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Dollar hits record high against depreciating kyats

Dollar vs Kyats

The dollar to kyat reference exchange rate, which is fixed by the Central Bank of Myanmar (CBM), hit a record high of K1,429 on August 2. At private banks and money changers, the exchange rate was as high as K1,445.

On the face of it, the depreciating value of the kyat bodes well for exporters, as goods sold will now be cheaper for overseas buyers. Yet, local traders say this isn’t the case. 

This is because the cost of importing commodities and raw materials involved in the manufacturing process would offset the higher export demand. 

U Win Thaw, director general of the CBM Governor’s Office, said the value of the kyat depends on the US dollar, and that the Central Bank does not have much control over the direction of the US currency.

However, the strength of the kyat is also influenced by the level of exports and foreign direct investments (FDI) into the country, which draws an additional supply of US dollars into the economy. 

«If export earnings and FDI are high, the exchange rate will be more stable due to sufficient supply of dollars in the market,” he said. 

Currently, the situation is such that exports are low and FDI is stagnant, which has led to higher demand for the dollar and caused the kyat to depreciate against the US currency. 

“To avoid volatility in the exchange rate, the CBM has been actively controlling its reference exchange rate on a daily basis,” said U Win Thaw. 

According to data from the Ministry of Commerce, trade between April 1 and July 20 included imports worth US$6 billion and exports of up to $4.8 billion, resulting in a trade deficit of more than $1 billion.

Myanmar’s Soe Lin Oo knocks out Muay Thai champ Iquezang

Soe Lin Oo (left) cornered Muay Thai champ Iquezang of Thailand, and delivers a flurry of punches that knocked out the visiting Iquezang two minutes and 22 seconds into the third round of their match at the Thein Phyu Stadium on Sunday. Zarni Phyo/The Myanmar Times

First class lethwei fighter Soe Lin Oo knocked out Muay Thai champ Iquezang of Thailand in 2 minutes and 22 seconds into the third round of the Lethwei Nation fight 2018 at Thein Phyu stadium in Yangon yesterday.

It was a lethwei versus Muay Thai supreme battle because hometown fighter Soe Lin Oo is talented lethwei fighter while the visitor Iquezang is one of top fighters in Muay Thai.

Myanmar’s Soe Lin Oo knocked out Iquezang with his dual punches and broke unbeaten lethwei records of Iquezang.

Iquezang actually is used to fighting with Myanmar traditional lethwei fighters. This is the third lethwei fight for him. He already met Saw Gaw Muu Do and Phyan Thway in the lethwei ring but he did draw fights. 

But it was the first match for Iquezang to be knocked out in lethwei for which he suffered emotionally.

Despite this bout was finished in third round, this challenge gave lethwei fans a pleasing fight and was a classic battle of wills between two strong fighters. With both fighters noted for their brutal attacking, the fight wasn’t a slow start.

All tempo of fight came in third rounds; both fighters used their dual punches as they stood facing each other. But Soe Lin Oo’s upper-cut was the hardest hit to Iquezang’s face. This strategy was working and Iquezang knocked out after suffering upper-cut of Soe Lin Oo in third round.

“ I’m very happy I was able to knock him out as I have already planned to do so. Iquezang is a tough fighter and he got best record against Myanmar lethwei fighters that’s why I’m so happy for this knockout matc,.” Soe Lin Oo said after the fight.

Yoma Land to focus on property development, expand into mass market

Cyrus Pun, managing director of Yoma Land, revealed the firm’s plan to go mass market.

Cyrus Pun, managing director of newly launched Yoma Land, is expanding beyond high-end, luxury properties into the mass market in a bid to promote home ownership and grow in Myanmar. 

Yoma Strategic Holdings and First Myanmar Investments Co (FMI) yesterday announced the launch of Yoma Land, which will hold all the real estate assets of both companies from now on. 

The new business arm will represent a new division under Yoma Strategic and hold Pun Hlaing Estate, StarCity, Yoma Central and The Peninsula Residences Yangon under its umbrella.

“We have combined our real estate projects under one brand, which we hope will help customers identify us as a serious real estate developer,” Mr Pun told the media.

