A good questions–with no clear answer–is where do the funds go from the large auctions of state-owned property?
Burma has been privatizing state enterprises for about 15 years. The majority of the property in this latest sale appears to have been sold, but some listings were later removed from the auction for undisclosed reasons, sources said.
Sources said that rumours again circulated that some properties acquired by bidders with close connections to the regime and who offered prices 50 percent to 100 percent higher than market price, in some cases.
Asia World and AA group were among the bid winners for property in prime business locations.
Some of the winning bidders were said to have not been able to make their bids good in time, because they were unable to resell the property to a third party. Several bidders had formed collectives to raise their bargaining power, sources said. Rumours circulated in Rangoon criticizing the auction as an attempt by some entrepreneurs to launder dirty money.
Under normal circumstances, it would be expected that higher revenues fetched from auction of enterprises and real estate sales would be used for productive use and invested in physical and human resource development.
However, observers say the pattern is for funds to generally disappear into state coffers, and little is known about how the funds are ultimately used.
On the other hand, huge flow of funds from the private sector to government coffers can make for a liquidity crisis in the private sector which can lead to appreciation of the Burmese currency, which hurts exporters the most.
To complicate matters, the cost of living in Rangoon for low income earners is steadily rising with little chance for a raise in wages.
Questions about the auction might have been asked in the just-ended session of Parliament, as to whether auction revenues could be put to use creatively in a way that would benefit the overall economy?
After all the assets that were auctioned off, we’re the people’s assets.