Yangon – On this day 57 years ago, military dictator General Ne Win’s government nationalized domestic and foreign banks in Myanmar (then Burma), marking the beginning of a wave of nationalizations which plagued the country for decades.
On Feb. 23, 1963, 31 banks —14 international banks (one of which had two branches outside Yangon, then Rangoon) including the Central Bank of India, Chartered Bank, the Hong Kong and Shanghai Banking Corporation, and 10 private, domestic banks (with multiple branches across the country) — were nationalized.
The nationalization of the banking sector came as part of “Burmese Way to Socialism” a year after the military coup led by Gen. Ne Win.
Foreign banks were paid the amount of capital they originally brought into the country when they were established, but not reimbursed for their earnings since that date. The value of the property and cash seized totaled an estimated 896 million kyats with 30.4 million kyats handed out in compensation. Two Chinese banks, the People’s Bank of China and Bank of Communications, did not accept the compensation and said they were donating the cash to the regime.
The banks were renamed People’s Bank Nos. 1 to 31. Military officers were appointed as general managers. Deputy military chief General Aung Gyi, who opposed the nationalization plan, resigned both from the government and the military. The relatively moderate Soviet leader Nikita Khrushchev urged the military regime not to rush into nationalization.
However, the regime continued with its nationalization plan. Twenty-four years after introducing the “socialist” banking system, which had the stated objective of rooting out capitalism for the victory of the working class, the country was listed on the least-developed countries list in 1987. Foreign banks were finally allowed to reopen branches more than 50 years after nationalization.
Translated from Burmese by Thet Ko Ko
You may also like these stories: