Demonetization

   (1964, 1985, 1987)

   An order of the government that revokes the legal tender status of currency notes, rendering them worthless. Burma under General Ne Win experienced three demonetizations: in May 1964, November 1985, and September 1987. They were designed to cripple "economic insurgency" (the black market), but the first two demonetizations offered limited compensation to persons who surrendered old banknotes. The 1987 order did not, wiping out as much as 80 percent of the country's savings because most people hoarded cash, reluctant to put their funds in the unreliable state banking system. The government replaced currency notes in denominations of 25, 35, and 75 kyats with oddly numbered notes of 45 and 90 kyats, reflecting Ne Win's preference for the auspicious number nine. In response, student demonstrations broke out, the first since the mid-1970s. Most observers believe the 1987 demonetization contributed substantially to the transformation of antigovernment sentiment into a nationwide opposition movement in 1988. Since the establishment of the State Law and Order Restoration Council, periodic fears of a new demonetization have added uncertainty to unsettled economic conditions. Those who can afford it keep their wealth in gold, jewelry, U.S. dollars, or capital-generating possessions such as automobiles.

   See also Economy and Economic Policy, Burma Socialist Programme Party Era; Economy and Economic Policy, State Law and Order Restoration Council / State Peace and Development Council Era; Numerology.