SOCIOECONOMIC DYNAMICS OF INLE LAKE

UNCLAS SECTION 01 OF 03 RANGOON 000138

SIPDIS

SENSITIVE
SIPDIS

STATE FOR EAP/MLS, EEB/IFD/ODF
PACOM FOR FPA
TREASURY FOR OASIA:SCHUN

E.O. 12958:N/A
TAGS: ECON EFIN PREL BM
SUBJECT: SOCIOECONOMIC DYNAMICS OF INLE LAKE

REF: A) 07 Rangoon 1001 B) 07 Rangoon 749

RANGOON 00000138 001.2 OF 003



1. (SBU) Summary. Inle Lake, Burma's second largest lake and one
of its most visited tourist sites, is a microcosm of the sharp
divide between Burma's socioeconomic classes. More than 70,000
people live on or around the lake and most are dependent upon the
lake for their livelihoods. People's occupations and social classes
are largely determined by their home village. The photogenic
"leg-rowers" and fishermen are generally the poorest, while traders
and goldsmiths are in a higher socioeconomic class. Villages in
Inle reflect the social class of their inhabitants: the fishing
villages are the worst, with most people living in bamboo and straw
huts with no electricity. In the wealthier communities, people live
in large multi-level teak houses, own satellite dishes and
televisions, and many have multiple motorboats. The economic
disparity found in Inle Lake is indicative of the rest of Burma:
most people are devastatingly poor while the few wealthy people live
in the lap of luxury. End Summary.

Inle Lake: A Study in Economic Disparities
--------------


2. (SBU) Inle Lake, located in southwestern Shan State, is
approximately eighteen miles long and seven miles wide, with an
average depth of five feet during the dry season and ten feet during
the rainy season. According to UNDP estimates, more than 70,000
people live on the lake or along its shores, with more than half of
them dependent upon the lake for their livelihoods. The several
hundred villages located on or around Inle Lake are home to people
with various occupations, including fishermen, farmers, weavers,
traders, and goldsmiths, and the villages are divided mostly by
occupation. Like with other places in Burma, Inle Lake residents'
occupations are determined by where they live. A few have broken
the occupational cycle by going to work in Inle's tourism industry,
but many of them continue to live in the villages where they were
born.

Saving Fish from Drowning
--------------


3. (SBU) During a recent trip to Inle Lake, we toured several
villages, witnessing firsthand the obvious economic disparities that
existed between groups with different occupations. Overall, the
fishing villages are the poorest villages, with an average of five
people living in small bamboo and straw huts. These rickety homes,
standing approximately eight feet above the water on bamboo poles,
only last an average of five years. According to local estimates,
it costs up to $200 to build or repair a bamboo hut. There is a
sense of community in these villages, as home owners rely on other
villagers to assist with home repairs and during financial troubles.
Most of the fishing villages on Inle Lake are sparsely decorated,
and most homes lack electricity. Instead, residents use 6-volt or
8-volt batteries to power portable lights and radios, traveling
several times a week to nearby villages with power plants to
recharge their batteries. To entertain themselves, adults visit
their neighbors to catch up on the daily gossip, while the children
play in the water or teach themselves how to row a boat.


4. (SBU) Fishermen typically have a meager annual income,
dependent upon how many fish they catch. Most fishermen catch an
average of two fish a day during the dry season and up to 10 fish a
day during monsoon season. Fishermen earn approximately 1,500 kyat
($1.25) for each fish, depending on the weight of the fish and local
demand. To earn extra income, some farmers raise pigs in pens
outside their huts, selling piglets to other fishermen or farmers.
Some fishermen's wives also work to supplement their incomes,
growing crops on small floating islands to sell in the local market
or making cheroot (Burmese cigarettes) at home, earning 1000 kyat

RANGOON 00000138 002.2 OF 003


($0.83) for 1000 cigarettes.

