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COUNTRY REPORT

Myanmar (Burma)The full publishing schedule for Country Reports is nowavailable on our website at http://www.eiu.com/schedule

1st quarter 2000

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Myanmar (Burma) 1

EIU Country Report 1st quarter 2000 © The Economist Intelligence Unit Limited 2000

Contents

3 Summary

4 Political structure

5 Economic structure5 Annual indicators6 Quarterly indicators

7 Outlook for 2000-01

12 The political scene

18 Economic policy

19 The domestic economy19 Economic trends24 Agriculture24 Energy and mining25 Tourism26 Financial services

28 Foreign trade and payments

31 Trade data

List of tables

7 Forecast summary19 Central government tax revenue20 Industrial output in the state sector21 Foreign direct investment approvals22 Consumer prices23 Prices of selected items, 199925 Tourist arrivals26 The dollar, FECs and gold on the free market, 199927 Interest rates27 Money supply and credit28 Merchandise trade28 Exports of main commodities29 Imports by category29 Imports of main commodities30 International liquidity

2 Myanmar (Burma)


List of figures

12 Gross domestic product12 Kyat real exchange rates23 Consumer price inflation25 Tourist arrivals26 Kyat exchange rate

Myanmar (Burma) 3


Summary

1st quarter 2000

There will be further international pressure on the ruling military junta to be-gin talks with the main pro-democracy party, the National League for Demo-cracy (NLD). However, the junta will remain unwilling to negotiate. Instead, itwill move slowly towards holding another election, while at the same time in-tensifying efforts to dismantle the NLD. The risk of political unrest will thusremain high. Without economic and political reform, aid and investment in-flows will remain limited, constraining the overall rate of GDP growth. Infla-tion will ease, but the free-market exchange rate will remain under pressure.

Several ministers in the military government have been replaced, but there hasbeen no change in economic policy, or in policy towards the NLD. A Japanesedelegation has called on the junta to begin dialogue with the NLD. The UN’sspecial envoy on Myanmar is to be replaced. The junta has started to reopenthe universities. Two senior religious leaders have called for political reform.The border with Thailand has been reopened, but relations have remainedtense. Attacks on ethnic minorities have continued. There have been borderclashes with Bangladesh.

The World Bank has called for economic reform, including reform of theexchange-rate regime and of policy towards private investment. The junta mayhold further talks with the World Bank.

• The release of economic data for 1998/99 has been further delayed. GDPgrowth may have slowed. There has been a shake-up at the investment com-mission, but approvals have remained sluggish in the absence of economic andpolitical reform. Inflation has eased, but unofficial data show that prices of keystaples have continued to rise.

• No data on the 1998/99 harvest have been published. Poor weather has hitopium production. Gas sales from the Yetagun field may face delays.

• A new hotel project is in the pipeline.

• The kyat steadied in late 1999. Money supply growth has remained brisk,and interest rates have remained steeply negative in real terms.

Crossborder trade with Thailand has been disrupted. After an increase in thesecond quarter 1999, international reserves have dipped again. There has beena rise in commercial borrowing.

Editor: Georgia BushAll queries: Tel: (44.20) 7830 1007 Fax: (44.20) 7830 1023

Next report: Our next Country Report will be published in June

February 28th 2000

Outlook for 2000-01

The political scene

Economic policy

The domestic economy

Foreign trade andpayments

4 Myanmar (Burma)


Political structure

Union of Myanmar

Military council

Following a military coup in September 1988, the State Law and Order RestorationCouncil (SLORC) took all executive power; in November 1997 the SLORC was renamedthe State Peace and Development Council (SPDC)

Chairman of the SPDC, Senior General Than Shwe

The Pyithu Hluttaw (People’s Assembly) was abolished after the military coup in 1988;an election was held for a new People’s Assembly in May 1990 resulting in an over-whelming victory for the opposition National League for Democracy (NLD), but thejunta has refused to allow parliament to meet; in September 1998 the NLD set up a ten-person “people's parliament” committee to represent the deputies elected in 1990

May 27th 1990; next election date unknown

The SPDC controls all the organs of state power

Since the military coup, political parties have in theory been permitted to operate pro-vided they are officially registered, but they face many restrictions; a number of organi-sations, most ethnically based, were in armed conflict with the government for manyyears—many have now reached an accommodation with the government, althoughsome groups continue armed resistance; the Union Solidarity Development Association(USDA) was set up in 1993 as a welfare organisation and support bloc for the junta—itnow has 11.8m members

National League for Democracy (NLD); National Unity Party (NUP); Shan NationalitiesLeague for Democracy (SNLD) and other ethnically based parties

Chairman Senior General Than ShweVice-chairman General Maung AyeSecretary-1 Lieutenant-General Khin NyuntSecretary-2 Lieutenant-General Tin OoSecretary 3 Lieutenant-General Win Myint

Prime minister & minister of defence Senior General Than ShweDeputy prime ministers Lieutenant-General Maung Maung Khin

Lieutenant-General Tin Tun,Lieutenant-General Tin Hla

Commerce & trade Brigadier-General Pyi SoneCommunication, post & telegraph Brigadier-General Win TinConstruction Major-General Saw TunEnergy Brigadier-General Lun ThiFinance & revenue Khin Maung TheinForeign affairs Win AungHome affairs Colonel Tin HlaingInformation Major-General Kyi AungOffice of the SPDC chairman Brigadier-General David Oliver Abel

Lieutenant-General Tin NgweBrigadier-General Maung Maung

Kyaw Kyaw Maung

Official name

Form of state

The executive

Head of state

National legislature

National elections

National government

Main political organisations

Main political parties

Main members of the StatePeace & Development Council

Key ministers

Central Bank governor

Myanmar (Burma) 5


Economic structure

Annual indicators

1995 1996 1997 1998a 1999a

GDP at current pricesb (Kt bn) 604.8 790.9 1,067.3 1,665.2 2,222.3

Real GDP growthb (%) 6.9 6.4 5.7 4.4 4.6

Consumer price inflation (av; %) 25.2 16.3 29.7 51.5c 28.8

Populationd (m) 44.7 45.6 46.4 47.3 48.1

Exports fob ($ m) 933.2 937.9 974.5 1,171.4c 1,194.3

Imports fob ($ m) 1,756.3 1,869.1 2,106.6 2,455.0c 2,607.5

Current-account balance ($ m) –258.6 –279.9 –412.2 –453.6c –608.0

Reserves excl gold ($ m) 561.1 229.2 249.8 314.9c 355.0

Total external debt ($ bn) 5.8 5.2 5.1 5.4 5.8

Debt-service ratio, paid (%) 19.1 11.5 7.7 6.9 6.8

Official exchange rate (av; Kt:$) Kt:$b 5.7 6.0 6.3 6.4 6.4

Free-market exchange rate (av; Kt:$)b 120 155 237 340 350

February 28th 2000 Kt6.12:$1 (official rate); first week of January, Kt324:$1 (free-market rate)

Origins of gross domestic product 1997b % of total Components of gross domestic product 1997b % of total

Agriculture 58.8 Total consumption 89.6

Industry 10.6 Total investment 13.3

Manufacturing 7.5 Increase in stocks –2.2

Services 30.6 Exports of goods & services 0.6

GDP at current prices 100.0 Imports of goods & services –1.3

GDP at current prices 100.0

Principal exports 1998e $ m Principal imports 1998e $ m

Pulses & beans 182.3 Machinery & transport equipment 751.3

Prawns 95.9 Base metals & manufactures 287.8

Teak 89.5 Electrical machinery 237.7

Fish & fish products 54.8 Edible oils 115.5

Rice 36.6 Cement 65.0

Total incl others 1,063.3 Total incl others 2,667.5

Main destinations of exports 1998 % of total Main origins of imports 1998 % of total

India 13.1 Singapore 31.2

China 10.8 Thailand 12.4

Singapore 9.9 Japan 12.3

Thailand 8.2 China 9.1

Hong Kong 4.2 Malaysia 8.0

a EIU estimates. b Fiscal years beginning April 1st. c Actual. d Mid-fiscal year. e Customs basis at official exchange rate.

Sources: GDP growth rates and breakdown: from Ministry of National Planning, Review of Financial, Economic and Social Conditions, 1997/98. Growth rate for 1997/98, from press reports. Exports(fob) and imports (fob), and current-account balance, all from IMF, International Financial Statistics. Export (fob) and import (cif) breakdown: from Central Statistical Organisation (CSO), SelectedMonthly Economic Indicators. Debt data: from World Bank, Global Development Finance. Destination of exports and imports: calendar year data from CSO, Selected Monthly Economic Indicators.

