UPDATE OF BURMA HANDBOOK

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00891A000700040001-2
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 17
• Document Creation Date: December 9, 2016
• Document Release Date: April 12, 2001
• Sequence Number: 1
• Publication Date: November 1, 1970
• Content Type: REPORT

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J 1
No. 0566
November 1970
Update of Burma Handbook
Please replace the July 1970 sections II, III, IV and V of the Burma
Handbook with the attached.
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Despite a marked potential for economic growth, mainly because of its
agricultural and mineral resources, Burma's economy continues to languish
as a result of the rapid nationalization of the economy under Ne Win's
Burmese Way to Socialism, the lack of admiristrators, managers, technicians
and skilled personnel, and the absence of economic incentives. Rice pro-
duction is Burma's most important economic activity, and during the mid-
1960s farmers responded to the government's low procurement prices by
hoarding, selling their crops on the black market, or restricting production.
In 1968 and 1969, however, bumper rice crops were produced, largely by
favorable weather, and the farmers unloaded their excess stocks. Mainly
because of this increase in agricultural production, gross domestic product
(GDP) grew by 10-15% in these years. Even so, in 1969 GDP was probably
some 5-10% lower than in 1963. Despite the government's more optimistic
claims, living standards are probably lower than at any time since World War
I I and unquestionably lower than they were during the 1930s. Between 1963
and 1969 per capita income in real terms declined about 20%, and now
amounts to about $60, among the lowest in Asia. Agriculture is the predomi-
nant sector and manufacturing has been actually declining in relative impor-
tance, from 15% to 9% of GDP from 1963 to 1969.
Statistics on income distribution are virtually nonexistent. The govern-
ment's nationalization policies under the Burmese Way to Socialism and
"Burmanization" of the economy, however, have greatly reduced the ex-
treme differences between rich and poor that existed earlier. Although living
levels have declined under the Ne Win regime, the laissez-faire economic
policies of the earlier colonial administration, characterized by oppressive
peasant indebtedness, exorbitant rental fees by the Chettyars, and absentee
land ownership, have been broken up. The peasants have become land-
owners, and limited credits to the farmers are provided by the government.
Both urban workers and the peasantry live at bare subsistence levels and
there are few, if any, real prospects of improved living standards for the
immediate future. Unrealistically low prices paid by the government for
agricultural goods, particularly rice, have kepi: farm income at a minimum.
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Main sectors-trends in industry and agriculture
The great majority of the population derives its livelihood from agri-
culture and related activities such as animal husbandry, forestry, fishing,
cottage and handicraft industries, and rural trade and services. An estimated
65% of the labor force is employed in agriculture, with over half of this
number in rice production. Agriculture and related activities have accounted
for some 60% of the GDP for the past several years. The Ne Win regime has
emphasized the expansion of agricultural output, particularly rice, but the
results have not been encouraging. The government has been the sole legal
purchaser of paddy for commercial purposes since October 1963; it also
owns and operates most of the rice mills. Despite legal prohibitions, a great
deal of rice and other agricultural products is moved through Burma's vast
black market, an institution that has become necessary for the distribution
of goods in the country.
Industrial activity, including mining, power, and manufacturing, en-
gages about 10% of the total labor force and produces an estimated 30% of
the GDP. Manufacturing alone accounted for 6% of the GDP in 1963, but it
declined to about 9% by 1965 and has since remained at that level. Manu-
facturing output has dropped with the rapid nationalization of much of the
industrial sector after the Ne Win regime came to power-an estimated two
thirds of the industrial structure had been nationalized by 1967. Strict
government controls over the few remaining private firms, and the lack of
qualified administrators, managers and technical personnel, have contributed
significantly to industrial stagnation. Since 1965 frequent shortages of raw
materials have resulted from the inept government distribution system and
the lack of foreign exchange to import needed equipment. Burma must rely
primarily upon foreign aid and technical assistance in the construction of
large manufacturing facilities, although the government has limited such
assistance because of its fear of compromising its policy of nonalignment in
foreign affairs. Food industries, predominantly rice mills, account for about
35% of the number of industrial establishments. Chemical, soap, and vegeta-
ble oil production rank next in importance, followed by textiles, tobacco,
footwear and apparel, and wood and bamboo products.
Burma is a food-surplus country, although only about one-tenth of the
total land area is under cultivation. Production could be increased by
bringing more acreage under cultivation and by the use of improved agricul-
tural inputs and techniques.
