Myanmar raises government pay, fuels inflation fear
Pyinmana (Myanmar), Mar 27: Myanmar's military rulers have given civil servants a hefty pay rise, driving gold prices higher on fears of inflation in one of Asia's poorest countries.
Top-ranked officials will see their pay soar more than 1,000 percent to up to 200,000 kyats (6) per month, according to a document circulated to various ministries.
The lowest paid will receive a 500 per cent increase to 15,000 kyats () a month.
''The incomes of other citizens, including the peasants, have become very high. So we need to adjust the salaries of our employees,'' Information Minister Brigadier General Kyaw Hsan told reporters late yesterdayday.
The pay rises would take effect on April 1, the start of the country's new fiscal year, he said.
Rumours of a steep salary rise triggered panic buying of gold, forcing dealers to stop selling gold bars in the main cities, Yangon and Mandalay.
The price of a 24-carat gold bar has soared to 383,000 kyats per tical from 340,000 per tical since the rumours began on Friday evening.
''We don't know whether to buy or sell,'' said one dealer.
The salary increases are expected to have a significant inflationary effect on the economy, which was hit by a nine-fold jump in state-subsidised petrol prices last October.
Since April 1989, the military government has raised bureaucrat salaries three times, by 180 per cent, 26 per cent and 500 percent.
The military has ruled the former Burma under various guises for the last 40 years and crippled the economy through a mix of corruption and mismanagement. The country also faces sanctions imposed by the West over its human rights record.