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Suu Kyi:Burma's economic boom may b

Subject: Suu Kyi:Burma's economic boom may bust junta.

	Burma's economic boom may bust junta: Suu Kyi

	Nine months after Ms Aung San Suu Kyi was released from house 
arrest, the country's Government and opposition are locked in a stalemate 
from which neither side seems willing to back down.

	In public the ruling junta downplays the significance of the 
popular opposition leader, but it has repeatedly harangued her in the 
official media as an "internal destructionist" bent on undermining State 

	"She is speaking nonsense... and is power crazy," said 
Lieutenant-General Kyaw Ba, a senior member of the State Law and 
Restoration Council, the military junta that rules the country.

	One Rangoon-based analyst said: "It has become clear that the 
SLORC has no intention of changing its game plan."

	That game plan, he said, consisted of ignoring the opposition's 
call for dialogue and slowly hardening its position against Ms Suu Kyi 
and members of her national League for Democracy.

	But doubts about an apparent economic boom have been voiced by 
human rights groups, the International Monetary Fund and Ms Suu Kyi herself.

	"The so-called boom is an artifical one," she declared earlier 
this month, going on to warn that the economy, far from being the 
generals' saving grace, "will be their undoing".

	Ms Suu Kyi is not alone in seeing the appearance of new 
prosperity as in part a mirage. In a report issued last October, the IMF 
concluded that, on a per capita basis, "neither GDP nor agricultural 
output have yet recovered to the levelsreached in the mid-1980s".

	The MIMF acknowledges that "real economic activity has expanded 
strongly over the last three years", but it also indentifies trends that 
liberalisers of their own propaganda, more the spendthrift military 
dictator portrayed by their opponents.

	Asia's tiger economies tend to be noted for fiscal caution, small 
State sectors and high levels of investment. But Myanmar's budget deficit 
has been widening. Consumption has been increasing as a percentage of GDP 
at the expense of investment; and the private sector's share in that 
investent has actually been declining.

	Foreign-exchange reserves have been maintained at their current 
low level only by failing to pay back foreign debt. Civil servants' wages 
and social services have been cut, while the junta has spent more on defence.

	The IMF estimates that defence expenditure accounts for 4 per 
cent of GDP. Arcanebook-keeping procedures, however, probably conceal an 
even greater amount.

	Fixing of the currency, the Kyat, adds to the illusion. The 
Kyat's value is fixed by the junta at six to the United States dollar. 
But on the streets of Rangoon, it takes 125 Kyats to buy a dollar.

	Myanmar insist it will need a lot of outside financial support to 
adjust the currency to market levels if intolerable inflationary 
pressures are least not for the person in the street, who laready pays 
for imports at a realistic exchange rate.

	The World bank has a more convincing explanation for the 
Government's reluctance to adjust the exchange rate:"the fear that 
influential groups in the population would lose as a result".

	That means those with access to imports at the official rate are 
govrnment departments, the army and State enterprises, as well as some 
individual civil servants and soldiers. The dual exchange rate robs the 
poor to give to the comfortably-off and the small but growing class of 
very, very rich.

[correspondents in Rangoon].