AFP-Myanmar to revamp besieged curr

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Subject: AFP-Myanmar to revamp besieged currency structure

Myanmar to revamp besieged currency structure
SINGAPORE, Oct 3 (AFP) - Myanmar is to revamp its beleaguered currency
structure, including realigning the official exchange rate to better reflect
the market, according to a senior junta minister.
The review would also include the question of whether the kyat should be
partially or fully convertible, Brigadier General David Abel told AFP as the
currency slumped to new lows against the US dollar.

He was speaking on the sidelines of the Association of Southeast Asian
Nations (ASEAN) trade ministers meeting here at the weekend.

The military rulers of Myanmar are facing international sanctions to punish
alleged gross human rights abuses and the suppression of the democratic
opposition of Nobel laureate Aung San Suu Kyi.

The junta have mounted raids on informal currency traders in Myanmar as the
black market rate rose recently to about 360 kyats to the dollar, from about
330 in May.

The official rate is around six kyats to the greenback.

"We are looking at mechanisms to realign our currency to an acceptable
rate," said Abel, a former finance minister. He declined to give a definite
time frame for the review.

Asked how the authorities would determine the "acceptable" rate, he said
among factors to be considered were Myanmar's gross domestic product and
foreign exchange earnings.

"There is a structural framework and structural calculations which we have
considered and have drawn up. This whole methodology we can always adjust to
the prevailing situation," said Abel, a member of the junta officially
called the State Peace and Development Council.

Pressed for some indication on the timing of the currency revamp, he said
Yangon had delayed the planned review due to the Asian currency turmoil
which erupted in mid-1997 and plunged most of the region into a recession.

"After the crisis, we have to be more prudent now in dealing with this
matter. It might take some time. When we feel that when we do it, it will
not affect the man on the street, then we will do it," he said.

Abel said the Myanmar authorities were aware of the difficulties endured by
foreign investors on the dual exchange rate for the kyat -- the black market
and official rates.

"We cannot have a dual rate - it is bad for investment, bad for trading, it
is not conducive.

"It is better to have one single currency rate," Abel said, adding that the
unit "might be partially convertible, wholly convertible from what we have
now which is a fixed rate."

Asked whether foreign expertise would be roped in to help in the realignment
of the currency rate, he said: "We can do it ourselves. We have enough
competent people to do it."

Myanmar had rejected an International Monetary Fund call to devalue the
currency in the 1980's because the Fund refused to give the country a
"safety cushion," Abel said.

He said despite Western sanctions, Myanmar was confident its economy would
expand by 6.4 percent in 1999 as forecast, up from 5.8 percent last year --
the highest GDP rate in Southeast Asia.

He forecast an "even higher but achievable" economic growth of 6.5 percent
in 2000.

Abel said European and US sanctions on Myanmar had little effect on the
economy and added that investments particularly from Europe had not stopped
flowing into the manufacturing, telecommunication, transportation, oil and
gas, forestry and mining sectors.

Myanmar is involved in an ASEAN programme knocking down tariffs to create a
regional free trade area.

ASEAN's original members, Brunei, Indonesia, Malaysia, the Philippines,
Singapore and Thailand, will have to lower their tariffs on industrial
products to between zero and five percent by 2002.

Myanmar, which has to knock down tariffs to such a level by 2004, and the
other newer members -- Cambodia, Laos and Vietnam -- have flexible
deadlines.