CURRENT SITUATION IN BURMA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP78-01617A003200120008-5
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 18
• Document Creation Date: December 27, 2016
• Document Release Date: August 8, 2013
• Sequence Number: 8
• Publication Date: March 17, 1949
• Content Type: REPORT

Declassified and Approved For Release 2013/08/08: CIA-RDP78-01617A003200120008-5
con NO. 113
SECRET FOR THE ASSISTANT DIRECTOR
FOR REPORTS AND ESTIMATES
43(8ct
c/si
CURRENT SITUATION IN BURMA
War
ad4.4e,:mcci frp: tt.t_otgia
Oha h.);Sr,4-$::27,..i, RE, (7,11
tkoo gc141... .
Dalto 1/42/Z-441
ORE 35-48
Published 17 March 1949
Document
CEA= ix
D7CL=TEI
a.:3. 'ql.CID TS S C
DDA pr 77
Auth: DD. R Wh ,3
Date:
By:
CENTRAL INTELLIGENCE AGENCY
S.74T
Declassified and Approved For Release 2013/08/08: CIA-RDP78-01617A003200120008-5
Declassified and Approved For Release 2013/08/08: CIA-RDP78-01617A003200120008-5
WARNING
?.
This document contains information affecting the na-
tional defense of the United States within the meaning
of the Espionage Act, 50 U.S.C., 31 and 32, as ,amended.
Its transmission or the revelation of its contents in any
manner to an unauthorized person is prohibited by law.
Declassified and Approved For Release 2013/08/08: CIA-RDP78-01617A003200120008-5
Declassified and Approved For Release 2013/08/08: CIA-RDP78-01617A003200120008-5
CRET
DISSEMINATION NOTICE
1. This copy of this publication is for the information and use of the recipient
designated on the front cover and of individuals under the jurisdiction of the recipient's
office who require the information for the performance of their official duties. Further
dissemination elsewhere in the department to other offices which require the informa-
tion for the performance of official duties may be authorized by the following:
a. Special Assistant to the Secretary of State for Research and Intelligence, for
the Department of State
b. Director of Intelligence, GS, USA, for the Department of the Army
c. Chief, Naval Intelligence, for the Department of the Navy
d. Director of Intelligence, USAF, for the Department of the Air Force
e. Director of Security and Intelligence, AEC, for the Atomic Energy Com-
mission
f. Deputy Director for Intelligence, Joint Staff, for the Joint Staff
g. Assistant Director for Collection and Dissemination, CIA, for any other
Department or Agency
2. This copy may be either retained or destroyed by burning in accordance with
applicable security regulations, or returned to the Central Intelligence Agency by
arrangement with the Office of Collection and Dissemination, CIA.
DISTRIBUTION:
Office of the President
National Security Council
National Security Resources Board
Department of State
Office of Secretary of Defense
Department of the Army
Department of the Navy
Department of the Air Force
,State-Army-Navy-Air Force Coordinating Committee
Joint Chiefs of Staff
Atomic Energy Commission
Research and Development Board
Declassified and Approved For Release 2013/08/08: CIA-RDP78-01617A003200120008-5
Declassified and Approved For Release 2013/08/08: CIA-RDP78-01617A003200120008-5
ORE 35-48 S RET
? CURRENT SITUATION IN BURMA
SUMMARY
Burma's importance to the security interests of the US lies less in its geographical
location than in its economic potential and its political position as a young nation
newly freed from colonial controls. Burma's present government has a strong "anti-
imperialist" bias, and its program for reconstruction of the country is based on ex-
treme state socialism. At the end of a chaotic year of independence, the government
is in serious straits, faced with dangerous economic dislocation as a result of the armed
revolt of numerous factions. The government will probably be able to survive for a
time, partly through the assistance of foreign loans and partly because the dissident
factions are not united. No person, group, or combination of groups appears to be
capable of regaining control over all of Burma. Before it is able to revive authority
and restore peace, the government will have to obtain different leadership and broaden
its representative base. As matters stand the government can probably maintain its
position through force of arms. Otherwise any change can mean surrender of power
through further assassinations or a coup d'etat.
In short, Burma's future appears extremely gloomy. The Burmese Government
is incapable of developing an orderly state by its own efforts. However, should a solu-
tion to Burma's unstable internal condition be found and a government friendly to the
Western Powers emerge, the example of this successful transfer from colonialism to
independence will have a considerable effect on the orientation of other Southeast Asian
nations facing the same problems. If the transition 'is unsuccessful, however, not only
will strife-ridden Burma be open to Soviet exploitation, but the rest of Southeast Asia
will interpret this as evidence of a further decline in western ability to stem the advance
of Communism in the Far East.
Note: The intelligence organizations of the Departments of State, Army, Navy, and the Air Force
have concurred in this report. The information herein is as of 3 March 1949.
1 S RET
Declassified and Approved For Release 2013/08/08: CIA-RDP78-01617A003200120008-5
Declassified and Approved For Release 2013/08/08: CIA-RDP78-01617A003200120008-5
.,7310
CURRENT SITUATION IN BURMA
1. IMPORTANCE TO THE US.
Burma, as one of the nations of Southeast Asia, is located in a critical geographical
area of the Far East. Its political importance from a US point of view will increase as
Communist influence in China continues to extend southward. Economically, Burma
is important as a food surplus area in a region of food deficits. Burma is also impor-
tant to the US, however, because its position in international alignments is still doubt-
ful. Although the present Burmese Government professes a desire for friendly rela-
don's with all major powers, there is a popular antipathy towards "Anglo-American
imperialism," and unstable conditions in Burma are conducive to the penetration and
extension of Soviet influence.
