Foreign businesses in Myanmar criticize junta’s curbs on foreign currency

Bangkok, Apr 8 (EFE).- Associations of foreign businesses operating in Myanmar on Friday protested against the military junta’s order issued earlier this month that necessitates all foreign currencies to be converted into the kyat.

“International business and investment depend on the use of globally accepted currencies, particularly the United States dollar, to conduct business,” around a dozen foreign chambers of commerce said in a joint statement, including those formed by businesses from Italy, France, Japan, Germany and the United States.

The statement added that in 2016 – when a democratically elected government headed by Nobel Peace Laureate Aung San Suu Kyi was in power – Myanmar had approved an investment law “that clearly defines the use of foreign currencies” to enable activities “that are essential for businesses in a globally connected financial system.”

However, the military junta, which ousted Suu Kyi on Feb. 1, 2021 to seize power, on Sunday passed a new foreign currency control norm that effectively prevents the use of foreign currency in the country.

As per the new regulation, foreign currency accounts and revenue in foreign currency have to be converted into Myanmar kyat within a working day.

The business chambers insisted that the norm “needlessly lowers the living standards of the Myanmar people, halts foreign business activity, stops the flow of foreign direct investment (FDI), and creates trade tensions with other countries,” warning that this would “disconnect Myanmar from the global economy and global financial system.”

“Implementation of these measures and the associated lack of clear exemptions for foreign investments creates significant, and for some, insurmountable challenges to all businesses operating in Myanmar,” the statement said.

The Myanmar economy, which witnessed a period of growth and relative prosperity between 2011 and the coup as the country opened up to the world during its nascent democratic phase, has suffered a massive slump since the military seized power.

In order to try and boost trade in border areas, the junta has legally allowed the use of China’s renminbi, the Thai baht and Indian rupee, currencies which were commonly used in these areas previously but were illegal.

Myanmar has plunged into a deep social, political, economic and humanitarian crisis since the coup, with the regime violently cracking down against dissent, and the armed conflict in the country intensifying as a result.

At least 1,733 people have been killed in the repression unleashed by the authorities against protesters, according to the nonprofit Assistance Association for Political Prisoners, while the United Nations in March accused the junta of widespread killings, detentions and torture against the civilian population.

The deputy governor of Myanmar’s central bank, Than Than Swe – recently put in charge of supervising the conversion of foreign currency deposits into kyat by the junta – has been wounded after being shot at her residence in Yangon on Thursday, without it being clear who carried out the attack. EFE

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