<P> In 1978, a military operation was conducted against the Rohingya Muslims in Arakan, called the King Dragon operation, causing 250,000 refugees to flee to neighbouring Bangladesh . </P> <P> U Nu, after his release from prison in October 1966, had left Burma in April 1969, and formed the Parliamentary Democracy Party (PDP) the following August in Bangkok, Thailand with the former Thirty Comrades, Bo Let Ya, co-founder of the CPB and former Minister of Defence and deputy prime minister, Bo Yan Naing, and U Thwin, ex-BIA and former Minister of Trade . Another member of the Thirty Comrades, Bohmu Aung, former Minister of Defence, joined later . The fourth, Bo Setkya, who had gone underground after the 1962 coup, died in Bangkok shortly before U Nu arrived . The PDP launched an armed rebellion across the Thai border from 1972 till 1978 when Bo Let Ya was killed in an attack by the Karen National Union (KNU). U Nu, Bohmu Aung and Bo Yan Naing returned to Rangoon after the 1980 amnesty . Ne Win also secretly held peace talks later in 1980 with the KIO and the CPB, again ending in a deadlock as before . </P> <P> Ne Win retired as president in 1981, but remained in power as Chairman of the BSPP until his sudden unexpected announcement to step down on 23 July 1988 . In the 1980s, the economy began to grow as the government relaxed restrictions on foreign aid, but by the late 1980s falling commodity prices and rising debt led to an economic crisis . This led to economic reforms in 1987--1988 that relaxed socialist controls and encouraged foreign investment . This was not enough, however, to stop growing turmoil in the country, compounded by periodic "demonetisation" of certain bank notes in the currency, the last of which was decreed in September 1987, wiping out the savings of the vast majority of people . </P> <P> In September 1987, Burma's de facto ruler U Ne Win suddenly cancelled certain currency notes, which caused a great down - turn in the economy . The main reason for the cancellation of these notes was superstition on U Ne Win's part, as he considered the number nine his lucky number--he only allowed 45 and 90 kyat notes, because these were divisible by nine . Burma's admittance to Least Developed Country status by the UN the following December highlighted its economic bankruptcy . </P>

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