If a Communist government gained firm control of South China, it would be able
to render aid to indigenous Burmese Communists and seriously embarrass the Govern-
ment of Burma. One result Might be a Communist or Communist-dominated regime
in Rangoon. Such a development, especially if a pro-Soviet Government gained control
of French Indochina, would constitute a direct threat to the existing regimes in Siam
and Malaya. Should these developments materialize, events in Burma would indirectly
affect US access to the extensive human and natural resources and strategic military
bases in Southeast Asia.
US-Burma trade In the past has never been of great consequence, but consumer
goods are in strong demand in Burma, and trade could be stimulated when and if Burma
were stabilized., As the world's leading exporter of rice, Burma normally makes a vital
economic contribution to several areas in the Far East. Before World War II, Burma's
annual export of rice exceeded three million tons, more than forty percent of the total
moving in world trade. About one-third of the prewar average is presently being
exported. Rice production, which had climbed steadily after the war's end, has been
hampered seriously by the outbreak of widespread insurrection that occurred early in
1948. This is a matter of concern because Burma's rice surplus is required to relieve
food shortages in China, Japan, Malaya, India, and Ceylon, which countries contribute
directly or indirectly to the success of the European Recovery Program, and where the
US has important economic and strategic interests of its own.
The unstable Burmese political situation is of more immediate importance to the
US. The provisions of the new Burmese constitution and the pronouncements of vari-
ous Burmese leaders place Burma politically far to the left and commit the country to
a program'of state socialism. Furthermore, while no Burman is known to have visited
the USSR for indoctrination, Soviet propaganda and political philosophy have had a
striking effect on Burmese thinking. Many influential Burmans, other than avowed
Communists, advocate 'closer relations with the USSR and regard with suspicion the UK
and US, which they consider "imperialistic and capitalistic." Finally avowed Burman
Communists are in alined rebellion against the government in widely scattered areas.
"O?ET
Declassified and Approved For Release 2013/08/08: CIA-RDP78-01617A003200120008-5
Declassified and Approved For Release 2013/08/08: CIA-RDP78-01617A003200120008-5
? CURRENT SITUATION IN BURMA
1. IMPORTANCE TO THE US.
Burma, as one of the nations of Southeast Asia, is located in a critical geographical
area of the Far East. Its political importance from a US point of view will increase as
Communist influence in China continues to extend southward. Economically, Burma
is important as a food surplus area in a region of food deficits. Burma is also impor-
tant to the US, however, because its position in international alignments is still doubt-
ful. Although the present Burmese Government professes a desire for friendly rela-
tiOn8 with an major powers, there is a popular antipathy towards "Anglo-American
irriperialiSna," and unstable conditions in Burma are conducive to the penetration and
extension of Soviet influence.
If a Communist government gained firm control of South China, it would be able
to render aid to indigenous Burmese Communists and seriously embarrass the Govern-
ment of Burma. One result Might be a Communist or Communist-dominated regime
in Rangoon. Such a dev.elopment, especially if a pro-Soviet Government gained control
of French Indochina, would constitute a direct threat to the existing regimes in Siam
and Malaya. Should these developments materialize, events in Burma would indirectly
affect US access to the r extensWe human and natural resources and strategic military
bases in Southeast Asia.
US-Burma trade in the past has never been of great consequence, but consumer
goods are in strong demand in Burma, and trade could be stimulated when and if Burma
were stabilized. ,As the world's leading exporter of rice, Burma normally makes a vital
economic contribution to several areas in the Far East. Before World War II, Burma's
annual export of ride exceeded three million tons, more than forty percent of the total
moving in worla trade. About one-third of the prewar average is presently being
exported. Rice production, which had climbed steadily after the war's end, has been
hampered seriously by the outbreak of widespread insurrection that occurred early in
1948.. This is a matter of concern because Burma's rice surplus is required to relieve
food shortages in China, Japan, Malaya, India, and Ceylon, which countries contribute
dire.thtly or indirectly to the success of the European Recovery Program, and where the
US has important 'economic and strategic interests of its own.
The unstable Burmese political situation is of more immediate importance to the
US. The 'provisions of the new'Burmese constitution and the pronouncements of vari-
ous ,Burmese leaders place Burma politically far to the left and commit the country to
a program 'of State socialism. Furthermore, while no Burman is known to have visited
the USSR fOr indoctrination, Soviet propaganda and political philosophy have had a
striking effect on Burmese thinking. Many influential Burmans, other than avowed
Communists, advocate 'closer relations with the USSR and regard with suspicion the UK
and US, which they consider "imperialistic and capitalistic." Finally avowed Burman
Communists are in armed rebellion against the government in widely scattered areas.
,fl?ET
Declassified and Approved For Release 2013/08/08: CIA-RDP78-01617A003200120008-5
Declassified and Approved For Release 2013/08/08: CIA-RDP78-01617A003200120008-5
SElfET
These Communists, whether or not in cooperation with the several other dissident
groups in Burma, are capable of a prolonged struggle which will retard, if not prevent,
the establishment of stable internal conditions.
