CNI News
11 July 2023
There are questions about why the State Administration Council(SAC) that is regulating the need of USD by restricting exports and controlling foreign currencies needs USD.
The SAC is in need of USD to buy weapons and ammunitions from abroad to use in the internal armed conflicts, said some politicians.
May be the SAC needs USD because it has to import fuel, medicine, fertilizer, cooking oil and other commodities which cannot be sufficiently produced in local, said U Thiha Paing, founder of Via Logistics and Supply Chain to CNI News.
" SAC doesn't have to buy weapons so much Many weapons are being produced in local. Some weapons can be even exported, I heard. Buying from abroad in relation to weapon is that technologies and new weapons. I don't think it's main. Mainly there are things we must import, such as fuel that has to be bought with USD and the ministry of health has to designate how much medicine will be imported yearly. We can't say the army alone is spending USD. There are things we must import. Fuel is used for the people as well. We must import medicine. Some countries sell controlled drugs according to the recommendation by the government. Fertilizer and cooking oil must be imported" he said.
US Dollar and Myanmar currency
Controlling USD from import and export activities due to the domestic dollar demand may cause export business to delay, so it should be reviewed, said businesspeople. Although Myanmar Kyat is directly exchanged to Yuan or Baht in payment at the border trade in order to reduce the Dollar demand, there is still Dollar demand.
The SAC has to pay the debt borrowed from international by Dollar and only if you knew exactly, you could say why the SAC needed USD, said U Ye Tun to CNI News.
" We don't know exactly what the paticulars are to find out why the government needs USD. So, we have to estimate. May be they need to pay the deby by Dollar. If it buys the weapons from Israel or Middle East, it will have to pay by Dollar. If it buys the weapons from Russia, it can pay by Ruble." he said.
US Dollars are being earned from oil and gas sales and foreign investments. But at present because foreign investments have left and there is little chance that foreign investment will enter, the SAC is looking for USD in many ways, he added.
natural gas is being produced
" The government is earning USD from selling natural resources such as oil and gas. And it earns USD from China for oil and gas pipelines passing the country. Under a democratically elected government, when foreign investments enter the country, because they would take US Dollars with them, they would exchange Dollars with Myanmar Kyats and would hire land lots and they would build buildings and but they would pay Myanmar citizen staff by Kyats. If the investments like that entered the country, the government would earn Dollars and its people could be employed. But as there is little chance that foreign investments will enter the country again after they has left, the government seems to be looking for USD by all means" he said.
The country had to spend USD 2,496.652 million to import 4.12 million tons of fuel in 2021 and the situation in 2022-2023 has not been reported as yet. And over 900,000 tons of cooking oil are being imported yearly.