6 Myanmar (Burma)


Quarterly indicators 1997 1998 1999

4 Qtr 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr 3 Qtr

PricesConsumer prices (1995=100) 169.4 190.2 220.7 249.9 253.0 261.6 264.3 370.0 % change, year on year 30.4 43.5 59.5 53.4 49.4 37.5 19.8 48.1

Financial indicatorsExchange rate Kt:$ (av) 6.29 6.38 6.41 6.41 6.16 6.21 6.38 6.33 Kt:$ (end-period) 6.36 6.41 6.47 6.25 6.11 6.34 6.43 6.23M1 (end-period; Kt bn) 220.0 259.1 258.0 271.4 282.2 307.6 307.0 n/a % change, year on year 31.0 30.6 27.4 30.4 28.3 18.7 19.0 n/aM2 (end-period; Kt bn) 323.0 369.2 382.2 414.0 433.5 470.9 483.6 n/a % change, year on year 28.8 28.7 26.9 30.2 34.2 27.5 26.5 n/a

Sectoral trendsProduction Ricea (annual totals; ‘000 tonnes) 17,673 ( 16,651 ) ( 17,848b ) Rubberb (qtrly totals; ‘000 tonnes) 6.5 8.3 3.2 2.7 12.1 8.5 3.3 3.8 Tin in concentrates (qtrly totals; tonnes) 59 22 19 32 33 32 22 n/a Zinc in concentrates (qtrly totals; tonnes) 384 415 266 416 258 296 145 n/a

Foreign trade (Kt m)Exports fob 1,536 1,550 1,533 1,524 2,131 1,894 1,875 n/aImports cif 3,271 3,284 5,029 4,896 3,712 3,255 4,333 n/aTrade balance –1,735 –1,734 –3,496 –3,372 –1,581 –1,361 –2,458 n/a

Foreign paymentsReserves excl gold (end-period; $ m) 249.8 261.3 255.3 282.2 314.9 328.7 341.1 305.3

a Fiscal year, beginning April of year shown. b Estimate.Sources: FAO; International Rubber Study Group, Rubber Statistical Bulletin; Myanmar Central Statistical Organisation, Selected Monthly Economic Indicators; IMF, International Financial Statistics.

Myanmar (Burma) 7


Outlook for 2000-01

Forecast summary

(% change year on year unless otherwise indicated; fiscal years beginning Apr 1st unless otherwiseindicated)

1998a 1999b 2000c 2001c

Real GDP growth (%) 4.4b 4.6 4.9 5.2 Agriculture 4.7 4.8 4.3 4.0 Industry 3.4 4.2 5.5 6.3 Services 4.5 4.6 5.2 6.0

Consumer price inflationd (av; %) 51.5 28.8 27.0 25.0

Merchandise exports fob 1,171 1,194 1,390 1,645

Merchandise imports fob –2,455 –2,608 –3,011 –3,479

Current-account balance –454 –608 –845 –1,023

Official exchange rate (av; Kt:$) 6.35 6.29 6.50 6.55

Free-market exchange rate (av; Kt:$) 340 370 400 430

a Actual. b EIU estimates. c EIU forecasts. d Calendar years.

The ruling military junta, known as the State Peace and Development Council(SPDC), will come under renewed international pressure for change in 2000-01(the two-year forecast period). Most of Myanmar’s key bilateral and multilateralaid donors suspended aid in 1988, in protest at the massacre by the junta ofpro-democracy protestors. However, since 1998 there have been signs that,following an aid freeze of more than ten years, some key donors are nowlooking for a new way out of the impasse by offering the cash-strapped junta aresumption of aid in exchange for political reform. No deals or conditions havebeen made explicit. However, the key donors can be expected to push for theresumption of dialogue between the junta and its key opponent, the NationalLeague for Democracy (NLD). (The NLD won conclusively the last election,held in 1990, but the junta has refused to recognise the result or to convene aparliament.)

However, there have been no signs to suggest that the junta is ready to graspthe nettle by opening talks with the NLD. The leader of the NLD, Aung SanSuu Kyi, has made it clear that she will step back to allow talks to begin (thejunta has long refused to negotiate with the charismatic and popular leader).However, the junta now wants the NLD to rescind its claim to election victoryin 1990 before talks begin. The NLD is extremely reluctant to accept such acondition, and hence talks may remain on hold. Meanwhile, the junta is likelyto continue its campaign of intense harassment of NLD members.

While dialogue between the junta and the NLD remains on hold, the junta willcontinue with its own plan of slowly preparing the way for a fresh election. Noelection date has been set, but the junta has repeatedly indicated that anelection will be held once a new constitution is completed. The NationalConvention, the body tasked by the junta with drafting a new constitution,has not met since 1996, but a junta-appointed committee has continued itswork. Some within the NLD fear that a new constitution is close to

The junta will not bow tointernational pressure for

change

preferring instead tomove slowly towards

another election

8 Myanmar (Burma)


completion, and could be unveiled within the next two years. Also, the NLDfears that any new election will be far from free and fair, and the junta willensure that a pro-military political party will win.

The junta has built up the Union Solidarity Development Association (USDA)into a mass organisation of almost 12m members, according to official esti-mates. It is likely that the USDA will be the vehicle through which the juntahopes to continue to maintain its grip on power. It is also possible that, at alater date, key military figures could resign from the armed forces in order to taketheir place in a new, partly civilian, political order. However, any such changesare likely to be largely cosmetic; the new constitution will enshrine a strongcentral role for the military, including reserving seats in parliament for themilitary and setting aside key government ministries for military appointees.

Against this backdrop, it is possible that deep public discontent could eruptinto periodic unrest. The junta faces strong opposition from students and somereligious groups, both of which were active in the pro-democracy uprising of1988. The junta’s fear of student unrest in particular has kept the universitiesclosed for most of its 11 years in power. However, the universities are slowlybeing reopened, with courses set to start up by May. Despite the precautionstaken by the juntasuch as moving classes to scattered locations far outsidethe key city centresit is possible that hit-and-run student protests could beorganised in the next few months. Nevertheless, the oppressive tactics used bythe junta, including the widespread use of informers, suggest that it will be dif-ficult to organise protests on a large scale. A mass uprising is thus unlikely dur-ing the forecast period, despite deteriorating economic and political conditions.

The junta may also continue to face armed resistance from a number of ethnicminority groups. The junta’s brutal policies towards ethnic minorities, and theimpact of continued fighting between the junta and insurgent groups, have re-sulted in the displacement of unknown numbers of people inside the country,as well as the flight of 120,000 refugees and close to 1m migrant workers intoneighbouring Thailand. Again, however, despite the continued unrest in borderstates, none of the ethnic insurgent groups is in a position to challenge thejunta’s grip on the country.

Widespread protests would be much more likely if any chink were to emerge inthe junta’s armour. Despite deep divisions, the junta is likely to present a uni-fied front. That said, a sudden collapse is not impossible, particularly if seniorfigures were to die, leaving a power vacuum, in which event some sectionsfrom the middle ranks of the military might withdraw support from the junta.However, this remains a remote possibility. Unless the junta implodes or can beconvinced of a safe exit strategyboth unlikely prospectsthe current dead-lock seems set to continue.

A visiting World Bank mission has prepared a report highlighting grave eco-nomic problems in Myanmar, and calling for economic (and political) reforms.Among the main problems highlighted by the World Bank are the need for arealignment of the multiple exchange-rate system and an improved environ-ment for the private sector. The World Bank has also warned of the potential

but political upheavalcannot be ruled out

There will be no sweepingeconomic reform

Myanmar (Burma) 9


for pressure on the banking sector, which is funding heavy governmentspending.

The EIU, in its last report, suggested that the continued economic stagnationmight make the junta more willing at least to listen to outside economicadviceand in line with this the junta has not rejected the World Bank’sfindings out of hand. Senior members of the junta have apparently indicatedthat further talks will be held with the World Bank. Recent hints that the juntais considering some economic reform measures, such as a realignment of theexchange rate, suggest a growing awareness among at least some sections ofthe junta that the economy will not pick up without economic reform.

However, progress is likely to remain sluggish. Economic policy will probablyremain focused primarily on boosting agricultural output by bringing moreland into production, as the junta sees food security and boosting rural pros-perity as key factors in ensuring social stability. Even here, however, successwill be very mixed, given the lack of capital (both public and private) formuch-needed investment in key inputs.

It should be noted that this economic policy outlook, and the resulting eco-nomic forecast, would be very different were a political breakthrough to bereached, and the NLD to assume a role in policymaking. The economic policiesof the NLD include undertaking a structural adjustment programme, includingrealignment of the exchange rate, backed by the multilateral institutions. Anend to the political impasse would also bring an end to the aid freeze, as well asthe removal of sanctions on new investment imposed by the US in 1997. Thiswould result in a faster rate of growth and stronger external environment thanwe have projected.

The junta has issued a revised economic growth figure of 5.7% for fiscal year1997/98 (April-March), slowing to 5.6% in 1998/99. However, it has not pub-lished its usual annual statistical review; in the absence of full data, we havecontinued to use our own GDP growth estimates for 1998/99. We believe thatthe junta’s figure of 5.6% is optimistic, given the problems in the agriculturaland industrial sectors, and we estimate that real GDP growth expanded by nomore than 4.4% in 1998/99. We estimate that growth will pick up only mod-estly in 1999/2000, to 4.6%, rising slowly to 4.9% in 2000/01 and 5.2% in2001/02. In 1999/2000 reasonable monsoons and the junta’s efforts to stimu-late private investment in agriculture (bringing more land into production) arelikely to boost output of key crops, lifting overall agricultural output slightly to4.8%. However, output gains will remain limited while shortages of key inputspersist, and overall agricultural output is likely to slow again over the next twoyears, unless weather conditions are exceptionally good.

Industrial output will pick up steadily during the forecast period, now that theprolonged, severe power cuts of 1998-99 are easing. There will be no rapid up-turn, however, partly owing to the recent collapse in foreign direct investment(FDI) approvals, which is likely to translate into slow actual foreign investmentinflows during the forecast period. FDI approvals collapsed to $29.5m in1998/99, compared with $777.4m in 1997/98 and a peak of $2.8bn in 1996/97;approvals have remained weak in the first seven months of 1999/2000. FDI

and so the economy willremain sluggish

10 Myanmar (Burma)


approvals have been hit by the Asian economic crisis, as well as investorconcern about the difficult operating environment, the deteriorating economy,high political risk and the potential for consumer boycotts.

