N.B Chyoi / September 13, 2021
Burma’s economy has been sinking since series of COVID-19 lockdowns, starting from August 2020 and followed by the military coup in February 2021. The Chinese business establishments in Burma came under attack after coup and have been incurring losses due to closure of factories and informal jade markets.
To compensate the losses, Chinese have switched over to money lending business through their Burmese confidants or trusted partners. The cap or limit over the cash withdrawals per day imposed by Central Bank of Burma for an individual and companies has given impetus to this illegal transactions.
The dollar has appreciated approximately 22% (1US$ equals almost 1800 Kyats) against local currency Kyat since the military coup, and the fuel prices have been doubled. On the other hand, Hundi (informal transferring money) network operated by Chinese having transaction facilities in Mandalay, Yangon, Myawaddy near the Thai border,Muse near the China border, and Tamu near Indian border have gained edge over formal transactions in the recent months.
As Chinese controls jade, drugs & contraband business in Burma, they hold liquidity which is being utilized to earn profit. As Chinese are controlling unregulated money exchange, shortage of dollar, yuan and baht has been created and as a result Burmese traders are having tough time since importers accepts payments only in dollar or Yuan or baht. Since Burma’s trade with China, India and Thailand is not regulated and is debt based, the financiers mostly Chinese are exploiting the situation & minting money despite the fact that managing two times meal a day has become a luxury for a common Burmese.
The chain of illegal transactions are complex and difficult to trace the actual financier due to obvious reasons. Commission varies from 3 to 5 % depending upon the currency and amount. The Wechat (Chinese) & BOTM apps are being used for such transactions. Some prominent businessmen majority based in Yangon, Myawaddy, Mandalay, Tamu & Rikhawdar are in Hundi business having network in India, Thailand, China, Malaysia, Bangladesh and UAE. Local Hundi agents in Tamu-Moreh, Muse-Ruili, and Myawaddy-Mae Sot are connected further with other satellite towns.
N.B Chyoi is a Kachin lawyer and geopolitical analyst focusing especially on Burma, India and China.
The opinion expressed here is the author’s own, and does not represent the editorial policy of The Kachin Post.