If future stability and prosperity in Burma could be partly attributed to Western
assistance, it might incline other nations of Southeast Asia to identify their interests
with the Western Democracies. The country could assume an important, although
limited, role in the restoration and expansion of world trade, international cooperation,
and general political stability. An unstable Burma, however, would permit a further
extension of Soviet influences in both the Pacific and Indian Ocean areas.
2. PROBABLE FUTURE DEVELOPMENTS.
The present Burmese Government, with or without modification, will probably
survive for some time, but its chance of reasserting control over all of Burma is very
remote. No person, group, or combination of groups appears to be capable of putting
Burma's house in order. Before it is able to revive authority and restore peace through-
out the country, the government will have to infuse new and more capable leadership
into its administration, broaden its representative base, obtain foreign financial and
military assistance, and come to an effective working agreement with the various ethnic
minority iroups. Its ability to accomplish any one, much less all, of these tasks is
highly questionable.
The Government of Burma is dominated by young, ambitious, inexperienced and
inept politicians of the more extreme nationalistic, leftist variety. None of them
appears capable of assuming constructive leadership. Furthermore, their ideologies
and private ambitions do not always coincide, since personal considerations are often'
placed above the general welfare of the country. It is almost inevitable that these
politicians, rather than voluntarily give up the power and position they have so
recently acquired, will resort increasingly to police state methods in order to remain in
office. If so, the possibility of a change in government, by means of further assassina-
tions or a coup d'etat, should not be ruled out.
There is no doubt that Burma's economic situation will continue to deteriorate
under existing conditions. While the government may receive some financial assistance
from the UK and perhaps from India, it will encounter serious difficulties in preventing
inflation and in maintaining the currency at its present rate of exchange. The fall of
exports, imports, and production is likely to result in a standard of living at a sub-
sistence level or below.
No general, amicable settlement of Burma's most pressing political problem, Karen-
Burman animosity, is expected in the near future. If the government succeeds in its at-
tempt to unite the Burmans in the face of the Karen threat, the Karens are likely to be
overwhelmed by sheer weight of numbers in the lowland areas, and either be annihilated
or driven into the hills in Eastern Burma. If Burmans remain divided politically, how-
ever, the Karens may be able to gain control of considerable areas of the lowlands and
set up some sort of state of their own. It would be subject to constant pressure from
Burmans both from within and without, and its existence would be precarious. The
SEIET
4
Declassified and Approved For Release 2013/08/08: CIA-RDP78-01617A003200120008-5
Declassified and Approved For Release 2013/08/08: CIA-RDP78-01617A003200120008-5
SEA
Karen issue may cause Burmans of various political faiths to unite, but such unity is
likely to be only temporary. It is further possible that other ethnic minority groups,
notably the Shans, Chins, and Kachins, will take advantage of Burman preoccupation
to strengthen their own autonomy.
There are two other possible political developments in Burma. The first is that
various Burman insurgent groups could establish a coalition, probably under Commu-
nist leadership, which might be capable of overthrowing the present government, par-
ticularly if assistance were forthcoming from Communist China. Operating against
this is the fact that such a coalition would experience serious internal stresses of fac-
tionalism and, externally, would find ranged against it both those Burmans who now
support the government and the various minorities as well. The second and more
likely possibility is that the government might achieve a political settlement with its
fellow-Burman rebels, particularly since differences, when they exist in Burmese poli-
tics, often assume far less significance than personalities, power and prestige. If the
Burmans unite, such a development may offer the Communists an opportunity to reen-
ter a coalition government on terms more favorable than have heretofore been offered
them. In this event, the ethnic minorities would probably oppose the arrangement
vigorously, with the result that ethnic factionalism would be greatly intensified.
In short, Burma's future appears extremely gloomy. The Burmese Government
is incapable of developing an orderly state by its own efforts. Some type of foreign
mediation, perhaps under Indian leadership, may be attempted to stop Karen-Burman
fighting. Such a solution appears remote at this time because ideological differences
are so great, emotional animosities so deep, and Burman resentment and fear of foreign
intervention so pathological. Even though outside mediation of the racial problem
succeeded, the difficulties created by other dissident elements would remain. Chaotic
conditions will continue until some forceful and generally acceptable Burman leader,
or group, capable of restoring stability to the entire country, appears upon the scene.
The only alternative is western intervention which is improbable at the present. Until
effective leadership emerges, the present disorders may be expected to continue, leaving
Burma with little more than a de jure government.
3. THE POLITICAL SITUATION.
Some 17 million citizens of the Republic of the Union of Burma became independent
of the British Commonwealth on 4 January 1948 in an atmosphere of high optimism
regarding the future. Burmese leaders and their followers alike believed that inde-
pendence and state socialism would be the solution to most of their country's press-
ing political and economic problems. The Anti-Fascist People's Freedom League
(AFPFL) , the most influential political organization in Burma, commanded an over-
whelming majority in the Provisional Parliament, and possessed widespread popular
support as a result of its leading role in the struggle for independence. The only
effective opposition organizations were the Burma Communist Party (BCP) and the
Karen National Union (KNU), the latter representing Burma's largest ethnic mi-
nority group. The BCP held only seven of over two hundred seats in the Chamber of
5 SEAT
Declassified and Approved For Release 2013/08/08: CIA-RDP78-01617A003200120008-5
Declassified and Approved For Release 2013/08/08: CIA-RDP78-01617A003200120008-5
Si/ET
Deputies (the lower house), while the KNU had no representation in the government
because it had boycotted the April 1947 elections. The assassination, however, on 19
July 1947 of the guiding genius and revered leader of the Burmese independence move-
ment, Aung San, together with six other high Burmese officials, deprived Burma of
its most promising leadership.