Sluggish FDI inflows will hit the construction, hotels and property sectors par-ticularly hard. However, despite these problems, there will be a modest upturnin industrial growth during the forecast period. Stronger world prices formanufactured goods and industrial raw materials will help to lift output of theagricultural processing sector and other manufacturing sectors. In addition,mining and energy output may receive a boost as some large foreign invest-ments come on stream. As a result, industrial output will pick up slowly, to6.3% in 2001/02, although there will be no return to the double-digit rates ofthe first half of the 1990s. Growth in services will also pick up modestly, to 6%by 2001/02; the retail sector will benefit from slightly stronger consumerspending as inflation eases, but the impact will be minimal as real incomes willremain low. The tourism sector may also pick up as arrivals from neighbouringcountries start to recover.

According to official data, the annualised rate of inflation averaged 28.7% inthe first half of 1999, compared with an annualised rate of 51.6% in the firsthalf of 1998. However, the sharp moderation in inflation during the first halfof 1999 was partly the result of the high base period (inflation surged in thefirst half of 1998). Private data suggest that price pressures remained strong inthe second half of the year, and we have estimated annual average inflation for1999 at 28.8%. A modest improvement in supply-side factors (assuming reas-onable harvests) will allow inflation to ease slightly in 2000, to an average of27%, before easing further to 25% in 2001 as world oil prices fall once again(reducing imported price pressures). However, money supply growth will re-main rapid as, in the absence of external assistance or fiscal reform, the juntawill continue printing money to fund the wide budget deficit. Continued de-preciation of the free-market exchange rate will also boost the cost of importedinputs and stronger world prices for manufactured goods will keep up im-ported inflationary pressures.

Myanmar’s current-account deficit will continue to widen in 2000-01, reachingaround $1,023m by the end of the forecast period. Merchandise exports willpick up fairly quickly, boosted by stronger demand from regional neighbours astheir economies continue to recover. Exports will also receive a boost fromearnings from gas sales from the huge Yadana gasfield, while the Yetagun gas-field is also due to come on stream from mid-2000 (although gas sales may bebelow initial expectations, at least in 2000). International prices of key exportcommodities such as rubber, metals, sugar and rice will also rise in 2000-01.However, Myanmar’s exports will be hampered by the fact that the country nolonger receives most of the export incentives offered to many developingcountries. These have been rescinded in protest at the junta’s human rightsand other abuses.

Despite stronger export growth during the forecast period, the merchandisetrade deficit will still widen. Merchandise imports will pick up from 2000onwards, boosted by recovering demand for capital goods, as well as strong

and inflation will remainhigh

The current-account deficitwill widen

Myanmar (Burma) 11


demand for consumer items. Myanmar has little capacity to manufacture itsown capital and consumer goods. However, the increase in imports will beconstrained in dollar terms by falling oil prices towards the end of the forecastperiod. The services account is likely to remain modestly in surplus, and theincome deficit will expand only slowly, as major foreign investors start to remitsome earnings.

A key factor in the size of the current-account deficit during the forecast periodwill be the size of remittances from overseas migrant workers. Large currenttransfers, probably mainly from migrant workers, have prevented a ballooningin the current-account deficit in the last few years. However, the repatriation oftens of thousands of workers from Thailand, begun in November 1999, mayerode these remittances at least for a time. Any prolonged dip in remittanceswould result in a much wider current-account deficitand greater pressure onreserves and the exchange rate (see below)than the EIU has forecast.

Myanmar’s international reserves have slowly recovered from the critically lowlevels of 1997, but remain weak, and there is little prospect of much improve-ment in 2000-01. The current-account deficit will continue to widen, and capi-tal inflows will remain modest. The junta and possibly some Myanmarcompanies have had some recent success in arranging commercial loans (as il-lustrated in rising liabilities to Bank for International Settlements (BIS) com-mercial banks in mid-1999, according to the latest available data). But withoutsweeping economic and political reform, access to international capital willremain very limited. FDI inflows will also remain sluggish during the forecastperiod, following the recent sharp fall in FDI approvals. Thus reserves will re-main at critically low levels.

Weak international reserves, combined with continued high inflation and fur-ther political uncertainty, will continue to drive down the free-market kyat rateduring the forecast period (albeit at a slower rate than in 1997-98). The free-market kyat will slide to an average of around Kt400:$1 in 2000/01, falling fur-ther to an average of Kt430:$1 in 2001/02.

A big question for the forecast period is whether the junta will take the plungeand realign the grossly overvalued official exchange rate, which has averagedaround Kt6.3:$1 for much of the last few years. The junta has indicated in re-cent months that it is considering a realignment of the official rate, which hasbeen fixed against the SDR since 1977. No indication of the likely timing, levelof the new exchange rate, or future exchange-rate regime has been given. It ispossible that the junta could scrap the foreign-exchange certificates (FECs) in-troduced in 1993, and move the official rate to a level closer to the free-marketrateeither to parity with the free-market rate (effectively scrapping the multi-ple exchange-rate system), or to an intermediary rate closer to the free-marketlevel (keeping a two-tiered system).

However, we believe that the junta is unlikely to risk such a move without sub-stantial international assistance. The junta would have little to gain, as mosttrade is already conducted at the free-market rate, limiting any boost toexports, while debt repayments would become more difficult. Furthermore,

reserves will remainweak

and the exchange ratewill remain under pressure

12 Myanmar (Burma)


rumours of a realignment of the official rate could spark renewed downwardpressure on the kyat. As a result of these factors, a dual exchange-rate regimemay be maintained throughout the forecast period.

The political scene

In late October 1999 the commerce minister, Major-General Kyaw Than, andthe sports minister, Brigadier-General Sein Win, were “permitted to retire”, ac-cording to reports from the ruling military junta. (The current junta is knownas the State Peace and Development Council (SPDC); a general election, lastheld in 1990, was won overwhelmingly by the opposition National League forDemocracy (NLD), but the junta has refused to recognise the result and par-liament has remained suspended.) Brigadier-General Pyi Sone was moved fromthe Ministry of Social Welfare, Relief and Resettlement into the post of com-merce minister, while General Thura Aye Myint was appointed as the newsports minister. As is the usual practice of the junta, no official reason for theresignations was given.

A third resignation followed at the end of November when Brigadier-GeneralMaung Maung, a minister in the office of the SPDC chairman, stepped down,losing his post as secretary of the Myanmar Investment Commission (MIC) atthe same time. Again, no reason was given for General Maung Maung’s resig-nation, but it was probably related to the recent collapse in foreign investmentapprovals (see The economy). Within a few days, General Maung Maung wasreplaced by a former deputy minister of electric power, confusingly also calledBrigadier-General Maung Maung. At the same time a new MIC chairman andvice-chairman were also appointed (see The domestic economy).

Changes in the line-up of Myanmar’s cabinet are infrequentthe last majorreshuffle was in November 1997and the apparent removal of severalministers has drawn some attention from Burma watchers. However, althoughthe cabinet is filled with senior military figures, it plays a much less importantrole in policymaking than the ruling military council, the SPDC. Hence the

There has been a shake-upof the junta

but no change ineconomic policy

Myanmar (Burma) 13


movement of a few ministerseven in such a key post as the Ministry ofCommerceis not in itself expected to result in any marked change ineconomic policy. The change in several economic portfolios probably reflectsdissatisfaction with the current economic stagnation, rather than a readiness toembrace the economic reforms called for by the major multilateral institutions.In a rare report on Myanmar, the World Bank has again urged the junta toundertake sweeping economic reform, but there are few signs that it is ready todo so (see Economic policy).

On January 4th, Myanmar’s Independence Day, the junta staged a mass rally inthe capital, Yangon. At the rally an address by the chairman of the SPDC andprime minister, Senior General Than Shwe, called for the “removal” of the“terrorist and destructive group”the term normally used to refer to the NLDand other pro-democracy supporters. The continued vilification of NLD mem-bers suggests that there has been no softening in the junta’s attitude, and thatit remains averse to starting even a low-level dialogue with the NLD.

Although the NLD remains a legal political party, the junta severely limits itspolitical activities, preventing key NLD leaders from moving freely, banningalmost all party meetings and public addresses, and regularly detaining partymembers. In 1998-99 the harassment intensified, when hundreds of partymembers were detained, and mass anti-NLD rallies were organised. The result,according to the state-controlled press, has been a slew of resignations from theparty. For example, at the end of December 1999 the junta-controlled RadioMyanmar reported that 295 NLD members had resigned in Ayeyawady Division,as they had “lost interest in politics”, with another 650 having resigned in lateNovember. A further 1,000 NLD members were reported to have resigned inMandalay Division in early November, for the same reason.

The junta has also continued to stifle any contact between pro-democracygroups and the outside world. For example, in mid-November the NLD re-ported that the leaders of two ethnic minority allies of the NLDthe chairmanof the Mon NLD, Naing Tun Thein, and the chairman of the Zomi NationalCongress, Kyin Shin Htanhad been arrested. The arrests apparently followedmeetings that the two had held with the UN special envoy to Myanmar, the as-sistant secretary-general Alvaro de Soto, which had taken place in October (4thquarter 1999, page 14).

Despite such constraints, the NLD is able to hold occasional party meetings,and on Independence Day several hundred party members gathered to hearsenior party figures. During her address, the leader of the NLD, Aung San SuuKyi, accused the junta of mismanaging the economy and called on it not tocling to power.

