As Myanmar undergoes an economic revolution, the International Monetary Fund comes calling
by Yaung Ni Oo
Myanmar is going through many changes, including new visa rules, the first trade unions, an expanding mobile phone network and better infrastructures. But the main change is the strength of the local currency, the kyat, against the US dollar. Next month, IMF officials are coming to help stabilise the currency and prices.
Yangon (AsiaNews) – Myanmar is a nation “on the go”. In recent weeks, it has experienced many changes: new visa rules for foreigners, the birth of the first trade unions, higher costs for domestic flights, more and better infrastructures and mobile phones, but especially a stronger kyat against the US dollar with major consequences for the local economy and the cost of living. In fact, the local currency has gained 30 per cent against the greenback, which is now traded at 700 per dollar against a 1,000 a year ago. Such changes are the result of the end of the military regime, replaced by a “civilian” government appointed by a parliament, albeit one still controlled by the armed forces, and the influence of international financial circles.
The government’s decision this month to impose a 10 per cent tax on domestic flights has caused grumbling among tourist operators. Yet, a small sign of the country’s modernisation comes from the establishment of professional organisations and trade unions, which have already begun labour action to increase wages.
Visa rules have also changed, but foreigners still need one to enter the country. In fact, since the summer, they must now enter and exit from the same border post. Thus, anyone arriving at Yangon’s international airport from abroad must leave the same way and can no longer cross the border with Thailand.
The government has invested heavily in infrastructure, building important motorways that connected the capital Naypyidaw to the country’s other cities like Yangon, Mandalay and Bagan. Once off-limits, the capital itself is now a tourist destination.
Visitors will be able to use local phone cards by paying a US$ 50 deposit, plus a US$ 2 daily fee. Foreign and international cards are not compatible with Myanmar rules.
The biggest change however is the rise of the Kyat. Over the past year, it has gained 30 per cent against the US dollar. That is more than 200 kyat in the last two months.
President Thein Sein warns that a strong currency could penalise exports and negatively affect the economy, but a crisis could force Myanmar’s rulers to introduce long awaited political, social and financial reforms.
The cost of services, including restaurants and transports, are rising as well. A hike in hotel prices is also possible.
The inflow of foreign capital and the growth of investments into a hitherto backward country sitting on the edge of Asia’s geopolitical fault lines is pushing up costs and revaluing the national currency.
Myanmar has great potential because of its energy resources (oil and gas) and mineral wealth (precious metals) as well as cheap labour, which is still primarily employed in agriculture.
At the same time, prices are rising in the real estate market as well, as local investors sell their dollars to buy kyats.
In October, for the first time, officials from the International Monetary Fund (IMF) will visit the country to help local authorities stabilise the currency and prices.
This is a toll task for a government still tied to the old military regime, but one that is increasingly necessary if Myanmar is to face the challenges of a new and modern market economy. The country formerly known as Burma is indeed a nation “on the go”.
The government’s decision this month to impose a 10 per cent tax on domestic flights has caused grumbling among tourist operators. Yet, a small sign of the country’s modernisation comes from the establishment of professional organisations and trade unions, which have already begun labour action to increase wages.
Visa rules have also changed, but foreigners still need one to enter the country. In fact, since the summer, they must now enter and exit from the same border post. Thus, anyone arriving at Yangon’s international airport from abroad must leave the same way and can no longer cross the border with Thailand.
The government has invested heavily in infrastructure, building important motorways that connected the capital Naypyidaw to the country’s other cities like Yangon, Mandalay and Bagan. Once off-limits, the capital itself is now a tourist destination.
Visitors will be able to use local phone cards by paying a US$ 50 deposit, plus a US$ 2 daily fee. Foreign and international cards are not compatible with Myanmar rules.
The biggest change however is the rise of the Kyat. Over the past year, it has gained 30 per cent against the US dollar. That is more than 200 kyat in the last two months.
President Thein Sein warns that a strong currency could penalise exports and negatively affect the economy, but a crisis could force Myanmar’s rulers to introduce long awaited political, social and financial reforms.
The cost of services, including restaurants and transports, are rising as well. A hike in hotel prices is also possible.
The inflow of foreign capital and the growth of investments into a hitherto backward country sitting on the edge of Asia’s geopolitical fault lines is pushing up costs and revaluing the national currency.
Myanmar has great potential because of its energy resources (oil and gas) and mineral wealth (precious metals) as well as cheap labour, which is still primarily employed in agriculture.
At the same time, prices are rising in the real estate market as well, as local investors sell their dollars to buy kyats.
In October, for the first time, officials from the International Monetary Fund (IMF) will visit the country to help local authorities stabilise the currency and prices.
This is a toll task for a government still tied to the old military regime, but one that is increasingly necessary if Myanmar is to face the challenges of a new and modern market economy. The country formerly known as Burma is indeed a nation “on the go”.
.png)
See also
Hanoi gives green light to Yuan in seven provinces. Economists: Damaging for the country
06/09/2018 12:03
06/09/2018 12:03
