GROUP PROJECT

Report

CURRENT WORLD ISSUE

BY MA’AM TOOBA SHAHID
BBA (Hons) 3rd Semester Morning
  Group Division & Members List
 Assigned Letter ‘a’ & ‘b’

Sub-Group 1
Sub-Group Leader: Muhammad Awais

Sana Mehmood (BBFM-20-37) Brazil & Angola

Wajeeha Naveed (BBFM-20-21) Armenia & Bangladesh

Sana Bilal (BBFM-20-29) Algeria & Australia

Muhammad Awais (BBFM-20-30) Azerbaijan & Austria

Sub-Group 2
Sub-Group Leader: Ali Raza

Huda Noor (BBFM-20-08) America & Afghanistan

Ali Raza (BBFM-20-02) Albania & Burma

Ayesha Ishaq (BBFE-20-48) Brunei & Argentina

Wasif Iqbal (BBFM-20-01) Bahrain & Bhutan

Group Project Leader: Ali Raza

  SUB-GROUP 1

Ali Raza Usman

BBFM-20-02

Selected Countries:

 Albania
 Burma

Issues Explained:

1. Currency Devaluation
2. Hyperinflation
(Burma)

3. Emigration
(Albania)
 Burma
Also known as “Myanmar”

Location:

Burma is located in the western portion of mainland Southeast Asia. In 1989,

the country’s official English name changed from the Union of Burma to the
Union of Myanmar.

Capital:

Naypyidaw

Currency Depreciation Issue of Burma

 INTRODUCTION
Currency: Kyat
Currency Value: 1 Kyat equals to 0.099 PKR / 0.00056 USD

Symbol: K
Central bank: Central Bank of Myanmar

ISO code: MMK

Burma's currency has lost more than 60% of its value since the
beginning of September. The poor purchasing power of the kyat reflects the fact that
Burma is one of the poorest countries in Southeast Asia. The country’s economy depends
on commodity exports, with petroleum and opium being among its largest exports.
Indeed, Burma’s opium production ranks second largest in the world as of 2019
  CAUSES
In the start of 2012, the kyat was trading at K 6 to K 8 / USD. After that
kyat was trading for around 820 per dollar in April 2012, that was a significant decline.
The exchange rate in fact stabilized at about 1,000 kyats per dollar until 2015. Signs of
gradual weakening again showed up in March/April of 2015, and the kyat had sharply
depreciated to 1,300 by August 2015. Until June 2018, the kyat traded in the range of
1300s before sharply depreciating to over 1500 by August 2018. Now Kyat is trading over
K 1700 / USD.

In particular, trade deficits usually lead to currency

depreciation/devaluation. Budget deficits and inflation also result in lower currency
values. It is not difficult to provide reasons for kyat depreciation during periods of
depreciation.

1. During 2012-13
 High total external debt (23% of GDP)
 High imports, and high budget deficit

2. During 2015-16
 Trade deficit jumped to 6.8% (from 2.8% in 2014-2015)
 Inflation increased
3. During 2018-19
 Trade Deficit

4. During 2020-21
 Global Inflation
 Slowed GDP & FDI
 Military Takeover

 IMPACTS
WORLD BANK WARNS ECONOMY TO SLUMP 18%

 The World Bank predicted on Monday the economy would slump 18% this year
and said Myanmar would see the biggest contraction in employment in the
region and the number of poor would rise

 In a country where gross domestic product per capita was just $1,400 last year,
a 48-kg bag of rice now costs 48,000 kyat, or around $18, up nearly 40% since
the coup, while gasoline prices have nearly doubled to 1,445 kyat per liter.

 CONCLUSIONS
The kyat depreciation is continue to increase under the military
takeover the Burma. By applying following measure could help Burma to recover
the kyat value.
 Sell foreign exchange assets, purchase own currency.
 Raise interest rates (attract hot money flows)
 Reduce inflation (make exports more competitive).
 Hyperinflation in Burma

 Introduction

Hyperinflation is a term to describe rapid, excessive, and out-of-

control general price increases in an economy. Burma experienced the
hyperinflation during 2002-03 (around 58 %) and still facing the inflation issue that
can be seen in the following graph.

Fig: Annual Inflation Rate in Burma

The sudden increase with almost 0% inflation in 2000-01

period to the 58.04% in 2001-02 proven, very problematic for the economy of the Burma. The
drop was seen in 2004-05 period to 3.76% but again rises to 33.32% in the 2007-08. The reasons
and impacts behind this instable inflation rate of Burma that was continuously disturb the
economy of the country are stated forward.
 CAUSES
The Main Drivers of High Inflation Rate in Burma are;

 Budget Deficit
The demand for resources by the state by far exceeds the state’s ability to
increase taxation revenue that is the result of which the state finances its
spending by the simple expedient of printing money is the fact of inflation in
Myanmar.

 Double Exchange Rate System

It shows a depreciation trend in a long term. Inflation has attached depreciation
and monetization of fiscal deficit that cause inflation and result in long-lasting
depreciation. For the period between ended 2002 and early 2005, double
exchange rate leaded to grow in spite of inclining inflation.

 IMPACTS
The major impacts of Inflation in Burma are;

 Raising Prices
 Lowering Purchasing Power
 Reducing Pensions
 Decreasing Savings & Treasury Notes

 CONCLUSIONS
Burma is facing long-term high inflation rate due to numerous reasons and
the recent military takeover and further government instability increased it a lot.
Better Strategies implementation to recover the currency can reduced the inflation.
 Albania
“One of the Highest Emigration Rate”

Location:
Albania is situated on Southeastern Europe’s Balkan Peninsula
bordering Greece.

Capital:
Tirana

Emigration in Albania

 INTRODUCTION

Population: 2.8M

Emigration Rate: -3.3 migrants / 1000 people

Net Emigration: 52% of Population (2018)

Max Emigrants: -443K in 1992

Albania is a country with one of the highest emigrations rates and

one of the poorest country of Europe. Albania experienced maximum of 443,212
emigrants in 1992 according to World Bank Statistics. Most of the Albanian moved to
Germany, Italy & Canada. High rate of Emigration proven good for the economy of
Albania that will be explain in impacts section but first the question arises why people
start migrated from Albania and that is explained in causes section
 Fig. Actual & Projected Change in Population of Albania

 CAUSES
 Brutal totalitarian dictatorship
 The absolute lack of freedom
 Lack of human rights
 Poverty
 Unemployment

 IMPACTS
 With the increase in the emigration, the majorly increase the remittances of the
Albania. Remittances were clearly an important factor in the Albanian economy
in the years following the collapse of communism that become the reason for
GDP Growth.

Maximum Remittances: 1595.87 Million USD (2008)

Recent Remittances: 1185.52 Million USD (2020)
 The continuous increase in the remittances can be
seen in the following chart

Fig. Albania: Remittances (In Millions USD)

 Increase In Recourses
 Enhanced Consumption

 CONCLUSIONS

As Albania has the highest rate of emigration, every year many

Albanians leave in the search of work and send back the money (remittances) to
their homes that proved beneficial for the country. As the population is contracting
and effective resources utilization help the country’s GDP to grow.