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Burma Related News-3rd April, 2000.



Business Recorder 3rd April, 2000.
Pay rise fuels fears over Myanmar economy

YANGON (April 3) : Myanmar's decision to grant wage hikes of up to 600 percent to civil servants has raised new fears about the military's ability to manage a chaotic economy which foreign experts say is already on the verge of collapse.
The pay rise for 1.5 million soldiers, civil servants and state and public services employees came into force from Saturday, covering eight percent of the workforce.
Although the new scheme was never announced officially it last week sent the price of the local currency, the kyat, to 345 to the dollar on the black market, compared to its normal rate of around 330.
The currency has since settled down but there are still fears that the new rush of money into the economy could spark rampant inflation and put basic commodities out of reach of those who do not qualify for a raise.
The heavy-handedness of the move has dismayed many observers who were relieved that inflation slowed from a punishing 49 percent in 1998-99 to 23.8 percent by last October.
"The measure is too brutal, there will certainly be inflationary consequences," said a western economist in Yangon.
The wage hike means that an advisor to the government currently paid 2,000 kyats a month, will now get around 12,000 kyats. An army captain who earns 1,200 kyats will get 6,000 or 7,000 kyats.
Observers said that the government may try to ease the consequences of its unsubtle action by intervening again to keep prices down.
A common complaint about the generals who rule Myanmar is that they have little or no idea how to run an economy.
The result is a primitive and informal system propped up by barter and a pervasive black market in everything from currency to gasoline.
."There is no indication that they are taking the (economic) problems seriously ... they have lost perspective," said a Western diplomat here. A World Bank report which last year warned the junta that political reform was the only route to a functioning economy was dismissed as "exaggerated and inaccurate" by Myanmar's economic minister.
"We have invited the World Bank back because their report has some wrong information, they have not come yet but we have to work together," a government spokesman told AFP.
Physical signs of the decaying economy and obvious. Power cuts are a daily headache for residents of Yangon and other cities and prices rise and fall dramatically throughout the year.
Foreign investment has all but dried up owing to the Asian financial crisis and stigma attached to investing in a country blamed by the West for gratuitous human rights abuses.
In new blows to the junta this week, American oil services firm Baker Hughes and a Thai department store owner withdrew investments in the country. But while few people praise the junta's economic management, some say it was forced to do something about the appalling wage packets offered in the public sector.--AFP
 
Monday, April 3, 2000
South China Morning Post - BURMA

Huge pay award puts economy at risk of collapse

AGENCE FRANCE-PRESSE in Rangoon

Burma's decision to grant wage increases of up to 600 per cent to civil servants has raised new fears about the military's ability to manage an economy which foreign experts say is on the verge of collapse.

The pay rise for 1.5 million soldiers, civil servants and state and public services employees came into force from Saturday, covering 8 per cent of the workforce.

Although the new scheme was never announced officially, it last week sent the price of the currency, the kyat, to 345 to the US dollar on the black market, compared with its recently normal rate of around 330.

The currency has since settled down, but there are still fears the new rush of money into the economy could spark inflation and put basic commodities out of reach of those who do not qualify for a raise.

The heavy handedness of the move has dismayed many observers relieved that inflation slowed from a punishing 49 per cent in 1998-99 to 23.8 per cent by October.

"The measure is too brutal. There will certainly be inflationary consequences," said a Western economist.

The wage rise means an adviser to the government previously earning 2,000 kyats a month will now get about 12,000 kyats.

An army captain on 1,200 kyats will get 6,000-7,000 kyats.

Observers said the government might try to ease the consequences of its unsubtle action by intervening again to keep prices down - a strategy many believe would be doomed to failure.

A common complaint about the generals who rule Burma is that they have little idea how to run an economy.

The result is a primitive and informal system propped up by barter and a pervasive black market in everything from currency to gasoline.

"There is no indication that they are taking the [economic] problems seriously . . . they have lost perspective," said a Western diplomat in Rangoon.

A World Bank report which last year warned the junta that political reform was the only route to a functioning economy was dismissed as "exaggerated and inaccurate" by Burma's economic minister.