Agricultural employment, in Burma, like Southeast Asia generally, is
characterized by seasonal slack periods; during the height of the rice-milling
Burma 11-2
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season, Burma's rice mills employ over five times the number of permanent
mill employees. Most of the rural labor force is found in the fertile rice-grow-
ing areas of the Irrawaddy basin and delta, with significant concentrations in
the Mandalay, Magwe, and Sagaing divisions of upper Burma. Approximately
two thirds of the surface of Burma drains into the Irrawaddy, and the deltas
of the Irrawaddy and Sittang rivers constitute the major part of the agri-
cultural area. Rice accounts for some 40% of agriculture's contribution to
GDP. Other crops are relatively minor, with the only other crop contribution
over 5% being ground nuts, which contributes about 15%.
Transportation and communication system
The transportation and communication networks of Burma center in
the Irrawaddy River valley, the best developed and most densely populated
part of the country. The key point of both systems is Rangoon, the only
major port, the hub of rail operations, the site of the principal international
airfield, and the nerve center of domestic and international telecommunica-
tions. Burma's transportation and communication patterns are generally laid
out in a north-south direction following the natural alignment of rivers and
mountain ranges. Very few developed lines of communication exist outside
of the Irrawaddy valley, and east-west surface movement is hindered by
mountain barriers. Communication with outlying areas is slow and uncertain.
Facilities have not been appreciably expanded in recent years.
Railroad and inland waterways are the most important means of com-
munication. Railroads connect the major trade and population centers and
provide the primary means of long-distance freight and passenger transport
in the areas which they serve. inland waterways also provide access to the
major centers of trade and population. Highways are important as feeders to
the railroads in long-distance transport. The volume of air traffic is modest.
The government owns and operates the railroads, the merchant marine, civil
air, and telecommunications facilities, and is the largest single owner and
operator of highway transport vehicles and inland waterway craft.
The rail system, which is the nation's foremost freight carrier and is
second only to government-owned highway transport as a passenger carrier,
is oriented on a generally north-south axis, with the main trunk line running
through the center of the country from Rangoon to Mandalay and a number
of branch lines extending to commercial and industrial centers. There were
2,026 miles of track in the network in 1969. All was single track, except 195
miles of double track, which is almost entirely in the Rangoon area and
between Rangoon and Toungoo. No lines are electrified, and there are no
international rail connections.
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The Burma highway network. totals 15,540 miles, of which 4,210 miles
are bituminous or bituminous-surface treatment; 5,130 miles are surfaced
with gravel, laterite, or crushed stone; 5,450 miles are improved earth; and
750 miles are unimproved earth road (about (300 miles are suitable only for
cart traffic). The network is sparse and unevenly distributed, but the basic
highway pattern consists of two trunk roads linking Rangoon and Mandalay.
These roads connect with the eastern region by the longest east-west road in
Burma, which, at Keng Tung, turns southeast and runs to the Thai border.
There are also primary highway connections with India and Communist
China and minor ones with Laos and Pakistan. The government's policy is to
improve the roads only to the standard necessary to meet internal require-
ments. Movement on the highways is seriously impeded by unsuitable
terrain, physical bottlenecks, such as narrow roadways and stream crossings,
adverse climatic conditions, and insurgent activities.
Burma has over 8,000 miles of navigable waterways, about 2,000 of
which are navigable by large commercial vessels. The principal waterways are
the Irrawaddy complex (Twante Canal, China 13akir, and Irrawaddy), and the
Moulmein, Rangoon, Chindwin, Bassein, and Kaladan rivers. The most im-
portant is the Moulmein. There are no important connections with water-
ways of neighboring countries. The largest single operator of river craft is the
Inland Water Transport Board of the Ministry of Transport and Communica-
tions, about 90% of whose fleet is diesel-powered. The inland waterway
fleet, which consists of about 2,500 registered craft and an estimated 8,000
nonregistered craft, is the single most important passenger carrier in the
country.
