Economic Disparity in Rural Myanmar: Transformation under Market Liberalization

Market liberalization in Myanmar began in 1988 and had some unexpected consequences. One was an explosion in the production of green gram, an export crop that became extremely popular in the 1990s. Under the new regulations, socialist policies that limited economic disparaties within the rural population were removed, and farmers began to operate in a context with little government control over prices and marketing, even though the sector was not fully deregulated. Market liberalization in the new export-oriented pulse industry produced increasing economic disparaties among different classes in rural Myanmar, largely determined by access to land, capital and credit. Traders benefited the most, and landless laborers the least.

Ikuko Okamoto explores these issues through a detailed case study of Thongwa Township, a place east of Yangon (Rangoon) in the major green gram producing region in the country, showing that rural people respond quickly to policy changes and make maximum use of new opportunities, even in a country where such opportunities have been very limited. Her work offers important insights into the transition from a socialist to a market-based economy, and local-level responses to market incentives. It also shows that the success or failure of new crops in a peasant economy largely depends on whether the crop is compatible with the initial resource endowment.