RANGOON — Salt producers in Irrawaddy Division who fail to repay government regeneration loans granted after Cyclone Nargis could face jail as early as January of next year, an official said.
Soe Myint, the divisional minister of forestry and mines, told The Irrawaddy that the current grace period will extend through the end of December, but that the government will take legal action against producers who have not begun repayment by January 2015.
“We will wait until the end of December,” the minister said, adding that borrowers will be required to pay back a portion of their debt or face legal action in January. Failure to pay could result in up to three months in prison.
Burma’s former military government offered loans of 300,000 kyats (US$300) per acre to salt producers whose farms were damaged in Labutta and Ngapudaw townships during the storm.
More than six years later, the government said it is time for those funds to return, demanding that each borrower who has not begun payback hand over a premium of 770,000 kyats. Remaining debt and interest will be forgiven, Soe Myint said. Those who have already repaid more than 50 percent of their debt have been forgiven their remaining balance, a write-off worth around 10 billion kyats.
Of 395 borrowers whose debts remain, 188 may be sued if they do not make an initial 770,000 kyat payment within the coming weeks. Many of them, however, are unable to make the payment because the start-up cash wasn’t enough to regenerate their businesses, according to Irrawaddy Division lawmaker Htein Linn.
“They would repay if they had money, but the problem is that they are in genuine hardship. They couldn’t restart their salt businesses,” he said. Some of the indebted salt-producers may seek private loans to avoid jail, he added, but others, having “no way out, just have to face the music.”
Minister Soe Myint said that failure to pay back the loans violates laws governing the salt industry, and that until recently a violation would result in a fine of 300,000 kyats. Following a meeting in early December, he said, the regulations were amended to allow for a three month prison term in lieu of or in addition to the fine.
According to statistics provided by the divisional government, 75 percent of the division’s salt is produced in Labutta and Ngapudaw townships, where about 900 salt producers work on more than 30,000 acres of field.
The Irrawaddy Delta is one of Burma’s most abundant sources of the mineral, but business has faltered since the cyclone—considered the most devastating natural disaster in Burma’s recorded history— lashed the coastline in May, 2008.