The merchant marine is small but modern. In late 1968, it consisted of
6 ships of 1,000 GRT and over. Of these, 5 are diesel-powered dry cargo
ships totaling 37,074 GRT. The sixth is an oil-fired boiler combination
passenger-cargo ship of 2,217 GRT, which operates in the coastal trade and
is supplemented by several vessels under 1,000 GRT, as well as by local small
craft. The overseas merchant marine consists of the 5 dry cargo ships. With
these and its chartered vessels (about 30 short-term charters in 1966), the
Union of Burma Five Star Line maintains service between Burma and
Europe, the United Kingdom, West Africa, the Philippines, Japan, Hong
Kong, Malaysia, Ceylon, India, Pakistan, and --he Persian Gulf. In addition to
the one principal port of Rangoon, Burma has 3 secondary and 6 minor
ports, most of them situated on or near the mouths of navigable rivers. These
ports are adequate for meeting their normal shipping and receiving require-
ments.
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The government-owned Union of Burma Airways (UBA) operates
scheduled international services to four cities in nearby countries: Bangkok,
Calcutta, Chittagong, and Phnom Penh. Domestically UBA links Rangoon to
30 cities, and performs numerous charter -flights. The government has
entered into formal or informal civil air agreements or arrangements with 17
countries permitting the exchange of scheduled air services. Under terms of
some of these agreements, 8 foreign air carriers serve Burma on scheduled
international flights, including the national airlines of Communist China,
Czechoslovakia, and the Soviet Union. Mingaladon airfield, just north of
Rangoon, is the major airport of entry and the most modern airport in
Burma. Burma has a total of some 84 usable airfields, but support facilities
throughout the airfield system are generally poor and inadequate.
Civil aviation is emphasized over other transportation modes. The
government has lowered passenger and cargo fares to encourage air travel,
and airfield improvement is promoted. Domestic services are fairly adequate,
but modern aircraft are needed.
Burma's communication facilities are among the least developed in Asia
and are hardly adequate to meet public, economic, and government needs.
The government-owned and operated telecommunications networks are
oriented on a north-south axis with heaviest concentration in the Irrawaddy
valley. Principal towns and many rural areas have telephone and telegraph
services, but 90% of the telephones are in Rangoon, Mandalay, and
Moulmein. International telecommunications facilities are fairly good. Radio
broadcast facilities are located in the Rangoon area. In mid-1968 an esti-
mated 400,000 licensed radio receivers were in use in Burma. There are no
television facilities.
Government economic policy and financial system
The government's Burmese Way to Socialism serves as the official guide
in directing the economy. Since Ne Win's rise to power, socialization has
been accelerated, and there has been a rapid extension of the public sector;
the transportation, communications, and power industries had been na-
tionalized earlier. Ne Win took over the nation's financial institutions, the
tobacco industry, much of the domestic and all foreign trade, and joint-
venture corporations with foreigners. The new wave of nationalism begun in
late 1968 has continued, extending government control to hundreds of
industrial plants, all foreign shipping agencies, all but one daily newspaper,
and to most of the mining and retailing of precious stones and jade.
Although agriculture has not been nationalized, the government has a mon-
opoly of the legal marketing and processing of agricultural goods.
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The first step toward the complete centralization of banking began with
the nationalization of the private banking system. In early 1963 all 24
private banks-14 foreign and 10 domestic, with more than 30 offices
throughout Burma-were nationalized. Over the next few years, these institu-
tions were reorganized and reduced to 13 People's Banks-9 of them in
Rangoon. A number of state banks in existence prior to nationalization of
the private banking sector have continued to operate alongside the govern-
ment-owned People's Banks. The state banks include the Union Bank of
Burma, which is the central bank; the State Commercial Bank, which was
given exclusive responsibility for foreign trade in 1965 and became the only
authorized dealer in foreign exchange in 1966; the State Agricultural Bank;
and a few other specialized institutions. In Ajgust 1968 Burma also estab-
lished a banking and insurance monopoly-the Union of Burma's People's
Bank-in order to centralize the banking and insurance sectors under one
corporation. The monetary unit is the kyat, valued officially at U.S. $0.21
(4.76 kyats-US$1.00).
Foreign trade
Burma, with foreign trade nationalized, has been a trade-deficit country
under the Ne Win regime. From 1964 to 1969 exports declined by 60%,
largely because rice exports fell. In the pre - Ne Win era, Burma was the
world's largest rice exporter, and in 1963 exported 1.7 million metric tons of
the product. By 1968 rice exports had fallen to 330,000 tons, as rice
declined in importance from almost 70% of total exports to about 50%.
