Sat Sep 29, 11:48 AM ET

YANGON, Myanmar - Myint Myint makes little more than a dollar a day as a construction worker. When the ruling junta doubled fuel prices last month in one of the world's poorest countries, she and her children fell further into poverty.

"Now they are getting used to eating just a meal a day," said Myint Myint, 35, who lives in the outskirts of this city in a thatched shack so rundown that monsoon rains seep through the roof.

The fuel hike triggered what has become the biggest wave of anti-government demonstrations in this isolated Southeast Asian nation since a failed uprising in 1988. It also emphasizes what is driving the protests: A deep and desperate poverty.

Myint Myint comes from one of many neighborhoods around Yangon where electricity and running water are rare and naked children play in muddy, potholed roads. Families from the countryside crowd into one-room homes and eat little more than rice. Jobs are few.

Experts said the government's mistake was raising fuel prices Aug. 15 overnight, without first publicly explaining the increase or considering a phased-in price hike, as other Asian countries have done. A similar misstep sparked the 1988 protests which the junta suppressed by killing 3,000 demonstrators, just after the government increased the price of rice and voided the kyat currency.

"It is a policy that has been applied overnight in a draconian manner," said Charles Petrie, the U.N. humanitarian chief in Myanmar, also known as Burma. "(The protests) are a popular expression of discontent because people do not have the cash reserves to absorb the shock."

The government, which holds a monopoly on fuel sales and subsidizes them, raised prices from 1,500 kyats ($1.16) to 3,000 kyats ($2.33) for about a gallon of diesel. The price of natural gas increased as much 500 percent.

Prices on commodities such as eggs, cooking oil and poultry have increased by an average of 35 percent. Gold prices have gone up while the kyat has weakened. Bus fares cost more.

The government has defended the price hikes as necessary to free up funds for social programs and reduce subsidies, which have increased along with the price of oil.

"The government has no recourse but to remove the subsidies," Thaung Tun, Myanmar's ambassador to the Philippines, told The Associated Press in August. "If you won't do that, it'll be very costly to the government. ... It's not politics."

Fuel prices in Myanmar remain among the lowest in Southeast Asia, despite the subsidy cut, Thaung Tun said. He acknowledged that average residents feel the pinch, but said Myanmar's military leaders would not reverse the move.

As they have done for decades, many of the poor are bearing the new hardships with stoicism. But others in this country where an estimated 90 percent of the population live on about $1 a day have taken to the streets.

Petrie and other economic experts argue the price hike shows the government either is not aware of or doesn't care about the plight of its poorest citizens, especially given its military leaders' taste for the good life.

The image of Gen. Than Shwe, head of the State Peace and Development Council, as the ruling junta is formally known, took a blow last year when video of an extravagant wedding for his daughter leaked out. It showed Thandar Shwe wearing a collection of diamond jewelry and receiving wedding gifts worth $50 million at a fancy reception.

Blessed with abundant natural resources and fertile land, Myanmar should be one of the region's most prosperous countries. But years of government mismanagement have placed it among the 20 poorest countries in the world, the United Nations estimates, with a per capita income of only $200 — 10 times less than its neighbor Thailand.

Its last fiscal surplus was in 1962, the year the military took power.

Sean Turnell, an expert on the Burmese economy with Macquarie University in Sydney, Australia, said Burmese are taking dramatic measures just to survive. Many are walking miles to work to avoid paying higher bus fares while others have begun selling furniture and other household goods.

"There are a lot of people who think they have nothing to lose," Turnell said of the frustration in Myanmar. "This isn't about assertions of political or human rights. It's about not having enough money to buy food."

On paper, there are upbeat government predictions of double-digit growth and weekly announcements of oil and natural gas deals with Chinese, Thai and South Korean companies. But experts on Myanmar said the government overstates its economic growth and that most of the oil and gas deals worth an estimated $2 billion are years away from producing significant revenue.

Complicating matters is the cost of building the country's new capital in Naypyitaw and maintaining one of the world's largest armies. Economic sanctions slapped on the regime by the United States and Britain have also hurt.

Strapped for cash, the government has been forced to come up with unorthodox measures to generate revenue, such as printing more money, raising customs duties and cutting fuel subsides.

"The state cannot raise funds in legitimate ways," Turnell said. "There is a real squeeze on the country's finances. If they can survive it for a couple of years, they might get there. But they don't have that cushion."

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On the Net:

Burma Economic Watch: http://www.econ.mq.edu.au/burma_economic_watch