Britain’s colonies were first and foremost a business that had to be profitable. Ownership of revenue was divided between the local British administration and the imperial British government in India, to which it reported. This division was generally done by sector; profits from key strategic industries were controlled centrally, and less crucial ones by local government. It was the responsibility of the Accountant-General that revenue was correctly collected and sent to British India, and that rules were followed on how the remainder could be spent. In the grand bureaucracy of the colonial administration, it was a hugely important position.
A 1899-1900 financial report for the country provides a glimpse into the scale of financial operations. For income controlled by the local administration, converted into USD values for today, the equivalent of 467m dollars were collected, and 440m spent. For income controlled by the imperial government, more than 350m dollars were taken, and 94m spent – a profit of more than 257m US dollars.
The Accountant-General oversaw these flows of wealth from an office in the Currency Department building. The building has an unusual design, in that it wraps around the Custom House on Strand Road. Or rather it used to, as the north wing that faced Bank Street was destroyed by Japanese bombing in 1942, and has been replaced by a low rise building that now houses the Pensions Office. The bulk of the building is now used as the Yangon Division court, but was then responsible for the financial rules and regulations of the country, and also printed banknotes until the establishment of the Reserve Bank of India’s local branch in 1937.
The story of currency in Myanmar gives a remarkable window into its history. Burma was administered essentially as a province of British India, and so in 1889 the Indian Rupee replaced the Kyat, which was a purely coin-based currency minted in Mandalay. After the Japanese took control of the country in 1942, they initially printed more rupees before the introduction of a second version of the kyat. This kyat was purely paper based, and became worthless when the Japanese lost Yangon and the rupee was reintroduced.
Seven years later Burma was freshly independent, and the kyat was brought back again for a third and final time in 1952, replacing the rupee at a 1:1 rate. Each kyat was subdivided into 100 pya. Though this is the same iteration of the kyat we use today, it hasn’t had the easiest of careers. In 1964, the two largest bank notes, 100 and 50 were demonetized; their value reduced to nothing without warning, ostensibly to fight black marketeering. New 50 and 100 notes were reintroduced in the 1970s, but then demonetized again in November 1985, with only minor compensation.
Soon after 25 and 75 notes were introduced, supposedly to commemorate military dictator Ne Win’s 75th birthday. This heralded the start of truly strange territory for the kyat. 15 and 35 notes were introduced the next year, but just two years later the 35 and the 75 were demonetized without compensation. In the same month, the government in introduced 45 and 90 notes. The popular explanation for these final odd denominations is Ne Win’s fascination with numerology; the 45 and 90 note were both multiples of and added up to nine, his favourite number.
The economic fallout of these rather baffling decisions was a key factor in the 1988 uprising and subsequent coup. Despite the occasional rumour otherwise, this was the end of the sporadic demonetisations of the kyat. Bank notes were made smaller in 2004, but the larger notes remained legal tender. Small denominations like one kyat notes are rarely spotted due to their impracticality, but are still legal. As far as I can tell, even the 50 pya note is still technically valid. To put fears to rest for good, the 2008 constitution specifically forbid future demonetisations.
5,000 and 10,000 notes have now been introduced, the latter of which I think is a particularly attractive design. Parliament recently voted that Aung San’s portrait be added to bank notes, as was the case with most of the pre-1980s notes – but only Aung San, rather than a broader set of famous Myanmar figures, which would have perhaps been a little more interesting.
Finally, regarding the enduring popularity of gold in Myanmar, and why the gold shops are always busy with customers – these changes and demonetisations are partly why. Throughout decades of chaotic currency policy, gold has remained a safe investment, and people will often exchange their salary for gold. Gold cannot be exported legally, and has never been completely standardised versus international purity criteria, so the market exists in a kind of national vacuum, and is highly liquid: the same shops would always buy gold back, and give customers whatever strange new denomination or currency was in use at the time.