Burma will test the Asian economic

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Burma will test the Asian economic 'Miracle' recipe'

BY PHILIPPE AGRET

The Asian Age (New Delhi), 5/9/79.

Rangoon, Sept. 4: After 30 years of self-sufficiency, Burma is
soliciting foreign investment as it tries to follow the recipe of the
Asian economic "miracle" and break away from the stigma of being one of
the world's poorest countries.  According to official figures, Burma had
approved $6.36 billion of foreign investment as on July 31, with oil and
gas being the most sought after sectors, attracting $2.3 billion.

The Burmese like to present their country as "the richest of the poor
nations", at least in terms of potential as it is blessed with energy,
mineral and forestry resources.  But, paradoxically, at a time when
Rangoon expected to be collecting the first fruits of its liberalised
economy, launched in the late 80s, the West put pressure on the military
junta and, above all, an unprecedented currency crisis hit its wealthy
Asian neighbours.

"The currency crisis in Asia and Asean is acute and it has affected us
also, but since we are not pegged to any currency we are free from a bad
situation," Brigadier David Abel, the national planning and economic
development minister, told Agence France Presse.

The local currency, the kyat, has been brutally depreciated since July,
losing 50 percent of its value in one week following the devaluation of
the Thai bhat, and the turbulence in regional markets has brought about
the return of black markets on the streets of Rangoon.

"We know we need to devalue the kyat and we will do it eventually," Mr
Abel said. "Of course, we can do it but at what cost to the poor. We
cannot afford to import anything we want, like before. We have to reduce
our imports to essentials that are necessary to the,,. country - food,
medicine, construction materials. spare parts, machinery, fertiliser."

Burma, which was once the world's leading supplier of rice, stopped
exports some months back when stocks dropped to a very low level. The
harvest was affected by serious flooding during the recent monsoon
season, especially in Pegu, north of Rangoon - one of the "rice bowls"
in
the country.

Moreover, the April decision by Washington to ban all new US investment
in Burma after accusing Rangoon of human rights violations, hinders the
economic take-off of the country.  Burma has complained to the World
Trade Organisation about-the US sanctions. Since the bloody crackdown on
the Burmese prodemocracy movement in 1988, the ruling military junta has
been deprived of capital and the expertise of the International Monetary
Fund, the World Bank and the Asian Development Bank.  Now, the needs of
its infrastructure are

glaring' The government, nevertheless, remains optimistic, confident it
will collect dividend from its recent entry into the Association of
South-East Asian Nations. Nearly half (46 per cent) foreign investment
in Burma comes from Asean nations, lead by Singapore ($1.22 billion) and
Thailand ($1.13 billion), "and it will go up", said Mr Tun Shin, a legal
adviser to the ministry of national planning and development.

Asean groups Brunei, Burma, Indonesia, Laos, Malaysia, the Philippines,
Singapore, Thailand and Vietnam. In the absence of reliable statistics,
especially on the amount of reserves in dollars, it is difficult to
judge the health of the economy - of which a good part remains hidden,
and the system of tax collection appears non-existent. To see the
traffic jams, the roadworks and the buildings under construction in the
capital, one would have to believe Burma is turning the corner towards
the Asian "miracle".

But the world diplomatic circle is that the economic situation "is
definitely more difficult" to analyse. (AFP)