In late November the Japanese prime minister, Keizo Obuchi, met SeniorGeneral Than Shwe on the sidelines of a summit of the Association of South-East Asian Nations (ASEAN) in the Philippines. This was a significant step, as itwas the first meeting between the junta’s senior leader and the prime ministerof a large industrialised nation since the junta came to power in 1988. Thismeeting was quickly followed by a visit to Myanmar by a former Japanese

or in policy towards theNLD

Japan has renewed calls forchange

14 Myanmar (Burma)


prime minister, Ryutaro Hashimoto, who led a delegation of economists andformer diplomats for talks with senior members of the junta, including thepowerful Secretary-1, Lieutenant-General Khin Nyunt.

During these talks, Japan indicated that it was ready to unfreeze desperatelyneeded aid, but only in exchange for concrete steps towards democratic re-form. (Japan, along with most other key bilateral donors, froze aid to the juntain 1988 in protest at the massacre of pro-democracy demonstrators, but re-sumed modest humanitarian assistance in 1995, and has continued to providedebt relief grants.) Japan has also indicated that greater levels of foreign in-vestment are on offer, if there are improvements in the investment environ-ment and political stability. For example, Mr Hashimoto’s semi-official dele-gation was followed in early December by a delegation from Japan’s Federationof Economic Organisations, the Keidanren, which visited Yangon to look at in-vestment opportunities (see The domestic economy).

Japanese officials did not reveal exactly what steps had been called for, but it islikely that Japan would expect measures to include the start of a dialogue be-tween the junta and the NLD. In the past Japan has supported the NLD’s insis-tence that Aung San Suu Kyi should be able to take part in any talks with thejunta, but Aung San Suu Kyi herself made clear in 1999 that she would standback from initial negotiations if that was what was needed to get talks off theground. Japan might thus look favourably on the start of even a lower-leveldialogue.

The Japanese visit was not sparked by any signal from the junta that it is readyto undertake any of the measures looked for by Japan. Rather, the Japanesemove is part of the recent renewal of efforts by the international community topush for change in Myanmar after years of stalemate in Yangon. Even some ofthose countries formerly supportive of the isolation/sanctions plank seem to belooking for new ways to break the impasse. For example, 1999 saw tentativesteps to make contact with the junta by the EU (which sent a very rare delega-tion in July 1999, and Australia (which discussed the possibility of assisting thejunta to form a human rights commission). In addition, the UN’s special envoyto Myanmar, Alvaro de Soto, visited several times in 1999. In Japan’s case, inparticular, efforts to engage the junta may reflect concern at China’s growinginfluence on Myanmar; China has become a key trade partner, a major sourceof investment, and provides military training and other technical assistance tothe junta.

The initial response from the junta to Japan’s initiative was not promising.Senior General Than Shwe apparently reiterated the junta’s long-standingclaim that it intended to move towards its own brand of “discipline demo-cracy”, at its own pacea stance described by Mr Obuchi as “not very forwardlooking”. The junta has long claimed that it is a “transitional government” andwill allow a new government to take over once slow-moving work on a newconstitution has been completedalbeit one that enshrines a critical centralrole for the military. In a rare interview with the regional magazine Asiaweek inJanuary, General Khin Nyunt reiterated this position. He claimed that the juntadid not intend to remain in office “for a long time” and that power would be

but the initial response isnot promising

Myanmar (Burma) 15


transferred to a “constitutional government” at some unspecified point in thefuture.

Although such a step does not seem imminent, the junta has continued tobuild up membership of the Union Solidarity Development Association(USDA), which is now being organised as the junta’s political wing. Accordingto reports in the junta-controlled newspaper, The New Light of Myanmar, some6m USDA members have now taken part in training courses of various kinds,including military and leadership training. Thus the junta does seem to bemoving towards holding a tightly controlled election at some future date, afterwhich it may replace parts of the military government with USDA supporters.The junta may hope that this will be sufficient to clear the way for a resump-tion of aid and investment. It is not clear that the junta has grasped yet thatthe international community will continue to regard negotiations with theNLD as the key to unlocking aid.

After his last visit to Yangon in October 1999 Mr de Soto was moved to a newposition as UN representative on Cyprus, leaving the UN to look for a new spe-cial envoy to Myanmar. Some diplomats in Yangon suggested that talks heldduring the recent Japanese visit could have covered possible candidates forMr de Soto’s replacement. The UN may hope that a new negotiatorpossiblyone more acceptable to the junta, perhaps from another Asian countrywillbe able to galvanize the junta into starting a dialogue with the NLD. Lastmonth the junta’s foreign minister, Win Aung, asked the UN secretary-general,Kofi Annan, for greater assistance, during a joint ASEAN-UN meeting.Mr Annan said that the junta would have to begin progress towards democracyif it wanted international aid.

In December students began to return to class as universities started reopening.Most universities and colleges have been closed for all but 30 months of thecurrent junta’s 11 years in power. Students were extremely active in the pro-democracy uprising of 1988, and the junta fears that further student protestscould ignite another mass uprising. The most recent closure began in December1996, following student protests. As a result of these prolonged closures, manytens of thousands of students are waiting to complete their degrees, while thereis a huge backlog of students wishing to enter university.

The decision to reopen the universities may reflect a desire to improve thejunta’s international image. It may also reflect efforts to counter growing dis-satisfaction among middle-ranking military members, many of whom are (un-like the senior generals) unable to afford to send their children abroad to study.In early December a minister in the office of the SPDC chairman, Brigadier-General David Abel, told visiting Japanese reporters that 76% of classes had al-ready resumed, and that the rest would restart by May. However, the juntaclearly remains afraid of student unrest, and many classes have been relocatedto the suburbs or to smaller towns, in an apparent attempt to prevent an activestudent body from gathering in large numbers in any one place.

The UN is looking for a newMyanmar rep

Universities have started toreopen at last

16 Myanmar (Burma)


Religious leaders, as well as students, were heavily involved in pro-democracyprotests in 1988. The junta has strict control of the Sangha, the organisation ofBuddhist monks in Myanmar, but some religious leaders have been able to re-tain an independent voice. For example, in January a senior monk from amonastery near Mandalay, Sayadaw Ashin Kondara Biwuntha, sent a letter onbehalf of 1,000 other monks to Senior General Than Shwe and the shadowformer leader of the junta, General Ne Win, as well as to Aung San Suu Kyi,calling on both sides to “forget the past” and to co-operate for “national recon-struction”. Another similar letter was sent by the abbot of Kyakhet Wain mon-astery near Bago.

This was a bold move, as monks have been regularly persecuted for their in-volvement in pro-democracy activities. However, senior political and religiousfigures do occasionally write such “open” letters to the military leadershipurging them to take steps towards political changeto date to no avail. Thesenior monks are extremely powerful and well-respected figures in Myanmar,and hence this call for change will not be taken lightly by the junta. In an “in-formation sheet” published on the Internet, the junta responded that themonks had been “exploited” by the oppositionalthough it held back fromexplicit criticism of the senior monks themselves.

In late November 1999 the official border crossings between Myanmar andThailand were reopened. The border was closed by the junta ahead of fearedprotests in September, and again in early October in protest at the Thai govern-ment’s handling of the siege of the Myanmar embassy in Bangkok (4th quarter1999, page 14). (The junta was dissatisfied as the pro-democracy hostage-takerswere eventually permitted to walk free by the Thai authorities, although arrestwarrants were then issued.) Following the embassy siege, in an apparent tit-for-tat, in October the junta suspended fishing rights granting access to Myanmarwaters to Thai fishermen. The junta subsequently announced that all permitsto Thai fishermen were to be reviewed. The junta also reduced the number ofseats that the Thai national airline, Thai Airways, may fly into Yangon eachweek, apparently in an attempt to boost custom for its own carrier, MyanmarAirways International.

The junta has continued to face armed resistance from a number of ethnicinsurgent groups, who are fighting for greater autonomy, and an end to thebrutal tactics used against ethnic minority members by the junta. (The UN andother bodies have reported widespread torture, rape, extra-judicial killings,forced labour and mass displacement of villages, in an attempt to break allegedsupport from ethnic minority members for the insurgent groups.) The fightingtraditionally intensifies from December onwards during the dry season, andsometimes spills across the border into Thailand, further straining relationsbetween Thailand and both the junta and the ethnic rebel groups.

In January the junta began shelling the base of a small, extremist Karen min-ority group called God’s Army, which is led by two 12-year-old twin brothers.The group was believed to be harbouring members of another splinter group,the Vigorous Burmese Student Warriors, who had staged the Myanmar em-bassy siege in October 1999. This shelling led to another serious incident in

Senior religious leadershave called for change

The border with Thailandreopens

but ethnic conflictscontinue to spill across the

border

Myanmar (Burma) 17


late January, when members of the two splinter groups took control of theRatchaburi hospital in Thailand, holding several hundred patients and staffhostage. The siege ended when Thai soldiers entered the hospital, killing theten rebels. Photos published in the Thai press suggested that the men had beenexecuted, confirming eye-witness accounts that they had been killed after sur-rendering. The group’s demands included medical care in Thailand for injuredrebel soldiers, and an end to shelling of their base by the juntaand by Thai-land. Thai authorities denied that they were shelling the base, claiming theyhad only fired warning shots. Following the attack, the junta sent more troopsto the area, and in early February the God’s Army base was taken by the junta.

The two sieges have hardened Thai attitudes towards ethnic rebel groups andrefugees from Myanmarand increased exasperation that the junta cannotbring these conflicts to an end. Nevertheless, the Thai authorities have triednot to antagonise the junta. The drastic action taken by the Thai military toend the hospital siege was in stark contrast to the softer approach taken inOctober, when student hostage-takers were flown to the border and allowed togo free. The violent response this time is likely to be meant both as a sign toethnic groups not to abuse Thai hospitality, and also as an appeasement to thejunta, which angrily protested the way the embassy siege was handled.