After a year of independence, no effective leadership has emerged. The three
major problems which had faced the new government?maintenance of law and order,
development of an effective administration, and hastening of economic recovery?re-
main unsolved. At present, a complete break-down of governmental authority is
threatened by political factionalism expressed through, armed revolt, chronic lawless-
ness, racial violence between Karens and Burmans, inexperience of high government
officials, and political nepotism. Cabinet ministers live behind barbed wire and are
never without bodyguards. The government, dominated by the Socialist Party which
is the only important entity remaining in the AFPFL, maintains itself only through
the support of its armed forces and by increasing use of police state methods. Even
so, the police and army control only the larger centers of population .in dissident areas,
and have great difficulty maintaining communications. Some army and police units
have deserted to the insurgents, and more may be expected to follow. This instability
has been accompanied by a steady deterioration of the country's economy. Under
these conditions, the government has lost considerable prestige and support.
Five distinct -groups are in armed insurrection against the Burmese Government.
Three of these groups; the "Red Flag" i and "White Flag" Communists, and the
"White Band" PV03, are ethnically Burman organizations. Their, struggle against
the Government is a matter of conflicting ambition rather than any basic ideological
difference. The other two groups are Karen and Arakanese ' ethnic minorities who,
suspicious and apprehensive of living under Burman rule, want a large degree of
autonomy or complete independence.
'The "Red Flag" Communists, an offshoot of the Burmese Communist Party (BCP), were out-
lawed in January 1947. Red Flag strength is probably not more than a few thousand, but ad-
herents are extremely active, largely in the Arakan District and the oil-field regions of central
Burma (see map) . Although Thakin Soe, leader of the Red Flags, has been in government hands
for several months, his arrest has not hampered the actions of his followers.
'The "White Flag" Communists (BCP) followed the "Red Flag" group underground in March
1948, when the government finally *Wok firm measures to curtail their activities. The BCP's nu-
merical strength is unknown, but is much greater than the Red Flag group, and it has a consider-
able following among Burmese peasants, students, and the press. BCP activities center in the
Yamethin and Pegu Districts of central Burma:, the Irrawaddy Delta, and the Irrawaddy and
Sittang River valleys (see map) .
- The "White Band" PVO, is the major faction of a wartime military group known as the
People's Volunteer Organization (PVO) , set up by the late Aung San. The PVO, together with
the Socialists, in turn, were the major members of the coalition Anti-Fascist Peoples' Freedom
League Party (AFPFL) . When, in May 1948, the government proposed to accept Communist
groups, upon condition that they disarm, in a new all-inclusive Leftist Union Party designed to
replace the AFPFL, the "White Band" PVO recognized an opportunity to enhance its influence.
"White Band" PVO leaders demanded that the government first negotiate with the Communists
before asking them to stop their insurrection. The government refused. The "White Band"
PVO then walked out leaving the Socialists in control of a seriously weakened government.
"White Band" PVO strength is roughly estimated to be at 'least 200,000, and includes some most
SEIET
6
Declassified and Approved For Release 2013/08/08: CIA-RDP78-01617A003200120008-5
Declassified and Approved For Release 2013/08/08: CIA-RDP78-01617A003200120008-5
ET
Although the Communists have Only slight ideological grounds for disagreement
with the government's socialistic policy, they have strenuously objected to certain
provisions of the Anglo-Burmese Treaty, and have used the Treaty as the basis of their
attacks upon the existing regime. They criticize the provisions of the Treaty which
require payment for all UK- interests which are nationalized, payment of outstanding
debts owed to' the UK, and acceptance of a UK military mission. The BCP opposes
payment for expropriated land, particularly that which is foreign-owned. Internally,
the Communists have advocated, with considerable persuasiveness, a policy of non-
payment of rents and taxes: There is no proof of direct contact between the BCP and
the USSR, but it appears that general directions are relayed to Burma via India, with
the details of practical implementation left to local functionaries. As Communist
penetration in China moves south, however, it is possible that the BCP may veer away
from India toward China not only as to directives and advice, but also for material
aid and assistance.
In an effort to unite all left-wing Burman political factions Prime Minister Thakin
l?tu On 25 May 1948 presented his now famous "Leftist Unity'Program." This plan;
Which was largely inspired by a leading Burmese Communist, Tetpongyi Thein Pe, is
in keeping-with contemporary Burman' political thinking. The plan, proposes a single
Leftist Unity Party in which the PVO and the Socialists would drop their identity,
and in which the COMmunists would be included if they laid down their arms. Of
the 14 points, the most - important propose: (a) to establish political and economic
relations With the USSR and its -satellites, (b) to nationalize all "monopoly Capitalist"
undertakings, (c) to reject any foreign aid which would compromise political and eco-
nomic independence, (d) to reorganize the army into a "Peoples Democratic Army,"
(e) to establish "peoples governments" in the villages, (f) to abolish private ownership
disreputable elements. This insurrection resulted in the desertion of numerous sympathizers in
the army, including one entire battalion.