With the launch of Yoma Land, Mr Pun also revealed that the firm’s aim will now be on promoting home ownership in fast-growing Myanmar by expanding into mass market property. 

“Our growth plan going forward will involve expanding into the mass market segment, which also includes developing low-cost housing projects,” he said. By doing so, the company will also gain access to a much larger proportion of the Myanmar population.

Mass market push

Yoma Land’s push into the mass market will be backed by its connection to Yoma Bank and other private banks in the country. Yoma Bank is controlled by FMI, which is the sister company of Yoma Strategic. This will enable Yoma Land to work closely with the banks in bringing a larger pool of financing options to potential home buyers, helping them to better afford new homes. 

Currently, the standard home loan arrangement in Myanmar involves a 30 percent downpayment and seven years to repay the remaining 70pc of the loan taken. Meanwhile, bank lending rates range between the Central Bank rate of 10pc and the maximum bank lending rate of 13pc. 

“By collaborating with Yoma Bank, we will be able to explore options of reducing the downpayment requirement and expanding the repayment term to 25 years to make houses more affordable for the people of Myanmar,” said Mr Pun. 

He added that Yoma Land’s aim of bringing cheaper financing options to home buyers does not require any change in current Central Bank regulations, under which interest rates in the country must be higher than inflation. 

All segments covered

Yoma Land’s push into the mass market, which could commence later in the year, comes after units of The Peninsula Residences Yangon went on sale in March. The luxury project is being developed on a 10-acre site in downtown Yangon at the junction of Sule Pagoda Road and Bogyoke Aung San Road. It is part of the $700 million Yoma Central mixed development project, which broke ground in February last year. 

The Peninsula Residences Yangon, which will include 96 residential units, is expected to be complete in 2021.

The move will also position the company as a property developer across each segment of the property market, from luxury units at The Peninsular Residences Yangon, upscale townhouses and condominium units at Pun Hlaing Estate and StarCity to low cost housing projects in the future, Mr Pun said.

Yoma Strategic is listed in Singapore and also runs businesses in the consumer and vehicle transport sectors. Shares of the company closed yesterday at 37.5 Singapore cents each, which is down by almost 28pc since the start of the year.

Nearly 120,000 displaced in Myanmar floods

A young man pushes his bicycle through floodwater in Bago.

YANGON — Nearly 120,000 people have been displaced after floods submerged a vast swathe of southeastern Myanmar, killing 11 people and sending panicked residents fleeing for dry ground with children perched on their shoulders and few belongings in tow.

An official told AFP Tuesday over 118,000 people have taken refuge in 285 camps so far, as the toll climbed to 11 dead — including three solders — with more deaths feared. 

Floods in Bago Region

Swirling, muddy waters reached thatched-roofed homes and wiped out farmland in four provinces as officials scrambled to set up rescue centres amid continued torrential rains on Tuesday.  

Rescuers in boats tried to pluck people from floodwaters in Hpa-an in Kayin State while other residents tried to escape by any means possible, balancing on makeshift rafts or wading out carrying children and plastic bags of goods. 

Rescuers boats from flood water in Hpa-An, Kayin State

"There could be a few more casualties but we are still collecting the information," Social Welfare Ministry Director Daw Phyu Lei Lei Tun said. 

"Water is going down in some places. But we do not know how long the disaster will last."

Meanwhile five others were confirmed killed in a landslide triggered by heavy rains in Kawthaung Township in Myanmar's southern tip. 

120,00 displace in Myanmar floods

Evacuation orders are still in place for many flood-stricken areas with a number of rivers exceeding danger levels by several feet and 36 dams and reservoirs overflowing, state-backed Global New Light of Myanmar newspaper reported.

The Mekong region has been battered by particularly heavy monsoon rains this year, causing devastating floods that have forced thousands to flee and wiped out homes and farmland.  

Heavy rains caused a massive dam in southern Laos to collapse last week, wiping out entire villages and killing at least 11 — though earlier official tolls initially put the number as high as 27. 

Floodwaters from that catastrophe seeped into Cambodia and forced thousands from their homes. 