At the same time, Thailand has got tougher with the many refugees and mig-rant workers from Myanmar living in Thailand. During late 1999 Thailandcontinued a massive drive to repatriate thousands of illegal migrant workers toMyanmar. Thailand is also looking for a solution to the problem of the morethan 120,000 mainly ethnic minority refugees from Myanmar. In Novemberthe National Security Council of Thailand urged the UN High Commissionerfor Refugees (UNHCR) to start talks with the junta over the issue of repatriationof some of these refugees. Then in February, during talks with Mr Annan, theThai prime minister, Chuan Leekpai, urged the UN to assist in speeding up thesettlement of asylum seekers (mainly students) in third countries, and repatria-tion of the remaining refugees.

However, while small numbers of refugees gain political asylum and are re-settled in third countries each year, it is not possible that all of the refugeescould be moved in this way. Nor, despite growing frustration, are the Thaiauthorities likely to push the refugees back into Myanmar just yet. Such amove could further strain relations with the junta, and would certainly drawinternational condemnation on the Thai government, which prides itself on itsgood human rights record.

Despite the tough Thai action during the latest hostage-taking, tensions be-tween Thailand and the junta have not lessened, particularly along disputedsections of the border. Tensions are likely to remain high during the junta’sannual dry-season offensive against ethnic insurgent groups. For example, inearly February six Myanmar soldiers strayed into Thailand and were arrested,prompting both Thailand and Myanmar to bring more troops and artillery intothe area. However, it is not likely that these tensions will escalate into any seri-ous clashes between the junta and Thailand.

hardening Thaiattitudes

18 Myanmar (Burma)


Thai anger at the recent sieges conducted by splinter ethnic groups has left themainstream rebel groups in an even more isolated position. Perhaps inresponse, in late January General Bo Mya, the long-time leader of the KarenNational Union (KNU)the main ethnic group that continues to fight thejuntawas replaced as KNU president by Ba Thein, who promptly called onthe junta to start a dialogue with the group. General Bo Mya was demoted tovice-president in charge of the KNU’s armed wing. In an about-turn, Ba Thainsaid that KNU soldiers would now serve a defensive role, signalling a possibleend to armed resistance to Yangon that has dragged on for most of the last 50years. However, while Ba Thain’s softer stance suggests that dialogue with thejunta may soon resume, he made it clear that the KNU was not consideringsurrender, and would continue to push for greater autonomy for the Karenunder a federal system.

In late December frontier guards from Myanmar and Bangladesh clashed southof the Bangladesh town of Cox’s Bazaar. Bangladesh officials claimed that theconfrontation started with an unprovoked attack by Myanmar border guards.Bangladesh complained that border guards from Myanmar had attacked acrossthe border on several occasions, blaming the ill-defined border and the pres-ence in the area of anti-junta militias. In Yangon, the junta admitted that theclash had taken place, but claimed that it was the work of an insurgent groupcalled the Arakan Army rather than of Myanmar border guards.

Economic policy

In early December preliminary details of the findings of a World Bank reporton Myanmar emerged in the international press. The report was harshly criticalof both the junta’s economic policies and its human rights abuses, and madeclear that a rise in investment and economic recovery were dependent on pol-itical reform. The report stated that malnutrition was becoming widespread,while child mortality rates were much higher than elsewhere in the region.

The World Bank report also warned of the rise in bank bad debt that had re-sulted from the government’s heavy spending on agricultural subsidies andstate procurement of rice. The report warned that these costs were putting pres-sure on the banking system, and that a “systemic” banking crisis could result(see Financial services).

The junta’s Secretary-1, Lieutenant-General Khin Nyunt, rejected these find-ings, claiming that the report was based on misleading data. However, despitethe report’s critical tone, the junta said that World Bank officials had been in-vited for talks, although no details of the likely timing were given. Some keygenerals within the junta realise that something needs to be done to revive thestagnating economy. Unusually, the junta has even talked publicly in recentmonths about such sensitive measures as a realignment of the multiple ex-change-rate system (see Financial services). However, weak technical capacitysuggests that the junta is highly unlikely to implement far-reaching economic

and a change of tacticsfrom other insurgent

groups

There have beencrossborder clashes with

Bangladesh

The World Bank calls forurgent economic reform

and warns of the risk of abanking crisis

but the junta rejects itsfindings

Myanmar (Burma) 19


reform. Rather, economic policy will remain focused on boosting agriculturaloutput rather than trade liberalisation, exchange rate and fiscal reform, andimproving the environment for the private sector.

The junta does not publish regular fiscal data. The partial data available showthat central government tax revenue has fallen by 11.3% year on year in thefirst seven months of the current financial year 1999/2000 (April-October). Alltax categories except income tax registered falls during this period. The slumpreflects continued weak tax compliance, as well as the sluggish economy, andconfirms the EIU’s expectation that a reduction in the budget deficit is unlikelyin 1999/2000.

Central government tax revenue

(Kt m)

Full fiscal year % Apr-Oct %1997/98 1998/99 change 1998/991999/2000 change

Commodities & services tax 18,056.0 22,734.0 25.9 10,446.0 9,104.0 –12.8

Income tax 11,059.0 16,601.0 50.1 4,121.0 4,187.0 1.6

Profit tax 4,215.0 4,323.0 2.6 1,423.0 1,218.0 –14.4

Customs tax 8,579.0 5,176.0 –39.7 3,197.2 2,205.3 –31.0

Lottery & stamp duty 5,031.0 5,117.0 1.7 2,766.0 2,750.0 –0.6

Tax revenue 46,940.0 53,951.0 14.9 21,953.2 19,464.3 –11.3

Source: Central Statistical Organisation, Selected Monthly Economic Indicators.

The domestic economy

Economic trends

The junta has still not released finalised statistical data for fiscal year 1998/99(April-March). According to press reports in 1999, GDP growth reached around5.6% in 1998/99. However, this estimate seems overoptimistic, given wide-spread supply-side problems (such as disrupted power supplies and modestharvests). Until the full official data are released, the EIU has not yet revised upits own estimate to match those of the junta. The junta expects growth to pickup in the current fiscal year 1999/2000, to around 6%. Again, this seems ex-tremely optimistic, given sluggish foreign investment inflows, and we expectmore modest growth of 4.6% (see Outlook for 2000-01).

There are no regular data on overall industrial output, making it impossible toassess the rate of industrial growth. The Central Statistical Organisation (CSO)publishes monthly volume data only on the production of goods by state-owned enterprises (SOEs). As the state sector accounted for less than half of to-tal industrial output in 1997/98 (44.5% based on constant price data), the CSOdata can be used only as a rough indicator of overall industrial activity. Thesedata gave a mixed picture for the first seven months of 1999/2000. Output ofcotton yarn and fabrics jumped (with output of cotton yarn picking up by

Tax revenue has fallen

GDP growth data are stillon hold

and industrial data give amixed picture

20 Myanmar (Burma)


24.4% year on year and fabrics up by 73.6% year on year, in April-October).However, output of cement, paper and sugar all fell year on year during thesame seven-month period. Sugar recorded a particularly steep decline of 24.2%year on year in April-October. The junta has sought to boost the area of sugarcultivation, but lack of key inputs such as fertiliser may have constrained out-put of sugar, as it has that of other key crops such as rice.

Industrial output in the state sector

Full fiscal year Apr-Oct 1997/98 1998/99 % change 1998/99 1999/2000 % change

Cotton yarn (‘000 lb) 8,286 8,988 8.5 4,945 6,150 24.4

Cotton fabrics (‘000 yd) 10,779 13,000 20.6 6,881 11,945 73.6

Paper (tonnes) 17,893 16,803 –6.1 9,039 8,852 –2.1

Cement (tonnes) 483,442 333,513 –31.0 202,167 187,743 –7.1

Sugar (tonnes) 55,338 48,398 –12.5 3,181 2,410 –24.2


In late November the secretary of the Myanmar Investment Commission(MIC), Brigadier-General Maung Maung, fell from grace, and stepped down asminister in the office of the SPDC chairman (see The political scene). Althoughno official reason was given, his loss of power is likely to have been connectedto the collapse in foreign direct investment (FDI) approvals in 1998/99. Duringthe entire financial year, only $29.5m in new foreign investment was ap-proved, compared with $777.4m in 1997/98, and a peak of $2.8bn in 1996/97.These data may exclude some smaller projects, but it is clear that foreign inves-tor interest has collapsed.

General Maung Maung was replaced by a brigadier-general of the same name.At the same time, the chairman and vice-chairman of the MIC were also re-placed. The minister of science and technology, U Thaung, was appointed asthe new chairman, replacing the deputy prime minister, Rear Admiral MaungMaung Khin. The minister of electric power, Major-General Tin Tut, was ap-pointed as vice-chairman, replacing another deputy prime minister, Lieutenant-General Tin Tun.

In first seven months of 1999/2000 (April-October), total FDI approvalsreached $33.1m, according to data from the Central Statistical Organisation.The approvals are already up on the dismal $29.5m approved during the wholeof 1998/99, but remain far below the levels approved in the mid-1990s.

There is a shake-up at theinvestment commission

following the collapse inforeign investment

approvals

Myanmar (Burma) 21


Foreign direct investment approvals($ m)


Manufacturing 319.2 19.6 –93.9 15.1 7.8 –48.29

Oil & gas 172.1 0.0 – 0.0 0.0 –

Property 122.2 0.0 – 0.0 0.0 –

Transport 106.6 0.0 – 0.0 0.0 –

Hotels & tourism 40.0 0.0 – 0.0 3.5 –

Mining 2.7 4.9 80.9 4.9 18.5 –

Industrial estates 0.0 0.0 – 0.0 0.0 –

Total incl others 777.5 29.5 –96.2 25.0 33.1 32.5


In early December a delegation from one of Japan’s largest business groups, theFederation of Economic Organisations (the Keidanren), visited Yangon to ex-plore investment opportunities (see The political scene). This was followed inmid-December by a visit from a Hong Kong business delegation, whose mem-bers expressed interest in investing in the timber and property sectors.

