The Link between Political Centralization and Regional Inequalities in Myanmar

Myanmar is opening up economically and, hopefully, politically too. This is good news for one of the most isolated and poorest countries in the world. The bad news is that opening up implies a huge transformation process that affects all aspects of society. One of the key challenges is rapid, at times too rapid urbanization and the concomitant concentration in few megacities. This hyper-concentration of people in a small and confined geographic space can lead to enormous problems of inequality, congestion, pollutions and safety.

Myanmar is no different. Waste, for instance, is an enormous hazard.

And problems may well explode in the near future. According to latest numbers, still a whopping 70 percent of its population still lives in the country side, mainly working in agriculture. With opening comes structural change of the economy, which will make people, for one reason or another, move to cities. In Myanmar this mainly means Yangon, Mandalay and the new capital Naypyidaw.
The deeper roots of this massive and overly rapid urbanization are, as so often in these countries, at least in part political. Among others, Davis and Henderson, Ades and Glaeser, and Henderson and Wang have shown that political institutions affect the unequal concentration of internal migration on few, usually capital cities. Political centralization is one of the key driving forces of megacities, next to high levels of corruption perhaps.

It may come as a surprise that Myanmar could be a prime suspect, as officially Myanmar is a federal country. But reality is quite different. Under British colonial rule the country was de facto centralized, at least in core Burmese territories. In the last decades, the military regime took great pains to centralize the political and administrative system of the country. This is nowhere more evident than in the decision to move the capital from Yangon to a city built from the scratch: Naypyidaw. While the reasons for this move may be diverse, it was in part a conscious effort of the government to re-concentrate government functions in one place, and isolate it as far from popular or regional contestation.

The outcome is one of those hyper-sterile cities, highly unpractical for everyday life. It is the latest example of a massive urban planning disaster as part of the state’s conquest of society.

However, the problem goes beyond question of aesthetics. To show this I make use of data on night time luminosity. This data comes from U.S. satellites
and is available from 1992 onwards and for 14 regions (districts plus ethnic states). Similar data has been used to measure urbanization, economic growth and income and ethnic inequality , among other things. Among political economists, the data has been used to detect ethnic patronage in Kenyan villages, foreign aid, the effects of economic sanctions, and regulatory capture.

Clearly, the data has some substantive issues of measurement and validity. However, it does give an idea about concentration of population and access to basic public infrastructure in the form of electricity. Moroever, in countries like Myanmar or North Korea, where official administrative data is extremely scarce and unreliable, it is the next best ‘thing’.

Below I show to images for 1992 and 2012 respectively. One easily spots several important stylized facts. First of all, compared to neighboring Thailand (Bangkok) or China (Hong Kong), Myanmar is still really dark, reflecting a low level of economic development. Second, there is an enormous catching up taking place, but mainly concentrated to the Irrawaddy region, and mainly visible for the three main clusters Mandalay, Naypidaw and Yangon. The remote regions are not only much poorer, they also (perhaps with some notable exceptions such as the Shan state close to the Chinese border), do not participate in the recent dynamics.

Another way to look at it is the sheer discrepancy between the luminosity intensity index across regions. One sees an almost tenfold increase in Mandalay/Naypidaw, and still an almost fourfold increase in Yangon. Hence, we see that ‘all the music’ plays in Mandalay (including Naypyidaw) and Yangon. Unfortunately, this is also were very often recent activities by international development agencies and private firms is concentrated.
The consequences are obvious. Yangon, which still in parts owns the charm of colonial architecture, might easily turn into Asia’s next Moloch, with all types of problems attached. The tension in the country, mainly between the Burmese lowlands and the ethnic hill people, will all but subside.

The question will be whether a regime change could reduce the speed of urbanization and concentration. This seems hardly likely, unless it is thoroughly combined with efforts of de-concentration and decentralization of public services and the political process. If modernity in the form of public infrastructure and services does not come to the periphery, the periphery will come to modernity.

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