Burma Govt Denies Reports That It Holds $11B in Singaporean Banks

Singapore city as seen from the harbor. (Photo: Reuters)

RANGOON—Burma’s government on Thursday denied reports that it holds up to US$11 billion worth of foreign reserves in several bank accounts in Singapore.

The figure was first mentioned by an independent financial researcher, who said that World Bank and Asian Development Bank (ADB) officials had provided him with estimates of Buma’s overseas reserves.

It is believed that the billions of dollars were stashed in Singapore by Burma’s former military junta, which for many years earned hundreds of millions of dollars annually from natural gas exports, much of which was siphoned off and pocketed by members of the regime.

On Thursday, Deputy Minister of Information Ye Htut refuted the allegations that Naypyidaw maintained vast amounts of foreign reserves overseas, after these reports emerged in local media in recent days.

“The government doesn’t stash away the national budget in foreign banks. Give us the evidence regarding the $11 billion in five accounts. The government is ready to take action on it,” he said in a Facebook post.

Jelson Garcia, Asia Program Manager with the Banking Information Center (BIC), said World Bank, ADB and International Monetary Fund (IMF) officials informed him last year that Burma’s government held up to $11 billion in several Singaporean bank accounts.

“These were estimates given to us […] I drew it from our meetings with the WB and ADB staff who said they were at that time informed that the accounts could be in 3 to 5 accounts,” Garcia told The Irrawaddy in an email. “They did not give the exact worth and specific banks as they themselves did not know that much.”

BIC is a Washington-based non-profit organization that monitors international financial institutions. The World Bank, ADB and IMF began re-engaging with the Burmese government last year. Previously, the institutions were not allowed to deal with the former military regime, which had grown isolated and failed to pay its outstanding arrears of almost $1 billion to the banks.

Encouraged by the political and economic reforms under President Thein Sein, a number of international creditor countries, led by Japan, slashed much of Burma’s debt in May, 2013. Japan also provided a bridge loan to Burma so that it could clear its arrears with the ADB and the World Bank, allowing both banks to resume lending and provide aid to Burma.

Garcia said ADB staff, during a meeting on April 2, 2012, told him that it was encouraging that Burma’s government was finally lifting the secrecy surrounding its Singaporean accounts—which at the time were estimated at $7 billion by the ADB.

“The $7 billion in banks in Singapore is both a good and bad thing. The government’s willingness to share the IMF report is encouraging. [Let’s] look forward to this meeting next year to see how things have progressed,” Garcia concluded from his meeting with ADB staff.

Following recent local media reports that Burma had parked $11 billion in Singapore, the World Bank issued a statement on Thursday distancing itself from Garcia. Although it made no mention of the reported claims, the bank said 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.”

World Bank officials could not immediately be reached for further comment on Friday afternoon.

It is not the first time that researchers have claimed that Burma’s government—and individuals connected to it—have stashed vast amounts of foreign reserves in Singapore and other overseas accounts.

In 2009, the US-based non-profit organization Earth Rights International (ERI) reported that the then ruling junta had excluded almost $5 billion in revenues—generated from the Yadana Gas project operated by oil giants Total and Chevron—from the country’s national budget.

These funds, the group found after an investigation, had been placed in two Singapore-based banks—the Overseas Chinese Banking Corporation and DBS Group—which functioned as “offshore repositories.” The banks have denied the allegations.

Paul Donowitz, ERI campaigns director, told The Irrawaddy on Thursday that these findings were corroborated at the time by international financial institutions. “The IMF confirmed that in fact over 99 percent of the income from natural gas sales due to the government, was held as foreign exchange reserves, and not included in the national budget,” he said in an email.

Donowitz said President Thein Sein’s reformist government, which assumed office in 2011, was ending the junta-era practice of parking gas export revenues overseas. “We understand that now, natural gas revenues are brought back into the country, and are likely included into the national budget,” he said.

ERI’s 2009 research also found that at the time “hundreds of millions of dollars” had been taken out of the government’s two Singaporean accounts and moved into other accounts controlled by Burmese individuals with close connections to the former junta, but who were not US sanctions lists.