However, it is unlikely that these visits will spawn much new investment. Thevisit by the Keidanren was the third by the group since 1997, but interest fromJapan has remained very muted. Approved Japanese investments totalled only$26.9m in 1997/98, dropping to $4.7m in 1998/99. Investor interest in Myan-mar has been hit by the difficult operating environment and more sluggisheconomic growth. In addition, competition from smuggled goods, many fromChina, remains intense. Finally, many international firms are concerned thatinvestment in Myanmar will leave them exposed to the risk of consumer boy-cotts in their home markets (well organised and widespread consumer boycottshave been a factor in the decisions of a number of major multinationals towithdraw from Myanmar in recent years).

The change in line-up at the MIC in late 1999 is unlikely to do much to im-prove investor sentiment. In its recent report on Myanmar’s economy, theWorld Bank indicated that foreign investment was unlikely to recover withoutthe following measures:

• reform of the multiple exchange-rate regime;

• reform of state-owned enterprises;

• the removal of restrictions on private enterprise (for example, private com-panies are banned from exporting key commodities and from mining, unlessin co-operation with the government); and

• improvements in the human rights environment.

but investor interest willremain minimal

without economic andpolitical reform

22 Myanmar (Burma)


Obstacles to trade and investment

• New restrictions imposed on imports and exports in March 1998: Onlyprescribed items may be imported; importers must purchase essential imports beforepermission is given to import selected non-essential items. The junta also banned privateexports of key commodities.

• US sanctions: In April 1997 the US banned all new investment in Myanmar by UScompanies. The sanctions were renewed for a further year in May 1999.

• US selective purchasing laws: One US state (Massachusetts), one county and 22US cities have passed selective purchasing laws. A US federal judge overturned theMassachusetts law in November 1998 following a challenge from the National ForeignTrade Council. One appeal has been overturned; a second appeal to the US SupremeCourt is pending.

• Spread of selective purchasing laws: In March 1998 an Australian local council,in Merrickville, New South Wales, became the first local government outside the US topass such a selective purchasing law targeting Myanmar. Two more Australian citieshave followed suit.

• Removal of GSP benefits: In March 1997 the EU withdrew generalised system ofpreferences (GSP) benefits on agricultural goods. Myanmar had already lost GSP onindustrial goods.

• Canadian restrictions: In August 1997 Canada removed Myanmar’s GSP benefits.

• Consumer boycotts: Active and well-organised consumer boycott campaigns havecontributed to the decision by a number of international companies to pull out ofMyanmar or to cease sourcing goods from the country.

According to the latest figures from the IMF’s International Financial Statistics,inflation eased in the second quarter of 1999, to 19.8% year on year, comparedwith a year-on-year rate of 37.5% in the first quarter. In the first half of 1999annualised inflation averaged 28.7%, compared with a year-on-year rate of51.6% in the first half of 1998. According to more recent data from the CentralStatistical Organisation, inflation averaged 21.5% year on year during January-October 1999. Inflation for all subsectorsfuel, clothing, housing and“other”eased in mid-year because of the high base period.

Consumer prices

1997 1998 1999 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr

Yangon index (1995=100)a 132.5 138.4 162.9 169.40 190.2 220.7 249.9 253.0 261.6 264.3

% change, year on year 27.4 24.2 35.9 30.4 43.6 59.5 53.4 49.4 37.5 19.8

a Rebased from 1990=100.Sources: IMF, International Financial Statistics.

Official data show amoderation in inflation

Myanmar (Burma) 23


However, private data suggest that inflationary pressure remained fairly strongduring the second half of 1999. Rice prices rose particularly quickly, with 2ndquality rice averaging a rise of 41.9% year on year during 1999, while 4thquality rice rose by an annual average of 23.6% during the year. Chicken andsome fish prices eased, although shrimp prices rose strongly. One reason forthe moderation in some meat prices may be that, after several years of poorharvests and faced with rising input costs, farmers were selling off livestock inorder to make ends meet. Some village communities around Yangon reportedthat pork prices fell in mid-1999 for this very reason. Petrol prices also slid byan annual average of 2.2% during 1999, but this was because rationing and aprice freeze had been reimposed in September 1998; the petrol data quoted inthe table below do not capture the more commonly used black-market cost ofpetrol.

Nevertheless, continued strong price increases for key staples such as rice sug-gest that inflation will have eased only modestly in 1999 compared with 1998.The true rate of inflation is almost certainly higher than the official data sug-gest. The price of many goods and servicessuch as stamps, electricity andtelephone chargeswere raised during 1999, but many of these increases arenot directly captured in the official inflation data. The rising cost of many im-ported consumer goods is also not captured. Thus, although the official dataare likely to show that annual average inflation eased in 1999, the price of keystaples continued to rise strongly, with a detrimental impact on the standard ofliving of many people, eating into incomes in real terms.

Prices of selected items, 1999a

(per pyi unless otherwise indicated)

% Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec changeb

2nd quality rice 127.5 130.0 140.0 165.0 165.0 170.0 190.0 230.0 230.0 235.0 235.0 41.9

4th quality rice 87.5 87.5 87.5 105.0 78.0 85.0 90.0 115.0 95.0 95.0 115.0 23.6

Catfish (per viss) 500.0 500.0 675.0 600.0 550.0 700.0 700.0 650.0 725.0 625.0 550.0 –3.0

Shrimp (per viss) 625.0 625.0 850.0 850.0 900.0 650.0 525.0 475.0 575.0 575.0 750.0 21.8

Chicken (per viss) 700.0 700.0 650.0 600.0 650.0 600.0 675.0 600.0 725.0 700.0 700.0 –5.6

Cooking oil, groundnut 610.0 610.0 700.0 600.0 680.0 650.0 640.0 650.0 640.0 570.0 635.0 12.7

Petrol (per gallon)c 230.0 230.0 230.0 230.0 230.0 230.0 230.0 240.0 240.0 240.0 240.0 –2.2

a Surveys carried out in the first week of the month; 1 pyi=2.1 kg; 1 viss =1.6 kg. b Average year on year percentage change, January-October1999 compared with the same period of 1998. c Petrol prices were capped in September 1998 and strict rationing was reintroduced. Blackmarket prices are around 50% above the official price.Source: Private reports.

but private data showfurther price rises

for key staples

24 Myanmar (Burma)


Agriculture

The junta did not publish the usual annual statistical review in 1999, with datafor fiscal year 1998/99 (April-March), and hence up-to-date figures for agricul-tural output last year, are still not available. Figures are also not yet availablefor the main 1999/2000 harvest. The junta’s new policy of offering incentivesto private investors in exchange for bringing unused land into production isbelieved to have resulted in a modest increase in the area under production ofkey crops such as rice in 1999/2000. Combined with a good monsoon season,output of key crops is likely to have risen in 1999/2000. However, a huge jumpin output is unlikely given continued shortages of key inputs such as fertiliser,seeds and fuel for irrigation pumps.

In November the UN Drug Control Programme (UNDCP) reported that opiumoutput in Myanmar had fallen by around 38% in the 1998/99 growing season(September-February). However, the junta’s claim that the drop was the resultof its anti-drug efforts was rejected: the UNDCP claimed that most of the fallwas the result of adverse weather conditions. The illegal drug trade has a hugeeffect on Myanmar’s economy, distorting trade and investment statistics, andproviding much-needed foreign exchange. However, the UNDCP estimatesthat the economic impact from the drop in opium output will be minimal, asthere has been a surge in the production and export of synthetic drugs such asamphetamines, which have been flooding into Thailand.

Energy and mining

According to a Thai newspaper, The Nation, in early December the PetroleumAuthority of Thailand (PTT) asked Thai government officials to negotiate a de-lay in delivery of gas from Myanmar’s Yetagun project. The economic crisis inThailand has already reduced energy demand, while there have been long de-lays in the completion of the Ratchaburi power plant, the end destination forthe gas. As a result, PTT has already had to pay compensation for delays in ac-cepting gas from Myanmar’s huge Yadana gasfield (3rd quarter 1999, page 23).PTT was originally contracted to buy 200m cu ft/day from the smaller Yetagunfield, starting in July, rising to 260m cu ft/day after one month, with a furtherincrease to 400m cu ft /day in the second phase, starting in 2003. It is this sec-ond phase increase that PTT wishes to renegotiate, hoping to avoid payingpenalties under the take-or-pay contract. However, even the first instalmentcould run into problems if the Ratchaburi power plant is not ready in time.

Another, more distant, threat to the Yetagun project comes from a recent settle-ment in the UK. In mid-December the British Burma Campaign group with-drew an application to the High Court to review government policy towardsMyanmar when the British foreign minister, Robin Cook, conceded that hisgovernment did have the right to impose unilateral sanctions on Myanmar.(The Labour government had previously indicated that, although it was op-posed to investment in Myanmar, it was unable to act unilaterally without thesupport of other EU members.) In theory, Mr Cook’s about-turn clears the wayfor the British government to impose unilateral sanctions on investment in

Harvest figures areunavailable

Poor weather cuts opiumoutput

Yetagun gas deliveries maybe delayed

Myanmar (Burma) 25


Myanmar. This could affect Premier Oil of the UK, which has a 26.6% stake inthe Yetagun project. (Other shareholders in the Yetagun consortium includePetronas of Malaysia with a 30% stake, PTT Exploration and Production, a unitof PTT, with a 14.2% stake, and the junta’s Myanmar Oil and Gas Enterprise(MOGE), with a 15% stake.) However, there is no indication yet that the Britishgovernment is preparing to impose sanctions.

