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FT-BURMA: City developers turn to f
- Subject: FT-BURMA: City developers turn to f
- From: tinkyi@xxxxxxxxxxxxx
- Date: Wed, 02 Jun 1999 01:57:00
Subject: FT-BURMA: City developers turn to farming
Financial Times May 31, 1999.
BURMA: City developers turn to farming
By Ted Bardacke on Nyaungdone Island, Lower Burma
Yesterday's property developers are today's farmers in Burma. A few months
ago the dozers and excavators that propelled a building frenzy in the
capital of Rangoon were lying idle as an economic boom came to an end and
foreign investment slowed to a trickle.
The military government's response is to chant a self-sufficiency mantra.
Agriculture is the new priority and in this command economy the private
sector must play along. So the earth movers now grind away on the Irrawaddy
Delta, draining potentially fertile land and plunging the country back into
"When we liberalised our economy the private sector invested in other areas
first. But now hotels and housing have reached a saturation point. So we are
encouraging the construction companies to move into the agriculture sector,"
says Mya Maung, director general of the Department of Agricultural Planning.
"There's no big difference working for the government or the private
sector," says Izaya Lin, former director of the government's Agriculture
Mechanisation Department and now project manager for the Myanmar Billion
Group, a consortium of local entrepreneurs with no experience of agriculture
who began reclaiming 30,000 acres in January.
So far 29 companies have been granted concessions for 1.1m acres, some of it
under 10ft of water. On Nyaungdone Island alone, 71,220 acres have been
reclaimed, nearly doubling the amount of arable land. Agriculture officials
say 19m more acres around the country are waiting to be claimed. Planting on
it would double the amount of sown land and multiply Burma's farm output
Those are certainly brighter prospects than anything the urban economy can
muster. Inflation is running at around 40 per cent and the black market
exchange rate is 60 times higher than the official rate. Half-finished
buildings dot Rangoon's skyline, while many of those that have been
completed stand half-empty. A $200 hotel room can be had for less than $50,
while the price of a new condominium has fallen by more than half.
The region's economic crisis has caused investment from other south-east
Asian countries, the country's main investors, to fall by 70 per cent. Most
western investors outside the oil sector have gone home, victims of economic
sanctions, consumer boycotts and the military's arbitrary rule changes.
Foreign tourist arrivals have plummeted.
And yet the economy has not imploded. The generals attribute this to a
combination of self-sufficiency in food and a relatively closed economic
system. Their new rural priorities seem a natural progression.
Burma was once the world's largest exporter of rice, though amounts have
fallen sharply in the past two years.
But turning property speculators into agricultural producers is no easy
task. Returns take a long time to materialise, as does the technical task of
draining the delta land.
Privileges for the new farmers are being arranged. The central bank recently
cut interest rates to make the agriculture projects easier to fund. Other
developers are seeking licences to import used cars to finance their farm