Tourism ministry orders industry dedollarization

YANGON—For the second time, the Ministry of Hotels and Tourism (MOHT) has ordered business owners in the Myanmar tourism industry to stop collecting payments in the form of U.S. dollars.

If companies want to continue accepting U.S. dollars, a letter sent by the MOHT to the Myanmar Tourism Federation (MTF) said, they must apply to become an authorized dealer (AD) with a money changing license from the Central Bank.

The letter was signed by MTF General Secretary U Kyi Thein Ko and sent to the MTF’s 11 affiliate organizations last Thursday. Its authenticity was confirmed to The Irrawaddy on Friday by a tourism ministry official.

Dated June 11, it said the move is part of a Central Bank plan to de-dollarize the Myanmar economy, and it ordered the entire industry to follow the procedure under the authority of Myanmar’s Foreign Exchange Regulation Act, which prohibits conducting business in or exchanging foreign currencies without Controller-granted permission or AD status.

The prohibition was the brainchild of the previous U Thein Sein administration, first proposed in 2014 but still in pending status until May 2019.

The letter noted that it had previously ordered the industry to only conduct business in Myanmar kyats but, despite previous instructions, the ministry said it had learned that tour, hotel and airline companies are still charging and accepting U.S. dollars.

Even so, the letter surprised some in the industry, particularly small travel and tour agencies.

Daw Sabei Aung, owner of tour company Nature Dream, questioned the ministry’s policy on her Facebook page.

The tour industry in Myanmar includes more than 3,000 travel and tour agencies and over 1,600 hotels across the country, she said. If the order is mandatory, it will create nearly 5,000 money changer license holders over night.

AD and money changing licensing, registration and deposit fees are too high for small-scale travel agencies, she said. If many thousands of travel companies in the country are suddenly granted licenses, she predicted it would only inflate the dollar exchange rate.

Further, she said, the industry’s ability to fully comply will depend on how effectively the government can force large hotels and airlines to comply with the CBM-set exchange rates.

“We are okay accepting payment in kyats but the government ministry should treat all equally, including hotels and airlines,” she said.

Daw Sabei Aung said if the government is serious about dedollarization they should also consider introducing an official transaction fee in order to decrease hundi money transfers, which illegally transfer millions of dollars annually from migrant workers abroad.

MTF Chairman U Yan Win declined to comment over the phone Monday afternoon.

Source: The Irrawaddy

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