"We have invited the World Bank back because their report has some wrong information. They have not come yet, but we have to work together," a government spokesman said.

Physical signs of the decaying economy are obvious.

Power cuts are a daily headache in Rangoon and other cities and prices rise and fall dramatically throughout the year.

Foreign investment has all but dried up due to the Asian financial crisis and the stigma attached to investing in a country blamed by the West for gratuitous human rights abuses.

In new blows to the junta last week, US oil-services firm Baker Hughes and a Thai department-store owner withdrew investments in the country.

But while few people praise the junta's economic management, some say it was forced to do something about the appalling wage packets offered in the public sector.

"If they don't do it, things can only get worse," a resident said, pointing out that regular fluctuations in the inflation rate and exchange rates were already a hardship for ordinary people.

Some observers of Burma, well used to the often-surreal nature of life in the country, say that, paradoxically, the economic chaos might cushion the impact of the wage rise.

The Straits Times - 3rd April, 2000.

Myanmar to lift wages by up to 600%

NEW FEARS FOR ECONOMY

YANGON -- Myanmar's decision to grant wage hikes of up to 600 per cent to civil servants has raised new fears about the country's economy which foreign experts say is already on the verge of collapse.

The pay rise for 1.5 million soldiers, civil servants and state and public services employees came into force last Saturday, covering 8 per cent of the workforce.

There are fears that the new rush of money into the economy could spark rampant inflation and put basic commodities out of reach of those who do not qualify for a pay rise.

The move has dismayed many observers who were relieved that inflation slowed from a punishing 49 per cent in 1998-99 to 23.8 per cent by last October.

"The measure is too brutal, there will certainly be inflationary consequences," said a Western economist in Yangon.

The hike means that an adviser to the government currently paid 2,000 kyats (S$550) a month will now get about 12,000 kyats. An army captain who earns 1,200 kyats will get 6,000 or 7,000 kyats.

A common complaint about the generals who rule Myanmar is that they have little or no idea of how to run an economy.

"There is no indication that they are taking the (economic) problems seriously... they have lost perspective," said a Western diplomat in Yangon.

A World Bank report which last year warned Myanmar that political reform was the only route to a functioning economy was dismissed as "exaggerated and inaccurate" by Yangon.

Myanmar also termed as "highly biased" and "derogatory" a report by the UN special rapporteur for human rights that condemned Yangon for widespread rights violations.

The Foreign Affairs Ministry said the report "ignored the fact that the entire population of nearly 50 million Myanmar people are enjoying peace, stability and better living conditions for the first time in their life." -- AFP

Bangkok Post - 3rd April, 2000.
Editorial
Burma has chance to refute ILO case
 
In action unprecedented in the International Labour Organisation's (ILO) 80-year history, the United Nations-sponsored group is to put a motion to its June conference to "sanction" Burma for its continued use of its citizens as forced or compulsory labour. The ILO, which comprises 174 member states, is to vote on whether to invoke, for the first time, article 33 of its constitution and "take such action as it may deem wise and expedient to secure compliance" by Burma for its grave and persistent violations of international labour standards.
 
It says forced or compulsory labour in Burma is in violation of national law and is used in actual practice in a widespread and systematic manner with total disregard for the human dignity, safety, health and basic needs of the people. The world has feared these activities may be going on in Burma but there has been little real evidence and the allegations were denied on Friday by Burma's military junta.
 
The ILO has based its assumption on a report from its "special rapporteur", Rajsoomer Lallah, who has never been allowed inside Burma. Therefore the junta's Ministry of Foreign Affairs is justified in saying the report is based on information received "from the elements outside the country... whose objective is to tarnish the image" of Burma. But the junta, in its rebuttal, has not denied that forced labour, forced portering, cultivating food for the army, the use of forced labourers as messengers, sentries and builders, and the use of females for forced sex for the military is a regular and continuing occurrence. These allegations are the gist of the ILO's argument. Instead, the junta says the ILO "is ignoring the fact that the entire population is enjoying peace, stability and better living standards for the first time in their life".
 
