BURMA AFTER TWO YEARS OF THE NE WIN REGIME

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A004400040004-8
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 10
• Document Creation Date: December 19, 2016
• Sequence Number: 4
• Content Type: REPORT

,006/10/16: CIA-RDP79-00927AO04400940004-8
OCI No. 0323/64C
Copy No. 60
SPECIAL REPORT
BURMA AFTER TWO YEARS OF THE NE WIN REGIME
CENTRAL INTELLIGENCE AGENCY
OFFICE OF CURRENT INTELLIGENCE
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downgrading and declassification
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IAL CONTAINS INFORMATION AFFECT-
I'ION AL DFFFNSF OF THE UNITED STATES
ANTN[r OP THE. ESPIONAGE LAWS.
lA TION OF WHICH TN ANY MANNER TO
JST NOT BE RELEASED TO FOREIGN
ENT_';, if narked with specific dissemination
in occorc ante:wirh the provisions of DC[D 1/7.
ent must be andied within the framework of
ation so Imposed.
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When General Ne Win seized power in Burma two
years ago, he announced that he would end the fac-
tionalism which contributed to the instability of
the country's parliamentary governments and that
he would eliminate foreign influence. Since then
he has indeed renounced democratic methods and
adopted a policy of isolation. He is also embarked
on a program involving the socialization and regi-
mentation of Burma's economy and society. In the
process he has had to quell opposition by the ar-
rest of large numbers of major and minor political
leaders, and the public at large has remained
apathetic to his program. In recent months, more-
over, the Ne Win regime has been harassed by a
breakdown in the distribution of staple food items
and by an intensification of Burma's chronic in-
surgency problem.
Authoritarianism
Ne Win's so-called Revo-
lutionary Government of the
Union of Burma has made clear
its determination to establish
an authoritarian state based
on the "Burmese Way to Social-
ism"--the regime's official po-
litical philosophy, which pur-
ports to reconcile Utopian so-
cialism and Marxism with Bud-
hist precepts. The private
press is gradually being put
out of business, partly by de-
liberate government pressure
and partly by disorganization
of imports of type and news-
print. The regime's political
party, the Burmese Socialist
Platform Party, aims eventually
to squeeze out all other politi-
cal groups as the mobilizer and
controller of the masses. Mono-
lithic labor and peasant organi-
zations are also being developed.
A new class of politically in-
doctrinated executives is emerg-
ing to replace the old nonpo-
litical civil service.
With the majority of the
people either alienated by
the regime or apathetic toward
it, the loyalty of the army is
critical. Ne Win's major asset
is that he is a hero to the
rank and file, who despise all
"politicians." In order to
improve the image of the army
among the traditionally anti-
military Burmese and to ensure
its fidelity, the government is
spending much of its energy on
a variety of training and public
relations programs. These pro-
grams attempt both to shape the
political outlook of the troops
and to identify the army as a
whole with Burmese workers and
peasants. Officers who have
been given extensive political
indoctrination are returning to
their units to serve as civilian
"political commissars." Their
curriculum includes material on
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Robert Owen and Saint-Simon
as well as on Hegel and Marx.
Officers with contacts among
the opposition have been purged.
The effort to develop posi-
tive support has' been accom-
panied by ruthless suppression
of opponents. over 700 na-
tional and local leaders of the
parliamentary political parties
were arrested last fall. After
peace talks with a coalition of
left-wing and Communist insur-
gents were abruptly broken off
last November, the regime in-
carcerated over 700 "above-
ground" Communist leaders. At
the same time Ne Win cracked
down on Burmese students, gen-
erally leftist and antiregime,
by closing Rangoon and Mandalay
universities and arresting sev-
eral hundred pro-Communist stu-
dent leaders.
At present, political par-
ties on both left and right are
thoroughly intimidated. The
Buddhist clergy represents the
only functioning organized op-
position group. Fearing as-
sassination, the only recourse
left to his opponents, Ne Win
lives in seclusion and makes
public appearances only with
elaborate security precautions.
eigners from participation in
any Burmese activity. Ne Win
himself avoids contact with the
diplomatic community in Rangoon
and has ordered officials and
army officers to limit their
foreign contacts.
Information activities of
foreign diplomatic missions have
been sharply restricted. The
latest move of this kind was the
closing of the Chinese Communist
Consulate in Mandalay, which had
flagrantly violated government
regulations on the dissemination
of propaganda. Even press cor-
respondents and tourists are dis-
couraged from visiting the coun-
try. The government has limited
the maximum stay under a transit
visa to 24 hours, and is not re-
newing the visas of most foreign
residents, including American
missionaries. At the same time,
"Burmanization" of the economy
is causing an exodus of foreign
businessmen, particularly In-
dians and Pakistanis.
