Army-owned Conglomerates Slowly Loosening Grip on Economy: Report ?

 25 April 2014

Burma experts and a defense analyst agreed with the ICG that the military had retained a largely similar size defense budget in real
terms compared to previous years, but some disagreed with the group's assertion that the military's off-budget income was in sharp
decline.
Noting the Tatmadaw's renowned ability to keep its objectives, weapons systems and budgets secret, veteran journalist Bertil Lintner
said, "The fact is that we know very little about Burma's military budget and the businesses the Burmese army controls because most
of it is shrouded in secrecy."
Lintner, the author of several books on Burma, said it is hard to square the loss of the army's income as reported by the ICG, with
a "military that has been able to expand its forces, buy new sophisticated equipment from abroad, and develop more and bigger
indigenous arms factories than any other country in Southeast Asia."
Anthony Davis, a Bangkok-based security analyst for HIS Jane's Defence, a UK publication, said the ICG also failed to take into
account secret government budgets for the army "which the Tatmadaw-like other militaries in the region-almost certainly has access
to."
He said that the economic reforms that have seen military-owned conglomerates lose market monopolies do not indicate how much money
the military earns because "none of this information is in the public domain."
Speaking on the issue of the military's declining relative share of the official budget, Davis said, "As the [ICG] report points
out, the budget itself is growing significantly so the military allocation today could actually be little different or even larger
in real terms than might have been the case two or three years ago."
Sean Turnell, an Australian economist who has long studied Burma's economic policies, echoed the conclusion of Davis, saying, "Most
important of all is that military spending in aggregate kyat terms has not really fallen at all. The confusion here comes from the
fact that the government budget itself is so much larger than it used to be, since now Myanmar's gas earnings are recorded at the
market exchange rate, and outlays in the same manner."
He said Burma's defense budget remains high compared to other nations and is still greater than health and education spending
combined.
"Military spending continues to distort Myanmar's economy in significant ways, not least since such expenditure comes at the cost of
more socially-constructive outlays. Military spending is destructive, in more ways beyond the obvious," said Turnell.
Despite the decline of the relative share of defense spending in the overall government budget, reports also continue to emerge of
procurement of foreign-produced, sophisticated arms or equipment by the Burmese government army.
In January 2013, the London-based Campaign Against Arms Trade said that Britain approved sales of US$5.3 million worth of "inertial
equipment," most likely technology that aids radar navigation systems, to Burma.