Business (November 2009)

New 5,000 Kyat Note Sparks Inflation Fears

Burmese banknotes, including the new 5,000 kyat denomination

The Burmese regime issued a new 5,000 kyat (US $5) currency note in October, raising fears of an increase in consumer prices as more paper money goes into circulation. Uncertainty surrounding the issuance of the new note also led to a spike in the price of gold and a drop in the value of the kyat on currency markets. Economists and business people believe the military government introduced the new note to ease budget deficit pressures created by excessive spending. The new note—mauve in color and with an elephant as motif—joins the 1,000, 500, 200 and 50 kyat notes now in circulation, which will remain legal tender. Traditionally, the Burmese junta has never announced how much money is in circulation. Burma’s inflation rate hit 26 percent in 2008.

Burma Licenses Private Hospitals, Clinics
A 47-year ban on private hospitals in Burma has been lifted by the military government, which is finally enacting a 2007 law regulating private health care. Privately run hospitals and clinics will be allowed to operate on payment of an annual fee and license charge. A general clinic with one physician must pay a 15,000 kyat (US $15) annual fee and 30,000 kyat ($30) for a license. Clinics with specialized physicians or surgeons must pay fees that range from 80,000 to 150,000 kyat ($80-$150). To operate, private hospital must pay fees from 750,000 kyat ($750) to 3 million kyat ($3,000), depending on the number of beds. The original ban on private hospitals was enacted when Burma adopted one-party Socialist rule after the army assumed state power in 1962.

Australian Fashion Group Announces Burma Trade Ban
Australia’s Speciality Fashion Group has stopped dealing with companies that trade with Burma. The group’s company secretary wrote to Burma Campaign Australia in October saying the decision was “due to continuing repression of the Burmese people and the ongoing presence of military rule.” Speciality Fashion Group said it has a very strict human and social rights compliance policy, focusing especially on workers’ rights and the prohibition of employing underage workers or forced labor in its factories, the company said. Speciality Fashion Group has six fashion labels—Millers, Crossroads, Katies, Autograph, City Chic and Queenspark.

Global Slowdown Leaves Cambodian Garment Industry in Tatters
The global recession forced the closure of 77 garment factories in Cambodia in the first nine months of 2009, throwing more than 30,000 people out of work. A further 53 factories suspended operations between January and September, but about half of them have since reopened, according to the Cambodian Ministry of Labor. Cambodia’s garment industry, which employs about 360,000 workers, is the country’s main foreign exchange earner. Garment exports from Cambodia in 2008 were worth about US $2.8 billion, with 70 percent of shipments going to US retailers. EU countries are the second-biggest market.

Typhoons Force Philippines to Import More Rice
Two devastating typhoons in the Philippines have forced the government in Manila to increase its already high imports of rice. The Philippines is the world’s largest rice importer, buying a record 2.54 million tons (2.3 million metric tons) on world markets last year to plug a 10 percent domestic production gap. A further 275,000 tons (250,000 metric tons) will be needed to make up for anticipated shortfalls caused by the typhoons’ destruction of paddy fields. Countries vying to supply the rice include Thailand, Vietnam, China, Pakistan, Australia, the US and India.