The military regime and agricultural development: A comparative study of Indonesia and Myanmar

When the military took over the government in Myanmar (formerly known as Burma) and in Indonesia three decades ago, both countries were classified as low-income nations. In the 1990s, before the outbreak of the current Asian financial crisis, Indonesia was rapidly expanding her economy and moving into the group of middle-income countries whereas Myanmar miserably slipped into the rank of the "Least Developed Countries." This study compares the contrasting experiences of Indonesia and Myanmar through the window of agricultural development and attempts to explain why and how these two seemingly similar authoritarian (military) regimes produced such different development outcomes.;This study uses agricultural development as the dependent variable and the state intervention as the independent variable to investigate the major thesis that strategic state intervention in an economy has a positive impact on development in general and on agricultural development in particular. The agricultural policies in these two countries are examined as the intervening variables because they directly affect agricultural productions, yet they are, at the same time, the instruments of the state intervention.;The major findings of the study suggest that the state intervention did not automatically lead to rapid development. In fact, the sheer power of the state may do more harm than good if it is not guided or harnessed by several important macro factors. In these two cases, the factors that seem to have made a qualitative difference are the state ideology, state-society relationship, and free market. In the case of Myanmar, the lack of a strong belief in development, the absence of a structural constraint on the state's power, and a suppressed free market, caused the state's intervention to become predatory rather than promotional toward agricultural development. On the other hand, the existence of these macro factors in Indonesia facilitated the conducive roles of the state in development and thus contributed to agricultural growth. The right combination of these factors and state intervention produced positive development outcomes, not state power alone.