Fuel price policy explodes in Myanmar

Public protests have broken out across Myanmar’s old capital Yangon after the military government unexpectedly removed fuel-price subsidies, resulting in a 500% spike in rationed fuel prices.

The shock policy is part of the government’s emerging economic and financial reform program and notably coincided with a high-level mission to the country of International Monetary Fund (IMF)

and World Bank officials, who have long pressed the junta to reduce or abolish a range of price subsidies.
The move has shocked the country’s already fragile economy and, depending on the eventual scale of the protests and severity of the government’s response, could have grave implications for political stability. Significantly, the spiraling acts of civil disobedience have been led by former political prisoners known as the 88 Generation Students Group, who nearly 20 years ago as student leaders led the pro-democracy demonstrations the junta cracked down on with an iron fist in 1988.

Myanmar’s ruling junta, known as the State Peace and Development Council (SPDC), has for decades maintained strict social controls – though security forces have loosened their grip in certain areas of Yangon since abruptly moving the national capital to a newly built city known as Naypyidaw in November 2005. The numbers joining the marches has grown since. More than a hundred people joined the first demonstration on Sunday demanding that the government intervene to lower fast-rising fuel and food prices.

More than 300 people took to the streets to protest on Wednesday, according to witnesses, and news reports indicate the rallies continued on Thursday. The junta has responded through stick-wielding vigilantes, including members of the pro-government Union Solidarity and Development Association. Some protesters have been beaten and whisked away in unmarked cars, according to witnesses who spoke with Asia Times Online.

There are preliminary indications that the subsidy policy is seizing up the economy. Prices for compressed natural gas, which the government had in recent years promoted for use in commercial vehicles, have increased fivefold, while the price of basic commodities has skyrocketed in line with the higher transportation costs. Bus fares and taxi charges doubled almost immediately in urban centers such as Yangon, Mandalay and Moulmein, resulting in drastically reduced passenger loads.

According to a Yangon-based financial analyst who requested anonymity over concerns of possible government reprisals, the increase in bus fares will disproportionately affect the urban poor. Manual workers and day-laborers in the country’ main cities, who earn less than 2,000 kyat (US$2 at the unofficial exchange rate, which is much closer to the real world than the official rate) a day, will, because of higher prices, have to pay more than half their wage in travel costs, he estimated. In certain instances, it may even be as much as three-quarters of their daily income.

Indeed, Yangon food prices have already risen steeply. Since last week, rice has risen by nearly 10%, edible oils by 20%, meat by about 15% and garlic and eggs by 50%, according to aid workers based in the city who monitor local market prices. A standard plate of Burmese noodles has nearly tripled in the past week, one aid worker said.

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