Rescuers are still searching for survivors in southern Laos more than a week after the dam collapse, with Thai, South Korean and Chinese specialists joining efforts to find scores still missing. 

British Ambassador Andrew Patrick: ‘The root of the problem is the status of the Muslim population'

Mr Andrew Patrick, British ambassador to Myanmar

Outgoing British ambassador to Myanmar Mr Andrew Patrick talks about his five years in Myanmar, including the 2015 election, the current state of press freedom and what the government needs to do to begin addressing the crisis in Rakhine State.

By WIN ZAR NI AUNG and HTET HTET NAING

You have been ambassador since 2013, and have witnessed some momentous highs and despairing lows during that time. Do you believe Myanmar is in a better place than it was five years ago?

Yes, I do. Obviously some things are better, some things are worse but overall I would say things are better. There’s more freedom, people are able to express themselves, freedom of the media, fewer political prisoners, all those things are important. Obviously the situation in Rakhine has got more difficult than it was five years ago but overall I would say things, for most people in the country, are better.

Myanmar has a chequered history when it comes to human rights. One thing Doh Athan has found is that public perceptions of human rights are very different to what they are in the UK, for example. What do you believe will help to change those views?

Well, I think it’s not surprising that views of human rights in Myanmar are different from the views of human rights in other countries. You have had this very unique history, this very difficult history for many decades and the main this during that time the education system was very badly affected, and I think everyone agrees that the Myanmar education system is not as good as it should be.

So I think that one of the things that I hope will change when people become better educated is that people will understand different views about human rights and different views about human rights will become a bit more similar to the view of human rights in Europe or America. But I think people understand some of this very well.

Talking to people they understand the fundamentals of democracy, they understand why the changes that have happened are good and I think, obviously, there are some issues about race and the role of ethnic identity in a modern society where the views in this country are very different from what they are in the UK or France or the United States.

So, there is some way to go but a lot has changed over the last five years and I hope, as I say, that as people get better educated over the next five, 10, 20 years we will see views changing on this.

A vital part of human rights is giving people a voice. Press freedom in Myanmar has deteriorated in the past 12 months, most notably with the imprisonment of the Reuters journalists. Do you think there has been a conscious effort to squeeze the media here? Should such outdated laws be used to imprison journalists in Myanmar?

I agree that things have got worse. We, as you know, have called for the release of the two Reuters reporters, we have called for the reform of article 66(d) [of the Telecommunications Law] which has been another major problem. Those things are important and if the media is to operate freely then that needs to change.

I think we shouldn’t be too hard on the situation here. When I compare the media situation here to some other countries in Southeast Asia things are still better here than they are there. Things are worse here than they were before in some cases but they are better than they are in other places and I can still read some very hard-hitting articles in Frontier magazine and they would be as hard-hitting as articles you would find in a British newspaper and nobody comes to shut down your newspaper.

The Rohingya crisis is obviously very complex and sensitive, and you have witnessed the scenes of devastation in northern Rakhine State yourself. What steps do you believe need to be taken to avert further hardship for the refugees in Bangladesh?

It’s a very difficult situation. I do understand the history, having been here for nearly five years, and I’ve talked to a lot of people about the history and I do understand the history is very much debated and we tend to call the Muslim community there Rohingya.

We don’t do that because we accept everything they say about the history. We do that because in general in the UK if a group wants to call itself by a particular name then we accept that and we say you can call yourself that.

The Rakhine situation is going to take some time to improve. At the moment my impression is that most of the people who have left are not yet ready to come back. The government has done preparation for that. They’ve prepared these reception centres. But at the moment it doesn’t look like people would want to come back because they don’t trust the security situation. They’re worried that if they return they would be attacked so I think it’s very important that as well as focusing on the physical preparation, the reception centres and so on, you need to look at the environment, the security environment in which people will return.

One of the other things that has been difficult [is that] there are very different views inside Myanmar and outside about what happened. If you read a British newspaper and you read most of the newspapers here you get a very different view. I haven’t investigated but some of the stories that come out of the camps in Bangladesh seem very convincing. The only way you are going to settle that debate is by having some kind of independent, credible, investigation that can go down there and really dig in to all of this and tell us what really happened. If you have that kind of investigation I think it will help clear the air and help people understand what really happened and hopefully make the people in Bangladesh feel more secure and more able to come back.

