Thu 30 Mar 2006
Filed under: Business / Trade,International,News
The Yangon municipal authorities are seeking ways to cope with rising commodity prices resulting from last Friday’s government decision to raise salaries of civil servants to an unprecedentedly high margin.
A meeting between the Yangon City Development Committee and business circles including goldsmiths, rice, edible oil and bean dealers, livestock breeders and industrial entrepreneurs was called on Wednesday to discuss measures to be taken to stabilize the commodity prices, the official newspaper New Light of Myanmar reported Thursday.
A plan of forming committees for controlling prices of basic food items in Yangon division was outlined at the meeting which urged respective business associations to make their efforts in the price control, the report added.
As news about the government’s move spread, gold prices soared immediately last weekend from 340,000 Kyats to 390,000 Kyats per tical (0.0163 kilograms) and continued to jump on the first two days of this week to a record high of 420,000 Kyats per tical. Despite panic buying of gold by people, triggered by the news of the sharp salary increase, dealers were forced to stop selling gold bars in Yangon as well as in Mandalay, resulting in the fact that despite existence of the sky-rocketed gold prices, business transactions were few, gold dealers said.
Meanwhile, local Myanmar Kyat currency devalued from 1,100 Kyats against US dollar to over 1,200 Kyats and then to 1,300 Kyats until Tuesday. The prices of the basic commodities such as rice, edible oil, meat and fish and other daily necessities as well as fuel also went up so far by over 10 percent, according to traders.
However, due to some measures preliminarily introduced, the gold prices went down to 370,000 Kyats per tical, while the value of Myanmar Kyats picked up to 1,250 Kyats per dollar on Wednesday in the latest development.
According to an order of the Ministry of Finance and Revenue issued from the newly relocated administrative capital of Naypyidaw (Royal City), the monthly salaries of government employees will be increased with effect from April 1, the start of the next fiscal year 2006-07, by a range from nearly six times to 12.5 times depending on their respective rank status.
The order designated that the lowest-pay-earning basic workers will receive nearly six-time increase of their pay from 3,500 Kyats up to 20,000 Kyats (16 US dollars) a month, while top- ranking officials will see their pay soar as high as over 12-time from 16,000 Kyats up to 200,000 kyats (160 US dollars) per month.
The news about the raising of the government servants’ salaries was not carried on the state media although it has been officially confirmed.
Observers here view that the salary increase would bring about a significant inflationary impact on the country’s economy which has been hit by a nine-fold rise in official fuel prices in October last year.
Since 1989, the Myanmar government has raised salaries of government servants for three occasions by 180 percent, 26 percent and 500 percent respectively.