Military council restricts exports to Bangladesh via Maungdaw

The regime’s ban on sales of rice, onions, and other goods through the Rakhine State border town may be a response to Bangladesh’s freezing of accounts belonging to US-sanctioned Myanmar entities

Myanmar’s junta has prohibited the export of various food commodities to Bangladesh via Maungdaw, Rakhine State, after a decision by Bangladesh’s Sonali Bank to freeze two major Myanmar banks’ assets. 

The regime’s ministry of commerce announced on September 1 that the restricted goods—including rice, beans, peanuts, and onions—must be shipped only through the commercial zone in the Rakhine State capital of Sittwe, saying the order would come into effect on September 4. 

“Sonali Bank imposed restrictions, which could lead to the smuggling of people and goods,” said Myint Thura, director general of the junta commerce ministry’s trade department. “That is why people need to export through Sittwe, to prevent smuggling.”

The junta-controlled financial institutions Myanma Foreign Trade Bank (MFTB) and Myanma Investment and Commercial Bank (MICB)—which were sanctioned by the United States Treasury in June of this year—together had balances amounting to over US $1bn at Sonali at the time of the asset freeze. 

According to some Bangladeshi news outlets, the United States government had been pressing for the asset freeze after sanctioning MFTB and MICB, the two financial institutions in Myanmar through which most foreign-currency denominated transactions are conducted. 

MICB and Sonali first signed a contract to allow for such transactions in 1995, under Myanmar’s previous military dictatorship, stimulating bilateral trade between Bangladesh and Myanmar. 

The Kanyinchaung Economic Zone in Maungdaw (Rakhine State Chamber of Commerce and Industry/ Facebook)

While the recent freeze has stopped such transactions for both MICB and MFTB, it is still possible to transfer up to US $50,000 at a time from MICB’s Maungdaw branch to Sonali’s Teknaf Upazila branch using certificates of deposit.  

Tin Aung Oo, chair of Rakhine State’s chamber of commerce and industry, said that the restrictions would not have a large effect on the state’s economy as goods could still be exported through Sittwe.

According to Tin Aung Oo, the Bangladeshi government had limited purchases from Myanmar to essential goods earlier in the year to control the depletion of its dollar reserves, which led to a decline in trade. However, he said, trade had improved in recent months despite continued restrictions on financial transactions.

“Before Thingyan, it dropped to virtually zero,” Tin Taung Oo said, referring to the traditional Buddhist holiday festival in April. “From there, trading has recovered gradually. Even though it’s not back to normal and Sonali has placed restrictions, for now exports are continuing.”

Having heard of the Bangladeshi government’s decision to freeze the Myanmar banks’ assets at Sonali, the Central Bank of Myanmar’s governor Than Than Swe reportedly responded with anger, saying at an August 19 meeting in Naypyitaw that she would not stay silent and would confront Bangladeshi officials head-on.

Bangladesh’s ambassador to Myanmar met with military junta chief Min Aung Hlaing on September 6 to discuss bilateral trade and cooperation between the two countries, according to reports in junta-controlled newspapers that day. 

According to the junta’s commerce ministry, the total value of goods exported to Bangladesh via Maungdaw exceeded US $4.5 million between April and August of this year. 

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