The BurmaNet News: April 7, 1998

[uneoo@xxxxxxxxxxxxxxxxxxxxxxx]

8-Apr-1998

re: Amount of foreign exchange (USD) and 
    the effect on local currency fluctuation,

Professor Mya Maung seems to be right that Burma may have insulated
the direct shocks of local currency crisis in Asian region. What 
appears to happen is that the Burmese Kyat has no direct connection 
with international financial exchange process. In addition, Burma's 
total  exchange reserves amount to $5 Per head: already too poor for 
speculative ripple effects. On the other hand, indirect effects of 
Asian currency crisis are coming into effect as Asian investors 
leaving Burma. Also, as a consequence of the crisis in Thailand, there 
have been less demand on Oil companies to conclude deals with the 
Burmese military. Following table is reproduction from the Economist 
Intelligence Unit's country prifile on Burma 1997-1998, the comparison
of FEs in the region.

FOREIGN-EXCHANGE RESERVES COMPARISONS, END-1996.
************************************************
		Total($ m)    Per head($)
		=========     ==========
Myanmar		229	      5
Thailand	37,731	      629

Malaysia	27,009	      1,305
Indonesia	18,251	      93

Philippines	6,372	      93
Vietnam		1,600	      21

Source: IMF, International Financial Statistics.

Regards, U Ne Oo.
---------------------------------------------------

On Tue, 7 Apr 1998 strider@xxxxxxxxxxx wrote:

> 
> BANGKOK POST:  THE SOLE SURVIVOR:  HOW HAS BURMA BEEN ABLE TO AVOID THE
> ASIAN FLU?
> 5 April, 1998
> Mya Maung
> 
> Unlike other Asian countries, Burma has not been covered extensively in the
> international news media, which suggests that it has been able to insulate
> itself from the ongoing Asian economic crisis. Burma seems to have
> successfully averted the speculative attacks on financial markets and the
> currency crisis which have affected a number of Asian economies.
> 

> 
> However, the Asian financial debacle seems to have shattered the
> possibility of this. The reality of the Asian financial debacle is that the
> largest investors in Burma, other Asean nations, with their own financial
> and economic crises, will not be able to finance their investment projects
> in Burma, let alone to make new investments.
> 
> In addition to no new investments by US firms due to sanctions imposed in
> April 1997, there is a strong possibility of divestment by US oil
> companies. Cases in point are Texaco's withdrawal from the Yadagun natural
> gas project in 1997 and Arco's revelation of its intention to liquidate its
> newly acquired natural gas project in the Bay of Martaban.
> 
> The controversial billion-dollar Yadana natural gas project, the largest
> joint venture between Unocal (US), Total (France), the PTT and the Myanmar
> Oil and Gas Enterprise (MOGE), also seems to be in trouble, with legal
> disputes and a sit-in protest by conservationists in Thailand against the
> PTT's pipeline project.
> 
> In addition, border conflicts between Burma and Thailand due to changes in
> the SPDC's trade policy led to the stoppage of cross-border trade. The
> ongoing economic and financial crisis in the region has also led to a
> massive deportation of illegal Burmese workers that will certainly deepen
> the economic and financial crisis of Burma.
> 


> 
> *Mya Maung is a professor of finance at the Wallace E. Carroll School of
> Management, Boston College, USA. 
>