Although rice exports in 1969 increased to 575,000 tons, rice prices declined
further. With the weakening world demand for rice, the downward trend in
export earnings will probably continue. Other exports consist of metals,
ores, and agricultural products, with teak and teak products second in
importance to rice. As export earnings declined, imports were also reduced
sharply. All categories of imports, except machinery and transportation
equipment, were affected. From their peak level in 1965, imports were
reduced by about 50% in two years, but since 1967 imports have increased
slowly.
Over half of Burma's exports are to the rice-consuming countries of
Asia. Exports to Western Europe, consisting largely of hardwoods, ores and
concentrates, now account for about 30% of the total. Exports to the USSR
and the US are minor, and trade with Communist China was terminated in
1967. Trade with the UK has declined in importance as Japan has become
Burma's principal supplier. About 20% of Burma's imports are from Japan;
the United States, the USSR, and Eastern Europe each provides about 10%;
Western Europe, including the UK, accounts for about 35%. Remaining
imports come largely from India, other sterling countries, and the rest of Asia.
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Balance of payments
Since the Burmese Revolutionary Government came to power, eco-
nomic mismanagement has produced a steadily worsening balance-of-
payments situation. Export earnings declined by about 60% during 1964-69,
and are expected to fall again in 1970. Because the Ne Win regime has
reduced the inflow of official foreign aid and has forbidden foreign private
investment, it was forced to cut imports drastically. Even so, foreign-
exchange reserves were drawn down from about $225 million in 1964 to
$155 million in 1967. In 1968 and 1969 the government sought to boost
imports by resorting to short-term bankers credits and IMF drawings. With
the sharp drop in rice exports during the past few years, Burma is now hard
pressed to meet its payments obligations. Repayments on international debts
are forecast at $83 million for 1970, $66 million on short-term bankers
credits and $17 million on official long-term debt. Since October 1969,
Rangoon has depleted its reserves by 35%, reducing them to about $100
million. In order fully to meet scheduled repayments for 1970, the govern-
ment may be required to reduce its foreign exchange reserves even further.
Foreign aid
Under the Ne Win regime, Burma's receipt of foreign aid has been
sharply curtailed. In the last two years, however, the country has been
utilizing aid on a somewhat larger scale. Long-term loans and grants utilized
by the government averaged under $20 million annually from 1963 to 1967,
but since then have increased each year and probably will reach $50 million
in 1970. Rangoon appears to be modifying in some degree its hostile attitude
with respect to both government-to-government aid and controlled private
investment. Burma has about $200 million in unutilized aid in the pipeline,
having received over $750 million in total aid since World War II but drawing
only about $550 million. About a third, or $62 million, represents aid from
Communist China, which has been unused since the two countries virtually
severed economic relations in 1967. Another $60-$70 million is accounted
for by a long-term agreement with Japan that will not expire until 1975.
About half of Burma's postwar aid has come from Japan. From 1956 to
1965 Japanese assistance came in the form of a $200 million war reparations
grant. When this program ended, Japan gave Burma a $140-million project
aid grant, about half of which has been used. In 1968, a $30-million
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long-term loan was also agreed upon. The US has not made any economic aid
commitments since its $60-million project aid agreement in 1959, although
some $50 million in PI_ 480 commodities has been provided. Less than $5
million of the funds provided in the 1959 agreement remains unused.
Since the mid-1950s economic assistance has also come from several
other countries and from international institutions-an $84-million interest-
free credit from Communist China, of which $22 million was drawn, some
$13.7 million from the Soviet Union, a $14-million loan from East Germany
in 1966, a $42-million loan from India, three IBRD loans amounting to
$33.3 million, and various assistance from IJN agencies and the Colombo
Plan countries.
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Ill. POLITICAL SITUATION AND TRENDS
Historical summary
Burma achieved independence in 1948. Earlier it had been a colonial
possession of the United Kingdom, and it was occupied by the Japanese
during much of World War II. The present Government of the Union of
Burma (GUB), a highly centralized military regime, came to power in a
nearly bloodless coup d'etat on 2 March 1962 after some 14 years of
parliamentary rule. Governmental authority is concentrated in the Revolu-
tionary Council, which has all executive, legislative, and judicial powers.
Ultimate authority, however, is held firmly by General Ne Win, who serves as
chairman of the Revolutionary Council, chairman of the Council of Min-
isters, and minister of defense. Although the 1948 constitution was never
formally suspended or abrogated, the regime has ignored it, and the Revo-
lutionary Council has ruled by decree.
