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-------------------------------------------------------------------------------- BURMA RELATED NEWS - May 31, 2001. -------------------------------------------------------------------------------- HEADLINE -------------------------------------------------------------------------------- AFP - World financial heavyweights
meet in Singapore amid global slowdown
Dow Jones - SE Asian Ctrl Bankers To
Meet In Singapore June 1-2
AP - Banking Rules Worry Asian
Officials
Asia Times - Hush-hush Myanmar talks
anger exiles
The Nation - Chavalit wants 'mock war' with Burma
The Nation - Thaksin plays it cool over Burma
The Nation - Opinion - If Thaksin fails in Rangoon, it could mean war
Bkk Post - Plans for a Wa state could
threaten national security
Bkk Post - Premier urged not to rush
to Rangoon
Kydodo News - Keidanren to help Myanmar's IT industry
Financial Express - Line-of-credit to Myanmar to be available free on board: RBI
-------------------------------------------------------------------------------- Thursday May 31, 7:57 PM World financial heavyweights
meet in Singapore amid global slowdown
SINGAPORE, May 31 (AFP) - A dinner for 11 Asian central bankers
Thursday began a week of heavyweight talks in Singapore, with many of the
world's most influential financial leaders meeting in the midst of a global
economic slowdown.
Delegates to a range of conferences include US Federal Reserve chairman Alan Greenspan, European Central Bank president Wim Duisenberg, the International Monetary Fund (IMF) deputy director Stanley Fischer and central bank leaders from Japan, Britain and France. The challenge facing policymakers was to prevent "greater
financial system fragility," Singapore's Second Finance Minister Lim Hng Kiang
told the opening of the Southeast Asian Central Bank governors (Seacen)
conference.
"Financial regulators also faced challenges arising from
the rapid changes in the global financial landscape," he said in a dinner speech
before delegates retreated behind closed doors for two days of
talks.
IMF's Fischer is to deliver a 50 Singapore dollar (28
dollar US)-a-head lecture to bankers and economists on Friday on the outlook for
Asian economies and the IMF's role in their recovery since the 1997
crisis.
Greenspan and Duisenberg headline a meeting of 200
financial leaders at the two-day International Monetary Conference (IMC)
starting Monday which will explore "a range of financial and economic subjects
with global implications."
Seacen -- which includes the central banks of Indonesia,
Korea, Malaysia, Mongolia, Myanmar, Nepal, Philippines, Sri Lanka, Singapore,
Taiwan and Thailand -- is to focus on financial stability in Asia.
The global downturn led by the US, the largest market for
most Seacen economies, and the continued weakness in the second largest market
Japan has seen export growth fall sharply, Lim said in his opening
speech.
"Concerns over the slowing growth in the US and the much
weaker Japanese economy have hit regional currencies," he said.
"While the greater flexibility of exchange rates has
reduced the risk of large speculative attacks, such fluctuations are not without
risk.
"The challenge facing policymakers is how to ensure the
greater exchange rate flexibility does not lead to greater financial system
fragility."
Lim said financial regulators also faced challenges from
rapid changes in the global financial landscape where the boundaries of the
banking, insurance and securities industries have become less clearly
defined.
While efforts were being made to strengthen the
architecture of the international financial system, in particular by the IMF and
World Bank, they were not universally accepted, he said.
Many developing countries "have expressed concerns over
the tendency of these organisations to adopt a one-size-fits-all approach
without taking into account the different circumstances and varying
implementation capacity of the countries involved."
The IMF's response to the Asian meltdown has been attacked
in some circles for its failure to detect problems ahead of time and for the
rescue packages which were harsh on the poor.
Fischer, who has acknowledged that the tight budget
policies advocated by the IMF in crisis-hit Asia were initially too restrictive,
is to tackle the theme in his lecture, analysing the outlook for Asian economies
and their reform efforts.
The IMC conference will also cover "Asia's role in the new
economy," and like Seacen will be mostly behind closed doors.
However, a special session for central bankers including
Greenspan, Duisenberg, Sir Edward George from England, Jean-Claude Trichet of
France and Japan's deputy governor Yutaka Yamaguchi, will be held in open
session.
The IMC is composed of 90 major international financial
institutions, which meets annually to discuss global financial and economic
issues.
--------------------------------------------------------------------------------
Wednesday May 30, 11:46 AM
SE Asian Ctrl Bankers To Meet In
Singapore June 1-2
SINGAPORE (Dow
Jones)--Southeast Asian central bankers will gather in Singapore
for a two-day meeting starting Friday to discuss developments in the financial
markets, said the Monetary Authority of Singapore, the meeting's host,
Wednesday.
