Burma: from boom to bust in the 1950s a historical review on economic interdependence

Abstract

Burmese regard the 1950s as the 'golden era' of Burmese history. The country was ruled by a democratically elected civilian Prime Minister and Burma was perceived also by the outsiders as one of the most promising countries in the region in terms of future economic development. Burma was the number one rice exporter in the world and was making a handsome surplus from the rice exports. Burma also exported teak, petrol, minerals and rubber, which added up on the surplus in the state budget. Prime Minister U Nu had ambitious plans to turn Burma into a 'welfare state', which could have been financially supported by the surpluses. This all changed in 1953, after which we can see a slow but steady decline in incomes from the rice export and from other exports. By 1956 the country was in a desperate economic condition and Prime Minister U Nu resigned temporarily allowing the Socialist opposition leader U Ba Swe to take over. U Nu returned to power, but had to hand over the power to General Ne Win and the Caretaker Government in October 1958. This paper outlines the various national and international, socio-political and geopolitical developments that caused this rapid economic decline of the once- prosperous Burma.