Isolationism
Preoccupied with the prob-
lems of transition to a social-
ist state, Ne Win has intensi-
fied Burma's traditional policy
of noninvolvement in foreign
affairs. The regime is with-
drawing from all foreign con-
tacts and seeks to exclude for-
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Ne Win's ready suspicion
of foreign, especially US inten-
tions toward Burma has recently
been heightened by the fact that
Bo Setkya, one of his former
colleagues,has traveled to the
US among other places seeking
support for a counterrevolution.
Economic Difficulties
Beginning with the latter
half of 1963, Ne Win stepped up
efforts to create a socialist
economy. The government has
nationalized a wide range of
industries, taken over most of
the foreign trade previously
handled by private firms, made
itself the exclusive middleman
between the farmer and the proc-
essor, undertaken to distribute
virtually all important commodi-
ties, and has instituted new in-
come tax rates designed to elimi-
nate the private business sec-
tor, which is made up largely
of Indian and Pakistani mer-
chants.
This program is a radical
shift from Burma's previous pat-
tern. The difficulty of break-
ing so sharply with the past
is compounded by the inadequacy
of the new political and economic
leaders, who are almost all mil-
itary officers with no previous
experience in economic matters.
By the end of 1963 private busi-
ness was stagnating and unemploy-
ment in the towns had risen
sharply. The government in
some cases was compelling em-
ployers to remain in business,
even if this meant operating at
a loss. There were also severe
dislocations in the supply of
raw materials to Burmese in-
dustries such as the Unilever
soap factory and various cot-
tage industries, and shortages
and maldistribution of basic
foodstuffs had become the gov-
ernment's number-one problem.
The distribution crisis
began in December with a scar-
city of cooking oil, a Burmese
staple. The peanut crop had
partially failed and the gov-
ernment neglected to order im-
ports in time. Oil prices shot
up as consumers panicked; wild-
fire rumors led to artificial
shortages of other staples--
rice, salt, and kerosene. As
shortages spread and rationing,
unheard of in Burma since World
War II, was introduced, a sense
of real grievance among the
people became evident.
The shortages have espe-
cially hit Buddhist monks be-
cause it has been difficult for
their benefactors to provide
them with food. Already dis-
affected by the regime's cavalier
attitudes toward religious prac-
tices, the monks have been quick
to utilize this latest govern-
ment embarrassment to revive
their lagging opposition move-
ment. (See Special Report, "The
Buddhist Opposition in urma,"
8 November 1963.)
Insurgency
Insurgency has been chronic
in Burma since independence in
1948, and one third of the coun-
try's budget is devoted to in-
ternal defense. The chief in-
surgent threat came originally
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from Communist forces, but these
groups, operating in central
Burma, have gained little sup-
port from the peasant popula-
tion and have gradually shrunk.
Ethnic minorities, with a his-
torical antipathy to the domi-
nance of the Burman majority,
account for most insurgent ac-
tivity today. The various
ethnic insurgent groups have
traditionally demanded independ-
ence or at least autonomy with
the right of secession. No Bur-
mese government could be ex-
pected to grant such demands.
Upon assuming power Ne Win
gave high priority to ending
insurgency. In April 1963 a
general amnesty for surrender-
ing insurgents was proclaimed.
In June the regime offered to
hold direct negotiations with
all insurgent organizations.
These gestures were to no avail.
By last fall peace talks with
all insurgent groups except one
faction of Karens had been
broken off, and insurgent ac-
tivity has steadily increased
since then.
The thinly spread Burmese
Army has had little success in
dealing with. the insurgents.
Army units have been tied down
defending principal towns, leav-
ing inadequate forces to hunt
the insurgents in the field.
The army's efficiency is also
hampered by the fact that most
of its able officers now are
occupying political posts. One
indication that the govern-
ment's anti-insurgent opera-
tions are not going well is
the increasing censorship of
news of insurgent activity.
Only a fraction of actual com-
bat is reported; reports reflect
government successes of course,
but never government casualties,
which have been numerous. A:
government counterinsurgent of=
fensive which was expected to -
follow the termination of the
general amnesty has thus far
failed to materialize.
The heaviest action has
taken place in the Kachin State,
where the Kachin Independence
Army (KIA) has exhibited con-
siderable strength and drive.
The KIA has de facto control of
nearly the whole state outsider
the garrison towns, which ban be
supplied by air and water. It..'
has halted virtually all road
traffic, and commercial activity
is at a standstill. Operating,
in groups of up to 200 men, KIA
units ambush army truck convoys
and trains, overrun police sta-
tions, and engage in village
raids.