Farming on Water
--------------


5. (SBU) Most who live in farming villages on the lake find
themselves in a higher socioeconomic bracket than fishermen. Rather
than farming typical plots onshore, farmers in the Inle region plant
crops, including zucchini, tomatoes, garlic, and leaks, on floating
islands that they anchor to the bottom of the lake with bamboo
poles. In the larger villages, the community will establish
communal farms and assign different farmers to oversee the
production of certain crops. Some farmers sell their products in
local markets while others sell them to traders, who ship the
products to cities, including Rangoon, Mandalay, and Taunggyi.
Because communal farmers produce substantially more crops than
individual farmers, these farmers as a group sell their crops
directly to traders in cities and divide the profits equally.
Compared to fishermen, farmers on Inle Lake can earn a decent living
by Burmese standards, earning up to $50 a month during harvest time.
Farmers that also trade and sell their products in big cities tend
to be wealthier than those who only sell their products in local
markets.


6. (SBU) Unlike the homes in the fishing villages, many of the
homes found in farming villages are single floor dwellings made of
teak wood and straw, which can last up to 100 years. Some poorer
farmers have homes made of bamboo, although they often stand on teak
stilts rather than bamboo poles. According to UNDP, the average
size of a farming family in Inle Lake is six people. Both women and
men farm, although the men are usually responsible for harvesting
the crops while the women sell them in the local markets. Farming
families typically own at least one boat, with wealthier families
having multiple boats or a motorboat, which costs approximately
$750. Larger farming communities have electricity and their own
power plants, which they use to generate additional income by
charging people to recharge batteries.

Wealthier Occupations
--------------


7. (SBU) While the majority of people living on Inle Lake are
either farmers or fishermen, several communities have developed
niche occupations that bring in even higher incomes. We visited
several different villages, including a village where the
inhabitants were silk-weavers, a village that specialized in the
building and repairing of boats and furniture, trading villages, and
goldsmith villages. The greater economic wealth of these
communities was obvious: houses were multi-level (two or three
floors) and made of teak with glass windows; people owned multiple
boats including several motorboats; more than one house in the
community had a satellite dish and TVs; and all homes had access to
electricity.

More Money for Education and Health
--------------


8. (SBU) The vast economic disparity among the various villages
translates into varying availability of education and health
services. While each village has a primary school, only the
wealthiest communities (several farming and trading villages) have
high schools and monasteries where children could continue their
education past the fifth year. Locals told us that children from
fishing communities often stop attending school at the age of 11,
when they start working to provide additional income for their
families.


9. (SBU) Poorer villages also have very limited access to health

RANGOON 00000138 003.2 OF 003


care. Locals told us that people must often travel to larger,
wealthier villages for medical treatment. Many medium-sized farming
villages have medical clinics with a midwife or a nurse, while
wealthier villages may have clinics staffed by a doctor or even a
small hospital. Pharmacies are only located in wealthy communities.


Fuel Costs Affect All
--------------


10. (SBU) Regardless of wealth, the August fuel price hikes (Ref
B) affected all residents of Inle Lake, locals told us. Immediately
after the August price increases, fares for water taxis and boat
"buses" to the main jetty doubled from 7,500 kyat to 15,000 kyat and
from 750 kyat to 1,500 kyat a person, respectively. While prices
have since fallen - taxis now cost 10,000 kyat to go to the jetty
and boat buses cost 1,000 kyat per person, they are still
approximately 45 percent higher than pre-August prices.


11. (SBU) The cost of food and supplies also increased this year,
due primarily to higher transportation charges. A carpenter told us
that it takes longer and is more costly to obtain teak from Southern
Shan State to make boats. As a result, the price of motorboats
increased from 700,000 kyat in 2006 to 800,000 kyat in 2007.
Despite higher prices, most incomes remain the same, making it even
more difficult for people to purchase basic necessities.

Comment
--------------


12. (SBU) The economic disparities between Inle Lake's different
social groups were shockingly clear, and the vast majority of people
falling into the lowest economic levels. The rest of Burma is much
the same: less than ten percent of the population, mostly the
military, controls more than 90 percent of Burma's wealth. While it
is possible for businessmen to make a decent living in Burma, those
with close ties to the regime earn the big bucks while the rest of
the population struggles to make ends meet. Burma's socioeconomic
dynamics are not likely to change while the military continues to
rule - it is much easier to control the people if they are poor and
hungry.

VILLAROSA