A number of factors contributed to the failure of parliamentary govern-
ment and brought on the coup by Ne Win. Endemic factionalism and the
lack of sound political organization in the major parties, mutual suspicion
and distrust between political leaders and administrators, and chronic in-
surgency by Communists and ethnic minorities discredited the political
leadership, led to governmental inefficiency, and impeded the implementa-
tion of economic and social development programs. Ne Win was prompted to
act in 1962 by the mediocrity of the civilian politicians and the willingness
of the U Nu government to make major concessions to the ethnic minorities
who were demanding greater autonomy. Ne'JVin concluded that parliamen-
tary democracy was unsuited to Burma, that the incompetent civilian admin-
istration must be replaced, and that thorough and radical reform was
imperative if the nation were to survive.
The national and foreign-policy objectives of the government are similar
to those of its predecessors, although the Ne Win regime's tactical approach
to the realization of its goals is different. All Burmese governments since
1948 have endorsed the pursuit of a socialist economy, but Ne Win has
accelerated the pace. Under the Burmese Way to Socialism, the regime's goal
is nationalization of the economy and the elimination of free enterprise.
Moreover, the economic influence traditionally exerted by foreign elements,
mainly Indian and Chinese, has been drastically reduced as a result of
"Burmanization" of the economy and the forced exodus of a great number
of foreign nationals. The regime has also reaffirmed "the policy of positive
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neutrality" and has more actively pursued a policy of isolation and nonin-
volvement in foreign affairs. This has led to a reduction of external eco-
nomic, political, and cultural contacts. Like its predecessors, the government
has attempted to promote a sense of nationhood among the country's
disparate peoples, while trying to cope with widespread Communist and
ethnic dissidence. To gain public support and to control all political activity,
the government created the monolithic Burma Socialist Program Party and
harassed andfinally banned all opposition political parties.
Although it has been able to maintain a -`air degree of political stability,
the regime's performance has been disappointing and both real and potential
sources of disaffection remain. Economic stagnation has been a constant
feature of Ne Win's tenure. National unity has not been achieved to any
marked degree, and insurgency continues unabated. Some senior army of-
ficers are resentful of their forced preoccupation with political and economic
responsibilities; other officers decry the lack of opportunity for professional
advancement. The Buddhist clergy and student organizations remain
passively resentful of the government's repressive measures, and the business
community has been alienated and demoralized by the regime's assault on
free enterprise. Almost all political detainees have been released since 1966,
but their arrest and imprisonment after the 1962 coup and the subsequent
banning of opposition political parties also aroused antipathy. Government
control of the press, education, and other social activities has further
alienated popular support. Nonetheless, there has been no appreciable coales-
cence of these discontented elements into a unified and activist opposition
that could provide an immediate threat to the regime. And Ne Win sedu-
lously cultivates and nurtures military support, and the army has remained
loyal to his regime.
Structure and functioning of governmental system
Burma's constitution, although not formally abolished, has been ignored
since the Ne Win regime came to power in 1962. Instead of the parliamen-
tary system of government provided for in the constitution, authority is
concentrated in the Revolutionary Council of 13 senior military officers,
which established itself by edict as the supreme governing body. The council
technically exercises executive, legislative, and judicial powers, but ultimate
authority is held firmly by General Ne Win, who serves as Chairman of the
Revolutionary Council.
The Council rules by decree and through an apparatus of control that is
superimposed upon the constitutionally established organs of administration.
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All principal laws, decisions, and appointments are promulgated in the name
of the Chairman of the Revolutionary Council. The Council does not meet
on a regularly scheduled basis, and its sessions are neither publicized nor
formalized by a specific routine. Ne Win promises periodically to return the
government to civilian control, but has taken no meaningful steps in this
direction and no specific plans have been made to reinstitute the electoral
process.
The Council of Ministers is the princ pal link between the Revolu-
tionary Council-to which it is subordinate-and the rest of the government
and is responsible for the administrative machinery of government.It consists
of 13 persons, including Ne Win as chairman and minister of national defense
and 12 persons heading the other 22 ministries. All ministries are headed by
senior military officers who are also members of the Revolutionary Council.