Tourism

On December 10th 1999 the new Myanmar Investment Commission (MIC)line-up concluded one of its first deals, worth an estimated $20m, with theAllure Group of Thailand. The group plans to build a luxury hotel in Myan-mar’s eastern Shan State, at the border town of Tachilek (opposite the Thaitown of Mae Sai). According to the state newspaper The New Light of Myanmar,the 80-room hotel will be constructed over two years on a build-operate-transfer (BOT) basis, with a further 140 rooms to be added during a later phase.Ownership of the hotel will be transferred to the state after 30 years. The pro-ject is to be fully financed by the Allure Group.

This is the first large new hotel project for some time. There was a rash of hotelbuilding in Yangon and Mandalay in the mid-1990s (some of it allegedly re-lating to money laundering from the drug trade), but weak tourist arrivals havekept occupancy rates at very low levels. The large international hotels are re-main almost empty and have been forced to lay off staff.

The junta’s hopes of turning the tourism sector into a major source of foreignexchange have fallen flat. During April-October (the first seven months of thecurrent 1999/2000 financial year), arrivals reached only 134,107, a fall of justover 10% compared with the same period of 1998/99. Tourist arrivals havebeen kept down by the worldwide international boycott campaign, fears ofpolitical unrest and poor tourism infrastructure.

Tourist arrivals

Full fiscal year Apr-Oct 1996/97 1997/98 1998/99 1998/99 1999/00

Arrivals (‘000) 251,501 265,122 287,394 144,262 134,107

% change, year on year 109.2 5.4 8.4 7.6 –10.2


A new hotel is planned

but tourist arrivals havefallen

26 Myanmar (Burma)


Financial services

The little-used official exchange rate barely moved in 1999, averaging Kt6.3:$1in the first 11 months of the year (the official exchange rate has been fixedagainst the SDR since 1977). However, the legally traded free-market exchangerate had another volatile year. Fears of widespread political unrest around thetime of the anniversary of a mass uprising in September resulted in sharpdownward pressure on the free-market exchange rate in September, when itdipped to a low of around Kt364:$1 (4th quarter 1999, page 24). When wide-spread protests did not take place, the free-market rate regained some ground,to end the year at Kt334:$1, a slight appreciation of close to 2% since the startof the year.

Foreign-exchange certificates (FECs, introduced in 1993 at parity with the dol-lar, and used by foreigners and for some other transactions) also strengthened,to FEC330:$1 in the first week of December, from FEC351:$1 in September.Gold prices also eased towards the end of the year as confidence stabilisedsomewhat (there is typically a flight to gold, driving up prices, at times of acutepolitical uncertainty). Gold ended the year at Kt48,500/0.5 troy oz, comparedwith Kt50,500/0.5 troy oz in October.

In its recent report on Myanmar the World Bank reiterated calls for an end tothe multiple exchange-rate regime (see Economic policy). In September 1999the junta indicated that a realignment of the multiple exchange-rate systemwas under consideration, although no details on timing or the likely outcomewere given (4th quarter 1999, page 16). Then in February press reports emergedthat the junta had informally asked Japan for $1.45bn in aid under theMiyazawa Plan, to assist it to abolish the multiple exchange-rate system. TheMiyazawa plan, launched by the Japanese finance minister, Kiichi Miyazawa,in late 1998, was established to provide assistance to a number of countries hitby the Asian economic crisis. However, Myanmar is not among the countrieseligible for funds, which are restricted to countries implementing structuralreforms in line with the key multilateral organisations such as the World Bank.

The junta is reluctant to tackle realignment of the exchange rate withoutexternal support, fearing that a change in the official rate would provokefurther distrust in the currency and put pressure on already weak internationalreserves. Multilateral agencies have long insisted that such a move is vital tothe stabilisation of the free-market exchange rate and to attracting greaterlevels of investmentbut will not offer assistance without some agreement onpolitical reform.

The dollar, FECs and gold on the free market, 1999a

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Dollar exchange rate (Kt:$) 340 325 334 341 350 350 340 350 356 356 341 334

Foreign-exchange certificates (Kt:FEC) 340 319 326 331 335 331 323 335 351 356 341 330

Gold (Kt per tical; av)b 49,500 50,000 50,000 50,500 50,000 49,000 48,000 47,000 45,000 50,500 49,000 48,500

a Survey carried out on the first week of the month. b 1 tical=0.525 troy oz.Source: Private reports.

The kyat has stabilisedsomewhat

but the World Bank hasagain called for a

realignment

Myanmar (Burma) 27


The junta has not made any further adjustments to interest rates following themodest cuts in the second quarter of 1999, and interest rates have thereforeremained steeply negative in real terms. The junta’s reluctance to raise interestrates reflects its own borrowing needs for the state-owned enterprise sector andthe budget deficit. Heavy issuance of Treasury bonds to the banks (in effect,printing money) is used to bankroll the continued wide budget deficit, andmoney-supply growth has thus remained brisk. According to the latest reviseddata in the IMF’s International Financial Statistics, broad money (M2) rose by27.6% year on year at the end of the first quarter of 1999, slowing only slightlyto 26.5% year on year at the end of the second quarter of 1999. According tothe World Bank’s recent report on Myanmar (see Economic policy), these fac-torsnegative interest rates and heavy lending to the governmenthave leftsome banks in a weak position.

Interest rates(Kt m unless otherwise indicated; end-period)

1998 1999 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr 3 Qtr

Central bank rate 15.0 15.0 15.0 15.0 15.0 12.0 12.0

Deposit rate (6-month) 12.5 12.5 12.5 12.5 12.5 10.5 10.5

Lending rate (working capital, state-owned enterprises) 16.5 16.5 16.5 16.5 16.5 16.0 16.0

Source: IMF, International Financial Statistics.

Money supply and credit(Kt m unless otherwise indicated; end-period)

1998 1999 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr

Money (M1) 259,148 257,967 271,399 282,177 307,567 307,033 % change, year on year 30.6 27.4 30.4 28.3 18.7 19.0

Quasi–money 110,003 124,249 142,582 151,363 163,329 176,556

Broad money (M2) 369,151 382,216 413,981 433,540 470,896 483,589 % change, year on year 28.7 26.9 30.2 34.2 27.6 26.5

Total credit 382,412 400,511 427,138 454,108 486,249 506,925 Claims on central government 260,173 258,495 252,672 251,598 316,217 334397 Claims on local government 61 61 61 61 n/a n/a Claims on non-financial public enterprises 3,447 13,769 28,675 46,688 3,474 13,614 Claims on private sector 118,731 128,186 145,730 155,761 166,558 158,914


Interest rates do not move

28 Myanmar (Burma)


Foreign trade and payments

Merchandise trade

(Kt m)

Apr-Oct 1999/2000 1998/99 % change

Exports fob 3,752.1 4,127.9 10.0

Imports cif –10,912.2 –8,640.0 –20.8

Balance –7,160.1 –4,512.1 –37.0


During April-October (the first seven months of fiscal year 1999/2000), mer-chandise exports rose by 10% year on year, to Kt4.1bn ($6.5bn at the officialexchange rate, or around $118m at the free-market rate), while importsdropped by 20.8%, to Kt8.6bn. As a result, the merchandise trade deficit dippedto Kt4.5bn. The trade data are confused by a variety of factors, including heavysmuggling and distortions relating to the drug trade. They should thus betreated with some caution. There is no clear reason for the sharp fall in im-ports, although weakening demand for capital and consumer goodsa resultof sluggish domestic and foreign investment and deteriorating incomes in realtermsmay be one factor.

Exports of pulses and teakwhich are among Myanmar’s top foreign-exchangeearnersjumped in the first seven months of 1999/2000 (with exports ofpulses rising by 26.9% year on year in volume terms, and teak exports rising92.7% year on year). There has been a healthy demand for pulses from India,and teak from Thailand and China. However, most other key exportsincludingrice, seafood, rubber and maizefell sharply in value and volume terms. Ex-ports have been hit by border closures and sluggish world prices.

Exports of main commodities(volume in ‘000 tonnes; value in Kt m; fiscal years)


Volume Value Volume Value Volume Value Volume Value Volume Value Volume Value

Pulses 662.3 1,232.7 621.6 1134.1 –6.1 –8.0 346.6 626.7 439.7 826.7 26.9 31.9

Prawns 13.5 565.8 13.2 575.7 –2.2 1.7 7.2 355.8 7 272.1 –2.8 –23.5

Rice 28.3 37.7 123.0 246.6 334.6 554.1 66.2 91.6 37.9 43.3 –42.7 –52.7

Fish & fish products 41.2 301.7 45.7 320.1 10.9 6.1 22.8 169.9 17.5 123.1 –23.2 –27.5

Rubber 21.8 133.6 29.7 100.4 36.2 –24.9 15 57.9 9.4 25.7 –37.3 –55.6

Teaka (‘000 cu tonnes) 138 697.6 165.1 848.3 19.6 21.6 62.6 382.6 120.6 544.1 92.7 42.2

Hardwood (‘000 cu tonnes) 153.9 155.3 235.3 209.9 52.9 35.2 78.5 109.9 188.1 113.1 139.6 2.9

Maize 50 45.4 174.3 115.7 248.6 154.8 51 35.1 11.4 6.8 –77.6 –80.6

Othersa – 2,581.5 – 3,206.3 24.2 1,753.6 1,753.6 – 2,093.7 – 19.4

a Mainly border trade.Source: Central Statistical Organisation, Selected Monthly Economic Indicators.

