History of Burma’s 3 demonetisations: 1964, 1985 and 1987…

Mostly Economics

Superb piece by Ananth Karthikeyan in Mint.

He analyses the three demon episodes in Burma:

The demonetization of 1964

The economy, unsurprisingly, plumbed and black markets grew exponentially. The Junta, however, did not pause to reflect. They could not slow down their drive to nationalization everything without losing face and revealing their administrative naiveté. Since they jealously guarded power, they could not delegate responsibilities, install a proper financial system or curtail policies that drove galloping inflation.

Something had to give. The dictator’s mind, moulded by years in the military, now seized upon a blitz-like move. In what was meant to be a masterstroke, large denomination notes, with which the “evil capitalists and deviants” obviously hoarded their money, would be swept away.

The reasoning was as follows: the Indians and the Chinese would be the first casualties and inflation would be halted. Therefore, the people would welcome the move. All deviants who had…

View original post 447 more words

Advertisements

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s