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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.
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