Burma's deteriorated economy has increased poverty according to UN economists, with areas populated by ethnic minorities suffering the greatest consequences.

Below are extracts of an article written by Larry Jagan and published by Mizzima News

Burma's economy remains the military regime's Achilles' heel. Over the past nineteen years the majority of people have got poorer and poorer, as a select few with strong links to the generals, have successfully accumulated substantial wealth. But the deteriorating economic situation and the rising poverty have fuelled increased anger and even recently occasional public protests.

The government's new found wealth in gas and oil reserves is only likely to exacerbate the situation as Burma's military rulers care little for the plight of the country's civilian population. There is a real danger of Burma becoming another authoritarian Petro-dollar regime like Nigeria, a UN economist told Mizzima on condition of anonymity.

As yet there are few signs of conspicuous consumption amongst the Burmese elite, with the exception of the lavish wedding party, the country's top general Than Shwe throw for his daughter more than a year ago. But as the wealth from the country's energy resources begins to roll in this is likely to change and the isible divide between rich and poor stimulate increased social and economic unrest.

This is what Burma's military rulers fear most. It was the demonetarisation of the kyat and subsequent food shortages some two decades ago that fuelled the strikes and political protests and demands for democracy that brought the country to a complete standstill nineteen years The regime fears a repeat of this and tries to ensure that there is no shortages of rice in the domestic market.

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There has, over the last fifteen years or so, been a continuous construction boom that has seldom slowed, even during the Asian economic crisis of ten years ago. The government has also pursued a vigorous mega infrastructure plan – building roads, bridges and dams throughout the country. But much of this construction was designed to improve the country's communications and transport links.

"These infrastructure projects also improved the military's access to the country's remote areas and significantly enhanced the speed with which the army could deploy troops," according to a senior Thai military source. These new roads should also have benefited the farmers, allowing them greater and speedier access to local markets – but the country's farmers have not benefited as they found themselves under increased economic pressure from government actions and the lack of investment in the agricultural sector.

"More than ninety percent of the country's population live in dire poverty," a Burmese economist told Mizzima on condition of anonymity. "It is not so much a case of food shortages as families' incomes being insufficient to purchase their daily needs," he added.

UN country-wide surveys in last few years have revealed this trend of increased poverty in Burma and the growing income gap. "More than ninety percent of the population live on less than 300, 000 kyat (around $300) a year," a senior UN official told Mizzima, but declined to be named. This is far greater than in the neighbouring countries with the possible exception of Laos.

"Food security has become a significant issue in many parts of the country, especially in the remote and border areas," he said. The worst areas are in Chin, Kachin, Rakhine and Shan states, according to a recent UN report seen by Mizzima.

By far the worst area is Chin state, according to the UN surveys, where 40 percent of the population just do not get enough food to live on. In Chin state nearly three in five people live below the poverty line, according to the UN's resident humanitarian co-ordinator in Burma, Charles Petrie. This situation is expected to worse further as there have been recent reports from various parts of Chin state of potential crop failures.

In eastern and northern Shan state more than half the population live under the poverty line. "They just do not have sufficient income to ensure food security, let alone provide a balance or varied diet," according to one of the UN researchers.

The UN research has documented a deteriorating situation, with poverty levels 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 percent. "This is reflection of a very low income level of the population," said a UN report. This compares unfavourably with its neighbours, where it is 59 percent in Indonesia, 57 percent in Bangladesh and 32 percent in Thailand.

What is more over the last ten years these neighbouring countries have reduced poverty levels significantly and improved food security whereas in Burma poverty levels have increased and food insecurity become critical, especially in the border areas. Government action in these countries has led to the improvement there, whereas in Burma the military government's lack of interest in these issues has allowed poverty levels to escalate alarmingly.

In fact some government policies have even exacerbated the situation. Poorer farmers have not been able to afford the high costs of agricultural inputs –fertilisers, seeds, pesticides, irrigation pumps and diesel as a result of price and market liberalisation.

"Farmers are using less and less fertilisers, and as yields drop, families are abandoning agriculture and becoming landless," according to a former senior Rangoon-based western diplomat, who did not want to be named.

"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 f US sanctions several ears ago, has fuelled a growing movement of people across the country and abroad in search of employment. There as 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.

The UN estimates that 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 the UN head in Rangoon, Charles Petrie.

But the grim economic situation for most Burmese does not end there. Infant mortality rates are increasing and much higher than in the neighbouring countries. This reflects the growing problem of malnutrition across the country. The UN estimates that more than thirty percent of the country's children under the age of five are severely malnourished. In the ethnic minority areas and conflict zone this can be as high as three out of four children are malnourished, according to a recent UN report.

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Burma is unique in the region for spending more on the military than health and education combined. That is a clear indicator of the regime's priorities. It is little wonder that many people in Burma are convinced that poverty, health and education will only be tackled once the military junta is no longer in power.