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NEWS - Tourists Not Amused by Myanm



Subject: NEWS - Tourists Not Amused by Myanmar Funny Money

Feature-Tourists Not Amused by Myanmar Funny Money

YANGON, Aug 12 (Reuters) - Myanmar, hungry for foreign exchange, prises
$300 out of every visitor to the country and in return issues them with
its own, unique brand of currency. 

But neither the foreign tourists nor the country's local merchants find
Myanmar's funny money at all amusing. 

The paper trail starts at the airport, where tourists are obliged to
swap their coveted hard currency for foreign exchange certificates, or
FECs -- which are worthless outside Myanmar. 

UNLOVED CERTIFICATES 

The government keeps the real money, and the FECs, denominated in
dollars, begin their unloved journey through the country's crippled
economy. 

"We don't refuse to take them, but we prefer dollars where possible,"
said one hotelier in the capital, Yangon. 

"This is simply because they (dollars) are acceptable throughout the
world but the FECs' domain is strictly within Myanmar." 

"And another thing, although one FEC is officially pegged at one U.S.
dollar, it is not worth as much as the dollar when they are exchanged
for kyats," he said. Kyats are the local currency. 

This also makes FECs a headache for tourists, who not only find it
difficult to exchange FECs at what they consider a fair rate but also
cannot convert them back to hard currency on departure. 

"We find most shopkeepers reluctant to give the prevailing exchange rate
values when we pay them in FECs," said one foreign tourist who declined
to be identified. 

Friendless, FECs quickly erode in value as soon as they are put to use.
Restaurants, department stores, jewellers and other retailers are all
loth to give the prevailing exchange rates. 

On August 10 an FEC bought 345 kyats, while the dollar itself fetched
352 kyats. 

UNHAPPY TOURISTS 

The military government, considered a political and economic pariah in
the West because of its human rights record, can ill afford to leave
tourists feeling cheated. 

The official Myanma News Agency reported in May that only 477,362
tourists visited the country in the year ended March. The government is
unhappy, but does not see FECs as the culprit. 

"National traitor destructive elements are spreading fabricated news on
Myanmar in collaboration with some foreign broadcasting stations and so
tourism has not developed as it should be due to their plot to belittle
the dignity of the state," the agency quoted Lieutenant-General Khin
Nyunt, powerful Secretary One of the ruling State Peace and Development
Council, as saying. 

Myanmar's opposition National League for Democracy, led by Nobel Peace
Prize winner Aung San Suu Kyi, and its international backers want a
boycott of Myanmar in support of democracy. But Myanmar's rich history
and beauty keep the visitors trickling in. 

The FECs saga goes back to February 1993 when they were introduced to
earn a guaranteed stream of tourist dollars for cash-strapped Myanmar.
They were also promoted as a way to help tourists beat the vagaries of
an official exchange rate. 

Tourists could go into the open market and get value for their dollars
via the FECs at kyat rates that truly reflected market exchange rates as
closely as possible. 

AIMED AT SAVING TOURISTS FROM BLACK MARKET 

A central bank official told Reuters the foreign exchange certificates
were introduced with "very good intentions." 

"We did not want foreign visitors to suffer because of the huge
difference between the government-controlled rates and the floating
rates in the parallel (informal) market." 

The official rate of six kyats to the dollar still exists, but only on
paper. 

At first, FECs could only be exchanged for dollars. But from December
1995 they were allowed to be swapped for kyat. However, this can only be
done at 10 authorised exchanges in the capital. 

The central bank official said FECs should not have hit problems because
all local shopkeepers were allowed to accept and exchange them for kyats
with authorised dealers. 

The government recently announced it was allowing all telephone
subscribers to make overseas calls directly and pay for them with FECs,
a move dealers and analysts said should help raise some confidence in
the units. 

But shopkeepers are still scratching their heads. One said he did not
even know where to convert the FECs into kyats. 

"Some people don't even know if it is legal to accept FECs," said one
local analyst. Others knew it was legal but worried that sudden exchange
rate changes could set them back, he added. 

"Most of them undervalue FECs when they accept them, not because of
their greed but because of ignorance."