IMF: Burma desperately needs currency reform
A Myanmar laborer undertakes renovation work at a building in downtown Yangon on January 21, 2012.
Just a few days ago, we ran through the reasons why investing in Burma, high on long-needed reforms, could be a mistake.
But a new International Monetary Fund report suggests that, if Burma can successfully seize this "historic opportunity," it must start with currency reform.
As I wrote in our series "Burma Rebooted" several months ago, "Burma’s currency, the kyat, is the mess crying loudest for a fix.
There are no ATMs in Rangoon. Visitors are advised to bring US$100 bills for a black-market exchange.
Rangoon’s fastidious dollar swappers conduct business in back alleys and beneath staircases. They examine visitors' $100 bills as a jeweler would diamonds. An infinitesimal smudge, the mere suggestion of a crease, and the bill is declared unworthy — or at least worth substantially less."
Now imagine trying to transfer several million into Burma for a large-scale project.
However, if Burma (officially titled Myanmar) can sort out its chaotic currency situation, perhaps it can meet the IMF's new predications: a full 6 percent GDP growth in 2013.
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