Published
Friday, February 29, 2008 - 17:18
Burmese people fearful of banks, choose land instead
Burmese people are avoiding the country's unreliable banking system, choosing instead to save money by investing in land. Burma 's banking system is among the least stable in the world, and its banking system suffered a severe crisis in 2003.
Burmese people are avoiding the country's unreliable banking system, choosing instead to save money by investing in land. Burma 's banking system is among the least stable in the world, and its banking system suffered a severe crisis in 2003.
Most of the land investments are made into rubber plantations, and the rubber sap has been dubbed "white gold" by the regime. Much of Mon state is covered by rubber plantations, even in the mountains. Land prices have begun to go up, and a good plot of land near a motorway currently sells for 8 million kyat, up from 2 million kyat in previous year after banking system crisis.
Rising land prices have surpassed the actual value of land, and people are aware that the land will not profit enough to pay back the investment.
Even were the land-banking strategy to be profitable, there is no guarantee the land will not be seized by the army. Rubber plantations are frequently confiscated, looted and even burned by the army in Mon state.
Burma's banking system suffered a massive meltdown in 2003, after deposit-taking defaulted, triggering a run on withdrawals. Burma 's twenty licensed private banks soon faced widespread panic, as people attempted to retrieve their money. Withdrawals were capped, and even halted, and many lost everything they had saved. This recent memory is enough to persuade people pursue the organic banking strategy, even though people understand its inherent risks.
Most of the land investments are made into rubber plantations, and the rubber sap has been dubbed "white gold" by the regime. Much of Mon state is covered by rubber plantations, even in the mountains. Land prices have begun to go up, and a good plot of land near a motorway currently sells for 8 million kyat, up from 2 million kyat in previous year after banking system crisis.
Rising land prices have surpassed the actual value of land, and people are aware that the land will not profit enough to pay back the investment.
Even were the land-banking strategy to be profitable, there is no guarantee the land will not be seized by the army. Rubber plantations are frequently confiscated, looted and even burned by the army in Mon state.
Burma's banking system suffered a massive meltdown in 2003, after deposit-taking defaulted, triggering a run on withdrawals. Burma 's twenty licensed private banks soon faced widespread panic, as people attempted to retrieve their money. Withdrawals were capped, and even halted, and many lost everything they had saved. This recent memory is enough to persuade people pursue the organic banking strategy, even though people understand its inherent risks.