In the Shan State, similar
but less frequent clashes have-
COMMUNIST INSURGENTS IN BURMA
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GAING(
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Taungg'T
BURMA
PRINCIPAL AREAS OF
OPERATION
AND STRENGTHS OF
MAJOR INSURGENT
GROUPS
Keng Tung
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been reported in recent months,
and the government is having
increasing difficulty in keep-
ing roads open. Some Shan in-
surgents have apparently been
receiving training from Chinese
Nationalists in Thailand, and
Shan emissaries buy arms and
recruit there. The apparent in-
crease in cooperation between
the Chinese Nationalists and
the Shan insurgents can be ex-
plained at least in part by their
common opposition to the govern-
ment's suppression of the opium
trade, in which both groups are
heavily involved.
Reports of Chinese Nation-
alist assistance to the Shans
and the general security dete-
rioration in the Shan State
have generated rumors in Rangoon
that Chinese Communist troops
in Burmese uniforms have been
operating there at Ne Win's re-
quest. Ne Win recently denied
to visiting Thai Air Marshal
Dawee that there are any Chi-
nese troops on Burmese soil.
Dawee in turn promised that Thai-
land would not allow Shans to
be trained and supplied on its
territory. Strong pro-Shan
sentiment in northwestern Thai-
land and the Thais' preoccupa-
tion with their other frontiers,
however, will probably enable
Shan insurgents to continue to
use Thailand as a safe haven and
base of support.
The regime has scored a
success with the Karen minor-
ity, however. The Karen Na-
tional Defense Organization
(KNDO), the largest and once
the most active insurgent group
in Burma, is split into two fac-
tions--a small pro-Communist
group operating in the Burmese
delta region and the larger anti-
Communist portion operating in
the Karen State and led by Saw
Hunter Tha Mwe. Saw Hunter's
group began negotiating with
the government under an official
cease-fire last November.
Saw Hunter's major demand
reportedly was incorporation
of his forces into Burmese Army
or police units stationed in
the Karen State. He did not
ask for the right of secession
for the state, and he publicly
expressed approval of Ne Win's
policies. On 12 March, an agree-
ment was announced which provides
for a joint committee to arrange
a cessation of hostilities and
the disposition of KNDO troops,
future consideration of the en-
largement of the Karen State to
include other predominantly Karen
areas, and cultural and religious
autonomy for the state.
Before the agreement, Ne
Win had said privately that a
settlement would enable him to
transfer one third of his troops
in Karen areas elsewhere. He
also hopes that successful ne-
gotiations with the Karens will
provide a precedent for other
ethnic insurgents to accept com-
promise terms.
Prospects for a negotiated
settlement between the govern-
ment and the major Communist in-
surgent group, the Communist
Party of Burma (White Flag),
appeared good, but last Novem-
ber Ne Win abruptly terminated
talks with this group. His ac-
tion was provoked by the White
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Flag's continuing organizational
activities in the countryside
and by pressure put on the gov-
ernment by above-ground Commu-
nists in collusion with the White
Flags.
Since the breakdown in the
talks the White Flags have been
relatively inactive militarily
and seem to have adopted a policy
of economic interference as their
major weapon. They have warned
peasants not to sell rice to the
government or repay government
loans. These warnings are some-
times emphasized by burning rice
storehouses and other acts of
terrorism. Despite these meas-
ures, however, the White Flags
have met with little success in
impeding this winter's rice har-
vest. The White Flags are es-
pecially irritating to Ne Win
since they themselves are Bur-
mans and operate in economically
vital Burma proper. If Ne Win
undertakes a general counterin-
surgent offensive, they will
probably be the primary target.
the regime appears to be in lit-
tle danger of overthrow or dis-
integration. Burma's disaffected
elements have proven almost pow-
erless in the face of the army's
support for Ne Win. Discontent
will have to penetrate the army
before the stability of the gov-
ernment is seriously threatened.
Ne Win evidently is de-
termined to press his program
despite considerable disloca-
tion of the economy and some
risk of popular reaction. In
the months to come, Ne Win's
inadequate bureaucracy will be
hard pressed and the economic
strains already in evidence can
be expected to become more se-
vere as the bureaucracy becomes
responsible for larger parts of
the country's life. A total
economic breakdown, however, is
unlikely. Although doctrinaire
in its statements, the regime
has from time to time shown it-
self flexible enough in practice
to make essential economic con-
cessions.
Ne Win's program embodies
essentially the same objectives
espoused by all Burmese leaders
since independence, but his im-
patience to achieve full "so-
cialism" and his authoritarian
methods have alienated broad
segments of the population. Yet
The insurgency problem
too is likely to remain a
constant drain on the regime's
resources even though it is
not a serious military threat.
The frustration of Ne Win's
hope to unite the country is
not likely to make his regime
easier for foreigners to deal
with. (CONFIDENTIAL)
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