Panic buying hits Myanmar

YANGON – Panic buying hit shops in military-ruled Myanmar yesterday after the junta introduced massive tax and duty hikes on imported goods such as TVs and construction materials without giving any warning, traders said.

The “commercial tax” on imports was raised to a flat 25 percent from a variable range of 2,5 percent to 20 percent, the ministry of finance and revenue said in a statement. Some items such as medicines, computers, fertiliser, pesticides, diesel and petrol, were exempted, the ministry said.It gave no reason for the hikes, which came into effect on June 15.In a further blow to importers, a finance ministry official said duty would now be calculated using a value of 450 kyat/dollar on all goods, rather than a previous staggered rate of 100 kyat/dollar for consumer goods, 150 for televisions and 180 for roofing sheets.”This new rate came into effect on June 15, but we were ordered not to make it public.I don’t know why,” the official, who requested anonymity, told Reuters.”Maybe they wanted to avoid causing panic among dealers.”On the currency black market – the only one anybody bothers with – the kyat slid to 970 to the dollar from 930 on Monday — a four percent decline.In the absence of any explanation, speculation focused on the fallout from Western sanctions designed to force the junta to embrace meaningful democratic reforms and release opposition leader Aung San Suu Kyi from year-long detention.The US House of Representatives voted overwhelmingly on Monday to renew an import ban against Yangon for another year.”The impact will be felt across the board.Only the elite were affected by Western sanctions, but now the impact is across the board,” one retired politician said.Ninety percent of the impoverished and diplomatically isolated southeast Asian nation’s needs are met by imports, apart from basics such as rice, salt, fish and vegetables.Four decades of military rule and economic mismanagement has left Myanmar, once known as the rice bowl of Asia, far behind regional neighbours like Thailand, despite its natural wealth in timber, oil and gas, and minerals.Tough US sanctions introduced last year forced textile factory closures and drove thousands of women workers out of work, forcing some into the sex trade.- Nampa-ReutersSome items such as medicines, computers, fertiliser, pesticides, diesel and petrol, were exempted, the ministry said.It gave no reason for the hikes, which came into effect on June 15.In a further blow to importers, a finance ministry official said duty would now be calculated using a value of 450 kyat/dollar on all goods, rather than a previous staggered rate of 100 kyat/dollar for consumer goods, 150 for televisions and 180 for roofing sheets.”This new rate came into effect on June 15, but we were ordered not to make it public.I don’t know why,” the official, who requested anonymity, told Reuters.”Maybe they wanted to avoid causing panic among dealers.”On the currency black market – the only one anybody bothers with – the kyat slid to 970 to the dollar from 930 on Monday — a four percent decline.In the absence of any explanation, speculation focused on the fallout from Western sanctions designed to force the junta to embrace meaningful democratic reforms and release opposition leader Aung San Suu Kyi from year-long detention.The US House of Representatives voted overwhelmingly on Monday to renew an import ban against Yangon for another year.”The impact will be felt across the board.Only the elite were affected by Western sanctions, but now the impact is across the board,” one retired politician said.Ninety percent of the impoverished and diplomatically isolated southeast Asian nation’s needs are met by imports, apart from basics such as rice, salt, fish and vegetables.Four decades of military rule and economic mismanagement has left Myanmar, once known as the rice bowl of Asia, far behind regional neighbours like Thailand, despite its natural wealth in timber, oil and gas, and minerals.Tough US sanctions introduced last year forced textile factory closures and drove thousands of women workers out of work, forcing some into the sex trade.- Nampa-Reuters