Daily News- February 19 - 2003- Wednesday
  • Burma Imposes Banking Restrictions as Withdrawals Threaten Crisis
  • Pressure must be maintained for change in Burma: Aung San Suu Kyi
  • Account-trade first for Thailand, Burma
  • Financial panic continues in Burma
  • Thai border town business suffers after ban on Burmese


    • Burma Imposes Banking Restrictions as Withdrawals Threaten Crisis

    By Ron Corben
    Source : VOA

    Burma's central bank has banned money transfers and limited bank withdrawals after bank runs threatened to create a financial crisis. The central bank's intervention indicates the government will tighten control over the fragile economy.

    Burma's new banking restrictions came after almost three weeks of a run on deposits. The controls cover most money transfers at 20 banks, including transfers through credit cards and automatic teller machines.

    Western diplomats in Rangoon reported long lines of people outside banks Tuesday as panicked customers sought to withdraw their savings. The banks were closing their doors early to stem the outflow of funds.

    Rumors have persisted for days that the banking system was in trouble. Some government officials accuse what they call "destructive elements" - a euphemism for the pro-democracy opposition - of being behind the rumors.

    Burma's economy ranks as one of the world's poorest after 40 years of economic mismanagement since the military took power in 1962.

    Chaiyachoke Chulasiriawong, a politics professor at Thailand's Chulalongkorn University, said the latest developments indicate Burma's economy is sliding into crisis. "I believe right now with the incidents with the banks - I'm quite sure the economic downturn will go even deeper. That is of course very bad for the country and for the people as a whole," he said.

    Professor Chaiyachoke expects the military to take even tighter control over the economy now. "I am quite sure the military will also tighten its rule on the country, merely for the reason that the economy is bad so that's why [Burma's military leaders] have to tighten their rule, so they can improve the economy," he said.

    The problem has been building for some time. Diplomats say that recently the finance minister was ousted, and the government began investigating the management of the ministry.

    "Burma has been facing an economic crisis and skyrocketing prices and people have been dealing with the daily hardship," said Aung Zaw, editor of the Irawaddy newspaper, a Burmese opposition paper.

    After a brief period of economic liberalization in the mid-1990s, the military once again resorted to tight export and trade controls.

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    Pressure must be maintained for change in Burma: Aung San Suu Kyi

    BANGKOK, Feb 19 (AFP) - Opposition leader Aung San Suu Kyi has said international pressure should be maintained to force military-ruled Burma to move towards democracy, a fellow Nobel peace laureate who met her said Wednesday.

    Jody Williams, 1997 Nobel peace prize winner and a campaigner against landmines, visited Aung San Suu Kyi in Burma this week to deliver personal messages of support from other laureates, a statement released here said.

    Aung San Suu Kyi, herself a Nobel peace laureate, said at their meeting that the ruling State Peace and Development Council (SPDC) would have to engage in dialogue with other groups in Burma to achieve peace, the statement from the Nonviolence International Southeast Asia organisation said.

    "There is no way for the SPDC to escape dialogue if we want to achieve a peaceful transition," Aung San Suu Kyi was quoted as saying.

    Williams said: "Outside of the country there is the usual debate about whether outside pressure helps or hinders the dialogue process.

    "On this point Suu Kyi was very clear that pressure both inside and outside the country are critical to bringing about democracy in Burma (Myanmar), and noted that such pressure has already made a difference."

    Aung San Suu Kyi, leader of the National League for Democracy (NLD), was released from 19 months of house arrest in May. Her party won general elections held in 1990, but the military government refused to recognise the result.

    "Despite numerous competing demands for the international community's attention, and even though Suu Kyi has been freed from house arrest, the policy of her party remains unchanged: the time is not right for foreign investment, lifting of sanctions nor tourism in Burma," the statement said.

    "The time will be right when there is meaningful dialogue which moves forward the process of democratisation in Burma."

    Aung San Suu Kyi was optimistic for the future of her country, it added.

    "She stated that the struggle has gone on for too long, and that the people of Burma should not have to wait much longer, but is firm in her conviction that democracy will prevail," it said.

    The statement also noted the increasing number of landmine victims in Burma where the military government's fight against ethnic rebels has resulted in the planting of landmines.

    "Victims are claimed by an increasing number each year and more land is polluted by landmines laid by all sides in the armed conflict which continues in the border areas of the country," the statement said.

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    Account-trade first for Thailand, Burma

    Bangkok Post -     Thailand and Burma have signed a deal for their first account-trade transaction with an initial value of US$1.5 million (64.5 million baht).

    The system is a measure to boost intra-Asean trade and reduce foreign-exchange risks. Cash is used only to cover any discrepancy in value at the contract's end.

    Thailand's Public Warehouse Organisation and the Myanmar Agricultural Product Trade will manage the deal.

    Thailand intends to buy 11,000 tonnes of mung beans, black beans and soya beans, 2,000 tonnes of maize and 400 tonnes of black tiger prawns and fish fillets in the next six months. Burma plans to import construction materials such as floor tiles and aluminium frames, second-handed machinery and more than 16,000 tonnes of steel products.

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    Financial panic continues in Burma

    RANGOON -     Businesses have been unable to pay staff members and labourers since private banks halted all significant withdrawals last week, as they are rumored to be facing a severe financial crisis, according to business sources in Rangoon.

    Due to the rising panic among account holders, anxious crowds eagerly awaited outside of the Asia Wealth Bank (AWB), hoping to receive something from the bank.

    "This afternoon, I saw the traffic police trying to disperse the huge crowd, who were waiting to withdraw money," said a Rangoon resident in reference to the AWB branch at Olympic Tower.

    One businessman said that if the situation persists, the businesses would have no choice but to close down operations until the financial climate changes. "Companies can't pay staff wages or even day [labour] wages," the businessman said.

    Problems surfaced late last week after 20 private banks refused to allow customers to withdraw their money after it was announced that more than a dozen general service enterprises had gone bankrupt.

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    Thai border town business suffers after ban on Burmese

    Source : Thai News agency

    Mae Hong Son, February 18 - The Mae Hong Son Chamber Commerce today urged the provincial administration to reconsider a ban on small-scale Burmese traders buying goods in the province, saying that the local economy was suffering as a result.

    Mr Phoolsak Sunthornphanichakij, chamber president, said that the ban, in effect since January, had caused a worrying reduction in amount of cash circulating in the local economy. An easing of the restriction allowing large-scale Burmese traders to purchase goods from Mae Hong Son shops had done little to solve the problem, as they found it difficult to transport the goods back across the border due to an army ban on lorries crossing the border into Burma.

    Mr Phoolsak warned that he would raise the matter with the provincial governor in the middle of next month.

    One large-scale Burmese trader, Mrs Ah Fang, said that she took goods from Burma to sell in Mae Hong Son, retuning with foam flip-flops and vegetable oil to sell in Burma. However, due to the army ban on lorries crossing the border transportation costs had soared, and she now had to hire people to carry the goods across on their backs.

    She said that if the ban was lifted traders from Tong Kee district in Burma would be able to conduct more business in Mae Hong Son.

    But provincial governor Suphot Laowansiri denied that the province banned Burmese traders from crossing over into Mae Hong Son, saying that local officials had perhaps misinterpreted orders. He said that the province was always supportive of border trade, and expressed confidence that before long Mae Hong Son businesses would hear good news about the opening of a permanent checkpoint.

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