The combination of portfolios held by a single individual is determined more
by personal and political considerations than by administrative requirements
and convenience. The senior permanent civil servant in each ministry is
ordinarily ranked as ministerial secretary, although the position is sometimes
held by a military officer; these secretaries collectively constitute the
Secretariat. The ministerial secretaries meet occasionally to advise on admin-
istrative procedures and provide continuity which otherwise might be dis-
rupted by ministerial changes. Various committees, usually consisting of
high-ranking officers on detached duty, are also utilized to coordinate
national policies. To ensure continuity of policy, most of these committees
are duplicated at regional and local levels.
After the Ne Win regime came to power, it disbanded the Supreme
Court and the High Court and replaced them with the new Chief Court of
Burma, which exercises the powers and functions of its two predecessor
courts and is the highest court of appeal. To lighten its burdens, criminal
appeals were transferred to lower courts, arid jurisdiction of the Rangoon
City Civil Court was enlarged to include some civil cases formerly handled by
the High Court. The Revolutionary Council also introduced a system of
inferior courts. These include Courts of Appeal, Special Criminal Courts, and
Primary People's Courts. The People's Courts handle misdemeanors and
minor crimes formerly adjudicated by justices of the peace, as well as
economic infractions. Judicial independence, at least in the Western sense,
does not exist.
Political dynamics-parties and electoral system
When General Ne Win seized power in 1962, the constitution was
ignored and old-line political leaders were swept aside and, arbitrarily
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imprisoned. The new elite were army officers and leftist intellectuals who
provided government for, rather than by, the people. In the process, demo-
cratic institutions have fallen, the private enterprise system has been eroded,
and a rapid transformation of the nation's economic life has been ac-
complished. That such revolutionary changes occurred without a cataclysmic
rending of the nation may be attributed to the fact that popular participa-
tion in government remains an essentially alien concept in Burma. The
average Burmese citizen concerns himself mainly with such parochial and
personal matters as rising prices, the availability of consumer goods, and
socioreligious observances.
The Burma Socialist Program Party (BSPP), or Lanzin Party, was
created by the Revolutionary Council in mid-1962 to reconstruct the na-
tion's political and socioeconomic life and 1o provide popular support for
governmental programs. Opposition parties were permitted to function for a
time but came under increasing pressures from the authorities. In March
1964, Ne Win finally banned all opposition parties and seized their property
and records.
The relationship between the BSPP and government remains vague, but
ostensibly the BSPP will eventually replace the Revolutionary Council as the
Government of Burma. Ne Win, however, reportedly has given assurances to
army officers suspicious of the BSPP that the ocus of power will continue to
be the armed forces, and the BSPP constitution itself states clearly that the
Revolutionary Council constitutes the supreme authority during the party's
transitional stage of development. Funds used to finance the BSPP are
provided by the government, and BSPP divisional committees occasionally
work with the regime's security and administrative committees in the im-
plementation of government projects. Presumably only 24 persons have been
admitted to full BSPP membership; significantly these include the members
of the Revolutionary Council and a small number of cabinet members and
party theoreticians. The two principal mass organizations of the party are
the People's Workers Council and People's Peasants Council, both of which
are financed by the government.
Burma's national police force, called the People's Police Force (PPF), is
organized along military lines and is hardly distinguishable from the regular
armed forces. It performs regular police functions, but its responsibilities
also include counterinsurgency and intelligence operations. The two basic
components of the PPF are the Burma Civil Police, which in early 1969 had
about 27,000 personnel and was responsible for maintaining order in all
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areas outside of Rangoon, and the Rangoon City Police, which has about
3,700 men and is, in effect, an autonomous metropolitan force restricted to
Rangoon and its environs.
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The Burmese Government has been plagued by Communist and ethnic
insurgency since the attainment of independence in 1948. The insurgents,
now estimated to number over 20,000 (some 13,000-17,000 ethnic and over
6,000 Communist insurgents), are maintaining continuous harassment
against the Ne Win regime. They are taxing the resources of thinly spread
government security forces, but they do no1 constitute an immediate and
pressing threat to the government. This is attributed more to their own
internal divisions and inability to form a united front against the government
than it is to government capabilities.
