Why speculate?
Can someone not ask the Singapore govt?

Ringisei,

Very interesting observations. The KTM seriously didn't believe that the Govt was responsible for the banks' actions - it just didn't seem plausible. Your theory is good. :-)

All

The basic issues are that all transactions which involves certain currencies go thru New york or London or Basel for clearance. Hence, any bankers worth their salt would start implementing such measures once particular comnpanies or currencies are involved.

Regards

George, good point. Though higher chance of getting an answer from the gahmen if someone more respectable than me did the asking. In any case, sanctions would be a reversal of current stated policy.

KTM, we tend to think of the gahmen being omniscient and omnipotent but this may be, subject to solid evidence, a good example of how globalization allows the regulatory activities of other states to affect Singaporean activity even in Singapore itself.

Wang, thanks for pointing out centralized clearing. Do you think the Myanmar junta would be able to avoid such chokepoints by securing financing outside USD, EUR - alternatives of SGD and RMB instead?

Good, you hit and it drove it in half way, but the question: what's really behind all this?

That turns on the whole definition of what is money or utility? - no one does anything just for the sake of the greater good, it's a lousy calculus, thats only true, if you can believe for one moment US troops stormed Normandy to protect their fellow men and to defeat Nazism.

So again what's really happening? To understand, you need to learn a word, it called 'cross-trading.' As far as instruments of war goes, this is a form of castling - that's to say, it attempts to revise the rules or shift the goal post.

Consider this, I constrict your access to hard currency - that doesn't mean that I stopped, your capacity to produce 'utility,' it just means, now u r like a man with a lap top with a three pin plug in the land of two pins - you still have the hardware, but you need an 'adapter' to get the juice.

Question: guess who comes in with the adapter?

Result: I get the utility i.e oil using a currency that I fix i.e barter trade / oil for food? Does that sound familiar? Get it now?

Nothing is ever what it seems.

Darkness 2007

Now the problem with cross-trading is that it's as non-competitive as it gets. I actually modeled it out some 3 or 4 years ago. That's to say, it's as close to stone age bartering, doesn't get more complex than that. Two arrow heads for a kg of dino kidney or something like that - now the problem with CT is this, because you don't have market access or even the ability convert your utility to any other tradable medium that you can expect to float in the free market, you're stuck with just one customer and one exchangable commodity i.e you only produce arrowheads that only fits on round shafts and because everyone else is using a square shaft, you can only sell to one customer - so it real terms, its a monopoly. If he decides to turn around tmr and say, OK one arrowhead for 2 kg's, you can't do anything abt it, perfect con job, the British perfected it to a science during the days of Empire. They buy raw latex from Malaya ship it all the way to Manchester and sell us back shitty Dunlop tires that aqua plane during the monsoon - now because, all our Morris Minors and Austin's only use Imperial metric wheel sets you cant even use Good Year or double happiness tires - it's Dunlop or you learn to commute to office with donkey power. So not only is it non-competitive, it's rigging the rules so that the house wins all the time - the perfect syndicated kill. Get it?

You will be amazed what you pick up from cooking magazines these days!

Darkness 2007

darkness,

Thanks for your points about how cross-trading can be used for sanctions-busting as well as its disadvantages. In the Myanmar-Sg case, oil for granite/sand?

I still haven't seen any news on Sprinter.gov.sg that confirms or denies official intervention on the Air Bagan case. Symbolically it could be manipulated, via press speculation, that the Gov.sg is 'doing something' - but I share KTM's scepticism in this respect. Our ruling party's leadership values an illiberal regional order over the desires of the people of Myanmar.

I hope this short/medium-term 'pragmatism' is not going to come and bite us in the backside as and when the military junta falls. The utility of karma?

hi,

It's the old one, two and three and you've out! First, like Sadam, they render the host currency useless. Second, they impose only one avenue of xchange eg oil for food. And finally, they go on to squeeze on the terms. Only I dont believe the yanks and their proxies will succeed on this occasion because China and India is too strong.

Ringisei

In answer, yes, the Myanmar Govt of the day could avoid via using non-sanction currencies but the problem remains for them who wants their kyat.
For the option of countertrading, it becomes plausible or possible only for what would be termed as international fungible commodities eg gems, oil & gas or timber. Hence, for all others, Myanmar woud be beholden for their trade with their neighbours eg China or India or Thailand or Vietnam.
Frankly, would opine at times at the naivety of sanctions, it only works mosty effectively when there is total economic blockade backed by ships and land blockade. If not, it just leaves unharmed the leaders of the day and their supporters until hyper inflation sets in eg Zimbabwe

Regards

Actually if the Americans want to pull off the old one, two, they need our govt to buy in, bc 90% of all the financial instruments are either structured or routed via MAS which has been a clearing hse for the Burmese junta for the last 10 yrs.

The part which I cannot seem to figure out is this, while I can understand how it benefits the US to play this game. How does it benefit us? I dont want to sound daft but isnt this a case of cutting off your nose to spite.....

So what gives at the end of the day? How does barter trade benefit us? I really find it tough to warp my head around that one.

OXO

OXO:

You say that "90% of all the financial instruements are either structured or routed via MAS which has been a clearing hse for the Burmese junta for the last 10 yrs." Could you clarify?

I was at a talk by Prof. John Taylor where he talked about using finance and economics as a third leg of US foreign policy, after the usual elements of security and politics. One of the efforts put in place was to monitor SWIFT transfers, ostensibly to deal with money laundering.

However, my personal opinion is that more can be achieved by continuing to engage a foreign country (as opposed to more strident sanctions which many seem to favour). It may make for better press, but in terms of getting results, I do not think Myanmar cares much about Singaporean sanctions.