4 There are an estimated 3,000,000 Karens in Burma, the great majority of whom are located
in the hills of Eastern Burma, in the Irrawaddy Delta and in the Tenasserim Division of South-
ern Burma (see map). The Karens differ ethnically from the Burmans, being of Tai-Chinese
descent rather than of Tibeto-Burthan stock. Before the British conquest of Burma, the Karens
were treated as an inferior race by the more numerous and ruling Burmans. Racial friction was
not eliminated during the British era, Although communal violence was effectively held in check.
The Karens accepted the British as protectors, and missionaries (mostly Americans) had con-
siderable success in converting Karens to Christianity: This Karen affinity for foreigners became
another source of antagonism and, during the Japanese occupation, several thousand Karens were
massacred by Burmans, particularly in the Irrawaddy Delta where the two people are highly
intermixed. When Burma became independent, mutual fear and distrust remained undispelled
and, as a result, the Karen National Union (KNU) developed as the instrument through which
most articulate Karens express their desire for freedom from Burman domination. Karen
leadership is almost exclusively Christian and opposed to the radicalism that marks present
Burman political thought. Furthermore, the Karens are anxious for closer cooperation with the
US and UK.
The 250-300,000 Arakanese, ethnically closely related to the Burmans, live mainly on the
northwest coast of Burma which is effectively separated from Burma proper by the Arakan Hills
(see map) . Separatist tendencies have long been strong among the Arakanese and sporadic
clashes between Arakanese and government forces have taken -place ever since Burma became
indePendent. However, this trouble is fairly well confined and is not expected to create a -situa-
tion that would be comparable to Karen-Burman strife.
7
Declassified and Approved For Release 2013/08/08: CIA-RDP78-01617A003200120008-5
Declassified and Approved For Release 2013/08/08: CIA-RDP78-01617A003200120008-5
FRET
of land and distribute holdings among the farmers, and (g) to establish a united front
against "capitalists" in order to raise wages, reduce rents, and industrialize Burma.
Thakin Nu hastened to add, however, that it is to Burma's best interest that friendly
relations be maintained with all nations. While a program such as the Leftist Unity
Plan is acceptable to most Burman politicians and some of it is already in the process
of being implemented, the matter of control and the distribution of the spoils still
remains an insurmountable obstacle to a general political settlement.
The government attempted to deal with the People's Volunteer Organization
(PVO) rebellion by sending out "Peace Missions" to negotiate a rapprochement.
These missions appear to have made limited headway in convincing the PVO that it
was necessary for all Burmans to unite. Recently, many PVO's temporarily came
above ground to join forces with the. government against the Karens, and may do so
again.
Before Burma became independent, Burmese leaders feared that one of their
greatest problems would be in dealing with the various ethnic minority groups, many
of which had been separately administered under British rule. The most important
of these groups are some 3 million Karens, whose relations with Burmans have never
been good. In September 1948, the Karens took control of most of the Karenni States
in Eastern Burma, and a part of the Tenasserim Division in Southern Burma, includ-
ing the important port of Moulmein. They are also reported as being in control of
some areas of the rich Irrawaddy Delta. Since the early part of January 1949 serious
fighting has been increasing between Karens and Burmans, especially in the Irra-
waddy Delta area, the suburbs of Rangoon and around Mandalay. This communal
fighting has been ferocious and destructive. The Burmese Government views these
clashes as a revolt, but the trouble was precipitated by irresponsible elements on both
sides. The internal difficulties are now assuming a strong racial complexion. The
Burmese press and high government officials have constantly whipped up anti-Karen
feeling by raising the bogey of foreign intervention. The Karens are described as be-
ing aided and incited by "Anglo-American imperialists."
The other indigenous minorities, Shans, Chins, and Kachins, appear to be reason-
ably satisfied with their semi-autonomous status under the Constitution. Recently
there have been indications that some tribal chiefs are becoming alarmed by existing
conditions in the predominantly Burman parts of the country and are attempting to
minimize Burman influence in tribal areas. As a whole, these peoples are more con-
servative and less politically sophisticated than most Burman political elements.- In
the event of full-scale Karen-Burman trouble these tribes are likely to sympathize
with, if not actively support, the Karens. At present, the Mons, another minority
group, are cooperating with Karens in the Tenasserim district.
Ironically, it is upon these minorities, Karens included, that the present gov-
ernment depends, possibly to a decisive degree, to maintain itself in power. Most of
the dependable personnel of the army and police, including some high-ranking officers,
are drawn from the minority peoples. The withdrawal of their support, or active
rebellion, would further undermine the government's already seriously weakened
position. To placate the restless non-Burman minorities, the government appointed a
iSE ET
8
Declassified and Approved For Release 2013/08/08: CIA-RDP78-01617A003200120008-5
Declassified and Approved For Release 2013/08/08: CIA-RDP78-01617A003200120008-5
SET
Commission for Regional Autonomy, composed of Burman officials together with
Karen, Arakanese, and Mon leaders. The Commission was charged with studying
minority, claims and aspirations and making recommendations to the government.
It has obviously failed to serve any useful purpose.
Despite some reports of cooperation between the two Communist groups and the
PVO, it is believed that they agree only in their opposition to the government. Co-
operation between these groups, however, may increase as the Burman-Karen
fighting intensifies. There has been no effective concerted effort on the part of the
various Burman insurgents to overthrow the government, and no proof of cooperation
between the Burman insurgents and the Karens. While the insurgents are relatively
free to roam over large areas of Burma, they have been either unable or unwilling to
meet government forces in positional engagements. The result is disorder bordering
upon chaos, wherein the Burmese Government is the de facto authority only in limited
areas.
