Paranoid, insular and inept, the junta has no plan B

The clashes turned bloody on the streets of Rangoon yesterday, as soldiers opened fire on protesters. But Burma's afflictions reach back far beyond the events that have made headlines over the past two weeks. Students of the country know only too well how entrenched the problems of this reclusive country have become over recent decades.The make-up of the current leadership is the product of the struggle in the 1940s and 50s against the British, and before that against the Chinese and, to some extent, the Indians. Of all the countries under British colonial rule in the region, Burma's "liberation" in 1948 was to leave the most bitter aftertaste. It was one of the few countries not to join the Commonwealth, and subsequently adopted a similarly standoffish stance towards the Association of South-East Asian Nations.

The military has been one of the constants in Burmese history since 1962, when the country's brief experiment as a democratic republic ended in a coup d'etat by General Ne Win, who went on to rule as dictator for 26 years. As in Indonesia before the democratic reforms introduced at the end of the Suharto era, the army has been the only entity with any cohesiveness and longevity, playing rule-maker, judge and jury. The general's resignation came amid the uprising of 1988 - which, much as events today, was driven by economic problems, and was eventually crushed - brutally and bloodily - by the army.

Any hopes for a new democractic dawn that would accompany elections in 1990 were swiftly quashed. The victory of Aung San Suu Kyi's National League for Democracy was ignored by a military government with little appetite for listening to differences of opinion internally, and with an increasingly paranoid and suspicious attitude to voices from outside its border - a mindset inherited from the colonial years, and from the subsequent battles to forge a national identity.

Seventeen years on, the Burmese junta is headed by Than Shwe, a 74-year-old general with minimal experience of the outside world, who served in the army's psychological warfare department during the first campaign against Karen rebels in the 1940s, before rising through the ranks and becoming head of state in 1992. The leadership is now even more entrenched, hidebound and inexperienced at dealing with the outside world than ever. Its closest links have been with China, Burma's largest trading partner; China's investment in the country has been guided by a hunger for energy. The EU and the US have had limited involvement.

The Burmese leaders' experience of dealing with foreign countries as trading partners is, therefore, negligible. The construction of a new capital, some 200 miles from Rangoon - the former capital and largest city - therefore tends to be viewed as a gesture of hubris, rather than as the action of a leadership utterly out of touch with its own and neighbouring peoples, locked in a nationalist mentality and simply unable to engage with the outside world.

Burma is operating with the same infrastructure it had in place a century ago, with almost no investment beyond Beijing's support for roads and railways (largely to ensure that China's own energy interests are preserved). Burma supplies almost 10% of the world's opium, and has a large illegal drug business operating across its border with Thailand. Its greatest enemy, however, has been rampant inflation, which reared its head in 1988, and has returned to plague the regime, causing a 500% increase in energy prices and a knock-on effect on food costs.

Despite its stewardship of one of the most resource-rich countries of the region, the current regime has mismanaged the economy to such an astonishing extent that it now ranks as one of the poorest nations in the world. Corruption and sanctions have played a more limited role than is sometimes suggested. General Than's leadership remains utterly inept in even the most basic forms of economic management. And despite lavish spending on weddings and an elaborate system of cronyism, its greatest weakness is probably the adherence to a belief that the Asian way - or, more importantly, the Burmese way - is the right way, and that any other path would be dishonourable to the nationalist cause.

A further problem - and one the Burmese share with North Korea - is the way huge economic resources are poured into the military, accompanied by constant imprecations to prepare for imminent threats, both internal and external. Burma has no proper infrastructure, or social welfare, and receives only 5% of the aid that neighbouring Cambodia enjoys.

The signs of more open-minded, reformist elements in the leadership four years ago caused a flurry of excitement. But the arrest of Kin Wynt, the head of secret intelligence and security - and the man seen as the most significant figure in the movement - put an end to those hopes.

For the opposition, years of attack have meant that even the high profile of Aung San Suu Kyi has not saved her party from being run into the ground. Were the regime to implode, and Suu Kyi able to create a new administration, she would be surrounded by people with limited experience. The regime has no other opponents of any significance, even among the ethnic groups that comprise a third of the population. And the monks who have played such a significant and heroic role in the past few days, while socially respected, lack any plausible figurehead.

Ominously, as with the leadership of Cambodia in the 1970s or the current regime in North Korea, the Burmese junta is caught in a zero-sum game. The Khmer Rouge was able to run the Cambodian economy along even more extreme lines than Burma's, and it was toppled only by the intervention of Vietnam. There are few clues in recent history, or in the events of the past weeks, as to whether the Burmese government has any plan B. But a military crackdown may well lead the junta into endgame scenarios. Perhaps only then will it awaken from its isolation and consider economic and political compromises. But to do so would require a profound break from a long-established habit.

Kerry Brown, associate fellow in the Asia programme at the foreign policy thinktank Chatham House.