Burma's Clearing Account Agreements

T HE COMPELLING REASON for Burma's entry into the clearing account (barter) agreements in I954-I956 with mainland China, the Soviet Union and Eastern Europe was her need to sell more rice.' It was necessary to dispose of stocks in order to avoid a loss on unsold rice, to maintain imports and to halt the decline in foreign exchange reserves. We have rice to sell and we must sell it if we are to survive ... If we cannot sell it for cash, we shall sell it under clearing account arrangements. In these words U Raschid, then Minister of trade development, justified the agreements (Burmca Commerce, February i9, I956). Certainly rice is vital to the Burmese economy and has become increasingly so in the postwar period. In the i937-i94i period rice constituted on the average 47 percent of the value of Burma's exports and amounted to nearly 3.2 million tons a year.2 In i955 the tonnage was about one-half that of the I937-I94i average but comprised 75 percent of the value of exports and was thus about 20 percent of the value of gross domestic product. Burma's problem derives from the fact that while paddy production has been high, reaching a peak of more than six million tons in i956 before the decline of nearly 20 percent in I957, rice exports have been considerably below the amount Burma regarded as available for export and needed to sell in order to maintain its desired level of imports. Sales in I95I-I952 and I952I953 hovered around I.2 million tons. At one point Burma had 2.5 million tons of rice stocks available for export. The I953 exports only slightly exceeded i.o million tons. Although Burma marketed i.5 million tons in I954, approximately a million tons were carried over from I953 and I954 into i955. In I955 Burma sold I.7 million tons and carried over about 6oo,ooo tons into i956

Business · Clearing · Political science · Asian Geopolitics and Ethnography · Finance