The merchandise tradedeficit falls

as some key exportspick up

Myanmar (Burma) 29


All three main categories of importscapital, intermediate and consumergoodsfell during the first seven months of 1999/2000. This may be partly ex-plained by tight restrictions on imports imposed in March 1998, which maynow be more strictly enforced. Most capital goods were not restricted by thenew rules, yet imports of capital goods fell by 28.7% year on year during April-October, to Kt3.9bn. Myanmar is reliant on imports of capital goods such asmachinery and electrical equipment, and the steep fall in imports of suchitems may reflect slowing foreign and domestic investment. Imports of inter-mediate goods also fell by 3.7% year on year in April-October. This may reflectsome success in import substitution, as the junta has encouraged the domesticproduction of palm oil and other key imports. However, it may also reflectweakening demand in the manufacturing sector. Consumer goods also de-clined by 16.2% year on year in April-October. The import restrictions imposedin 1998 largely target consumer goods, while slowing growth and rising infla-tion have dented real incomes, hitting consumer demand.

Imports by category(Kt m; fiscal years)


Capital goods 6,172.1 8,678.7 40.6 5,443.6 3,882.7 –28.7

Intermediate goods 3,350.1 1,979.4 –40.9 1,390.8 1,338.7 –3.7

Consumer goods 4,735.2 6,234.2 31.7 4,077.8 3,418.6 –16.2


Imports of main commodities(Kt m; fiscal years)


Machinery & transport equipment 3,597.4 4,649.3 29.2 2,915.2 1,681.6 –42.3

Base metals & manufactures 1,498.6 1,951.5 30.2 1,277.2 1,183.8 –7.3

Electrical machinery 1,202.8 1,676.8 39.4 986.0 861.7 –12.6

Edible oils 805.5 669.6 –16.9 161.3 310.8 92.7

Cement 502.6 393.3 –21.7 257.6 151.7 –41.1

Paper & paper board 202.4 298.6 47.5 171.8 184.5 7.4

Pharmaceuticals 185.9 242.1 30.2 134.1 170.6 27.2

Rubber manufactured goods 156.6 227.9 45.5 167.2 100.5 –39.9

Scientific instruments 266.3 209.4 –21.4 160.9 94.2 –41.5

Fertiliser 357.4 152.1 –57.4 124.1 216.4 74.4

Unspecified itemsa 4,875.5 6,018.6 23.4 4,069.5 3,404.9 –16.3

Total incl others 14,257.4 16,892.3 18.5 10,912.2 8,640.0 –20.8 Government 4,126.9 5,489.6 33.0 3,720.1 2,637.9 –29.1 Private 10,130.5 11,402.7 12.6 7,192.1 6,002.1 –16.5

a Mainly border trade.Source: Central Statistical Organisation, Selected Monthly Economic Indicators.

while capital goodsimports collapse

30 Myanmar (Burma)


The closure of the border with Thailand disrupted an important crossbordertrade route for almost two months. The balance of border trade is in Thailand’sfavour, and although Myanmar’s exports of wood and other raw materials willhave been hit, its imports will also have been reduced. However, there is exten-sive crossborder smuggling and much trade is not captured in the official figures.

International reserves fell from $351.8m at the end of the second quarter to$335.7m at the end of July 1999, before rising slightly to $341.5 at the end ofAugust, according to the latest data in the IMF’s International Financial Statistics.Myanmar's international reserves have been rising slowly, since hitting a low of$166.9m at the end of the second quarter of 1997. Although the junta hasceased servicing on almost all external debt, and imposed new restrictions onimports in March 1998, foreign-exchange reserves have remained very low.Without access to international capital, and with most aid frozen, foreign in-vestment and remittances from overseas workers have become the mainsources of capital. However, foreign direct investment (FDI) approvals havefallen off sharply in the past two years, suggesting that actual inflows are alsolikely to slow, while the recent repatriation of thousands of illegal migrantworkers from Thailand may hit repatriated income. At the same time, the cur-rent-account deficit is expected to continue to widen (see Outlook for 2000-01). Myanmar is thus likely to remain close to a balance-of-payments crisis.

International liquidity($ m)

1997 1998 1999 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr Jul Aug

Foreign exchange 207.2 155.6 186.4 249.7 261.2 255.1 282.0 314.6 328.6 340.9 323.9 330.1

SDRs & IMF reserve position 0.1 0.1 0.1 0.1 0.1 0.2 0.2 0.3 0.1 0.1 0.8 0.3

Gold (national valuation) 11.2 11.2 11.1 10.9 10.8 10.8 11.1 11.4 11.0 10.8 11.0 11.1

Total international reserves 218.5 166.9 197.6 260.7 272.1 266.1 293.3 326.3 339.7 351.8 335.7 341.5


As FDI inflows and other capital inflows have weakened, the junta has had tolook elsewhere for funds. According to the latest data from the Bank for Inter-national Settlements (BIS), which collects international data on lending bycommercial banks, total outstanding borrowing by Myanmar jumped from$296m at the end of 1998 to $666m at the end of June 1999. An increase incommercial lending to Myanmar, from only $116m at the end of 1997 to$296m at the end of 1998, was entirely the result of exchange-rate movements,according to the BIS. However, the bank estimated that exchange-rate move-ments explained only $51m of the $379m increase between end-1998 andmid-1999. Most major aid donors have cut off aid and concessional lending tothe junta, but in recent years the junta has looked elsewhere for funds, for ex-ample by using expected future earnings from major gas projects as collateralfor loans. Such loans could be one factor behind the increase. The jump inloans will add to Myanmar’s total debt stock, which may have increased in1999, assuming that the junta continued its policy of not servicing most of itsoutstanding official debt.

Crossborder trade isdisrupted

Foregin reserves fall

Commercial borrowingjumps

Myanmar (Burma) 31


Trade data

Trade with major trading partnersa

($’000)

China Singapore Thailandb Malaysia Japan Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec

Exports to Myanmar fob 1997 1998 1997 1998 1995 1997 1997 1998 1997 1998

Food 6,289 9,277 44,878 27,471 27,240 39,961 4,830 2,742 529 161 of which: dairy products 4,383 4,242 20,562 9,013 8,167 13,418 708 324 0 0 Beverages & tobacco 30,359 36,995 59,496 17,464 30,532 39,523 1,219 489 9 20 Mineral fuels 10,466 16,120 84,118 55,913 8,789c 29,926 94,490 82,423 25 36

Animal & vegetable oils & fats 2,024 24 25,301 4,600 3,249 5,983 99,877 135,186 0 0 Chemicalsd 60,364 34,467 71,479 46,610 44,892e 63,921 7,216 6,977 5,739 4,994

Textile fibres, yarn, cloth & mnfrs 80,217 68,534 22,990 21,357 40,261f 32,921 2,049 1,822 3,169 2,974

Iron & steel & mnfrsg 41,095 68,938 41,986 30,029 915h 19,396 141,580 47,248 12,432 16,535

Tools etc & misc metal mnfrs 3,441 2,889 6,569 6,873 14,068i 2,104 164 396 1,263 1,267

Machinery incl electric 102,587 156,758 247,663 166,462 29,738 37,205 9,670 7,146 80,027 110,282 Road vehicles & tractors 21,930 17,849 27,833 12,226 7,814j 12,305 180 196 96,807 40,447

Other transport equipment 103,096 59,897 3,013 4,396 0 439 60 77 1,819 325 Clothing 2,488 1,366 7,787 6,065 14,459 7,091 18 8 28 6 Scientific instruments, etc 1,226 6,757 18,487 12,902 765 696 107 120 2,317 2,094 Total incl others 570,115 514,335 732,978 455,914 348,525 403,602 373,045 292,915 211,522 184,422

India US Singapore Thailandb China Imports from Apr-Mar Apr-Mar Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Myanmar cif 1994/95 1995/96 1997 1998 1997 1998 1995 1997 1997 1998

Food 114,212 131,625 9,179 4,857 73,529 62,636 32,012 13,606 3,693 5,263 of which: fish 0 0 7,354 1,985 49,293 39,112 30,625k 12,129 996 245 fruit, vegetables & prods 114,085 131,337 77 328 18,313 18,622 55 21 1,995 3,072 Oilseeds 28 157 5,822 4,242 17,828 12,329 9 129 1,890 1,562 Rubber crude 234 0 0 0 19,659l 7,574l 0 2l 42l 430l

Wood, lumber & cork 46,175 43,342 3,878l 7,453l 30,412l 16,921l 185,361 58,511l 28,460l 23,720l

Non-ferrous metal ores 265 163 0m 0 1,323m 454m 87 51m 2,307m 4,918m

Pearls & precious stones 0 0 4,889n 10,600n 247n 1,717n 3,476n 41,456n 25,867n 8,172n

Total incl others 161,989 177,107 123,198 174,805 173,572 120,433 223,087 82,303 73,412 62,050

a Figures from partners’ trade accounts. b 1996 figures are not available. c Petrolum & products. d Including crude fertilisers and manufactures ofplastics. e Excluding crude fertilisers and manufactures of plastics. f Excluding fibres. g Including scrap. h Excluding scrap & manufactures. i Metalmanufactures. j Excluding tractors. k Including preparations. l Including manufactures. m Ores, ash and slag. n Including precious metals andjewellery.Sources: UN, External Trade Statistics, Series D.

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