I was very pleased the government has started discussing with the UNHCR, the United Nations High Commission for Refugees, and the UN Development Programme, discussing how they can be involved in northern Rakhine because I think that will reassure everybody that this process is going to be managed in a way which fits with international best practice.

You were here for Myanmar’s historic election in 2015. What lessons do you think need to be learned for the next national vote, due to take place in two years’ time?

I thought it was an amazing election in 2015 given the history of the country, given this was the first fully – well it wasn’t even fully democratic because the constitution, there are still some problems with that. Given where the country was I thought it was a very, very high standard achieved. I think a lot of people deserve thanks for that, the election commission performed a great role.

It seemed to me that a major problem at the time was about the voters list and I think – I hope – some work is going on to try and make that whole process a bit easier for next time round. I was worried some people might have felt excluded by the problems with the voters list. Actually we got a very high turnout and people seem to have been able to express their vote freely and that’s what’s important.

Do you think foreign embassies, including your own, should move to Nay Pyi Taw?

I guess we are all going to move to Nay Pyi Taw one day. There are lots of practical things you have to think about before moving an embassy. It takes a long time. In the British system it usually takes about 10 years, so it’s not going to happen immediately and of course people are interested in things like schooling and those sorts of practical things.

In the long-term if the capital of the country is Nay Pyi Taw then embassies should be in the capital: that’s natural, that’s how things work. I am sure we’ll all keep a presence here in Yangon too. The business centre of the country will clearly be Yangon, probably the media centre will still be Yangon and all of the civil society people will be mainly in Yangon. I think we’ll keep a foothold in both places. I’m not expecting we’re going to move very quickly.

What are your hopes and expectations for Myanmar for the next five years?

I hope that things will continue to improve, I hope the economy will grow more quickly. I think people deserve to see better livelihoods. This is a very rich country, should be a very rich country and it has very talented people and I am always encouraged when I go around the country and I see how young people, how passionate they are about education, about teaching themselves on the internet. I think the new generation is going to be a very good thing, very exciting. So I hope the economy will improve, obviously I hope the peace process will get onto a more positive track and I hope the situation in Rakhine, we can see people coming back and we can see progress on some of the longer term issues because the root of the problem is the status of the Muslim population and whether or not they have the right to citizenship. That is the key question.

Banking Sectors in Burma

Banking Sector in Burma

Myanmar's banking industry has benefited significantly from reforms initiated by President Thein Sein's reforms and the partial lifting of US sanctions, which have enabled them to expand both their footprint and range of services on offer.

But the sector also faces significant challenges – not least a lack of public trust – and there are both threats and opportunities on the horizon. Many institutions are betting on the arrival of mobile money – financial technology instruments that will enable anyone with a smartphone to open an account – to reach Myanmar's great "unbanked": the 90 percent of the population without a bank account.

In this special feature, Frontier Myanmar provides an in-depth look at the current state and future of the banking industry, including what further reforms are planned, the role of newly licensed foreign banks and why cash is still king.

Why America won’t take your Myanmar Kyat?

A bank teller in Yangon counts US currency. 

Although most financial sanctions have ended, the high cost of violations and low potential profits means few US banks will do business with Myanmar.

ANYONE who has tried to get US dollars out of the country will know what a headache it can be. Options range from complicated third-party money trails through Thailand or Singapore to tucking US$100 bills into the backpacks of friends heading back home.

In the eyes of the United States Treasury and Congress, Americans should have no problems conducting these transactions, however. In 2012, the US Treasury lifted general sanctions on the financial sector and in subsequent years removed individual banks, Asia Green Development Bank, Ayeyarwady Bank, Myanma Economic Bank and Myanma Investment and Commercial Bank, from its blacklist.

But American banks are often not willing to do businesses, making it difficult for American companies to remit money home and for Myanmar companies to buy goods and services from the US.

