Former NLD Govt Deputy Minister U Set Aung Warns of Soaring Prices and Deteriorating Economic Environment Due to Myanmar Military's Import Restriction Policy

Yangon, July 4 U Set Aung, the former Deputy Minister of Planning, Finance, and Industry under the National League for Democracy (NLD) government, warned via social media that continuous price increases and a detrimental economic environment that benefits no one are occurring due to the military junta's import restriction and control policies. Although some business entrepreneurs are currently suggesting that the central bank does not need to sell the required US dollars and that they should find dollars themselves from the open market to allow imports, this method is merely a temporary solution that cannot solve the original problem, U Set Aung analyzed. "This is also not a correct policy. It is just a short-term remedy to quickly find a way out of the problem of restricting imports because they do not want to sell the necessary dollars," U Set Aung said. He explained that the current policy is like blocking a naturally flowing river and only allowing water to flow through side openings, and that the original blockage must be removed. Furthermore, he pointed out that although the shortage of dollars is being used as an excuse, a significant amount of foreign currency enters the system annually due to policies that mandate the sale of a percentage of export earnings at a fixed price and policies that compel a portion of the income of Myanmar workers abroad to be remitted back to the country. However, he stated that these policies cause difficulties for domestic businesses, harm Myanmar workers abroad, lead to dollar shortages domestically, cause exchange rate instability, and result in price increases not only for imports but also for domestically produced goods, creating a situation where only a specific organization benefits. "Even if one says that 'we cannot change these policies because they increase dollar income for a specific stakeholder,' even though they are policies that benefit no one and worsen the economic environment, one can still try to understand the reason. However, the excuse of 'reducing the trade deficit' is inconsistent with the actual economy and is laughable," U Set Aung criticized. According to U Set Aung, if the trade deficit is to be reduced, efforts should be made to increase exports rather than restricting imports, and for this, it is necessary to carry out mutual coordination and long-term reforms of investment policy, industrial policy, financial policy, and trade policy. He analyzed that current domestic business entrepreneurs are likely proposing intermediate solutions not because they are unaware of the weaknesses of these policies, but because they understand the difficulty of changing them. "In reality, the Myanmar economic environment cannot be improved in the long run with such short-term remedies. It can only temporarily cover up the problem, and in the long run, it can further worsen the economic environment," U Set Aung warned. U Set Aung was arrested on February 6, 2021, after the military coup, sentenced to three years in prison under Section 3(1)(c) of the Myanmar State Secrets Act, and was released from Thayet Prison on June 2, 2023. Photo: Xinhua.