Donowitz said, however, that ERI had since lost track of these funds. “More recent information indicates that this money left Singapore a couple of years ago, going briefly to Dubai, then to Macau and China […] whereupon the trail and details have gone very cold,” he said.

During the decades of military rule, Burma was plagued by public sector corruption on all levels, ranging from citizens paying for basic services to massive losses of revenues generated from the exploitation of Burma’s vast natural resources, such as timber, gemstones, oil, coal and gas. The resource revenues were siphoned off by the country’s military, political elite and businessmen with close connections to the regime.

In the past, economists and researchers have pointed to the junta’s artificial overvaluation of the kyat against the US dollar, at 6.5 kyat to $1, while money changers in Rangoon were offering about 1,000 kyat for $1. (The government launched the managed float of the kyat in April 2012, and it is currently valued at about 970 kyat to $1)

This overvaluation of the kyat in the past allowed the junta to claim that gas export revenues were reaching state coffers, while in fact most of the foreign currency paid by Thailand for Burmese gas imports simply stayed overseas.

“The difference was siphoned off and sent to banks in Singapore and Dubai. The country was robbed of billions of dollars,” said a foreign banking consultant based in Bangkok.

The consultant, who declined to be named, said the Burmese nationals who controlled this ill-gotten wealth through their connections with the former junta are now looking for ways to invest their illicit funds back into Burma’s growing economy.

With the economic reforms under way in Burma, however, the local financial sector is coming under closer scrutiny of the IMF and other monitoring organizations.

Rangoon’s booming property market provides the best vehicle for laundering this illicit, overseas money, according to the consultant, as Burmese authorities do not require real estate buyers to disclose the source of funding for their property purchase.

“They can use the money there [overseas] to buy real estate in Burma, then sell it and declare the income as money from real estate deals. Then the money is ‘clean’,” he said in an email.

“Hence the astronomical prices for real estate in Rangoon. This is what has caused prices for real estate to skyrocket. It’s not because of foreigners wanting to buy anything,” he said. “Foreigners cannot buy property in Burma and they think the prices are outrageous anyway, they are not interested… [They are] only [interested] in renting some office spaces or such.”

Aside from benefitting Burmese individuals tied to the former military regime, the Burmese government’s billions kept in Singaporean accounts could also have been used for defense procurements for the country’s powerful military.

In July, Lt-Gen Thein Htay, who heads the Directorate of Defense Industries (DDI), was put on a US Treasury sanctions list after it was found that he may have opened several bank accounts in Singapore in past years in order to help Burma’s military sort out international arms deals.

DDI was designated for US sanctions a year earlier for developing missile technology with the help of North Korean experts.

Several businessmen in Burma told The Irrawaddy that Thein Htay is believed to get involved in “illicit trade in North Korean arms to Burma,” which is said to involve tens of millions of dollars.

9 Responses to Burma Govt Denies Reports That It Holds $11B in Singaporean Banks

  1. Singapore is the bunker for thieves and robbers. The best despot so fit for Than Shwe and his fellow thieves. They will keep denying but it will be fully revealed sooner or later.

  2. I have been saying that for years. Singapore is the “black hole” of Burmese national wealth which is created by rampant exploitation of natural resources destroying the country’s environment and the livelihoods of the poor farmers. All these crooks and thugs, from Than Shwe and Khin Nyunt down to their business cronies like TayZa, ZawZaw, Steven Lo, etc etc. stash their money away in Singapore ( where their children also go to school) . Squeaky clean Singapore is a money-laundromat and a safe haven for thieves despots and drug warlords.
    Shame on Singapore!

  3. The Ordinary People of Burma

    Surely everyone knows it’s DBS and OCBC.

