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Privatisation schemes fuelling inflation and mistrust, business people say
Published on Wednesday, 16 January 2013 21:25
The Mininsters' Building in Yangon seen on January 15th
The effectiveness of the government’s privatisation plans is being undermined by a lack of transparency that is sparking speculative buying and fuelling mistrust and inflation, businesses owners told Eleven Media.
Land that had been snapped up in industrial zones after cronies received tenders for purchasing plots in them and this speculation had driven prices so high that investors who wanted to set up businesses in the zones were unable to afford to do so, they said on condition of anonymity.
Some state-owned buildings and land plots had been privatised without inviting tenders while in cases in which bids were invited the price of the winning bid was sometimes not published in state-owned media, they added.
Lack of transparency is fuelling a speculative buying binge that is driving up the cost of living, especially in Yangon, the country’s commercial hub, where the cost of property has doubled in some areas, businesspeople said.
The profits margins for construction companies building low-cost housing projects on state-owned land in Yangon indicated that the projects would not benefit those they were intended for, businesspeople said.
Department of Human Settlement and Housing Development officials have said that the low-cost housing projects will see more 17,000 apartment units built on state-owned land in Yangon for 500 billion kyats (about US$581 million). Each apartment unit is expected to sell for K20 million (about $24,000), putting them well beyond the reach of most city residents.
The government privatised more than 90 state-owned businesses in 2008, more than 300 in 2009, more than 100 in 2010, and 76 businesses in 2011. Figures for last year have not yet been released. The government also privatised 246 petrol stations in 2010 and 100 apartments in 2011.
Noting that the government had recently formed an anti-corruption commission, Wai Phyo, chief editor of Weekly Eleven News Journal, said, “We want to make a complaint on behalf of the public to look into the privatisation processes of state-owned land and buildings in commercial areas of Yangon.”
“Who received these facilities and through which procedures?” he asked, adding that it was necessary to determine whether these privatization schemes benefited the public.
“Land prices in some commercial areas of Yangon are one million kyat per square foot. However, the prices paid for privatisation were not made public. Recently, the government evicted some residents to make way for low-cost housing projects. They should get apartments as compensation for the loss of their land,” he said.