Staff writer How greedy Myanmar's cash-strapped military regime is! It is trying to wheedle Japan, the world's largest aid donor, for a huge amount of money that it probably would not be able to digest. The Myanmar military regime, struggling to survive deep economic trouble amid continued isolation by many parts of the international community, has informally asked Japan to provide $1.45 billion in aid under the so-called Miyazawa Plan, government and private-sector sources familiar with the matter said Friday. In making the informal request a few months ago, the junta, which now refers to itself as the State Peace and Development Council, has said it wants to use the money to abolish its currency's current double-rate system. The $1.45 billion the SPDC has requested is probably more than it requires for that purpose, the sources said. The SPDC, however, may be disappointed as it has yet to receive a response from Japan. The Japanese government is reluctant to meet the Myanmar aid request for political reasons and because Myanmar is not included in a list of countries that are eligible for Japanese aid under the Miyazawa Plan. "The Miyazawa Plan is supposed to apply only to countries that have implemented -- or at least have a will to implement -- economic structural reforms in cooperation with such international lending agencies as the International Monetary Fund and the World Bank," one government source said. "They (the SPDC) may be envious of Myanmar's neighbors that are receiving aid under the Miyazawa Plan," the source said. The $30 billion Miyazawa Plan was announced by Finance Minister Kiichi Miyazawa in autumn 1998 as a package of assistance measures for countries hit hard by the Asian economic crisis that erupted about a year earlier. The initiative originally targeted Thailand, Indonesia, Malaysia, the Philippines, Singapore and South Korea. But Vietnam was added later to the list after Prime Minister Keizo Obuchi visited Hanoi at the end of 1998. The military took power in a 1988 coup in Myanmar. They nullified the results of a 1990 election, in which Nobel Peace Prize laureate Aung San Suu Kyi's National League for Democracy won a landslide victory. Myanmar faces continued economic and other sanctions by the United States and other industrialized countries in Europe because of its human rights violations and lack of democratic principles. Japan has also frozen fresh official aid for Myanmar, except for what it regards as humanitarian purposes, since the 1988 coup. Myanmar was dealt yet another serious economic blow by the Asian economic crisis that erupted in Thailand in July 1997 and swept through much of Asia. Foreign direct investment in Myanmar, especially from its neighbors, dropped sharply and Myanmar's foreign currency reserves have dried up. A possible abolition of the double-rate system would further deteriorate the country's already dire fiscal conditions, primarily because civil servant salaries would have to be raised drastically under the new system, according to the sources.
Although the official exchange rate of the Myanmar currency -- the kyat -- is six to the dollar, the weak currency is actually being traded on the Southeast Asian country's black market at a rate of 340 kyats to 350 kyats to the greenback. Myanmar, or Burma as the country was called before the coup, has not yet decided to abolish the double-rate system, but the idea is under consideration within the SPDC, the sources said. But the question is: Would the SPDC actually need $1.45 billion just to abolish the double-rate system? "I think they (the SPDC) would not need so much money just to cope with the possible change in the currency system," one private-sector source said. "It is also quite strange that the size of Japanese aid requested by Myanmar is roughly equal to the amount of arrears on Myanmar's official debts to Japan.