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Bleak prospects for Slorc -- cash-s
- Subject: Bleak prospects for Slorc -- cash-s
- From: brelief@xxxxxxx
- Date: Sat, 05 Apr 1997 00:36:00
Subject: Bleak prospects for Slorc -- cash-starvation and civil unrest
(Originally posted on soc.culture.burma)
Japan Leading Business Newspaper
THE NIKKEI WEEKLY
March 31,1997 The Nikkei Weekly
Myanmar turns to region for investment
Threat of civil unrest worsens plight of cash-starved government
BY TEIICHI MIYAUCHI
BANGKOK - A sense of foreboding hangs over Myanmar's economy. Although
the country desperately needs to improve its social infrastructure, it
is suffering from a severe shortage of hard currency, as international
criticism of the government's human-rights record continues to dry up
The threat of civil unrest is further complicating its economic
circumstances: Conflict between the country's military rulers and
pro-democracy supporters dregs on with no end in sight.
Myanmar's generals seem to be increasing the nation's dependence on
China and other developing countries in Asia by using the scheduled
entry of Myanmar in July into the Association of Southeast Asian
Poor rice sales overseas in fiscal 1995 and increased general imports
prompted by its recent economic spurt have left Myanmar in dire need
of hard currency. According to a report released by the International
Monetary Fund, the country's foreign-currency reserves had plunged to
$183 million as of August last year from $663 million a year earlier.
To rectify the situation, the junta gave Ministry of Finance and
Revenue officials authority late last year to take control of funds
apportioned to individual ministries, including the Ministry of
The number of foreign contracts signed by the government has been
falling ever since, as the ministry is strictly screening imports of
equipment and machinery, a foreign trading-company official said.
Fears are emerging that the ministry's crackdown will further slow the
development of Myanmar's infrastructure.
Some of the hard currency saved by the ministry has been used to
purchase crude oil on the spot market because foreign oil companies
are unwilling to sign long-term contracts with the dollar poor
Myanmar needs to continue its austerity policy at least until summer,
when its Yadana offshore gas field is scheduled to start pumping out
natural gas and earning foreign currency.
But mixed signals are coming from U.S. and European companies, the
keys to foreign investment and economic growth. While natural-gas
developers, including Texaco Inc. of the U.S. and Total of France, are
willing to invest in the country, companies operating in most other
sectors are not. Pepsi Co Inc., for example, after facing tremendous
pressure from a public campaign in the U.S., announced in late January
it would support Washington's foreign policy and pull out of the
In Massachusetts and at least 10 other localities in the U.S. with
selective purchasing laws, companies operating in Myanmar are
prohibited from obtaining government-procurement contracts, and more
state and local governments are expected to follow suit. Although
Japanese companies are active in Myanmar, they are growing concerned
about the toughening U.S. and European stance.
Myanmar's military regime longs for the Japanese government to resume
yen loans, but Japan shows no sign of changing its policy. Thein Win,
Myanmar's minister for transport, is irritated by the Japanese
government, which he sees as overly concerned about reactions from the
U.S. and Europe. He said the Myanmarese government will complete
Yangon International Airport an its own, without yen loans.
He also muttered about Japanese companies being all talk and no
action, when listing the Chinese and ASEAN companies participating in
building the country's other airport and large scale seaports.
A Chinese government delegation signed a memorandum with the Myanmar
government last week to promote economic cooperation, including
provision of grant funds, official sources said.
The memorandum provides for extension of 5 million Yuan ($605,000) in
grants and provision of agricultural and farming technology. The two
countries also agreed to strengthen trade.
These will be the first Chinese grants to Myanmar since the military
junta seized power in 1988.
China's Yunnan Machinery and Equipment Import and Export Corp. signed
a contract in mid-March with Myanmar's Ministry of Rail Transportation
to supply $50 million worth of locomotives and coaches. Payment will
be made through credit offered to Myanmar by the Chinese government.
Another Chinese company 'China First Automobile Group Corp.,
established an automobile-sales joint venture in Yangon with the
Ministry of Defense last autumn.
Myanmar's five-year economic plan; fiscal 1996 to 2000
FISCAL 1995 FISCAL 2000
- Population; In millions 44.7 49.01
- Real GDP; In billions of kyat 68.5 91.8
- GDP per capita; In kyat 1,532 1,873
- Exports; In billions of kyat 5,9 15.8
- Manufacturing Industry's share of GDP 9.4% 10.1%
- Agriculture's share of GDP 38.3'/. 37.2%
Note: Official rate is USS I - 6 kyat., market rate is US$I. 165 kyat
Source; The Nihon Keizei Shimbun
Foreign direct-investment approvals In Myanmar from Nov. I 988 to
Dec.'96; in billions of U.S. dollars
1 SINGAPORE (55) |XXXXXXXXXXXXXXX
2. U.K. (26) |XXXXXXXXXX
3 THAILAND (38) |XXXXXXXXXX
4 FRANCE (2) |XXXXX
5 MALAYSIA (17) |XXXX
6 U.S. (15) |XXX
7 NETHERLANDS (5) |XX
8 INDONESIA (3) |XX
9 JAPAN (12) |XX
0 0.5 1.0 1.5
Note: Numbers of projects In parentheses
Source., The Nihon Keizai Shimbun
A country-by-country breakdown of direct foreign investment approved
in Myanmar shows companies from Singapore, Thailand and other
Southeast Asian nations spent freely, pushing the record investment
total above $2.2 billion. Myanmar is one of the most popular countries
for small and mid-size -Thai garment makers, said Chairman Chavalit
Nimla-or of the Thai Garment Manufacturers Association.
After averaging annual economic growth of 8.2% during its
four-year economic plan through Fiscal 1995, the Myanmar
government aims to expand its economy at a greater-than. 6% clip in the five
through 2000. While the government's method for realizing this goal
appear a dependent on closer relation with Asian nations, their help
alone is unlikely to be sufficient to improve Myanmar's infrastructure
while restraining inflation.
To gain the support of rich, industrialized countries, the military
regime needs to improve its relationship with pro-democracy
supporters. But it has given no indication it intends to either
initiate talks or offer concessions to its opponents.