Central Bank Confirms $7.6B in Burmese Funds Held in Overseas Accounts

By Htet Naing Zaw 20 September 2013

NAYPYIDAW — Burma’s Central Bank chairman confirmed recent claims that the government holds billions of dollars of foreign reserves in overseas bank accounts. He said on Friday that a total US $7.6 billion was kept offshore by Burmese state-owned and private banks.

Central Bank Chairman Kyaw Kyaw Maung, President’s Office Minister Soe Thein and Deputy Energy Minister Myint Zaw held a general press conference in Naypyidaw on Friday morning.

Asked by The Irrawaddy about recent reports that claimed that the government held up to $11 billion in several bank accounts in Singapore, Kyaw Kyaw Maung said the claims were partially true.

“We only keep $7.6 billion [abroad] legally,” he told reporters. “These are foreign exchange reserves; it includes national [government] budget funds as well as privately-held accounts.”

“We use it when needed,” the bank chairman said, adding, “We don’t know about the $11 billion that people are talking about.”

Kyaw Kyaw Maung declined to specify in which offshore locations and banks the $7.6 billion in Burmese funds were held. He also failed to clarify exactly how much of these funds were government-owned and how much was in private company hands.

The Central Bank, the Myanma Foreign Trade Bank and the Myanma Investment and Commercial Bank, are among the government institutions that have overseas foreign reserves, Kyaw Kyaw Maung said, adding that several private Burmese banks also owned part of the $7.6 billion.

Deputy Energy Minister Myint Zaw denied past claims made by international non-government organizations (NGOs) that the overseas billions had been generated from the export of Burma’s natural gas.

Last week, Jelson Garcia, Asia Program Manager with the Banking Information Center (BIC), said World Bank, Asian Development Bank (ADB) and International Monetary Fund officials informed him in 2012 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,” Garcia told The Irrawaddy on Sept. 13.

He said ADB staff told him that Burmese government officials had disclosed to ADB the existence of an estimated $7 billion in government funds in Singaporean banks. According to Garcia, ADB officials considered Naypyidaw’s decision to lift the secrecy surrounding these accounts “encouraging.”

BIC, a US-based non-profit organization, monitors international financial institutions like the ADB and the World Bank, which have recently begun reengagement with Burma, after President Thein Sein’s government announced wide-ranging political and economic reforms.

Earth Rights International (ERI) has said that the billions of dollars in Singapore were stashed there 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.

In 2009, ERI claimed to have received evidence showing that the military regime 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.

An ERI investigation found that the funds had been parked in two Singapore-based banks—the Overseas Chinese Banking Corporation and DBS Group—which functioned as “offshore repositories.” The banks have denied the allegations.