By saying this the junta is contradicting an earlier UN report which stated that 1 million children in Burma suffer from malnutrition and that there is increasing use of heroin and an alarming spread of HIV/Aids. The ILO also says ethnic and religious minorities such as the Karen, Karenni, Shan and Rohingyas continue to suffer severe abuses, including arbitrary arrest, killings, forced labour in the army and controlled trafficking of women.
 
The question is, who are we expected to believe-the ILO or the junta? As a reputable international body, it is improbable that the ILO would go to such dramatic lengths and suggest the invoking of a yet-to-be-used rule against Burma if it did not possess hard, clear evidence. The junta has barred the ILO's special rapporteur from its country as if it fears allegations could be proven. If the junta has nothing to hide the special rapporteur should be welcome.
 
This is not the first time the ILO and the junta have clashed. In the years leading up to the 1999 ILO conference, the labour body voiced concerns about the use of forced labour to the junta but received little response. At last year's conference, it was decreed that "the attitude and behaviour of the junta are grossly incompatible with the conditions and principles governing membership of the organisation".
 
If the ILO conference in June passes this resolution it will add further to Burma's woes. The decision will mean that the ILO will actively enlist the support of all 174 member states, the United Nations, national governments and international organisations worldwide to review their dealings with Burma to ensure that by their involvement they are in no way contributing to the perpetuation of this alleged human rights abuse.
 
Between now and June, the junta should welcome the ILO and its rapporteur to its country to refute the allegations and prove to the world that Burma does not use forced labour. If it doesn't, the 174 member states will know which way to vote come June.
 
The Daily Star - 3rd April, 2000.
Civil servants to get 600pc more in wages
Pay hike fuels fears over Myanmar economy
YANGON, Apr 2: Myanmar's decision to grant wage hikes of up to 600 per cent to civil servants has raised new fears about the military's ability to manage a chaotic economy which foreign experts say is already on the verge of collapse, reports AFP.

The pay rise for 1.5 million soldiers, civil servants and state and public services employees came into force from yesterday, covering eight per cent of the workforce.

Although the new scheme was never announced officially it last week sent the price of the local currency, the kyat, to 345 to the dollar on the black market, compared to its normal rate of around 330.

The currency has since settled down but there are still fears that the new rush of money into the economy could spark rampant inflation and put basic commodities out of reach of those who do not qualify for a raise.

The heavy handedness of the move has dismayed many observers who were relieved that inflation slowed from a punishing 49 per cent in 1998-99 to 23.8 per cent by last October.

"The measure is too brutal, there will certainly be inflationary consequences," said a western economist in Yangon.

The wage hike means that an advisor to the government currently paid 2,000 kyats a month, will now get around 12,000 kyats. An army captain who earns 1,200 kyats will get 6,000 or 7,000 kyats.

Observers said that the government may try to ease the consequences of its unsubtle action by intervening again to keep prices down - a strategy many believe would be doomed to failure.

A common complaint about the generals who rule Myanmar is that they have little or no idea how to run an economy.

The result is a primitive and informal system propped up by barter and a pervasive black market in everything from currency to gasoline.

"There is no indication that they are taking the (economic) problems seriously... they have lost perspective," said a Western diplomat here.

A World Bank report which last year warned the junta that political reform was the only route to a functioning economy was dismissed as "exaggerated and inaccurate" by Myanmar's economic minister.

"We have invited the World Bank back because their report has some wrong information, they have not come yet but we have to work together," a government spokesman told AFP.

Physical signs of the decaying economy are obvious.

Power cuts are a daily headache for residents of Yangon and other cities and prices rise and fall dramatically throughout the year.

Foreign investment has all but dried up owing to the Asian financial crisis and the stigma attached to investing in a country blamed by the West for gratuitous human rights abuses.

In new blows to the junta this week, American oil services firm Baker Hughes and a Thai department store owner withdrew investments in the country.

But while few people praise the junta's economic management, some say it was forced to do something about the appalling wage packets offered in the public sector.

"If they don't do it, things can only get worse," a Yangon resident told AFP, pointing out that regular fluctuations in the inflation rate and exchange rates are already a hardship for ordinary people here.

