Bad Swap

"Anybody who goes for barter deals is out of his mind," said Burma's ex-Premier U Nu--and he should know. Burma's Rangoon docks were still overflowing with the bartered Iron Curtain cement it could not use (TIME, May 21). Originally Burma thought that it had at least got a good price for its surplus rice--only to find that the Soviet Union was upping the prices of the goods it sent in exchange. All this was demoralizing enough. Last week Burma came face to face with another unsettling discovery: it really had no surplus rice problem to begin with.

Burma's rice crop turns out to be smaller and the country's potential market bigger than it had calculated. Already losing 10% to 30% of the value of the bartered rice, Burma decided to lower slightly the prices on the rest of the crop. It found itself besieged by cash customers: India, Indonesia, Pakistan, Malaya. Now Burma faces a frustrating problem: there is not enough exportable rice to supply cash customers and at the same time fulfill barter obligations (600,000 tons a year) to the Iron Curtain countries. Burma has already mortgaged some of its 1957 crop to meet 1956 commitments. Worst of all, it has had to refuse offers of the cold, hard cash it needs so badly. Reluctantly turned down by Burma in its request for more rice, Pakistan has been forced to go to Red China, which has plenty of bartered Burmese rice on hand and is perfectly willing to part with it--for hard cash.

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