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Although it is not clear whether any of this money has been used to build the city—Thailand’s Exim Bank told The Irrawaddy that the arrangement is “very confidential”—it is worth noting what the money has paid for.

 

In a statement in August designed to allay fears that Burma was failing to repay the loan, the bank said that 1.75 billion baht ($46.6 million) had been paid to nine Thai “exporters of machinery and equipment,” and 980 million baht ($26.1 million) went to three “construction contractors.” An additional 600 million baht ($16 million) was paid to two “telecommunications companies” and 500 million baht ($13.3 million) to two “petrochemical enterprises.” It remains unclear what infrastructure has been developed with these funds—and where.

 

The CIA estimates that by the end of 2005, Burma already owed $6.99 billion overseas, and $4.5 billion is due for repayment by next year, the EIU says. By comparison, the International Monetary Fund, CIA and Bank of China estimate that Burma’s reserves of foreign currency and gold are o­nly worth about $800 million.

 

Despite strong statistical evidence that the move to Naypyidaw is pushing Burma into a financial abyss, a regional representative of the World Trade Organization, Raymond Krommenacker, praised the project and the government in July. “The capital is absolutely amazing, in terms of size and the level of construction. Everything is booming in every respect,” he is quoted as saying in the Rangoon-based English language weekly The Myanmar Times.

 

The relocation project has had some positive economic impact. Local companies have benefited from the influx of new business, notwithstanding their allegations of the government’s confiscation of land. New shops that offer mostly construction materials and furniture have sprung up in old Pyinmana, which is not subject to the strict building and trading regulations applied in Naypyidaw.

 

Big construction companies—Asia World Company, Htoo Trading, Eden Group, Max Myanmar and Shwe Thanlwin—have also seen significant revenues, but the government’s reported inability to pay for services has required companies to generate income from numerous concessions offered in the place of cash.

 

These companies were all given the opportunity to build hotels in Naypyidaw, while the government simultaneously prohibited smaller operations in old Pyinmana from accepting foreign guests, thereby denying them the ability to earn foreign currency.

 

Max Myanmar has made the most of government concessions. It’s Royal Kumudra hotel, located in Naypyidaw’s new guest accommodation zone along an unfinished stretch of two-lane highway, is the busiest of the city’s new hotels—and o­ne of the most expensive, charging $144 per night for its top-tier executive villas.

 

The hotel often runs at full capacity—this was the case in August, as it hosted teams of smartly dressed Asian businesspeople in town for high-level meetings with ministry officials.