The single most serious insurgent threa-: is posed by a heterogeneous
Communist group affiliated with the Communist Party of Burma/White Flag
(WF), which operates in the northeast along the Chinese border and receives
some support and backing from Communist China. This force, called the
Northeast Command and numbering about 4,000-5,000 men under the
leadership of Kachin rebel Naw Seng, is a source of increasing anxiety to the
government. Resuming their dry-season operations in February 1970, these
units have inflicted fairly heavy losses on isolated government forces and
have caused them to withdraw from some areas. Government forces recap-
tured some positions in late summer, but have not forced the Communists
into significant withdrawals.
Some 2,500 White Flag Communists are operating from their tradi-
tionally established bases in central Burma. During the past year they have
suffered severe losses in the Pegu Yomas arid Irrawaddy Delta areas as a
result of government security sweeps. The White Flag Communists are
further weakened by personal feuds, ideological differences, and a lack of
leadership since Than Tun, Secretary General of the organization since 1945,
was assassinated by a disaffected Chin follower in September 1968.
White Flag units have cooperated with Karen insurgents since 1948 in
ad hoc guerrilla operations, primarily in the Irrawaddy Delta. In 1959 the
White Flags formalized their relations with the leftist Karens, organized into
the Karen National United Party and led by Mahn Ba Zan, under the banner
of the National Democratic United Front (NDUF). The NDUF also included
representatives from the minuscule Chin and Kayah National Progressive
Parties and the New Mon State Party. The NDUF was largely a paper
organization until 1967, when for the first time mixed bands of Karens and
Communists conducted joint operations in the Irrawaddy Delta as the
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NDUF. Following the victory of the Peking faction within the White Flag
organization and the eruption of anti-Chinese disorders in Burma in mid-
1967, some Karens reportedly ceased cooperating with the WF's. In late
1969 the number of leftist Karens was estimated at 750-1,500 men.
The Communist Party of Burma/Red Flag (RF), founded and still led
by Thakin Soe, has remained an isolated minority group whose numbers by
late 1969 had dwindled to a hard core of 150-300 armed insurgents. They
are concentrated mainly in the Arakan and Chin Hills regions, but isolated
small units are also active in the Mandalay and Irrawaddy Delta areas.
Although the Red Flags traditionally are more militant and radical than the
White Flag Communists, their capabilities have been weakened to a point
where they constitute only a slight nuisance to the government.
Non-Communist subversion
The Karen National Defense Organization. (KNDO) is the paramilitary
arm of the Karens who favor independence for the now semiautonomous
"State of Kawthule." Estimated to have about 4,000 men in mid-1968 and
armed mainly with British and Japanese weapons from World War 11, KNDO
insurgency remains at a low level. The KNDO's over-all effectiveness as a
guerrilla force is limited because of its small size, lack of adequate arms and
equipment, internal rivalries and differences, and terrorist tactics by some
individual units that divests them of badly needed local support.
In mid-1968, the Shans had an estimated 3,500-5,000 men, broken into
several factions. The Shan dissidents, like most of Burma's ethnic minorities,
are fighting for an autonomous state within a federated Union of Burma.
Some efforts toward reconciliation were made between the insurgents and
the Burmese Government following the Sino-Burmese rift in 1967, but little
real progress has been made. The government now faces increased disaffec-
tion in the Shan State, where about half of the some 4,000-6,000 local
militia, left the government service last October because of the arrest of one
of their leaders. Although they have not resorted to all-out opposition to the
government, national leaders have made no effort to placate these disaf-
fected units.
Farther north along the Chinese border, Kachin insurgents continue to
harry government positions in the countryside while avoiding open battle
with Burmese military forces. Although basically a non-Communist ethnic
minority group, some elements of the 3,500-man Kachin Independence
Army (KIA) have received limited Chinese Communist arms aid. The KIA's
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effectiveness is impaired by chronic shortages of weapons and supplies and
by some internal divisions, although these insurgents operate in favorable
terrain, enjoy widespread local support, and maintain generally friendly
relations with the Shan insurgent groups.
There are several other ethnic insurgent forces operating in Burma.
These include about 3,000 Chinese Nationalist (Kuomintang) irregulars oper-
ating in the Burma-Thailand-Laos border areas, as well as small numbers of
Mons, Arkanese, Chins, Pa-0, and others. An organization actively opposed
to the Ne Win regime is based in Bangkok, but does not pose a serious threat
to the Burmese Government. Led by former Prime Minister U Nu, the exile
Parliamentary Democracy Party has considerably irritated the Ne Win gov-
ernment through its clandestine radio broadcasts, but has not developed a
significant military capability.
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