More Than $7 Billion in Myanmar Funds Held in Overseas Accounts

Email story
Comment on this story
Print story
Bank employees stack bundles of Myanmar kyat bank notes in Yangon, Sept. 19, 2011.
Bank employees stack bundles of Myanmar kyat bank notes in Yangon, Sept. 19, 2011.

The Central Bank of Myanmar on Friday said the country’s lenders have parked more than U.S. $7 billion worth of foreign reserves in overseas bank accounts, rejecting reports that the figure was much larger and had led to the World Bank refusing to cancel its debt.

At a press conference in Naypyidaw, Central Bank Chairman Kyaw Kyaw Maung denied reports last week that the Myanmar government held up to U.S. $11 billion in five overseas accounts, and which said the size of the holdings had prompted the World Bank to stand firm on recouping the country’s loans.

“We don’t know about the U.S. $11 billion in foreign banks,” Kyaw Kyaw Maung said.

“According to our official foreign exchange figures, the Myanmar government has only U.S. $7.6 billion in foreign bank accounts,” he said.

Kyaw Kyaw Maung called the funds “foreign exchange reserves,” which he said include government “budget funds as well as privately-held accounts.” They are “used when needed,” he added.

But the bank chairman declined to specify where the funds were held or how much of the money was government-owned or privately controlled.

He said that the Central Bank, Myanma Foreign Trade Bank and the Myanma Investment Commercial Bank are among government institutions that hold foreign reserves abroad, and that a number of private Myanmar banks also control part of the U.S. $7.6 billion.

Minister of Finance Win Shein, who was also in attendance at the press conference, told reporters that reports that the World Bank refused to wipe out Myanmar’s loans, which total more than U.S. $890 million, were false.

“The idea that the World Bank refused to cancel Myanmar’s debts because of U.S. $11 billion worth of funds in foreign bank accounts is totally untrue,” he said, adding that he had evidence to back his claims, though he did not provide further details.

President’s Office spokesman Ye Htut challenged the media to produce the names of the banks and locations where the U.S. $11 billion was allegedly kept, saying the government would investigate the claims if evidence could be produced.

“Three or four months ago, there were similar reports in Greece. The media said the exact names of the banks and the countries where the Greek government had opened accounts and the government was about to work with the banks to solve the problem,” he said.

“If someone is willing to provide the relevant evidence, the government will solve this problem accordingly.”

Overseas hoard

Last week, Jelson Garcia, Asia Program Manager with Washington-based Banking Information Center (BIC), said he was told that the Myanmar government owned U.S. $11 billion in overseas funds during meetings with the World Bank, Asian Development Bank (ADB) and International Monetary Fund (IMF) in March and April of 2012.

During a discussion at the Library of Myanmar Media in Yangon, Garcia also said that the World Bank had refused to cancel Myanmar’s outstanding debts because it was aware of the funds held in five foreign bank accounts.

Garcia made no claims that the U.S. $11 billion included revenue nongovernmental organizations have previously said was siphoned by the country’s former military junta from the export of natural gas and sent abroad.

Myanmar’s Daily Eleven newspaper in a report last week quoted an email from Garcia which said the information about the overseas funds from the series of meetings included “different estimated figures” and “did not specify [in] which banks the accounts were located.”

The report also cited a statement since issued by the World Bank which said that Garcia does not speak on its behalf and that it is common for governments to hold reserves in foreign bank accounts in order to facilitate importation of goods and services and management of the exchange rate.

BIC monitors global financial institutions such as the World Bank and the ADB, which have restarted development programs in Myanmar in the wake of sweeping reforms implemented by President Thein Sein since his nominally civilian government took power from the former military junta in 2011.

Siphoned revenues

The former military regime is believed to have skimmed hundreds of millions of dollars annually from natural gas exports, and Washington-based Earth Rights International (ERI), which monitors human rights and natural resources, has said that the junta stashed the money in Singapore, according to a report by the Irrawaddy online journal.

In 2009, ERI claimed to have evidence showing that the junta excluded some U.S. $5 billion in revenues from the country’s national budget and that the revenues had been generated from the Yadana Gas project, operated by French oil giant Total and its U.S. partner Chevron.

ERI claimed that the funds had been sent to the Overseas Chinese Banking Corporation and DBS Group—two Singapore banks which served as “offshore repositories.” The banks have denied the allegations.

At Friday’s press conference, Deputy Energy Minister Myint Zaw denied claims that the overseas billions had been generated from the export of Burma’s natural gas.

Reported by Myint Oo, Win Naung Toe and Kyaw Htun Naing for RFA’s Myanmar Service. Translated by Khet Mar. Written in English by Joshua Lipes.





More Listening Options

View Full Site