Myanmar's people take desperate measures to survive

KUALA LUMPUR (Reuters) - People in Myanmar were already living on the edge before the government doubled fuel prices, raising the cost of just about everything and shoving many over the precipice.

In a country where more than a quarter of the 56 million people live on less than a dollar a day, the sudden announcement of fuel price hikes on August 15 became the tipping point of a crisis that had been building for a long time.

For retired headmaster U Sein, 82, and his wife Daw Nu, 80, the plunge in their quality of life has been nightmarish.

"My monthly pension now buys only two cups of tea although it used to be enough for the monthly subsistence diet for my wife and me when I first retired over 20 years ago," U Sein told Reuters in May, months before fuel prices went up.

The cost of living had soared since the failed uprising of 1988, residents say, but has really rocketed the past year.

"We saw incredible changes within a year," food-stall owner Ma Ahmar said. "A viss of chicken is about 5,500 kyat, from 3,000 kyat last year, while a viss of palm oil costs 2,300 kyat, compared with 1,250 kyat last year."

Fresh water and electricity are luxury items for many in Myanmar, which is also known as Burma.

"We have to queue for about an hour to fetch two pails of drinking water from the lake," said Ko Myint Oo, a resident of Dala Township, just outside the capital.

Similar conditions fuelled the 1988 rising, when the government suddenly raised rice prices and demonetized the kyat, rendering peoples' savings worthless overnight.

"It's desperate," said Sean Turnell, professor at Australia's Macquarie University and co-author of Burma Economic Watch. "Middle-class Burmese are selling their possessions literally to survive. People can't go to work because they can't afford the bus fares."

"For a while, we've been hearing stories about people on the margins of survival. Now in Yangon, the fuel price rises have pushed people to that margin where their survival is at stake.

"People are fed up and saying, 'what are we doing?'"

THE WEDDING VIDEO

The stoicism of people who have been living under military rule for 45 years began to crumble last November when a leaked video of the lavish wedding junta supremo Than Shwe laid on for his daughter sparked outrage.

The first low-level protests came in February, when the hitherto unknown "Myanmar Development Committee" called on the junta to address inflation, education and poor infrastructure.

Myanmar was one of the richest countries in Asia when it achieved independence from Britain in 1945 but, after decades of poor governance, it is now one of the poorest countries on the planet, with an estimated per capita income of only $200.

The budget deficit is growing so fast the government has not even bothered to publicize spending plans since the 2001/2002 fiscal year.

Moving the entire government machinery to Naypyidaw, the new $300 million capital carved out of the jungle in central Myanmar, has been a huge drain on public finances. So is the cost of maintaining the 375,000-strong army, which has nearly doubled in size over the past decade.

To cope with the budget shortfalls, the regime has raised taxes across the board, which has had a ruinous effect on small- and medium-sized businesses, said a university professor who asked not to be identified.

"Whatever the papers say, the regime should realize that the true cause of the 1988 uprising was not the people's thirst for democracy, it was just their thirst for a better life."

Economic sanctions by the United States and Britain over the past decade have undoubtedly had an impact and now the West is pressing the U.N. Security Council for more punishment.

Some experts question whether sanctions hurt people more than rulers.

"It actually plays into the military's hands," said Tom Green, executive director of Pacific StrAtegies and Assessments. "In the long term, sanctions end up hurting and stunting the growth of the very classes that could successfully challenge them."

(Additional reporting by Aung Hla Tun in Yangon, and Darren Schuettler in Bangkok)