The 36th Conference of the Governors of Southeast Asian Central Banks will
meet behind closed doors and discuss financial sector reforms and financial
stability.
Bank for International Settlements General Manager Andrew Crockett will
deliver the keynote address, while Stefan Ingves, director of the International
Monetary Fund's Monetary and Exchange Affairs Department, will share the IMF's
views on financial surveillance issues, the MAS said.
SEACEN, as the organization is called, comprises Bank Indonesia, Bank of
Korea, Bank Negara Malaysia, Bank of Mongolia, Central Bank of Myanmar, Nepal
Rastra Bank, Bangko Sentral ng Pilipinas, Monetary Authority of Singapore,
Central Bank of Sri Lanka, Central Bank of China, Taipei, and Bank of Thailand.
The conference also includes observers from Brunei's Ministry of Finance,
National Bank of Cambodia, Reserve Bank of Fiji, Bank of Lao PDR, Bank of Papua
New Guinea, and National Reserve Bank of Tonga.
The meeting comes amid renewed turmoil in Asian financial markets, with
Indonesia, the Philippines and Thailand's currencies losing ground on domestic
political instability and concerns over economic policies.
The conference comes ahead of the two-day International Monetary Conference
starting June 4 in Singapore.
U.S. Federal Reserve Chairman Alan Greenspan, European Central Bank
President Wim Duisenberg, Bank of England Governor Eddie George, and Bank of
France Governor Jean-Claude Trichet are among the speakers at the IMC.
Other key attendees include Bank of Japan Deputy Governor Yutaka Yamaguchi,
MAS Managing Director Tharman Shanmugaratnam, and Bank Negara Malaysia Governor
Zeti Akhtar Aziz.
--------------------------------------------------------------------------------
Thursday May 31, 9:42 am Eastern Time
Banking Rules Worry Asian Officials Asian Central Bankers Worried About New Global Standards Imposed by Developed Countries By DEAN VISSER - Associated Press Writer SINGAPORE (AP) -- New banking
standards imposed by developed countries could put developing nations at a
disadvantage, Asian financial officials meeting in Singapore said
Thursday.
A new capital accord proposed by the Bank of International Settlements in
Basel, Switzerland, ``poses challenges to Asian banks and regulators alike,''
said Lim Hng Kiang, Singapore's second minister for finance.
Asian banks ``would have to develop more sophisticated risk management
capability'' under the new accord, Lim said in an opening speech. He addressed a
conference held by the Governors of Southeast Asian Central Banks, or
SEACEN.
``The regulators would need to build up technical knowledge as well as
supervisory resources,'' Lim added.
The Bank of International Settlements hopes to implement its new accord by
2004. The accord would give banking regulators more power to assess whether
banks have the capital to back up their lending activities.
The new accord would update the 1988 Basel Accord established by central
banks of the world's 10 most industrialized countries.
Asia's 1997-98 financial meltdown rocked banks and economies worldwide,
drawing intense international pressure for transparency and reform among Asian
financial institutions.
As the world's financial system becomes more interconnected, big groups
such as the International Monetary Fund and World Bank are pushing for higher
assessment standards, Lim said.
``Many developing countries, however, have expressed concerns over the
tendency of these organizations to adopt a one-size-fits-all approach,'' without
considering different situations in various countries, he said.
``A lot of things need to be clarified'' about international capital
adequacy standards, said Philippine Central Bank Governor Rafael
Buenaventura.
SEACEN groups the central banks of Indonesia, Korea, Malaysia, Mongolia,
Myanmar, Nepal, the Philippines, Singapore, Sri Lanka, China, Taiwan and
Thailand.
--------------------------------------------------------------------------------
Asia Times - May 30,
2001.
Southeast Asia
Hush-hush Myanmar talks anger exiles
By Boonthan Sakanond CHIANG MAI, Thailand - Nearly nine months after talks began to end
confrontation between Myanmar's military junta and pro-democracy political
groups, there is little sign of progress in their arriving at a consensus on the
country's future.
Despite initial reports that the negotiations would prompt the release of
hundreds of political prisoners and the resumption of political activity by the
opposition National League for Democracy (NLD), nothing of the sort has
happened. The talks seem to be bogged down due to differences of opinion within
the ruling military government.