“The challenges of getting money in and out of the country are a nightmare,” said Mr Hal Bosher, CEO of Yoma bank.

Bosher, who worked at the World Bank Group for 10 years, said the lifting of sanctions thus far amounts to a “half step” where US dollar transactions are concerned.

The remaining obstacle is the Specially Designated Nationals (SDN) blacklist of individuals and companies. Aside from those listed, any company in which a sanctioned entity has a majority stake is also automatically off limits.

As many American banks see it, this creates a due diligence minefield. Profits are too low, and potential reputational and financial damage too high, to justify the risk of inadvertently transferring money connected to the wrong person.

“American banks say, ‘I’ve still got to sit here and root through 150 names.’ It’s very cumbersome,” Bosher said.

The problem is not specific to Myanmar.

“There have been recent cases involving international banks which were heavily fined in [New York] for not having exercised sufficient due diligence,” said Dr Yvonne Wong, author of Money Matters in Myanmar, an in-depth analysis of Myanmar’s financial sector.

In February of this year the US Treasury fined Barclays Bank US$2.48 million for 159 violations of sanctions against Zimbabwe. Go back a little further and you’ll find fines for sanctions violations – including Myanmar sanctions – that are in the hundreds of millions of dollars.

“US domestic legislation makes dealing with Myanmar banks – which still remain a money laundering concern – difficult,” Wong said. “Domestic legislation calls for enhanced due diligence, making compliance much more costly for US banks.”

In Southeast Asia, countries like Cambodia, Vietnam and Indonesia are also handled with extreme care. Indeed, viewed from the US, Myanmar is just one of many countries with entities that need to be avoided. The issue of whether Myanmar banks are trustworthy is irrelevant if the country can’t cut through the noise to begin with.

Change must begin on the Myanmar side, Bosher argued. He and US ambassador Scot Marciel have entertained the idea of a “road show” for Myanmar banks, facilitated by the embassy, that would see American companies tour their compliance departments in order to show them a Myanmar beyond smuggled opium and jade.

But the market will also need to demand change, with more, large US corporations and investors setting up shop in Myanmar and pressing their banks back home to play ball.

Sanctions and Myanmar government efforts to control currency flows across borders have contributed to a large transfers “grey market”. Rather than banks, informal networks, such as hundi, are used to remit funds back and forth.

“It’s not like money isn’t going offshore. It’s just run through a money network that is completely off the grid,” Bosher said. “That market is not necessarily black money. It could be a legitimate business, but the pain of going through a formal bank is so high that they say, ‘Forget it, let’s just go back to this other mechanism.’”

By JARED DOWNING | FRONTIER

Corruption case opened after Yangon court frees actor's alleged killers

Actor Aung Ye Htwe (Facebook)

YANGON — The national anti-corruption body has opened an investigation into a Yangon court’s decision to drop charges against three men accused of killing Facebook celebrity turned movie star Aung Ye Htwe in a fatal altercation last New Year’s Eve.

On July 26, Yangon’s Eastern District Court accepted an application from the victim’s family to drop the charges and the three suspects were freed.

But following public outcry and subsequent intervention by President U Win Myint, a government spokesperson said on July 30 that the Union Attorney General’s Office would submit an application to continue the pre-trial hearing and examine eight remaining witnesses.

Today, the Anti-Corruption Commission announced on its Facebook page that it would investigate the case. “Speculation that there might be corruption concerning this case is spreading on social media,” it said in a statement.

“Since there are reasons to be suspicious of corruption in this case, the commission unanimously decided to take it as reported information, at a meeting held on August 2, under Section 17(h) [of the Anti-Corruption Law]. The commission believes there may be reliable evidence in this case.”

Under Section 17(h) money or property may be confiscated from a person who has been “illicitly enriched by such monies or properties due to bribery.” A spokesperson from the Anti-Corruption Commission told Frontier today they could provide no further comment as the investigation is ongoing.

The suspects turned themselves in following an incident on New Year’s Eve in which Aung Ye Htwe later died from severe head injuries.

They were charged with murder under Section 302 of the Penal Code but the case was dropped after the court received a petition from the victim’s elder brother, plaintiff Ko Thant Zin Oo and his family, under Section 494(a) of the Code of Criminal Procedure.

