A predominantly Buddhist country on the northeastern shores of the Indian Ocean, Burma is mountainous in the north and east, while the fertile Irrawaddy basin occupies most of the country. Rocked by ethnic conflict ever since it gained independence from the UK in 1948, Burma has been ruled by repressive military regimes since 1962. The National League for Democracy (NLD) gained a majority in free elections in 1990 but has been prevented from taking power by the military. Rich in natural resources, which include fisheries and teak forests, Burma remains a mostly agricultural economy.

A savage history of ethnic repression at the hands of the majority Burman still plays a large part in the mistrust felt by the smaller minority communities. Each group maintains a distinct cultural identity. At independence the Chin, Kachin, Karen, Karenni, Mon, and Shan all unsuccessfully demanded their own state within a federation. Despite uniting against the military dictatorship in 1988, most factions had by 1996 signed peace agreements. Only the Shan and Karen remain militarily active to any significant degree, the former agreeing to a short-lived cease-fire in 2000. While the Burman claim racial purity, many of them are in fact of mixed blood or ethnically Chinese.

Accusations of forced labor lie at the heart of international criticism of the military regime, with ethnic minorities apparently at highest risk.

Domestic life in Burma is still based around the extended family. Women have a prominent role, and access to education. Many run or own businesses in their own right. However, top jobs in government are still held almost exclusively by men.

Strengths

Very rich in natural resources: fertile soil, rich fisheries, timber including diminishing teak reserves, gems, offshore natural gas, and oil.

Weaknesses

Shortage of skilled labor, managers, and technicians. Rudimentary financial systems and institutions. Nationwide black market. Huge external debt. Dependence on imported manufactures.

Profile

Burma's economy is agriculture-based and functions mainly on a cash and barter system. Its key industries are controlled by military-run state enterprises. Every aspect of economic life is permeated by a black market, where prices are rocketing – a reaction to official price controls.

Since 1989, the SPDC's open-door market-economy policy has brought a flood of foreign investment in oil and gas (by Western companies), and in forestry, tourism, and mining (by Asian companies). The resulting boom in trade with China has turned less developed Upper Burma into a thriving business center. A narcotics-eradication program has been initiated in the northeastern border states, which account for about 60% of the world's heroin, by encouraging farmers to grow food crops instead of poppy. Few plans exist for the manufacturing sector, however, and dependence on imports continues.

Burma is ruled by the military-backed State Peace and Development Council (SPDC), under Gen. Than Shwe.

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Seizing power amid mass pro-democracy protests in 1988, the military has suppressed all democratic opposition. The regime has never recognized the 1990 electoral victory of the NLD. Recent moves toward negotiation have produced few tangible results. Ethnic rebellion in outer regions degenerated into cross-border guerrilla activity after a concerted government offensive in 1996.

Main Political Issues

Restoring democracy

In a nod to international pressure, and the popularity of the pro-democracy movement, the junta has talked openly of steering Burma toward "disciplined democracy." In reality there has been little progress toward ending the dictatorship. The opposition NLD is led by the charismatic Aung San Suu Kyi who has been intermittently under house arrest since 1990. Her latest release, in 2002, quickly proved to have been a hollow gesture.

Forced labor

The practice of using slave labor in rural areas was officially banned in 2000. However, many groups, including the International Labor Organization, insist that the military authorities still regularly make use of "slave" laborers.

Burma's key relationship is with China, which backs the SPDC military regime and is a major supplier of weapons to the Burmese army. The relationship allows China access to the Indian Ocean and gives it influence over a regime dependent on its support. While Burma's neighbors fear that the arrangement could destabilize the whole of the Asia–Pacific region, many favor a policy of "constructive engagement" with the SPDC. In July 1997, Burma was admitted to ASEAN, despite continuing concerns about its human rights record.

The EU and Western members of the UN have strongly condemned the human rights violations in Burma and threatened to impose economic sanctions in response to the regime's policies. In practice, however, the West maintains an ambivalent position. Economic ties are expanding, particularly between SPDC-owned state enterprises and Western multinationals which have an interest in Burmese offshore oil and gas drilling sectors.

The military authorities have steadily increased the country's military power, doubling the size of the army and obtaining modern weapons and military technology from around the world, primarily from China, which since 1989 has delivered arms worth over $1 billion to Burma, including tanks and jet fighters.

Burma's growing military capability is used mainly to control internal dissent, and the army has suppressed most ethnic insurgent campaigns by utilizing its military superiority and cutting numerous deals with rebel leaders. The remaining militant groups are now combated in cooperation with neighboring states. The army is accused of human rights abuses in rural areas.

Burma is the world's largest teak exporter. It is also a producer of pearls, rubies, and other gems. Foreign capital is funding exploration for natural gas and oil in the Tenasserim strip, while offshore fields are already in full production.

Deforestation is a major problem, and it has increased since the 1988 coup. Chinese companies have been given unrestricted logging concessions.

Burma's main transportation corridors run north–south. Most traffic is concentrated between Rangoon and Mandalay. A daily express train runs between these two cities, although visitors are urged to take internal flights on the state-owned carriers. The Irrawaddy River and its tributaries also provide an important artery for travel.