While a section led by the powerful chief of military intelligence
Lieutenant-General Khin Nyunt favors sharing power with opposition groups, other
hardliners within the military are not prepared to consider any proposals which
they believe will "lead to uncontrollable processes".
In the meanwhile, frustration is growing among Myanmese activists in exile
over what they feel is a lack of transparency in the highly secretive
negotiations between NLD leader Aung San Suu Kyi and the State Peace and
Development Council or SPDC, as the military rulers call themselves.
"The government is supposed to be discussing the future of the Myanmar and
the Myanmese people, so why can't they let everybody know at least the agenda
for their talks?" says Bo Gyi of the Association for Assistance to Political
Prisoners, a Myanmese dissident organixation based in Thailand.
The SPDC is reported to have entered into negotiations with the NLD only on
condition of strict secrecy over proposals. Even many senior leaders of the
organixation who are not part of the talks have little idea about what is being
discussed.
In the absence of hard information, various rumors are doing the rounds in
the Myanmese capital, Yangon. According to some, the SPDC has mooted a proposal
for it to hand over power to a transitional government led by the NLD provided
the military is allowed to retain control over defense and home affairs and
given substantive representation in any new Parliament. Although the NLD won the
1990 general elections by a majority of more than 90 percent of the votes cast,
the military regime has refused to hand over power.
"It is difficult to figure out where the talks are leading to, assuming of
course they are taking place in a proper way at all," says Zaw Min, a former
student activist and currently in charge of foreign affairs for the Democratic
Party for a New Society (DPNS), a Myanmese opposition group.
Reports coming from diplomatic sources in Yangon indicate that in recent
weeks, the talks have been stalled due to the death in mid-February of
Lieutentant-General Tin Oo, a hardliner opposed to sharing power and a powerful
member of the SPDC hierarchy. Tin Oo died with several other military officers
in a mysterious helicopter crash, attributed to sabotage by rivals within the
SPDC, while on an inspection tour along the Thai-Myanmar border. His death is
believed to have sparked off a severe power struggle inside the SPDC and made
the dialogue with the NLD an issue of serious contention among the generals.
Many observers point out that even if the talks do go ahead as planned and
produce some kind of framework for a transition of power from the military to
civilian institutions, there is bound to be serious opposition from Myanmar's
numerous ethnic minority groups, many of whom have been battling Yangon for
decades to seek autonomy or even independence.
The ethnic groups have been left completely out of the talks and have
demanded inclusion if the discussions are going to have any real political
meaning for all populations living in Myanmar.
"The current negotiations between the military and the NLD are welcome but
very inadequate without the participation of all ethnic groups," says Saw Ba
Thein, president of the Karen National Union, which has been fighting for
autonomy on behalf of the Karen minorities for more than half a century.
According to him, what most ethnic groups want is a genuinely federal Myanmar
where ethnic groups will have the freedom to socially and economically develop
their societies without domination by the majority Myanmarns.
In fact, the question of how to bring in the various ethnic minorities into
the transition process may prove to be the most contentious and divisive issue
during the talks between the NLD and the military. While the SPDC has
successfully signed ceasefire agreements with many of the erstwhile rebel
groups, many senior military leaders still think of the ethnic minorities as
being discontented populations to be suppressed and controlled without any
consideration for their aspirations.
"All the ethnic minority groups are willing to be part of a Myanmar that is
democratic and under a leadership that can be trusted to abide by the principles
of federalism, but there is no way they will accept the current military
regime," says Ba Thein.
One unfortunate fallout of the secrecy surrounding the negotiations in
Yangon has been a growing distrust between Myanmese dissident groups in exile
and the ethnic rebel groups. Some ethnic minority leaders see the talks between
the pro- democracy opposition groups and the military as a entirely "Myanmarn
affair" and a snub to smaller ethnic populations inside the country.
"Whether or not the talks produce any transition to democracy, the SPDC is
sure to emerge the winner in this episode because it has managed to cast
aspersions on the motives of the NLD and divide the Myanmarn opposition
activists from the ethnic minority rebel groups," says an Asian diplomat here.
Among the other rewards that Myanmar's military rulers have reaped by
taking part in the dialogue with the NLD is a softening of the international
stand against their regime, whose human rights record has been called one of the
worst in the world. While some foreign governments like the Japanese have taken
the talks as an excuse to break sanctions and restart financial aid to Myanmar,
others have decided to tone down their opposition to the SPDC to "give them a
last chance".