. THE ECONOMIC SITUATION.
Burma's economy depends primarily upon the production and export of rice. The
12 million' acres planted to rice before the war produced over 7 million tons of paddy
annually, from which well over 3 million tons of cleaned rice were exported. During
Japanese occupation, acreage was cut approximately in half, and exports practically
ceased. Production has increased since the war's end, in response to present high prices,
reopened markets, and government encouragement. The 1947-48 rice planting was esti-
mated at 9,200,000 acres with an export target set at 1,500,000-1,600,000 tons. The
government had optimistically hoped to achieve prewar export levels by 1951-52.
Under normal conditions, the chances are that the government's plans would be
reasonably successful. Widespread political disorder, however, has seriously disrupted
these plans. Government military forces cannot provide adequate protection from
raids, to each village and its surrounding rice fields. Further, the movement of rice
to mills and ports is slowed and often prevented by the dislocation of land and water
transportation. Rice exports for 1947-48 totalled only 1,230,000 tons. The 1948-49
crop was good and has been harvested, but insurgent activities have seriously inter-
fered with its movement to market. Exports will miss the original target of 2,100,000
tons by a wide margin and it is highly unlikely that the revised target of 1,350,000
tons will be met. Indeed, the Burmese Government will be fortunate to export as
much as 1,000,000 tons.
Other important segments of the Burmese economy feel the effect of internal
unrest. Teak production, an important source of revenue for Burma, as the leading
prewar exporter, is practically at a standstill. What little teak is logged often is kept
from the sawmills by insurgent activities. Mining operations are negligible as com-
pared to former levels. Little petroleum has been produced since the end of the war.
In respect to the last three, dissident activities have been a contributing factor only, the
principal causes being heavy war damage, difficulty of securing replacements and spares.
An even greater handicap lies in the fact that these enterprises are almost entirely
9
87dT
'
Declassified and Approved For Release 2013/08/08: CIA-RDP78-01617A003200120008-5
Declassified and Approved For Release 2013/08/08: CIA-RDP78-01617A003200120008-5
SEAT
British-owned: There is natural British reluctance to expedite rehabilitation until
the Burmese Government clearly defines its nationalization policy: In the case of the
Irrawaddy Flotilla Company, the British owners are dissatisfied with government offers
of compensation following nationalization. The Burmah Oil Company (BOC), which
held a near-monopoly of petroleum production and sales before the war, has suspended
most of its oilfield reconstruction and threatens to close down entirely unless the gov-
ernment gives the company certain guarantees, particularly that of tenure. Similarly,
the government, in conformity with its nationalization policy, is refusing to renew
expiring mining leases, thus discouraging reconstruction investments.
The government, faced with increased military expenditures_ and decreased reve-
nues, finds its financial position seriously weakened. The failure to achieve the target
for the export of rice alone will amount to a loss of between $40,-55,000,000. Other
export and internal revenues, especially land taxes revenue, are far_ below normal, and
the state is losing money on the operation of public utilities, particularly railroads and
inland water transportation. Burma's 1947-48 budget, which was to have been
balanced, showed a deficit of almost $20 million. It is believed that the final deficit
in 1948-49 will amount to some $70 million, if not more. Although the government has
taken steps to forestall immediate economic collapse by doubling the export duty on
rice, increasing tariffs, and levying new taxes on business, ,such measures are only
stopgaps. It is also attempting to raise the local price of rice, and has reduced the
cost-of-living allowances of government workers in the face of rising prices. This latter
action resulted in a serious strike by government clerks. -
Widespread unrest is the major contributing factor to an unbalanced budget and
unfavorable balance of payments which in turn are creating inflationary conditions
that will tend to cause further unrest and instability. Indeed, the economic difficulties
created by the current disorders are a greater threat to the government than the dissi-
dents' purely military operations. Although the Burmese economy 'may avoid collapse
even though present trends continue, it is in danger of deteriorating to the subsistence
level, as it did during the Japanese occupation.
The government's economic policy reflects the extreme leftist tendencies now in
vogue among Burmese politicians. The government has attempted to bring about
drastic reforms and the removal of foreign economic interests through sweeping gov-
ernmental control of the economy. Imports and exports are rigidly controlled; land
and property legislation amounts to confiscation; and, as has been noted, a program
of nationalization has already been partly implemented. An ambitious Two-Year
Plan has been drawn up, designed to restore Burma's economy th its prewar level. Its
objective is "to lay the foundations of a planned economy" and "to transform Burma
into a country where the welfare of the common man constitutes the main motive of
the State's activity." Even under favorable conditions of peace and tranquillity, the
plan is optimistic, and its authors admit that "some details" are lacking. - In addition to
the obvious impediment of unsettled conditions, the Two-Year Plan fails to consider
Burma's increased population and resultant increased consumption, the difficulties in
procurement of materials, and the extremely serious shortage of qualified managerial
and technical personnel.
