.August 31, 2005   

Crude oil price tops $70, how is Burma doing?

      Burma eases trade restrictions in mid July after cheating among export earners and top Generals’ relatives realized, according to report in New Era Journal News. Normally export licenses were allowed to those who have export earnings. In which 80% of available earnings must import the mandatory items set by government, then only 20% will go for others. With new rules, there is no more priority item. Again in early August, any source of foreign earnings after paying taxes to government also allowed for imports. Consequently, those legal earners can open US$ account in Myanmar Foreign Trade Bank (MFTB).

The reasons for new policies are skeptical, some business misconducts might have actually been occurred but the main reason of changing economics policy could be meaning more than that. Since the impact of non-stop sky rocket oil prices severely effects most of the emerging countries’ economy, there is no doubt to seriously hit Burma economy as needing more dollars for oil. According to 1993 data of CIA World Fact Book, Burma imports oil about 50,000 barrels a day. The number could have been double in year 2005. The oil prices, on the other hand, increase more than double compare to June 2004 – see www.nymex.com. Recently rising Chinese Yuan value ceases most business transactions in Burmese major cities and finally lead prices increased. Border trades closure with Thai made short in supply that also led Thai merchandises price higher.

Thus, a changing economics policy looks more like to attract more foreign currency inflows to government bank (MFTB) to compensate shortage foreign exchange needs rather than preventing business misconducts. Normally, foreign workers earnings inflow via underground money transfers. Easing import regulations encourage supply increases. Availability of more supplies in the market, other things being equal, leads to price drops if properly handle the changing policy. But the of Generals’ business handlings history has never been indicated positive ever.

The point here is not to analyze over changing business policies. But to highlight SPDC economics troubles. As long-time EU and US economics sanctions led SPDC in trouble, the exponential oil prices fuel more hardships to SPDC. Dollar needs for oil can no longer be covered by drug dollars whereas higher China Yuan makes lessen import extensive border trade incomes along with slower business transactions. So the changing economics policy clearly indicates that SPDC is in deep economics trouble.

SPDC hardships are opportunities for Democratic forces. This is a better time to step up giving out more pressures SPDC to make positive change. It is cheerful to see number of Burmese Democratic groups keep carrying out frequent movements around the world. It is going to be more effective if all the individual groups combined as a whole pressuring SPDC under one leader at the same time. Since our leader Daw Aung San Suu Kyi is still under house arrest, also the domestic forces have slim chance to make a huge movement under SPDC cruelties, the oversea forces have better chances to push SPDC in such a time. But it will be successful when all clusters are under one leadership in abroad as once did in 8888.

simon kham