Written by U Ne Oo on 1998-09-08

Dr U Ne Oo

18 Shannon Place

Adelaide SA 5000


8th September 1998.

Lt. General Khin Nyunt

Secretary 1

State Peace and Development Council

c/o Ministry of Defence

Signal Pagoda Road

Rangoon, Burma.

Dear General Khin Nyunt:

I am very concerned about the news that your council is renewing the arrests on members and supporters of National League for Democracy. These arrests, together with your council restricting the elected members of parliament gathering in Rangoon, have not been consistent with the objective of confidence-building tasks in Burma. I urge your council to release all those detained and also to lift the restriction ofrestriction of movement of the members of parliament.

There is also an internationally shameful revelation made by the World Bank that your council has been defaulting the loan repayments to the international creditors. This kind of international shame has been brought to bear upon Burma by the World Bank only because of the economic incompetence by your State Peace and Development Council.

The debt settlement for Burma with its international creditors can only be made by the authority of democratically elected parliament. parliament. I ask your council to help arrange the National League for Democracy convening parliament this month. To solve Burma's debt problems promptly, your council together with Central Executive Committee of National League for Democracy should form a crisis committee in order to prepare a draft legislation to discuss in parliament.

It should also be noted that the existing Cabinet appointed by your council has no legitimate authority to conduct the national matters. In accordance with international standards, the appointmhe appointment for the members of current cabinet must be approved by the democratically elected parliament. I once again ask your council to lift restriction on the movement of the members of parliament so that they could convene the parliament.

Yours sincerely,

Sd. U Ne Oo.



From the latest development regarding with Burma's repayment of debt arrears to World Bank (see Reuters report), the amount of foreign exchange reserve that Burmerve that Burmese junta currently having may have been less than $20 million (or) close to complete collapse. In August 27 report by Far Eastern Economic Review, Burma foreign exchange reserves was reported to be less than $60 million. Earlier our study showed that, in recent years, Burmese junta choose to service the arrears only to the multilateral donors, which include World Bank. The junta, since it doesn't have the capacity to repay all its arreared-debts, has been defaulting the payments to bilateral donors on regular basis. Japan' Japan's annual debt relief grant to Burma was primarily to cancel the interests and loan repayment arrears. Burmese junta defaulting repayment to one of its multilateral donor, World Bank, is an indication that SPDC/SLORC has certainly been in a severe financial difficulty.

The remedial measures to this can be made by Burma's parliament directly negotiating with these multilateral and bilateral donors. To tackle this problem, the CEC of NLD and appropriate members of SPDC/SLORC should form, as a practical first step, a 'Crep, a 'Crisis Committee' to prepare a draft-plan to put forward before Burma's parliament. To convene Burma's parliament, of course, the lifting of restriction on members of parliament has yet to be made by SPDC/SLORC.

SPDC/SLORC arresting NLD members/supporters in regional areas yesterday is a wrong and dangerous move. Burmese people, now adays, appears to be very conscious of what is happaning in their country; even a slightest misconduct by SPDC/SLORC can cause a mass uprising. No one will be able to help SPDC/SLORC achieviC achieving reconciliation, if public is mobilized along that direction.

With best regards, U Ne Oo.


WASHINGTON, Sept 4 (Reuters) - The World Bank on Friday cut financial ties to Myanmar, saying it would not consider giving the government any more money because it had failed to make repayments on past loans. In a rare and severe step, the Washington-based lending agency said it placed loans and credits to the Myanmar government in ``nonaccrual'' stataccrual'' status, meaning the country will not be able to borrow money from the World Bank until it clears its arrears, estimated at $14 million.

The decision will make it more difficult and expensive for Myanmar -- formerly known as Burma -- to borrow money from other lenders, because it sends a signal to private banks and financial markets that the government was in default to one of the world's lenders of last resort. Myanmar is ruled by a military junta that has refused to let a democratic legislature elected in 1990 take in 1990 take power.

In May 1997 the United States imposed unilateral sanctions on Myanmar, barring any new investment in the country but allowing existing projects to go ahead.

Myanmar has borrowed more than $700 million from the World Bank since 1956. But no loans have been made since July 1987.

``The bank does not have an active lending programme and does not have plans for one,'' a World Bank official said.

International pressure is growing against Myanmar's military government over the issue of human rights, human rights, particularly its treatment of Aung San Suu Kyi, the daughter of Myanmar independence hero Aung San.

Other countries with protracted arrears to the World Bank include Iraq, Liberia and Syria.


YANGON (Sept. 4) XINHUA - Japan has extended to Myanmar a grant-in-aid of 2 billion yen (15 million U.S. dollars) for debt relief, according to a press release of the Japanese Embassy here Friday. Notes to this effect were exchanged on the same day hethe same day here between the two sides.

The grant-in-aid was extended to relieve the burden of debt the Myanmar government owes to the Japanese government, the press release said.

Japan, one of the major donors of Myanmar, has extended 20 grants-in-aid for debt relief to the country.

According to official statistics, Japan's investment in Myanmar reached 206 million dollars in 17 permitted projects at the end of April this year, ranking ninth among 23 countries or regions which have a total of 7 billion dollars of investment in the country.

Letter to Gen Khin Nyunt (9/98)