With the Myanmese economy in dire straits and on the verge of collapse,
some see the entire talks as a charade carried out by the military rulers to buy
time. The SPDC's foreign minister Win Aung, asked by visiting foreign reporters
about a timeframe for the talks to conclude, replied: "There is no set time for
the dialogue or peace process in Northern Ireland, or in Sri Lanka or the Middle
East. This is also not a process where you can start a countdown. This is
timeless."
For the people of Myanmar, already laboring under four decades of military
rule, waiting for the military to make up its mind about giving up political
power may not be a very appealing idea.
--------------------------------------------------------------------------------
Chavalit wants 'mock war' with Burma
BANGKOK, May 31 (The Nation) --
Defence Minister Chavalit Yongchaiyudh suggested on Thursday that Thai armed
forces and their Burmese counterparts should organise joint military exercises
on regular basis to promote closer ties and reduce border tension.
Gen Chavalit, also deputy prime minister, said the Thai armed forces had
been holding regular mock wargames with the United States and Singapore for many
years and that such arrangements should be expanded to include Burmese armed
forces in the future.
"I understand that Burma is upset with the recent joint military exercise
between Thai and US soldiers [which took place near the Burmese border],"
Chavalit said. "We [Thailand] want to make clear that the exercise was aimed at
promoting peace and stability -- not provocation or aggression."
He said the proposed joint military exercise with Burma could be arranged
to enhance cooperation between the two countries in drug suppression.
Thai and Burmese armies have engaged in a series of border skirmishes
following incursions by Burmese troops or Rangoon-backed Burmese ethnic
guerrillas in recent months.
--------------------------------------------------------------------------------
The Nation - June 01,
2001.
Thaksin plays it cool over Burma
Prime Minister Thaksin Shinawatra yesterday dismissed his deputy's claim
that his trip to Burma to mend deteriorating relations had been scheduled for
next month.
The trip was being prepared, but no date had been set, said Thaksin.
"The Burmese government wants to talk to me," he added. "If we have time to
talk, we should stop [the tensions]. But I can't give the exact date at the
moment. We have to go through the protocol and diplomatic procedure."
On Tuesday, to the surprise of the Foreign Ministry, Deputy Prime Minister
and Defence Minister Chavalit Yongchaiyudh said that Thaksin would visit Burma
next month. He said the trip would help reduce the rising border tension between
Thailand and Burma.
Meanwhile, the chairman of the Senate Foreign Relations Commi-ttee conceded
that the problems between Thailand and Burma are too complicated to be resolved
soon and that the best solution lies in promoting democracy in the latter.
Speaking after a meeting of Foreign Ministry and Senate officials, Kraisak
Choonhavan said he expected that a summit negotiation between leaders of the two
nations would reduce the tension.
But he said Thaksin should visit Rangoon after a visit to Bangkok by
Burmese Foreign Minister Win Aung scheduled for the third week of June. Kraisak
said that two Thai leaders, Foreign Minister Sura-kiart Sathirathai and PM's
Office Minister Thammarak Issarangu-ra, had already visited Burma, but to no
lasting effect.
He said issues concerning the neighbouring countries were discussed at
length during the meeting. Among them were narcotics, double taxation and high
transportation costs for exported goods.
He presented a study by a special working group to the foreign minister
about the situation in the Kokang area of Burma, an area he described as a
semi-autonomous state over which Burmese authorities have little control.
Mong Yawn, he noted, is a satellite town whose centre at Pangh-sang is
crowded with modern facilities and casinos.
Moreover, he urged a serious review of non-interference policy, saying
Thailand should start talking tough with the Burmese and pursue "a long term
policy that promotes people-to-people relations aimed at promoting
democracy."
--------------------------------------------------------------------------------
The Nation - May 31,
2001.
Opinion
If Thaksin fails in Rangoon, it could
mean war
Kulachada Chaipipat
The prime minister's trip to Burma will have crucial consequences regarding
hostilities, drug measures and redress for media insults
Prime Minister Thaksin Shinawatra's eagerness to visit Rangoon could be a
diplomatic catastrophe in the making for Thailand since it could be construed as
a sign of weakness in dealing with the dictatorial Burmese junta.
Without being considered nationalistic, the highest-level visit should only
take place after Rangoon sends a clear signal that it really wants to make peace
with its eastern neighbour.
Moreover, the dust should settle here over who is taking charge of
executing Thai foreign policy towards Burma. Apparently, at the moment, the army
is speaking very loud and clear - if war fits, wear it! - while Thaksin as a
leader cannot calm the discord between Defence Minister General Chavalit and the
aggressive army.
