Tuesday, May 12, 2009

Myanmar economy 'bleak'

Myanmar, which has been ruled by the military since 1962, is among the world's least developed countries. --PHOTO: AP
BANGKOK - MYANMAR'S foreign exchange reserves are at a record US$3.6 billion (S$5.25 billion) but the ruling junta has not used it to help the people and the country's economic prospects are 'bleak", a report said on Monday.

The Financial Times quoted a unreleased annual International Monetary Fund report as saying that Myanmar's strong natural gas exports have pushed reserves to their current unprecedented level.

But it said that the global slowdown, coupled with a May 2008 cyclone that left 138,000 people dead or missing, have combined to slow Myanmar's gross domestic product to about 4.5 per cent last year from 5.5 per cent in 2007.

Social spending remains the lowest in Asia, even as the military regime continues to plash out on showcase projects including the building of the new administrative capital Naypyidaw, the paper quoted the IMF report as saying.

Printing money to fund the schemes had pushed inflation to 30 per cent, it said.

The report added that if Myanmar does not remove legacies of its socialist past including the multiple exchange rate and economic controls, then its economic prospects 'look bleak'.

The IMF report said that because revenues from gas exports are added to the budget at the 30-year-old official exchange of six kyat to the dollar, instead of the 1,000-kyat black market rate, they have a 'small fiscal impact'.

Myanmar, which has been ruled by the military since 1962, is among the world's least developed countries, lagging behind wealthier neighbors like China, India and Thailand.

The current junta seized power after crushing a pro-democracy uprising in 1988, ending a socialist dictatorship and slowly opening up the economy.

Many of its exports are raw materials like natural gas, teak wood, or gemstones sold to neighbouring countries which eschew the sanctions imposed by the United States and other Western nations. -- AFP

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