Even in Burma's deep south, fear is everywhere

Burma is more closely in contact with people all over the world than at any time in its history. But the tragedy is that the proximity doesn't make a bit of difference. Burma's rulers remain as impervious to change and reform as they were 40 years ago, during the hermit years of the "Burmese Road to Socialism".

At this seedy little port town in the far south of the country the teenage touts on the quayside give you their thoughts about Beckham and offer to sell you viagra before you've reached dry land. At a shabby open-air coffee shop by the port there are two large modern televisions going, one tuned to a Japanese samurai soap, the other to CNN. About half the American channels' news coverage yesterday was devoted to the uprising in Burma, with blogged images of clashes on the streets, lorries full of troops, trashed monasteries. The customers in the coffee shop watched round-eyed and in silence.

Two young semi-official guides take me round the approved sights of Kaw Thaung. One tells me without coaxing, "A lot of trouble in Yangon (Rangoon). There was trouble here too, weeks back. Monks paraded through the town. Just one day. All finished now. Now only trouble in the big cities – Yangon, Mandalay, Moulmein, some others. People in the big cities are different..."

We are alone in the deserted temple complex, yet as soon as conversation turns to forbidden topics – the regime, resistance – his voice drops to a mumble, his eyes glaze, he gives every indication of discomfort. The walls have ears.

"You have been watched all the way, all the time," he says later. I ask him if he can help me meet monks or others involved in the demonstration here. No, he can't, he says, with un-Asian bluntness. "We are being watched all the time," he repeats.

As usual in Burma, nothing can be said because the man at the next table may squeal on us. But words are scarcely necessary. The grounds for misery and rebellion confront one at every turn. The soaring price of rice, for instance, the spark for many rebellions in the past. "Before it was 300 Kyat per kilo, now it's 1,000 Kyat." Thousands of Burmese in the area have migrated across the water to Thailand, just 45 minutes in a motor boat. A one-off bribe buys them informal permission to work and a salary four to five times more than they can earn in Burma. Many have no plans to return.

Aung San Suu Kyi did not pluck the title of her book Freedom from Fear at random. Burma has been a country terrorised by its rulers since the day in July 1962 when the army supremo Ne Win, after seizing power in a coup. Indicated his feelings about peaceful protest, his soldiers shot dead dozens, perhaps hundreds of demonstrating students from Rangoon University, then dynamited the students' union, allegedly with many students still inside. The blast was heard all over the city, and is still echoing this week.

What is remarkable about the country today is that the arrival of the modern world has done so little to dent that fear. Nineteen years ago, during the great uprising of 1987 to 1988, there was one daily paper, the Working People's Daily, and one, state-run, television channel. Ne Win had shut down all other newspapers. The sullen acquiescence of its people in the army's grotesque misrule was explained by the fact that they were shut off from all outside influences.

Today, that is no longer remotely true – yet the same climate of pervasive terror persists, unchanged since my first visit in 1991. There are big satellite dishes on the roofs and a host of weekly newspapers in Burmese many with true news from the rest of the world. There is no Internet provision in Kaw Phaung – you have to go across to Thailand for that. And the tightly-supervised local newspapers has only the most cryptic comment to make on the present uprising. But out there in broad daylight is the Burma coverage of CNN, hour after hour of it.

When Albania's Stalinist regime finally collapsed, it was the oxygen of information that finished it off, like some archaeological relic fatally exposed to fresh air, crumbling into dust. In Burma satellite television and state terror have co-existed for nearly a decade. But perhaps the fresh air is finally doing its corroding work. Perhaps there really is a limit to what the regime can get away with.

If any small town in Burma has a hope of growing rich, it's Kaw Thaung. Its 30,000-strong population has a mix of religions including Catholics, Baptists, Muslims and Hindus, but there has never been an insurgency problem.

There's a healthy smuggling and black market economy that brings Thais over in large numbers to buy Scotch and domestic appliances at bargain prices. Burmese fishermen land their catches in Thai ports. The locals, practically all of them, get around on motorbikes smuggled in from Thailand. And so on.

But the place is on its uppers. People can scarcely afford to buy food. There is no work for the young. "Four or five years ago it was better," says one young man with a part-time job in the port. "Now it's terrible. Everybody who wants a job is going abroad –Thailand, Malaysia, Singapore, Japan. Here there is no work." Most of the day there is no power, either. The manager of my hotel said it would be provided between 6pm and 6am. It eventually came on at 5.45, just as my keyboard was disappearing in the gloaming. It's not provided by the national grid but the hotel owner's generator. No wonder the 50 cent rise in the price of fuel oil in August Casus Belli for the first protests – caused such fury.

The two minders I am handed over to have a starved, hangdog appearance. Their job is to take me everywhere, not to let me out of their sight.

They take me to see the sights of the town: two cement temple complexes, their golden pagodas poking out of the forest; then the southernmost point on the Burmese mainland. The British named it Victoria Point, but independent Burma re-styled it Bayint Naung Point after King Bayint Naung, the 16th century warrior king whose 42 wives gave him 97 children. The State Law and Order Restoration Council, as the junta was previously named, erected a large, gilded statue of the king, looking belligerently out towards Thailand and tugging at his sword, at the end of the promontory.

But there is another gilded statue of a warrior in the town, this one astride his horse and facing not Thailand but Rangoon: Aung San, father of Aung San Suu Kyi, father also of the Burmese Army and of the independent Burmese nation: a most inconvenient hero for the Burmese regime, but one they find it impossible to tamper with.

My two minders and I were riding up the hill that leads through the middle of town, all squashed onto one small motorbike, when I saw Aung San's statue glinting ahead. "Who's that?" I asked, knowing the answer. One of the two cupped his hand in front of his mouth and whispered - as if it were a secret, as if there were a risk of us being overheard whilst scootering along at 30mph - "That's Aung San, a very great man." They both nodded significantly. "I believe he's got a great daughter, too," I put in. They nodded some more.