Fuel price increases by as much as 500% announced by the military junta are expected to hit poor the hardest
The Burmese government’s enormous increase in fuel charges last week has left Rangoon’s residents quietly fuming, according to Western diplomats. Transport costs have already more than doubled and prices of essential goods are beginning to skyrocket.
‘’The poor people have been hit hardest,'’ a European diplomat said.
‘’They were already finding it hard to survive, and the increase in fuel charges and the knock-on effect on food prices will make it even harder,'’ he said. ‘’It is likely to fuel increased social unrest.'’
At midnight on Tuesday Burma’s ruling military junta unexpectedly raised the price of rationed fuel by as much as 500%.
Compressed natural gas, which the government has been promoting, especially for commercial vehicles, was increased five fold, while diesel and petrol prices were more than doubled.
Bus fares and taxi charges doubled immediately in Rangoon and Mandalay.
Already there is a substantially reduced service in many parts of Rangoon. The increase in bus fares will severely affect the poor, said a financial analyst in Rangoon.
Labourers in the country’s main cities, who earn less than 2,000 kyats (80 baht) a day, will now have to pay more than half their wages in travel costs, he said.
In some cases it may be up to three-quarters of their income.
Businessmen are complaining bitterly and some have closed their businesses _ at least temporarily.
Besides the operation of motor vehicles, diesel is also used by many families and shopkeepers to run small power generators which they use during power blackouts that frequently hit Rangoon.
An owner of a small printing works in Rangoon said the increase in diesel costs now made his business unprofitable.
‘’In the coming weeks more and more businesses, which use natural gas and diesel, are likely to be forced to close,'’ a Burmese economist in Rangoon said.
‘’The increase in fuel costs will mean a rise in transport charges generally, which will then cause food prices to rise,'’ said an independent Burmese analyst at Chiang Mai University.
‘’Inflation is already running at more than 40% a year and this could now more than double,'’ he said.
‘’There will be an increase in lay-offs as businesses are forced to close and we are likely to see a significant rise in the prices of food, clothing and basic commodities,'’ he said.
‘’There is also likely to be a dramatic rise in the number of migrant labourers crossing into Thailand in search of work.'’
This rise in fuel charges will only increase the level of poverty in Burma. ‘’More than 90% of the country’s population already live in dire poverty,'’ a Burmese economist said. ‘’It is not so much a case of food shortages as families’ incomes being insufficient to purchase their daily needs.'’
Country-wide UN surveys in recent years have revealed a trend to increased poverty and a growing income gap.
‘’More than 90% of the population live on less than 300,000 kyat (about 10,000 baht) a year,'’ said a senior UN official.
‘’Food security has become a significant issue in many parts of the country, especially in remote and border areas,'’ he said.
The worst areas of Burma are in Chin, Kachin, Rakhine (Arakan) and Shan states, according to a recent UN report seen by the Bangkok Post.
By far the worst area is Chin state, according to the UN surveys, where 40% of the population do not have enough food to live on. In Chin state, nearly three of four people live below the poverty line, according to the UN’s resident humanitarian coordinator in Burma, Charles Petrie.
This situation is expected to worsen as there have been recent reports from Chin state of potential crop failures.
In eastern and northern Shan state more than half the population live below the poverty line.
‘’They just do not have sufficient income to ensure food security, let alone provide a balanced or varied diet,'’ said one of the UN researchers.
UN research has documented a deteriorating situation, with poverty in the country growing with no attempt by the Burmese government to counter it.
A crucial sign of food insecurity and poverty is the level of household income devoted to purchasing food. In Burma the average household expenditure on food is nearly 70%.
‘’This is a reflection of the very low income level of the population,'’ said a UN report. This compares unfavourably with its neighbours, where it is 59% in Indonesia, 57% in Bangladesh and 32% in Thailand.
In the last 10 years, these neighbours have reduced poverty levels significantly and improved food security, whereas in Burma poverty levels have increased and food insecurity has become critical, especially in the border areas.
Government action in these countries has led to the improvement, but in Burma the military government’s apparent lack of interest in these issues has allowed poverty levels to escalate alarmingly.
In fact, some government policies have exacerbated the situation.
Poor farmers have been less able to afford the high costs of agricultural input _ fertiliser, seeds, pesticides, irrigation pumps and diesel _ as a result of price and market liberalisation.
‘’Farmers are using less and less fertiliser, and as yields drop families are abandoning agriculture and becoming landless,'’ said a former senior Rangoon-based Western diplomat.
‘’This has led, over the past few years, to an alarming increase in voluntary migration throughout the country, as these families go in search of paid work.'’
This lack of sustainable agriculture and the decline in some manufacturing sectors, especially the textile and garment industries which were crippled by the imposition of US sanctions several years ago, has fuelled a growing movement of people within and outside the country in search of employment.
There has been a massive increase in the number of women and children entering the sex trade or working in slave-like conditions in the textile factories in Thailand’s border regions.
At least 10,000 girls every year are trafficked across the border to work in Thailand’s brothels, according to a recent report prepared by Mr Petrie.
But the grim economic situation for most Burmese does not end there.
Infant mortality rates are increasing and are much higher than in neighbouring countries.
This reflects the growing problem of malnutrition across the country.
The UN estimates that more than 30% of the country’s children under the age of five are severely malnourished.
In the ethnic minority areas and conflict zone it is even higher, and in some areas three out of four children are malnourished, according to a UN report.
The UN is also now reporting an alarming increase in beri-beri (caused by a vitamin deficiency). Burma is the only country in the world where this disease is a major factor in infant mortality.
The list goes on and on _ like the increase in drug-resistant tuberculosis. In 2004, multi-drug resistant TB accounted for 4% of newly diagnosed TB patients, and over 15% in previously treated sufferers.
This is more than double the incidences in most countries in the region.
For example, Thailand’s reported rate is 1.5% among new cases.
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