------------------------ BurmaNet ------------------------ "Appropriate Information Technologies, Practical Strategies" ---------------------------------------------------------- The BurmaNet News: December 10, 1997 Issue # 887 HEADLINES: ========== THE NATION: KYAT PLUNGE HAS CURRENCY DEALERS WORRIED THE NATION: PRIME MINISTER HAS NO PLANS FOR TRIPS ABROAD BKK POST: NEW WORKING GROUP FORMED ----------------------------------------------------------------- THE NATION: KYAT PLUNGE HAS CURRENCY DEALERS WORRIED December 9, 1997 AP RANGOON - Burma's currency, the kyat, fell to a record low against the US dollar yesterday, prompting fears among some currency dealers that the military government would blame them for it and punish them. Yesterday, the kyat was trading at 314 to the dollar in the "grey" market. It fell to 300 against the dollar for the first time ever late last week. The government maintains an official exchange rate of about six kyats to a dollar, but that is used mainly for state enterprises. Otherwise, money is changed through grey market dealers, who follow market forces, and government exchange counters, which at times attempt to control or influence the rate. Government exchange counters were recently offering only 199 kyats to the dollar, but had to abandon that rate for lack of business. Dealers said they weren't sure why the kyat was falling again, but that customers, and particularly businesses, were buying more dollars than they were selling, driving the price up. "People come to my shop mostly to buy the dollar rather than to sell," said one dealer, who spoke condition of anonymity. In September, the kyat was trading at 254 to the dollar. down from 140 a year earlier. In July, when the kyat hit 240 to the dollar for the first time, the government detained several dealers for questioning. All were eventually released without charges being filed. Last week, as the kyat hit 300, several dealers in Rangoon shut up shop, fearing they might be questioned. Unlike most other Southeast Asian currencies, the kyat is barely traded internationally, and so is not subject to attack by speculators. Some Burmese businessmen, however, have said that the drop in value of the Thai baht has hit the kyat because there is so much cross-border trade between the two countries. Analysts in Bangkok have frequently cited the military government's high defence and weapons expenditures, and the mismanagement of the economy, as the main reasons behind the kyat decline. The World Bank has said that the government spends nearly half the national budget on defence. Burma has no external enemies and its internal insurgencies are dying out. Analysts in Bangkok have also said there are several indicators that the military government is extremely low on foreign reserves. Economic statistics of the Burmese government are not considered reliable. The analysts point to a law passed in August that prevents businesses from repatriating profits of more t a US$50,000 a month. And some businesses operating in Burma told reporters in Bangkok that government was pressuring them to extend it loans in dollars. The United States imposed economic sanctions on Burma in April because the military regime's repression against the democracy movement led by Nobel laureate Aung San Suu Kyi and its allege failure to fight the drug trade. ******************************************************** THE NATION: PRIME MINISTER HAS NO PLANS FOR TRIPS ABROAD December 9, 1997 The Nation PRIME Minister Chuan Leckpai has no plan to travel abroad to meet foreign leaders because of the ailing economy, Foreign Minister Surin Pitsuwan said yesterday. Chuan has already met his foreign counterparts during the recent Asia Pacific Economic Cooperation (Apec) meeting in Canada, and he is scheduled to meet leaders of Southeast Asian countries at the Informal Asean Summit in Kuala Lumpur next week, Surin said. "Thailand is suffering from-an economic slowdown and the premier has already met his foreign counterparts during the Apec meeting. He has no time to make any Tore visits. When Chuan was premier the last time, it took him about six months before he visited other countries," Surin said. Surin said that Chuan had already informed his foreign counterparts that he would be unable to travel overseas for familiarisation trips. However, an overseas visit could be, made if it were necessary. Traditionally, new Thai prime ministers and foreign ministers conduct overseas trips to introduce themselves to their counterparts, usually starting with Asean member countries. Surin was responding to a report that quoted Army Commander-in Chief Gen Chetta Thanajaro as saying that the prime minister would soon travel to Burma. An informed source said yesterday that Burmese Foreign Minister U Ong Gyaw would pay a courtesy call on Prime Minister Chuan Leekpai today before the weekly Cabinet meeting. U Ong Gyaw is in Thailand to co-chair the third Thai-Burma Joint Commission meeting with Foreign Minister Surin Pitsuwan. The aim of the commission is to promote bilateral relations and trade. ******************************************************** BKK POST: NEW WORKING GROUP FORMED December 9, 1997 Bhanravee Tansubhapol Thailand and Burma agreed yesterday to form a working group aimed at tackling the dual problem of illegal Burmese labour and overflowing refugee camps along the Thai side of the border. Thai and Burmese officials reached the decision in talks to prepare agendas for their foreign ministers due to meet today in a joint commission meeting. Foreign Permanent Secretary Saroj Chavanaviraj hailed the proposed body an important step as Thai people were facing rising unemployment during the economic crisis. "The issue is very important and needed to be tackled in this time of economic downturn in the country," he said. Foreign Minister Surin Pitsuwan and Burmese Foreign Minister Ohn Gyaw will announce the formation of the body today. Mr Ohn Gyaw will visit with Prime Minister Chuan Leekpai before the meeting. According to unofficial estimates more than one million Burmese are currently working illegally throughout the country. Thailand wants to send the refugees back to Burma. Most of the refugees have crossed the border to escape ongoing fighting between government soldiers and anti-Rangoon forces. -----------------------------------------------------------------