Myanmar wrestles with high inflation<\/p>\n
By Aung Hla Tun<\/p>\n
YANGON (Reuter): Rocketing prices of essentials such as rice
\nand cooking oil have sent inflation soaring in recent months,
\nringing alarm bells in impoverished Myanmar.<\/p>\n
So severe is the problem that the military government has
\ntaken action to curb runaway prices, heading off the type of
\ncrisis that brought down the previous socialist government in
\n1988, private analysts and government sources told Reuters.<\/p>\n
\"The uprising and demonstrations that took place in 1988 were
\nmainly because of the economic difficulties,\" Minister of Trade
\nLieutenant General Tun Kyi said at a recent symposium.<\/p>\n
For the first time, after 26 years of isolation and self-
\nimposed exile from the rest of the world, Myanmar is enjoying a
\nheavy flow of foreign investment, mainly in the services sector,
\nunder the leadership of the ruling State Law and Order
\nRestoration Committee (SLORC).<\/p>\n
The growing foreign investment in the country, and strong
\neconomic growth and certain economic reforms fathered by the
\nSLORC have all fueled inflation, analysts and government sources
\nsaid.<\/p>\n
The Minister for National Planning and Economic Development,
\nBrigadier General David Abel, detailed Myanmar's hefty economic
\ngrowth rates at a recent top-level coordination committee
\nmeeting.<\/p>\n
He said Myanmar's economy as measured by gross domestic
\nproduct is set to grow a provisional 9.8 percent in fiscal 1994-
\n95 (April-March) compared with 7.5 percent in 1994-95 and 6.0
\npercent in 1993-94.<\/p>\n
Lieutenant General Tun Kyi put foreign investment in Myanmar,
\nmainly from Singapore, Thailand, Japan and the United States, at
\nend-December 1995 at a total of over US$3.0 billion.<\/p>\n
\"The issue of inflation is inevitable since more and more has
\nto be invested for national reconstruction, but the rate of
\ninflation must not be out of control,\" said General Than Shwe,
\nprime minister and head of the SLORC, at a meeting last week.<\/p>\n
He called for all-out efforts to bring down production costs
\nby stressing frugality in spending funds. Commodity prices would
\nstabilize and fall only when production and distribution costs
\nfell, the general said.<\/p>\n
Most of the side-effects of inflation are felt in major
\ncities, the border region and the capital city of Yangon where
\nthe official food price index has jumped.<\/p>\n
Official data shows the Yangon index rose to 853.61 (base 100
\nin 1986) up to October 1995 from 691.90 in fiscal 1994-95 and
\n418.65 in 1992-93.<\/p>\n
Some residents attribute the jump in inflation to increased
\ngovernment taxes and utility rates. Others said domestic
\nshortages of essentials may be due to excessive exports of some
\nitems to earn much-needed foreign exchange.<\/p>\n
Asked what he exported, a local exporter who declined to be
\nidentified said \"sesamum, pulses, onions, furniture, leather and
\nmarine products -- you name it.\" These are consumer items much
\nsought after by local residents.<\/p>\n
Electricity and water charges have gone up and parking
\ncharges, previously unheard of in downtown Yangon, were imposed a
\nfew months ago at a rate of 10 kyats per hour.<\/p>\n
At the official rate, one U.S. dollar is worth 5.75 kyats
\nwhile the blackmarket rate is about 125 kyats to the dollar.<\/p>\n
Government-licensed exchanges convert one U.S. dollar into
\nforeign exchange certificates at the rate of 123 kyats.<\/p>\n
The price of a pyi (two kilos) of the most popular Emahta rice
\nhas now risen to 60 kyats at retail stores from the officially-
\nannounced cost of 41.11 kyats in 1993-94 and 11.72 kyats in 1991.<\/p>\n
A viss (1.63 kilos) of cooking oil (groundnut oil) costs 200
\nkyats in shops now compared with official figures of 129.85 in
\n1993\/94 and 66.51 kyats in 1991.<\/p>\n
Two rounds of salary increases for civil servants in 1989 and
\n1993, the sale of subsidized commodities and free transport to
\nwork have all failed to cushion the effect of inflation, some
\ngovernment employees said.<\/p>\n
\"Each month, I get 16 pyis of rice at 15 kyats each, a viss of
\ncooking oil at 38 kyats and some candles and soap,\" said U Than
\nSein, a branch clerk at a service enterprise.<\/p>\n
\"I wish the government could raise our quota of subsidized
\ngoods to meet our actual demand instead of raising our salaries
\nagain,\" he added.<\/p>\n
\"I also moonlight every evening as a taxi driver and earn
\nabout 250 kyats daily. The most precious thing inflation has
\nrobbed us of is our character,\" he said.<\/p>\n
Struck hard by inflation, many experienced and educated
\nemployees of various ranks have left their jobs for greener
\npastures abroad or in the booming domestic private sector.<\/p>\n
\"In the past in Myanmar we never thought of changing our jobs,
\nlet alone our careers,\" said U Kyaw Maung, a university lecturer
\nturned hotel supervisor. \"Previously I got only 1,700 kyats per
\nmonth but my salary is about 45,000 kyat now, not counting free
\nmeals and other facilities.\"<\/p>\n
\"I will not hesitate to change my career again if I get a
\nbetter offer,\" he added.<\/p>\n
The SLORC set up a task force of high-ranking officials from
\nvarious departments to bring down soaring prices. The committee
\nmet merchants and wholesalers dealing in key consumer goods, but
\nlittle has been heard of this panel in the official media.<\/p>\n
\"Life is not as easy as it used to be. What most people are
\nlonging for is not democracy, but only better earnings. It is
\nhigh time they beat this enemy (inflation),\" said a retired army
\nofficer.<\/p>",
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