Beyond the Irrawaddy basin transportation is limited and hazardous. The vast majority of roads remain unpaved, and access to neighboring countries is restricted. At certain points on the Chinese border, access is one-way only: out of China.

Leprosy, although it affects relatively few people compared with other diseases, has a higher prevalence in Burma than in the rest of Asia. In the last few years Burma has seen an increase in the incidence of malaria.

The growing number of AIDS cases is largely due to migrant prostitution across the Thai–Burmese border. They put an additional strain on health facilities, which are well developed but not comprehensive.

The education system provides ten years of schooling. Ethnic-language schools are discouraged. A shortage of teachers, many of whom have left or are in jail, has disrupted education. All but two universities were closed in the late 1990s by the regime, but quietly reopened in 2000. The NLD has criticized the shortened and "sanitized" courses on offer.

Levels of robbery, murder, bribery, corruption, embezzlement, and black marketeering are high, compared with similar totalitarian regimes. The state is guilty of illegal activity. The UN reports regularly on human rights abuses against civilians, and the murder of innocent civilians including children, women, Buddhist monks, students, minorities, and political dissidents.

There is a nominal civilian judicial system in Burma, but in practice all judges and lawyers are appointed by the junta and all legal functions are executed by the SPDC. The most common charge is that of sedition against the state or the army under the 1975 "Law to Protect the State from Destructionists." Among the SPDC's frequent arbitrary "notices" is Order 2/88, prohibiting assemblies of more than five persons. Most detainees have no legal rights of representation and are either jailed, used as forced labor or put under house arrest without public trial. Amnesty International is banned.

The state monopoly of the production and distribution of goods by rationing under Gen. Ne Win's administration led to an increase in corruption and the rise of a nationwide black market, with huge disparities between official and unofficial prices. Only the military elite and their supporters could afford to live well. The situation has not changed significantly since 1988. Giant military enterprises grouped under a Defense Services holding company, whose capital amounts to 10% of GDP, now reap wealth and distribute privileges for a minority. Nevertheless, traditional social and economic mobility still exists. Climbing the socioeconomic ladder is mainly a matter of loyalty to the military. Dissidents forced out of their jobs and hill tribes form the poorest groups.

Since 1988 the military authorities have courted tourists for the economic benefits. The previous one-week restriction for visitors arriving to marvel at Burma's stunning Buddhist heritage was increased to 28 days. The state-run tourist agency is heavily promoted while independent travelers are required to spend a minimum of $200 during their stay. However, whole provinces remain entirely off-limits, and elsewhere official guides are often required. Opposition groups discourage people from traveling to Burma at all.

From the 11th century, Burma's many ethnic groups came under the rule of three Tibeto-Burman dynasties, interspersed with periods of rule by the Mongols and the Mon. The Third Dynasty came into conflict with the British in India, sparking the Anglo-Burmese wars of 1824, 1852, and 1885.

• 1886 Burma becomes a province of British India.
• 1930–1931 Economic depression triggers unrest.
• 1937 Separation from India.
• 1942 Japan invades.
• 1945 Antifascist People's Freedom League (AFPFL), led by Aung San, helps Allies reoccupy country.
• 1947 UK agrees to Burmese independence. Aung San wins elections, but is assassinated.
• 1948 Independence under new prime minister, U Nu, who initiates socialist policies. Revolts by ethnic separatists, notably Karen liberation struggle.
• 1958 Ruling AFPFL splits into two. Shan liberation struggle begins.
• 1960 U Nu's faction wins elections.
• 1961 Kachin rebellion begins.
• 1962 Gen. Ne Win stages military coup. "New Order" policy of "Buddhist Socialism" deepens international isolation. Mining and other industries nationalized. Free trade prohibited.
• 1964 Socialist Program Party declared sole legal party.
• 1976 Social unrest. Attempted military coup. Ethnic liberation groups gain control of 40% of country.
• 1982 Nonindigenous people barred from public office.
• 1988 Thousands die in student riots. Ne Win resigns. Martial law. Aung San Suu Kyi, daughter of Aung San, and others form NLD. Gen. Saw Maung leads military coup. State Law and Order Restoration Council (SLORC) takes power. Ethnic resistance groups form Democratic Alliance of Burma.
• 1989 Army arrests NLD leaders and steps up antirebel activity. Officially renamed Union of Myanmar.
• 1990 Elections permitted. NLD wins landslide. SLORC remains in power, however. More NLD leaders arrested.
• 1991 Aung San Suu Kyi awarded Nobel Peace Prize.
• 1992 Gen. Than Shwe takes over as SLORC leader.
• 1996 Demonstrations against approval of Burma's membership of ASEAN.
• 1997 Ruling SLORC renamed State Peace and Development Council (SPDC). USA imposes sanctions and bans further investment in Burma.
• 1998 NLD sets deadline for convening parliament; junta refuses.
• 1999 Aung San Suu Kyi rejects conditions set by SPDC for visiting the UK to see her husband, Michael Aris, who dies of cancer.
• 2000 Negotiations between junta and NLD begin.
• 2002 Aung San Suu Kyi released from house arrest.