Tatmadaw, Economic Role of

   Both in terms of control of economic enterprises and defense expenditures by the central government the Tatmadaw has played a dominant role in the economy of Burma. After Ne Win established the Revolutionary Council in March 1962, he ordered the nationalization of private firms, both foreign and domestic, in the name of the "Burmese Road to Socialism." Some 15,000 enterprises, large and small, were brought under government ownership in 23 state corporations. Management of the corporations became the responsibility of inexperienced and often corrupt military officers. After the establishment of the State Law and Order Restoration Council in 1988, the socialist economic system was, in principle, abandoned, and the private sector, both domestic and foreign, was given a greater economic role. But the Tatmadaw has remained the largest economic player through ownership and control of combines such as the Union of Myanmar Economic Holdings, Ltd. (UMEH), established in 1990, and the Myanmar Economic Corporation. These entities are involved in the majority of joint ventures established with foreign companies. Other state-owned enterprises fall under Tatmadaw control, and few civilian businesspeople in Burma are able to survive without a close informal, if not formal, relationship with high-ranking military officers.

   Although statistics are unreliable, defense expenditure in the late 1990s was estimated to be between 30 and 40 percent of total government budgets, not counting "hidden" subsidies, such as free electric power for military units. This amounted to around 4 percent of Burma's Gross National Product. Generous budgets for the Tatmadaw have resulted in serious neglect in other areas, especially spending for education and health care, which are regarded by many observers as being lower than during the 1962-1988 socialist period.

   See also Defence Services Institute (DSI); Economy and Economic Policy, Burma Socialist Programme Party Era; Economy and Economic Policy, State Law and Order Restoration Council/ State Peace and Development Council Era.