As 2008 Approaches,
Burmese Economy in Shambles
By Wai Moe December 26, 2007
As the New Year approaches, Burma’s economy has undergone a year of skyrocketing commodity prices, touching a 50 percent inflation rate and putting even more stress on average citizens.
As the New Year approaches, Burma’s economy has undergone a year of skyrocketing commodity prices, touching a 50 percent inflation rate and putting even more stress on average citizens.
Business sources told The Irrawaddy on Wednesday that the average Rangoon resident must think of their basic daily needs rather than take part in holiday festivities or special ceremonies.
Most people simply buying food instead of extras, said an owner of a medium-size business in Rangoon.
Rangoon, the nation’s largest city, has about a dozen shopping centers. Many have put items on sale, but people flock to the centers mainly to look at products rather than buy, said a woman who regularly shops at City Mart, a large shopping center in Rangoon.
“If you see the number of shopping centers in Rangoon, you would think the economy is good in Burma,” said one business source.
City Mart has expanded its number of branches, he said, “but total income is lower.”
Regular customers at shopping centers tend to be the wealthy, commercial brokers, gamblers and government officials, according to sources.
“Most people cannot afford good things, but they can look around a shopping center and have a good feeling about all the expensive things,” said one Rangoon resident. “Poor people in Burma see rich peoples’ pleasures but their own lives are a disaster, and they know they must show patience.”
Business conditions were fairly good before the mass uprising in August and September. Sales dropped as much as 50 percent after the demonstrations, according to business sources.
In mid-August the government increased the price of subsidized fuels, creating severe problems for transport operators and people already struggling with soaring prices for food and other essential goods and services. The inflation rate approached 50 percent at the end of 2007, according to The Economist Intelligence Unit.
“Owners are afraid to extend their businesses at the moment,” said a successful businessman who works in one industrial zone. “We [businessmen] think all business situations are uncertain after the crackdown on protesters.”
An additional factor is the lack of electricity. Since November, electricity distribution has been irregular in Rangoon with long outages. Disruptions grew worse this month, with many residents experiencing about five hours of electricity daily.
In many industrial zones there is no electricity from 5 p.m. to 8 a.m., forcing factories to operate only in the day time.
Running private generators to supply electricity is no longer an option for many businesses, since diesel fuel sells for around 5,000 kyat (about US $3.9) a gallon, said a factory owner.
“But we cannot complain about electricity,” he said. “If we complain, we might face more income tax. It is like a fine for complaining. We are lucky if our businesses are not nationalized,” he said.
Many people turn to astrologers during bad times.
“Many astrologers say there will be a new government or a change in government in the next year,” said one businessman. “We are waiting for that time to extend our business. At the moment, we are keeping our savings rather than expanding.”
Meanwhile, The Economist Intelligence Unit noted in its year-end report that the junta’s management of the economy remains poor, and its policies will continue to contribute to economic instability.
Most people simply buying food instead of extras, said an owner of a medium-size business in Rangoon.
Rangoon, the nation’s largest city, has about a dozen shopping centers. Many have put items on sale, but people flock to the centers mainly to look at products rather than buy, said a woman who regularly shops at City Mart, a large shopping center in Rangoon.
“If you see the number of shopping centers in Rangoon, you would think the economy is good in Burma,” said one business source.
City Mart has expanded its number of branches, he said, “but total income is lower.”
Regular customers at shopping centers tend to be the wealthy, commercial brokers, gamblers and government officials, according to sources.
“Most people cannot afford good things, but they can look around a shopping center and have a good feeling about all the expensive things,” said one Rangoon resident. “Poor people in Burma see rich peoples’ pleasures but their own lives are a disaster, and they know they must show patience.”
Business conditions were fairly good before the mass uprising in August and September. Sales dropped as much as 50 percent after the demonstrations, according to business sources.
In mid-August the government increased the price of subsidized fuels, creating severe problems for transport operators and people already struggling with soaring prices for food and other essential goods and services. The inflation rate approached 50 percent at the end of 2007, according to The Economist Intelligence Unit.
“Owners are afraid to extend their businesses at the moment,” said a successful businessman who works in one industrial zone. “We [businessmen] think all business situations are uncertain after the crackdown on protesters.”
An additional factor is the lack of electricity. Since November, electricity distribution has been irregular in Rangoon with long outages. Disruptions grew worse this month, with many residents experiencing about five hours of electricity daily.
In many industrial zones there is no electricity from 5 p.m. to 8 a.m., forcing factories to operate only in the day time.
Running private generators to supply electricity is no longer an option for many businesses, since diesel fuel sells for around 5,000 kyat (about US $3.9) a gallon, said a factory owner.
“But we cannot complain about electricity,” he said. “If we complain, we might face more income tax. It is like a fine for complaining. We are lucky if our businesses are not nationalized,” he said.
Many people turn to astrologers during bad times.
“Many astrologers say there will be a new government or a change in government in the next year,” said one businessman. “We are waiting for that time to extend our business. At the moment, we are keeping our savings rather than expanding.”
Meanwhile, The Economist Intelligence Unit noted in its year-end report that the junta’s management of the economy remains poor, and its policies will continue to contribute to economic instability.
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