country’s administration lost their jobs to military personnel. 2 Security and administrative councils were also set up at the divisional, township and village levels in central Burma. The ethnic states lost what autonomy they had had, with security and administrative councils established there as well. These new military-guided councils served as the primary structure through which the Revolutionary Council interacted with society.
The Revolutionary Council instituted what it called ‘the Burmese Way to Socialism’, a programme that was originally supported by some intellectuals and politicians who felt that the AFPFL’s watered-down socialist policies had not gone far enough. For them, capitalism was linked with foreign exploitation, and they supported the regime’s decision to seal the country off from foreign investment. Between 1963 and 1965, all banks, industries and large shops were nationalized. Most of the businesses were run by Indians and Chinese; by taking state control, the government intended to return the profits to indigenous Burmese. In March 1964, the Revolutionary Council demonetized 50-kyat and 100-kyat notes, also with the intention of removing wealth from foreign hands. As a result, hundreds of thousands of Indian and Chinese business people lost everything and left the country. Those businesses that did not collapse came under state ownership.
Military men were brought in to run the businesses, but with little education or relevant experience, they found it difficult to handle their new jobs. In cases where skilled civilians remained on staff, the new bosses often felt threatened by them. With no other opportunities available, many experienced professionals and bright young people emigrated, starting the brain drain which has continued ever since. The Revolutionary Council appeared to be unconcerned by the departure of so many of its most talented people, but the effect on industry was devastating. Burma had been ahead of both Malaysia and Thailand in industrial production in the 1950s, but declined steadily from 1964 onwards.
Agricultural production was also profoundly affected. While land reform programmes carried through by the regime gave agricultural plots to many landless farmers, farmers were told that they had to sell their rice to the government, at below market prices. Frustrated with the new system, some farmers put less effort into their cultivation while others hoarded as much rice as possible and sold or bartered it surreptitiously on the black market. Because rice exports were one of Burma’s primary sources of foreign exchange, the dramatic fall in rice exports, from 1.8 million tons in 1963 to 0.3 million tons in 1968, made it impossible for the government to pay for necessary imports. 3 Both industrial and agricultural production suffered. The regime responded not by liberalizing the sale of rice but by cutting imports, including machinery and spare parts. This further hindered agricultural development.
With the nationalization of shops also came the establishment of cooperatives, where people could buy their daily necessities at subsidized prices. At first the shops were well stocked and the government prided itself on taking care of the people. But soon stocks of even the most basic goods were insufficient, and waiting in line for rations became a part of daily life. To make up for the inadequacies of the cooperatives, a thriving black market emerged, with goods coming from Thailand and other neighbouring countries. 4
In what at first seemed a positive development, the military regime announced that it would hold peace talks in Rangoon for all groups willing to participate. Safe passage to and from the talks was guaranteed. In 1963, many representatives of armed ethnic groups as well as communist leaders came to Rangoon, but the regime took a hard line with all of them. The communists were told to give up their armed struggle, and the regime refused to consider various
The Revolutionary Council instituted what it called ‘the Burmese Way to Socialism’, a programme that was originally supported by some intellectuals and politicians who felt that the AFPFL’s watered-down socialist policies had not gone far enough. For them, capitalism was linked with foreign exploitation, and they supported the regime’s decision to seal the country off from foreign investment. Between 1963 and 1965, all banks, industries and large shops were nationalized. Most of the businesses were run by Indians and Chinese; by taking state control, the government intended to return the profits to indigenous Burmese. In March 1964, the Revolutionary Council demonetized 50-kyat and 100-kyat notes, also with the intention of removing wealth from foreign hands. As a result, hundreds of thousands of Indian and Chinese business people lost everything and left the country. Those businesses that did not collapse came under state ownership.
Military men were brought in to run the businesses, but with little education or relevant experience, they found it difficult to handle their new jobs. In cases where skilled civilians remained on staff, the new bosses often felt threatened by them. With no other opportunities available, many experienced professionals and bright young people emigrated, starting the brain drain which has continued ever since. The Revolutionary Council appeared to be unconcerned by the departure of so many of its most talented people, but the effect on industry was devastating. Burma had been ahead of both Malaysia and Thailand in industrial production in the 1950s, but declined steadily from 1964 onwards.
Agricultural production was also profoundly affected. While land reform programmes carried through by the regime gave agricultural plots to many landless farmers, farmers were told that they had to sell their rice to the government, at below market prices. Frustrated with the new system, some farmers put less effort into their cultivation while others hoarded as much rice as possible and sold or bartered it surreptitiously on the black market. Because rice exports were one of Burma’s primary sources of foreign exchange, the dramatic fall in rice exports, from 1.8 million tons in 1963 to 0.3 million tons in 1968, made it impossible for the government to pay for necessary imports. 3 Both industrial and agricultural production suffered. The regime responded not by liberalizing the sale of rice but by cutting imports, including machinery and spare parts. This further hindered agricultural development.
With the nationalization of shops also came the establishment of cooperatives, where people could buy their daily necessities at subsidized prices. At first the shops were well stocked and the government prided itself on taking care of the people. But soon stocks of even the most basic goods were insufficient, and waiting in line for rations became a part of daily life. To make up for the inadequacies of the cooperatives, a thriving black market emerged, with goods coming from Thailand and other neighbouring countries. 4
In what at first seemed a positive development, the military regime announced that it would hold peace talks in Rangoon for all groups willing to participate. Safe passage to and from the talks was guaranteed. In 1963, many representatives of armed ethnic groups as well as communist leaders came to Rangoon, but the regime took a hard line with all of them. The communists were told to give up their armed struggle, and the regime refused to consider various
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