  4. Chinese myitsone power station money ( part of the 60% of 3.9 billions-dollars )might be in Singapore bank under than shwe’s men name. Now than shwe attracts more Japan, EU and US to invest more in Burma with good terms and conditions as well as inflating the property price in Burma cities- ( buying properties with Chinese myitsone money). After more japan, EI and US investment come into Burma , than shwe feels safe in himself. In case of Chinese aggression in term of regaining Myitsone money or compensation, China might be reluctant to attack Burma due to the already presence of US, EU and Japan business investment and interest in Burma. Than shwe thinks he has a protection from other foreign countries when China tries to attack him. Than shwe thinks all around the greedy countries are naive. Than shwe’s 2008 nargic than shwe casual killing right also protect than shwe and his men. UN is paper made tiger. After next election, than shwe can change the another government name again. Then, all current cease-fire agreements with all ethnics will be needed to re-write again. All foreign investments will be needed to re-viewed again and need to stop temporarily ( like Myitsone power station ). Then, than shwe can have free lunch more from all ethnics and all foreign investment. Than shwe can re-write again the Panglong agreement if all ethnics now sign cease-fire agreement carelessly. Singapore bank will be more happy to accept than shwe’s easy money afterwards. The most difficulty part for than shwe is how to make the black money owned by than shwe to be to white money. Than shwe might need north Korean advice how to deal with US, EU and japan. Korean nation is divided by Russian and US involvement in history. Chinese Chairman Moa’s son and his one million red army were killed in Korean war in the favor to Russian by Chairman Mao. Not very long after Korean war, Chinese communist was dumped by Russian. China was divided into mainland and Taiwan after US dumping Chinese nationalist army when communist army attacked Japanese war-torn Chinese nationalist army. Let see, who will think than shwe is naive.

  5. Well, well, well!!!
    We in Myanmar had heard of these illicit bank accounts. But now, it is more plausible.
    We, Myanmar citizens, have been misled in every single way since March, 1962.
    I think the Myanmar government, instead of denials, should start revealing the facts, or else should start invstigating the cases and the suspected people.
    But firstly they should back track and clear the accounts with all exports, including the gas export to Thailand. If no entry, or very little, has been accounted for in our annual national budgets, then the culprit will be found out. And proper action can be taken. It is most important to recover the account, and placed in Myanmar currency reserves. Action against the robbers isn’t as important as the reserves recovery. That can come later in the process.
    Our parliament should raise cries over this affair. Should’t they?

  6. I believe current President U Thein Sein Government does not have $ 11 Billions in secret Singapore’s Banks’ A/C. In Fact that11 Billions dollars was hold up by previous dictator Than Shwe in secret Singapore Banks’ Account.
    That money was disappeared in thin air in Singapore just before current Government came into office and the money show up again in Bank Account of children of dictator Than Shwe in secrete location. Also I believe some of current Ministers knew about ex dictator Than Shwe regime has kept 11 Billions dollars in several secret Singapore Banks’ account.
    I hope one day the money will be coming back to true owner peoples of Burma.
    Look at to the family of former dictatorships around the world, they have to pay back money and goods what their father had stolen from nation and peoples once their father dead. I hope one day justice will come for those thieves in Burma too.
    One day, Army leaders will change and their attitude toward former dictator and his family will be changed as well. Evil dictator Than Shwe can not control Army forever and he must understand there’s nothing has forever for anyone.
    President U Thein Sein may be known about fate of 11 Billions dollars in secret Singapore Banks’ account but U Thein Sein is avoiding collision with ex dictator Than Shwe.
    I hope next Burmese Government will track down11Billions dollars in Singapore Banks’ transactions and prosecute whoever evades tax under previous military regime.
    I believe the nation has lost hundreds billions of dollars in revenue under ex dictator Than Shwe to regime’ cronies and their family.

  7. With $450 billion belonging to offshore clients, Singapore has grown to become the fourth largest offshore banking center globally. It’s a sunny place for shady Burmese generals

    • it would be interesting to see what the other offshore banking centres like Switzerland; Bahamas..etc hold for and on behalf of the top global companies, leaders, who all have been doing their individual countries out of their legitimate revenues.
      Can you blame little cities (country) like Singapore for promoting offshore banking, what other way to earn a living?

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