New Internationalist

Burma: Billion dollar con

Ever got a bum deal when changing money in a foreign country? Here’s an exchange rate scam to beat them all.

Bearing in mind the furious global thirst for fuel, Burma’s stores of natural gas have become the mainstay of its economy. But there’s been some pretty nifty accounting going on with the monies earned, as an article by Sean Turnell of Burma Economic Watch published in The Irrawaddy demonstrates.

With gas prices airborne, Burma should have made huge gains by now. But not so. The gas export earnings are being published in government accounts at the ‘official’ exchange rate of the Burmese currency, the kyat. So every export dollar earned is being entered at the official rate of six kyat, whereas the market rate of the dollar runs at around 1,000 kyat.

Turnell has done the math: ‘Recorded at the official rate, Burma’s gas earnings for 2006/07 of $1.25 billion translate into 7.5 billion kyat, or a mere 0.6 per cent of budget receipts. By contrast, if the same US dollar earnings are recorded at the market exchange rate, their contribution of 1,500 billion kyat would more than double total state receipts, and more or less eliminate Burma’s fiscal deficit.’

So where’s all the missing dough gone? According to Turnell: ‘The most likely explanation is that, so recorded, Burma’s foreign exchange earnings can be kept “quarantined” from the public accounts, and thereby are available for the portioning out by the regime to itself and its cronies.

‘Where the funds are located is also a mystery. The only thing we can be certain of is that they are safely locked away from the people of Burma, to whom they rightly belong, and to whom they might just make a difference.’

Well, I’ve heard of skimming the cream off the top, but this amounts to taking the milk too and leaving the empty glass behind.

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About the author

Dinyar Godrej a New Internationalist contributor

Dinyar Godrej has been associated with New Internationalist since 1989, but joined as an editor in 2000. His interest in human rights has led him to focus on subjects like world hunger, torture, landmines, present day slavery and healthcare. His belief in listening to people who seldom get a chance to represent themselves led to unorthodox editions on (and by) street children and people with disabilities from the Majority World. He grew up in India and remains engaged with South Asian affairs.

Dinyar wrote the original No-Nonsense Guide to Climate Change (2001) and edited Fire In The Soul (2009).

An early fascination with human creative endeavour endures. He has recently taken to throwing pots in his free time.

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