No reason was given for the request, but local media reports speculated that defendant Ko Than Htut Aung and his co-defendants may have paid the family to drop the charges.

A Facebook campaign accused the court and the suspects of corruption while lawyers and activists said the acquittal risked undermining what public confidence remained in the judicial system.

Win Myint, who is trained as a barrister, took a personal interest in the case, government spokesperson U Zaw Htay told media earlier this week.

At a meeting with government officials in Yangon on July 29 the president stressed the importance of the rule of law in a democratic system and the need for the judicial sector to be free from bias and corruption, the Irrawaddyreported.

Zaw Htay told media the remaining eight witnesses in the case would testify once the court formally reopens the case. He said there were reports that the suspects had left the country and that if that were the case, Myanmar would cooperate with international police to ensure they returned.

MIC approves Border Guard Force-backed luxury villas project

Myanmar Investment Commission, MIC

YANGON — The Myanmar Investment Commission has approved the first phase of a multi-billion dollar “city expansion” project in Kayin State’s Myawaddy Township backed by a local Border Guard Force and Chinese conglomerate.

Myanmar Yatai International Holding Group, formed by the Kayin Border Guard Force and Chinese listed firm Jilin Yatai Group, will invest US$22.5 million in the project, a Directorate of Investment and Company Administration official told Frontier.

Daw Mya Sandar, director of Investment Division 3 at DICA, said the first phase of the city expansion would see the company build high-end villas on 25.5 acres of land beside the Thaung Yin river in the Kaukoo Myaing region of Myawaddy. The project was approved on July 26.

MIC data shows the BGF will hold a 20 percent stake in Myanmar Yatai, while Jilin Yatai will own the remainder.

BGF official and Myanmar Yatai director Saw Min Min confirmed earlier reports that the entire project would see 2,000 acres of land along the border developed. The project will include a a hotel, school, monastery, shopping centre, park, villas and golf course, and will connect with the Asia Highway, he said.

“We want to implement the whole city expansion project but the state government doesn’t allow us so we’ve decided to begin with phase one,” Min Min said.

Myanmar Yatai Group expects to complete the first phase within three years and is also hopeful of receiving prompt approval for phase two. The engineers on the first phase of the project would be Chinese, he added.

Mya Sandar said MIC had no information on future phases of the “city expansion” project.

“They just submitted a proposal for high-end villas project. We don’t know about the rest,” she said.

“We don’t know that their partner is Chinese. According to our documents a Cambodian businessman owns 67.68 percent and two Malaysian businessmen own 12.32 percent,” she said.

However, Min Min from the BGF confirmed that the three foreign directors involved in Myanmar Yatai are representatives of Jilin Yatai Group, which is involved in the building materials, real estate, pharmaceutical, finance, coal, and trading industries.

He said the directors are Chinese but hold citizenship of other countries.

Dismay as veteran Central Bank chief nominated for second term

Many had hoped President U Win Myint would promote a reformer to the role. (AFP)

NAY PYI TAW — Parliamentarians say they hoped for change at the top of the Central Bank after President U Win Myint nominated governor U Kyaw Kyaw Maung for a second five-year term.

The veteran banker has served 15 years as Central Bank chief, including from 1997 to 2007, a period marked by a major financial crisis that critics say he did little to avert.

More recently, when President U Thein Sein called him out of retirement in 2013 to lead the newly independent institution, Kyaw Kyaw Maung was seen as a conservative who was unable — or unwilling — to modernise in line with wider economic reforms.

His term ends on July 31 and many had hoped Win Myint would take the opportunity to promote a reformer to the powerful role. Hluttaw representatives say they are disappointed by what they see as a missed chance to accelerate economic reforms.

U Aung Kyaw Kyaw Oo (Hlaing, Yangon Region) said he did not agree with the decision. “We want a new [governor] who can really make reforms and who will make the Central Bank more independent and improve banking facilities,” he said.

He said Kyaw Kyaw Maung appeared to have done little to control inflation or the exchange rate. Local businesses had also hoped a new governor might relax rules around foreign banking operations, he said, so they could access long-term loans at low interest rates.

