remain in double digits.

Monthly review

• The UN has again called on the SPDC to release political prisoners and begin political reform talks with opposition groups.
• The pro-military National Unity Party (NUP) is starting to reorganise ahead of the 2010 election. In early January NUP leaders indicated that the party would focus this year on organisational work to prepare for the poll.
• Thailand’s new prime minister, Abhisit Vejjajiva, has stated that his government wants to “see some changes” in Myanmar.
• Government tax revenue has continued to rise rapidly in nominal terms, but the government does not appear to have taken any specific measures to counter the potential negative side-effects of global economic woes.
• The limited data available suggest that overall industrial production growth was sluggish during the first six months of fiscal year 2008/09 (April-March).
• Consumer price inflation has eased slightly, in line with falling food prices, but it remains in double digits. The consumer price index rose by 26.2% year on year in September 2008.
• Exports contracted by 14.1% year on year in January-September 2008 in value terms, owing primarily to falling commodity prices and weakening demand in China.

Source: Country Report