SEFET 10
Declassified and Approved For Release 2013/08/08: CIA-RDP78-01617A003200120008-5
Declassified and Approved For Release 2013/08/08: CIA-RDP78-01617A003200120008-5
SOOE. T
5. THE MILITARY SITUATION.
To meet the numerous challenges to its authority, the Burmese Government had
originally a total military and civil police force of some 40,000, an army of 23,000 men,
and a miniscule air force and navy. Karen and PVO defections, however, and the
immobilization of some Karen units as a result of Karen-Burman strife has reduced
these regular army and police figures. The army and military police are organized
along British lines and are supplied with British equipment. The Anglo-Burmese
Treaty provides for British military advisers who, however, have not had much success
in developing the Burmese army into an efficient and effective force. There are no
tactical units higher than a battalion, and no heavy weapons. Most army troops are
scattered about the country in small garrisons, and the police are even more thinly
distributed. The government has, during the last six months, undertaken to raise
five new army battalions, through revival of the prewar Burma Auxiliary Force, re-
cruited from all races in Burma. Enlistment has been slow, owing to popular apathy
and the absence of strong government support.
In addition, and by contrast, the government has vigorously recruited at least
22,000 auxiliary police drawn from every part of Burma, but composed_ of followers of
the Socialist Party. The government has more recently pressed hastily armed civilians
into service. These forces were raised despite strong objections from both the Burmese
Army Commander in Chief and the head of the British Military Mission, who feared
that the levies would become a private army of the Socialist Party, designed to suppress
all political opposition. Recruitment, command, ,and training of these levies are under
the direction of Socialist functionaries, a fact that seems to justify these fears, even
though at least some of the Auxiliary Union Military Police (AUMP) are under the
command of the armed forces Commander in Chief. The larger number are under
Home Office (Civil) control. Recent disappearances of government funds are believed
to be connected with support of the auxiliary police force. The total military strength
of army, police, and auxiliaries is believed to be sufficient to maintain the government
in power, at least for the present, but inadequate to restore a reasonable degree of law
and order in the foreseeable future.
A little less than one half of the Burmese Army is composed of Karens, Chins, and
Kachins. These troops, primarily interested in military careers, are the most effective
personnel in the military forces. They have been and will be the backbone of practically
all government offensive operations except where their own people are involved. Purely
Burman units; in contrast, are subject to political influences in varying degrees and
possess little martial spirit. They have been used chiefly for garrison duty in relatively
quiescent areas.
The extent of politics in the armed forces is indicated by the assignment of top
posts. Lt. Gen. Smith Dun, a Karen, until recently Supreme Commander of the mili-
tary forces, was a fairly competent administrator who cooperated closely with the
British Military Mission. Maj. Gen. Bo Ne Win, who replaced him is a Burman with
little military experience, is deeply involved in Socialist Party politics, and has studi-
ously ignored the British.
11
pew
Declassified and Approved For Release 2013/08/08: CIA-RDP78-01617A003200120008-5
Declassified and Approved For Release 2013/08/08: CIA-RDP78-01617A003200120008-5
Si94T
Military operations, except those engagements against Karen forces, presently
consist of an endless series of skirmishes between government forces, and guerrillas,
never involving more than a few hundred people. Some of the engagements between
government forces and the Karens have been on a much larger scale, and occasionally
have resulted in heavy casualties. The government always claims victories, but the
fighting goes on. The main immediate objectives of the insurgents are the capture of
arms, money, food, and supplies, rather than the seizure and administration of terri-
tory. The government's minimum objectives are the holding of Rangoon and other
important towns, and maintenance of cornmmunications. Operating from these urban
strongholds, the government expects to bring the dissidents progressively under control.
The outbreak of Karen-Burman fighting caused many Karens to desert, and others
have followed since the departure of Smith Dun. Under existing circumstances, no
Karen in the government armed forces can be regarded as completely reliable. There
is also a strong possibility that the Chins and Kachins will not show much enthusiasm
in fighting Karens. The government will therefore have to rely more and more upon
strictly Burman manpower much of which is half-trained or untrained, undisciplined,
subject to political influences, and united only in opposition to the Karens. The gov-
ernment may be able to maintain itself with such a force so long as there are sufficient
numbers of Karens to fight and so long as it can capitalize on the fear of "capitalist
expansion." It has approached both the US and UK, asking for large quantities of
arms and other military equipment needed to bring its campaign to a successful con-
clusion. The UK promised to fill a part of the requirement, and has supplied 10,000
rifles but has recently delayed shipments of 12,000 more in view of conditions. The
government is also attempting to secure arms on the open market. No matter what
it attempts, its military position, and thereby its very existence, will be shaky.
6. FOREIGN AFFAIRS.
Burma's internal disorders and a shortage of qualified diplomatic personnel have
restricted its foreign relations. Embassies are maintained in the US, UK, China, India,
and Pakistan; and Burma is a member of the UN. The implementation of agreements
to exchange ambassadors with Siam and the USSR have been delayed.
Relations with the US and UK have been relatively cordial, although normal diplo-
matic transactions are rendered difficult because of Burmese inexperience and the iden-
tification of the US and UK, in the minds of 'many Burmese leaders, as "capitalist,
imperialist" nations. US negotiations for a Consular Convention, air agreements, and
the purchase of real estate have been painfully slow, while British efforts to secure fair
compensation for nationalized properties have been far from satisfactory. On the
other hand, Burma has depended, and will continue to depend, on the UK for military
and economic assistance, and so must attempt to maintain friendly relations. Burma
is now attempting to raise the price of rice (much of which is contracted for by the
UK for India, Ceylon, and Malaya) and also to obtain another loan from the UK. The
British have refused to pay as much as is demanded for the rice and may not extend
the loan because the British Embassy suspects that it would be used for military pur-
poses rather than for the financing of rice exports.