The industry would have preferred a younger choice such as U Set Aung or U Bo Bo Nge he said, and he questioned the government’s decision to prioritise stability over reform.

Daw Khin San Hlaing (Pale, Sagaing Region) also believes it is time for change. “I want someone else,” she said. “There are many competent people … we expected a young person who could do the job effectively and energetically for the rest of our government’s term.”

She said Kyaw Kyaw Maung was trusted because of his experience, but warned that he was unlikely to implement much-needed reforms.

Hluttaw representatives were told to register by today if they wanted to discuss the nomination, with debate likely to take place this week.

The confirmation process for the Central Bank governor position is vague, with the Central Bank Law of 2013 stating only that the person should be “appointed by the president with the consent of the Pyidaungsu Hluttaw”.

This differs from appointments for most other union-level positions, such as the chair of the Union Election Commission or Constitutional Tribunal, where the constitution states that lawmakers can only object to the president’s nomination if it “can clearly be proved” that the nominee does not meet the criteria.

However, parliament observers said they thought it unlikely NLD lawmakers would object to Kyaw Kyaw Maung’s nomination given it had come from the party’s leadership.

If the nomination is upheld, major economic reforms over the next five years appear unlikely. Aung Hlaing Win (Mingalardon, Yangon Region) said he does not expect anything to change.

“With the same old [governor], no doubt, all will be the same as before,” he said. “The government deficit will be replenished by the Central Bank. Commodity prices will continue to rise and the government will let the Central Bank print new currency.”

It is not just parliamentarians who are upset by the choice. Small and medium businesses, hamstrung by strict lending rules, that have benefitted the elite and curtailed economic growth, had been hoping for reforms since the current administration took power.

The business community was “shocked” by the decision, said U Maung Maung Lay, vice chair of the Union of Myanmar Federation of Chambers of Commerce and Industry.

“All yearn for change. New ideas, new leaders, new approaches, renewed hopes,” he said. “The present government, as many have claimed, needs a sort of miracle.”

At the very least, he said, political leaders should attempt to alleviate fears of businesses and the general public over the slow pace of reform. “Otherwise they will be doomed,” he said. “No landslide in 2020.”

President nominates Central Bank governor for another term

The Central Bank of Myanmar office in Yangon. (Burma Business Insider)

YANGON — President U Win Myint has nominated Central Bank Governor U Kyaw Kyaw Maung for another five-year term, in a move that is likely to disappoint those hoping for a change in leadership at the bank.

The president informed parliament of the nomination this morning and lawmakers are expected to approve it in the coming days. Kyaw Kyaw Maung’s five-year term was due to expire on July 31. Under the 2013 Central Bank Law, the governor can serve two consecutive terms. 

Frontier understands that the decision to re-appoint Kyaw Kyaw Maung, 79, was made following the resignation in late May of Minister for Planning and Finance U Kyaw Win. The minister was replaced by U Soe Win, who had been considered a frontrunner for the Central Bank governor position. Some in the government felt that replacing both the finance minister and Central Bank governor in quick succession could create instability.

Kyaw Kyaw Maung’s nomination ends months of speculation over who the government would tap to lead the bank, but is likely to spur further discussion over the direction and pace of economic reform under the NLD.

Prior to being nominated by U Thein Sein in 2013, Kyaw Kyaw Maung had already served 10 years in the role from 1997 to 2007, a period marked by a major financial crisis that critics say he did little to avert.

After returning to the post he was soon being attacked for continuing with policies reminiscent of the junta-era. When the currency began weakening in 2015, he refused to let the official exchange rate depreciate and his actions created a parallel market for the kyat. The President’s Office was forced to intervene to restore stability.

Under the National League for Democracy, however, Kyaw Kyaw Maung appears to have become more reform-minded. Last July, the Central Bank released a set of modern prudential regulations which, while signed by Kyaw Kyaw Maung, were closer to International Monetary Fund blueprints than junta-era edicts.

For more on those who had been discussed as potential candidates for the governor position, read our primer from late May.

Credit by: FRONTIER