Myanmar economy in a shambles amid

[tinkyi@xxxxxxx]

Myanmar economy in a shambles amid political tensions: analysts

       Sun 13 Sep 98 - 04:20 GMT

       BANGKOK, Sept 13 (AFP) - Myanmar's economy is in a shambles, with
its already basic infrastructure rapidly
       deteriorating, food stocks depleting and foreign investors
withdrawing at a rapid pace, analysts warn.

       Electricity to some areas of the country have been cut off and in
the capital of Yangon power is cut for anywhere
       from six to 12 hours in certain districts.

       Authorities have detained currency traders in a bid to stop the
kyat sliding to new lows, while political tensions
       have destabilised the isolated state's precarious economy, the
analysts said.

       International opposition to Myanmar's junta has discouraged
foreign investment and compunded the severity of the
       problems, they added.

       "There isn't really anything going for Burma at this stage," said
one foreign diplomat in Yangon specialising in
       economic matters, using the former name for Myanmar.

       "Everything has gone downhill, or at least not improved at all.
They put a lot of hope on tourism, but that's not
       exactly doing well. Besides the general problems of visiting
somewhere like Myanmar, the political developments
       aren't conducive to foreign tourism."

       Tension between the junta and its opponents has escalated in
recent months and dozens of opposition members were
       reportedly detained last week.

       The junta has also detained some 40 currency traders in Yangon in
a bid to bolster the beleaguered kyat, which is at
       new lows amid a devastating regional economic crisis.

       The traders, licensed by the country's junta in a de facto
endorsement of the currency black market currency, were
       held in the hope that reduced transactions would prevent the
artifically pegged unit slipping further, diplomats in
       Yangon added.

       The kyat was trading around 360 to the dollar on Yangon's black
market Friday but earlier crashed through the 400
       mark in some parts of the country.

       The black market rate was around 150 to the dollar before Asia
became embroiled in an economic crisis last July.
       The official rate is six kyat to the dollar but is almost totally
ignored.

       Hundreds of power generators have been imported by Myanmar in
recent weeks to counter the electricity shortage,
       according to official sources, but with starting prices at about
500 dollars, few in the impoverished country can
       afford to buy them.

       The power shortage is widely believed to be due to a drop in the
water table because of a lack of rain, as well as
       shortages of parts and other problems at electricity plants.

       "It is mainly because of water shortage and also due to some
technical problems," a junta spokesman recently said.

       "This is not a permanent problem and will be resolved sooner or
later."

       The lack of rainfall associated with the El Nino weather pattern
last year had also caused food shortgaes in some
       areas, driving up the prices for basic commodities. But diplomats
in Yangon said recent heavy rain may abate the
       problem and good rice crops were now expected.

       The Asian economic crisis now in its second year has further
shaken fragile Myanmar, with many foreign investment
       projects cancelled or put on hold and some big spending foreign
companies withdrawing from the country
       altogether.

       "The biggest problem is with the hotels, which are mainly foreign
projects," said another western diplomat in
       Yangon.

       "There were too many new hotels to start with, and now there are
not many tourists or business visitors, they are
       really suffering.

       "I've heard several have applied to the government to be allowed
to cease operations, but apparently that has been
       refused and they have to continue racking up the losses under the
terms of their licence agreements."

       The junta has acknowledged some economic difficulties and lays
much of the blame on opposition leader Aung San
       Suu Kyi and her National League for Democracy, which has
campaigned for international boycotts of Myanmar as
       well as other trade sanctions.

       The opposition, which won 1990 polls by a landslide but has never
been allowed to take power, has also urged
       tourists to stay away from the country until the junta accepts
change.


)AFP 1998