SECtET
12
Declassified and Approved For Release 2013/08/08: CIA-RDP78-01617A003200120008-5
Declassified and Approved For Release 2013/08/08: CIA-RDP78-01617A003200120008-5
CRET
? Burma and India are, to a considerable degree, interdependent since India needs
rice and Burma needs manufactured goods, particularly textiles. Burma is also in-
terested in an Indian loan, but in view of the existing situation in Burma, India will
probably move slowly in granting one. There are, however, certain matters which
could easily strain friendly relations. Among these the most important are the man-
ner in which the Burmese Government has handled Indian immigration, attainment
of Burmese citizenship by domiciled Indians, and disposition of the huge Indian assets
in Burma, especially land. The Burmese have rejected all Indian protests, and the
problems are now dormant albeit vexatious and unsolved. Since both countries are
primarily concerned with their respective internal affairs at the moment, no significant
developments are expected in the near future.
Relations with China have been quiet. Although there has been recurrent talk
about efforts to settle the long-standing problem of the undefined portion of the Sino-
Burmese border, nothing has been done. This matter may assume much greater
proportions if Yunnan falls under the domination of a strong Chinese Communist
Government, as it could serve as a means to exert pressure upon the Burmese.
Burma's strong sympathy for the independence movements of colonial peoples
in Southeast Asia prompted Prime Minister Thakin Nu to urge Prime Minister Nehru
to call the recent Asian Conference in Delhi in protest to the Dutch "police action" in
Indonesia. In this respect, Burma, along with India, Pakistan and Ceylon has denied
the use of its port and airfield facilities to the Dutch. Providing that a government
exists which can claim to represent all of Burma, the nation may be expected to join
in, and to support any future undertakings of a similar nature and be a party to any
regional grouping of Asian countries resulting therefrom.
13
Declassified and Approved For Release 2013/08/08: CIA-RDP78-01617A003200120008-5
Declassified and Approved For Release 2013/08/08: CIA-RDP78-01617A003200120008-5
U. S. GOVERNMENT PRINTING OFFICE
3525-STATE-1049
Declassified and Approved For Release 2013/08/08: CIA-RDP78-01617A003200120008-5
Declassified and Approved For Release 2013/08/08: CIA-RDP78-01617A003200120008-5
11147
2 e. \
BHUTAN'?
..... a%)
?
PAKISTAN
01,19
24?tn.
r )c.
. ......e
22?
20?
8? BENGAL
..; ****
l .
/
l
INDIA
ss
s.
.....1
I
I
ori
rt....N.
'")
c 1
CHIN
; 1
I
1 i'd HILLS
1 ?
?1. ? 1
1 ? i
1.1
?,...,?
cARAKANI ,e
TRACTS.
ARAK AN tc,
1
BAY
0 F
?
BURMA
Primary 4100 01 Communist
i
(
)
. /1.1
1
CHINE)
j
( WIN
?
l:Sit...'e
N
'
-
..
M
I
; m
?
activiry
conflict
among Burman
.
are necessardy
.
'BOUNDARIES
BOUNDARIESGULF
Nal,
1,9.250,000
220
6, rut
T
\ ........
?28
.
YI TK 'I
AGA
LL
#
/V a ?26
.. .. ?
_... /
SAGAING f C HINA
...:..
PP ER
il
A T ? e ?24
\
\
NORTHERN?w.
X
H /
SAN STATES '
...
?,,,:(0,? .
-,..,. ?........ /
,,,,*?,,,,,,. ..?.....F....E....DER 'TED!"--n ?22
\ N SHAN STATES k.... ,--1
N
,:40,,,:N\Nv? .....-... i)
.. .....
S .0 u T H .E R N ?
SHAN STATES .,...)
( INDOCHINA
....... . M AND SOT
?20
r..--? ...../'?',
1
: s%,,,.. l
: KAREN ?
4, 70 00.:-, ?
)
NK\
\ %.. \ 4: , . .
s' /? 3
. ,1..:Y14\ ' 9
HE, N' 4.: U er
?An v,
SIAM (.1
. .
A ,'kINSEIN ,-.1- H A T 0
:.. ................
AU v\-..,,,, :0
- RANGOON
A 4.? .
?16
D 'AMHERST
TENASS RIM
?14
A 4,0 Y
pIAioi.I factions
?
generalized doe to ,
-e
-M G UI ?12
il. U g
0 F
0
e
- 300 MILES S / A M
ME Area of Karen-Burman
- -.9 Area of emend unrest
Area of Arakanese separatism
Area claimed by Chi.
Data as of 1 Felmrary 1949. The. areas
.the overlapping of some 01100 activioes12?
ADMINISTRATIVE
INTERNAllONAL
? IID,lia46.1
? Sale
0 100
100 203 303 KILOMETERS
ea UllkOn 01 Bum. The rma I9,10, 1,0.2500013. 110 00 9.48 0
CONFI TIAL 10
I I I I I
92 94 ' 96 98 i00
11147 Map (3ranch, CIA, 2-49
Declassified and Approved For Release 2013/08/08: CIA-RDP78-01617A003200120008-5
CIA Reproduction