Apparently, Rangoon's prime concern is its domestic politics. Its fragile
political dialogue with opposition leader Aung San Suu Kyi would have a
far-reaching impact on the survival of military rule. Given high expectations
for these talks, both inside and outside the country, their failure could be
detrimental to the country's stability.
Nevertheless, a series of border spates with Thailand which began in
February have temporarily shifted the focus of attention away from the talks, if
not completely. By fanning the hatred of the Burmese against Thailand through
the revival of historic hostility, Rangoon hopes to gain popularity among its
people. And if the internal rifts within the top echelons of the Burmese
leadership are real, a potential war with Thailand could be the only reason for
them to keep united.
Similarly, scepticism is high and rising here among military observers that
the Thai army is using the same tactic, deliberately or not, to garner political
support for the military institution whose image was badly tarnished in the May
1992 crackdown on the pro-democracy movement.
In the broader picture, the Thai army is worrying about its diminishing
strength amid the perceived existence of a cold war among regional powers, each
struggling to wield their political and economic muscles.
It should go down on record that, in no time at all, about six aide
memoires about border incidents and media attacks were exchanged by both sides
over the past month as if they were mere correspondence with no diplomatic
weight. There were at least three known border skirmishes between Thai and
Burmese troops and/or Rangoon-allied minority groups.
Against this backdrop, however, Burma is negotiating with Thailand from a
position of strength since it still speaks with one voice.
As for Thailand, the perceived successful anti-drug campaign has now
degenerated into a mere trap used by Rangoon to provoke border incidents over
the past few months.
Military observers warn the tide of nationalism fanned on both sides of the
border has reached a level of danger that it could be used to justify the rise
of militarism in the two countries. They say the use of force, however, had but
one effect: torpedoing the current fragile unity of Asean, to which both nations
are members and which might eventually invite third parties to intervene.
Nevertheless this begs a question about why Rangoon dared to allow its
mouthpiece, The New Light of Myanmar, to publish two articles affronting the
Thai monarchy despite the fact that the junta knows how sensitive the issue is
to the Thai people.
Moreover, Burmese shells that landed on a royal agricultural project at Doi
Aungkhang on May 22 was a deliberate act to fan nationalism on the Thai side.
Both cases provide enough justification for the Thai army, as an
institution closely linked to the monarchy, to react by force. But what are they
waiting for?
In the conduct of international relations, military means will be used only
when all diplomatic avenues are exhausted. In this case, Thaksin's trip to Burma
is Thailand's only trump card after two ministerial trips to Burma and three
diplomatic protest notes failed to quell border tensions. If he fails,
hostilities could escalate into war.
When the prime minister sits down with foreign affairs and security policy
makers tomorrow, he should define clearly what is the current Thai national
interest vis-a-vis his anti-drug campaign, which has now proven to be only a
short-term gain for the government since its effects have snowballed on the
border.
Thus there are only three reasons justifying Thaksin's trip to Burma.
Border retaliation and spins on nationalism should end on both sides. The
Burmese should make a sincere effort to fight the drug flows originating in the
territory of its allied minority groups.
After that, Thaksin should get a clear gesture from Rangoon on what is an
appropriate remedy to the damage caused by the Burmese media's insults to the
monarchy.
--------------------------------------------------------------------------------
Bangkok Post - May 31,
2001.
Plans for a Wa state could
threaten national security
DURG SUPPRESSION Wassana Nanuam The Wa tribal minority's plan for a Wa state could pose a threat to
national security, says the Third Army commander.
Lt-Gen Watanachai Chaimuanwong said the United Wa State Army would need
more money to pay for its plans and a huge increase in drug production could be
expected.
The United Nations Development Programme had moved 50,000-100,000 Wa people
from Burma's northern border to areas opposite Chiang Mai to stop them making
opium.
They had turned to making methamphetamines for the Red Wa, since help with
occupational development was rather slow, Lt-Gen Watanachai said.
Drug factories in Mong Yawn were moved into jungles near the Salween river
and that was why Thai officials on a recent trip to the Wa-controlled town did
not spot any drug activity.
There were a lot of "mobile" factories which could be moved anywhere, he
said.
The Red Wa also moved some factories to border areas opposite Tak and used
the pro-Rangoon Democratic Karen Buddhist Army to make and sell speed.
Lt-Gen Wattanachai said some reports suggested that five factories were
operating in a military base in Laos, which used a resort owned by a Burmese as
a front.
He said Thailand was intercepting only 10% of drugs from Burma. An
estimated 600-700 million pills would be made this year.
