Reuters-FEATURE-Tourists not amused

[tinkyi@xxxxxxxxxxxxx]

Subject: Reuters-FEATURE-Tourists not amused by Myanmar funny money 

FEATURE-Tourists not amused by Myanmar funny money
09:31 p.m Aug 11, 1999 Eastern
By Aung Hla Tun

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.''