Burma’s Trade Council

Thursday, 03 June 2010 21:40 Mizzima News

Chiang Mai (Mizzima) – Burma’s Trade Council was established in 1997, charged with supervising and scrutinising the country’s trade policies in the wake of widespread accusations of graft and mismanagement, especially linked to Commerce Minister Lieutenant General Tun Kyi, who was sacked on allegations of corruption and bungled trade policies, especially in the rice sector. Though its status is not officially disclosed, the body ranks above the Commerce Ministry, which must abide by Trade Council edicts.

Function

To make decisions on the allowance for export and import items and the permitted volume of each item to be exported or imported.

Chairman

Vice-Senior General Maung Aye.

Composition

It currently comprises, in addition to the chairman, Commerce Minister Lieutenant General Tin Aung Myint Oo and ministers from trade-related ministries such as transport, and the portfolio responsible for border area development, ethnic affairs and other development affairs. However, the names of those who sit on the council remains unclear.

Meetings

A regular meeting is usually held once every three to four months. Previously, meetings were held at the War Office in Rangoon, but they have since been moved to the new administrative capital of Naypyidaw.

How the export/import sector is controlled

Regarding exports, the Commerce Ministry and other organisations such as the Federation of Chamber of Commerce and Industry, the Rice and Paddy Traders Association and the Fisheries Federation are required to regularly report to the council on the current situation of domestic production. The council then considers these presentations based on trade policies of domestic consumption, reserve stocks and other factors before deciding the respective quotas for export and import products.

Regarding imports, the council controls all imported items. According to practice and procedure, the ministry issues import licences on items and sets the volume of each import item according to Trade Council guidelines. On occasion the council directly issues import licences, especially in dealing with the automobile industry.

Background

For fiscal year 1996/97, then Commerce Minister Tun Kyi announced the export goal of one million tons of rice. At that time, the Commerce Ministry directly purchased rice for export. After almost meeting its target, the price of rice rose on inadequate supply for domestic consumption.

Former ministry officials disclosed that Commerce Minister Tun Kyi’s daughter sold rice export licences for exporters and effectively took a cut at the rate of US$5 per ton. The average rice price at the time was US$1,000 per ton.

So in effect, the daughter of the Commerce Minister was profiting from a rice shortage her father was helping to create inside Burma by selling rice export licences on the condition she would receive US$5 for every ton exported from Burma by exporters trying to fulfil her father’s export quota.

The ministry further signed agreements with foreign companies to import chemical fertiliser for domestic consumption in the agricultural sector. The exchange rate of US dollars in the domestic market started to deviate wildly as imported chemical fertilisers were sold to the Agriculture and Irrigation Ministry. The then-Minister of Agriculture and Irrigation paid these companies at the black-market exchange rate.

These companies bought up hundreds of millions in US hard currency on the domestic black market with import money paid out by the government, pushing the black market US dollar rate to about 430 Kyats in June 1997 from 200 Kyats in early April that year.

The rising price on the domestic rice market and doubling of the US dollar exchange rate within two months led to instability in the country’s economy.

The Defence Services Commander-in-Chief Than Shwe exploited the situation to eliminate senior officers within the military establishment such as Tun Kyi, Lieutenant General Kyaw Ba, Major General Myint Aung, Major General Aye Thaung, Major General Aung Ye Kyaw and Major General Myo Nyunt.

Along with changing the title of the ruling military council from Slorc (the State Law and Order Restoration Council) to SPDC (State Peace and Development Council), the military regime eliminated 14 senior officers who had been in the military council since the 1988 coup, charging them with bribery and corruption, misconduct and embezzlement. Some of those dismissed would also serve prison terms.

The Trade Council was then established shortly after at the end of 1997.