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SET AND READY FOR ASEAN
- Subject: SET AND READY FOR ASEAN
- From: moe@xxxxxxxxxxxxx
- Date: Mon, 12 May 1997 15:20:00
Set and ready for Asean 12/5/97
Cambodia, Laos and Myanmar are expected to come on board as members of
this year when the grouping celebrates its 30th anniversary. In this
segment of an
occasional series, Sunday Review looks at the preparations being made
Myanmar tries to get its economy on track
THE ruling generals of Myanmar often like to say their economy is booming.
But macroeconomic problems and political uncertainties paint a much
less rosy picture
for the economy, diplomats and economists say.
They say rising prices, growing international complaints about the
military regime and
the threat of sanctions by the United States and the European Union
(EU) may hinder
Government officials say Myanmar's economy is growing and on the road
after more than 25 years of decline under an isolationist socialist
They say liberalisation efforts made since the State Law and Order
(SLORC) took power in 1988 have been beneficial as the economy opens up to
Approved foreign investment from late 1988 to the end of March this
US$6.05 billion (S$8.65 billion) in 247 projects. Of this, US$2.13
billion or 34
projects were in the petroleum and natural gas sector and US$1.12
billion or 82
projects were in manufacturing.
Other industries attracting major foreign investment were real estate,
US$874.9 million, and hotels and tourism with US$762.6 million in 39
But economists estimate that only about half of the US$6.05 billion has
invested since SLORC opened up the economy -- although a National Planning
Ministry official estimated that closer to 60 per cent of planned
projects were implemented.
Some companies are awaiting more political stability before beginning
the SLORC continues to come under international pressure for human
and for failing to recognise a democratically-elected government.
Opposition leader Aung San Suu Kyi's National League for Democracy won
in 1990 but the council never recognised the result.
Others are waiting to see if the economy is on track, and many
economists say it is not.
The International Monetary Fund (IMF) said in a report presented to
in March that the economy was still suffering serious macroeconomic
problems and the
SLORC needed to adopt sweeping reform programmes to set it straight.
"The macroeconomic situation has taken a marked turn for the worse
1996," said the IMF report.
"Foreign exchange reserves have fallen sharply, the exchange rate in
the parallel market
depreciated by 40 per cent in six months and inflation has accelerated."
Economic problems could spark political instability if left unchecked,
"The biggest problem is inflation, especially in the city," an Asian
diplomat said, noting
inflation is around 30 to 40 per cent a year. "Incomes of people are
still low and the
lives of ordinary people are still very hard."
He said the SLORC could face political as well as economic problems if
continued to rise and the people of Myanmar were unable to buy even
"As long as Myanmar can produce enough rice, there will be no uprising.
But if a
problem occurs with rice, maybe people will turn to the streets," he said.
"The government knows the potential problems. That is why it is always
trying to keep
stocks of rice and stay in control. It does not want unrest, especially
The Asian diplomat was referring to the fact that Myanmar was awaiting
become a full member of Asean.
The nagging fear adding to all the other problems is the threat of
sanctions. The US has approved a bill for sanctions if the political
situation in Myanmar
worsens, and some diplomats say recent repression of the democracy
by Nobel Peace laureate Suu Kyi is enough to trigger the law.
"The main concern for companies is economic sanctions," a diplomat
said. "If the US
imposes economic sanctions, it will have a big impact on all companies
-- not just
He said even Asian companies, which have been showing the most interest
over the past few years, could be convinced to pull out or not to
invest if the US
sanctions are imposed.
Ms Suu Kyi, who was released from six years of house arrest in July
sanctions and has urged foreigners not to invest in Myanmar until the
Yangon has also dismissed a decision by the EU on March 24 to strip the
special trading privileges in reaction to reports that it had used
forced labour to help
The decision would deprive the nation of preferences benefits that it
had received for
exporting agricultural and industrial products to the EU.
But newspapers in the capital, reflecting the government's position on
the matter, said:
"They would think Myanmar would become bewildered and wide-eyed and come
kneeling down and be subservient. However, Myanmar felt nothing about
it and did not
care less and even did not blink eyes."
Pointing to its self-reliance, commentaries said the country had
infrastructure projects by itself without foreign assistance.
"They were built with our own strength. There is no one to thank
newspaper said. -- Reuter, DPA