Some seasoned Myanmar observers, well used to the often-surreal nature of life in a country which has for decades lived in isolation from the rest of the world, say that paradoxically, the economic chaos might cushion the impact of the wage hike.

In any other country, they say, a 400 to 500 per cent public sector pay rise would drive the economy and the country to the wall.

But in Myanmar's massive informal economy, the normal logic may not apply, one analyst said.

"Who knows? we will have to wait and see."

Bangkok Post - 3rd April, 2000.

Postbag
Policy on Burma demands a rethink

It is interesting to note that in the last week or so we have had statements from the army and now the National Security Council offering different views on the "Burmese problem".

Khun Kachadpai Burusphat of the NSC seems to think that co-operating with the Burmese will solve the problem. This is like asking the dog that is biting your leg to kindly open its jaws and be friends with you.

The fact is, in case you haven't noticed, Khun Kachadpai, the Burmese junta is an illegal government. Whenever it is described in the press and in discussions, we hear words like "junta", "suspicion", "suppression", "terror" and "torture". These are not words used to describe a democratically elected government.

We don't see the Thai government forcibly rounding up civilians as porters to carry materials to war zones. Nor do we see Thai citizens jailed because they criticise the government. Thais don't flee across the border to escape imprisonment, torture and death.

Even though the junta continues to deny these abuses, there is plenty of evidence, and witnesses, to support the charges.

And if the junta is not involved in supporting the drug trade, why would their top "equal among equals" (don't you just love that?) visit the drug producers at their bases near the Thai border? Was it just a social visit to admire the beautiful poppies?

Instead of worrying about the Burmese viewing Thailand with suspicion because we offer humane assistance to refugees from the junta, it would be better to view the Burmese generals with suspicion and act accordingly.

Why isn't Thailand actively supporting the return of democracy in Burma? Are there perhaps financial reasons for this? Or are the people responsible for these policies just plain blind?

It seems to me that the government, the NSC, the army and a group of ordinary citizens should sit down and discuss the Burmese problem in earnest. I think the NSC would soon find out that it stands alone in its approach to "solving" the Burmese problem, the national security problem, and the drug problem.

The problem is not in Thailand. It is across the border where the junta viciously controls all power and the people.

The drug problem in Thailand won't be solved until the root cause of it is attacked. The drugs are not being made here in Thailand. The drug factories are able to operate in Burma because there is no effective government in charge of the country.

It's time to reassess Thailand's stand and start acting positively towards the ordinary people of Burma. If the revolution comes before Thailand is seen to back the right side, it will suffer the consequences in the future.

Why would a democratically elected Burmese government want to deal with a country that backed its oppressors? Something to think about, Khun Kachadpai.

Komsan Issaraparp

The Nation 3rd April, 2000.

1,500 Karens flee to Thai safety

TAK – About 1,500 Karen refugees fled to safety in Thailand yesterday from heavy fighting in Burma between the military government’s troops and rebels from the Karen National Union, a district official said.

About 300 soldiers from Burma’s 77th Brigade and 101st Battalion launched an allout attack against the union’s 7th brigade yesterday opposite Tak province’s Tha Song Yang district, said the district’s chief Veera Phothisuk.

An ethnic Karen living in Thailand, Moh Kyijae, also known as Yord Chai, was shot dead by Burmese troops while watching over cattle feeding along the border, Veera said.

Junta and rebel troops suffered high casualties from a heavy exchange of shelling, officials on the Thai border said.

Border officials are looking after the 1,500 refugees, but will not allow them to join other Karens in area refugee camps, they said.

Instead, the refugees will be sent back to Burma as soon as fighting stops, they said.

The flood of refugees came one day after the governor of nearby Mae Hong Son province, Poj Utana, ordered a curfew on four refugee camps over fears they would be attacked by the Democratic Karen Buddhist Army, a proRangoon Karen splinter group.

The curfew order came after the government received information that the group would attack the camps, which are located between five and eight kilometres inside the border.

About 100,000 Burmese refugees, mostly ethnic Karens, live in scores of camps along the border.

The Karen National Union is one of the largest rebel groups refusing to surrender or enter a ceasefire agreement with Burma’s military junta.

The Nation