Lt-Gen Watanachai said special task force 399, set up to deal specifically
with drugs and trained by American soldiers, would not cross the border to crack
down on manufacturers because that violated international law.
"Drug factories would have all been gone if we really launched cross-border
operations," he said. "But we won't do that because it is not right."
He appointed a panel to investigate officers who allowed six trucks to
enter Burma through a closed border pass in Chiang Rai's Mae Sai district on
Tuesday. Some officers in border areas were corrupt, he said.
--------------------------------------------------------------------------------
Bangkok Post - May 31,
2001.
Premier urged not to rush to
Rangoon
Wait for positive signs, says Kraisak Sermsuk Kasitipradit and Yuwadee Tunyasiri
Prime Minister Thaksin Shinawatra should not be rushed into making his
official visit to Burma as Rangoon has not demonstrated it wants to strengthen
bilateral ties with Thailand, said Kraisak Choonhavan, the senate foreign
affairs committee chairman.
His comment came after Mr Thaksin yesterday said he would hasten his trip
there in the hope it would strengthen ties and resolve mistrust and
misunderstanding between the two countries.
Mr Kraisak expressed surprise over the premier's abrupt decision. He said:
"I agree with the idea that our premier should make the trip but I am doubtful
whether it is the proper time to make such a trip now.
" The government should not rush this, we have to wait and see for any
positive development from the Burmese side."
Mr Thaksin said he was very concerned about an escalation of border
tension.
"If we have a chance to discuss the issue then we should do it to tackle
the problem once and for all, since the government still has other things to
do," he said.
Mr Kraisak, a senator from Nakhon Ratchasima, also doubted Burma's
sincerity.
Recalling a recent trip to Rangoon by Foreign Minister Surakiart
Sathirathai, Mr Kraisak said he found it unusual the trip coincided with a heavy
border clash at Hua Lone hill in Chiang Rai's Fang district, where Burma-backed
Red Wa soldiers seized the hill on May 7.
He urged the premier not to rely solely on information provided by Defence
Minister Chavalit Yongchaiyudh and said Mr Thaksin should find information from
other sources to ensure objectivity.
"I'm worried that this trip might be a failure. We have yielded a lot to
Burma and have not got anything in return.
"We should wait at least until the Burmese foreign minister returns us a
visit before the premier makes his journey," he said.
--------------------------------------------------------------------------------
Kyodo News
Keidanren to help Myanmar's IT
industry
Wednesday, May 30, 2001 at 09:00 JST
YANGON — The Japan Federation of Economic Organizations (Keidanren) agreed
Tuesday to help Myanmar establish an information technology (IT) software
industry, a joint communique said.
In a joint communique issued at the close of a two-day Myanmar-Japan joint
economic conference, Japan's most powerful business organization expressed its
readiness "to offer any possible assistance to cooperate and establish the
software industry in Myanmar."
--------------------------------------------------------------------------------
Financial Express
Line-of-credit to Myanmar to be
available free on board: RBI
Our Bureau
Kolkata, May 29: THE Reserve Bank of India has notified that the
$15-million line-of-credit to be extended to Myanmar under the Indo-Myanmar
credit agreement, will be available on a free-on-board (FoB) basis. It will
cover 100 per cent value of the eligible goods to be exported from India.
According to a circular issued by RBI’s exchange control department, the
Letters of Credit should clearly specify that 100 per cent of the value of goods
is financed from credit. In the circular, the apex bank authorities have also
clarified that the Myanmar government and the State Bank of India, New Delhi,
should be informed in respect of each approved contract by the Union finance
ministry. According to RBI, all disbursements under the line of credit should be
made under Letters of Credit opened by banks in Myanmar only. All Letters of
Credit shall be advised by the banks in Myanmar to SBI, New Delhi, for onward
transmission to the exporters either directly through SBI or through any other
bank, as specified by the exporter.It is learnt that the Letter of Credit is
negotiable after SBI issues an advice that is operative.RBI has also stipulated
that ordinarily no agency commission shall be payable in respect of exports
financed under the Line of Credit. However, the apex bank authorities may
consider on merit, requests for payment of commission up to a maximum of five
per cent of the free on board value in respect of goods which require after
sales service. “In such cases, commission will have to be paid in Myanmar by
deduction from the invoice value of the relevant shipment and the reimbursable
amount will be 100 per cent of the free on board value minus the commission paid
and the approval for should be obtained before the relevant shipment is
effected.,”
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