Sunday, January 11, 2009

Junta struggling to keep state budget afloat

by Moe Thu

Rangoon (Mizzima) – Experiencing increased pains related to the global financial crisis, Burma's military government is struggling to maintain a solvent state budget, seemingly exploiting every option available to them, such as the introduction of a pre-paid phone system and further state-run auctions.

"Given the measures of the military government, they are apparently absorbing cash from the general public, which is adding to the woes of poor cash flow among public trading activities," said a retired professor from the Rangoon Institute of Economics.

Only last month, a pre-paid cellular phone system was introduced, attracting many customers.

"Theses days, public voices over stagnant business, from street vendors to large-scale exporters, are getting louder," added the professor, who declined to be identified.

He said many items normally intended for export – like seafood and agricultural produce – have instead flocked into the already suffering local market.

He also said revenue from natural gas, primarily exported to Thailand, is declining – as prices of crude oil have fallen under US $50 a barrel in the world market.

"Decreased energy prices are symbolic of reduced economic activities," he said.

Additionally, the military government is facing a limited supply of raw gems, reduced extraction possibilities the result of aggressive extraction over the past few years in previous attempts to service the country's cash-strapped budget.

The supply of Burmese rubies dropped to 1.5 million carats in fiscal year 2007-2008 from 2.3 million carats in 2004-2005, according to government statistics; while sapphire decreased to 308,642 carats in 2007-2008 from 1.088 million carats in 2003-2004.

"These [the gems] are not just decreasing in quantity, but in quality also," the professor said, adding that the real situation signals the sector's decreasing reliability as a means of revenue.

Yet, to counter pains from the ongoing financial crisis, Burma's military government has limited options. However, one such proposed course is the plan to maintain the construction sector by contracting for new projects in the country's nascent capital of Naypyitaw.

For example, the government has recently revealed that the development of a prototype of a countrywide geographical profile map is beginning around Naypyitaw, utilizing a model scaled at 1: 60 kilometers.

"The government hopes that the multi-million dollar project will provide job opportunities for general workers who are in dire straits, increasingly suffering from economic hardship," the professor said.

However, he iterated that most infrastructure projects are politicized on purpose, not really for the sake of the general populace, but more in a move to make an impression on the public.

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