BANGKOK: A military takeover in Myanmar has set its economy back for decades, if not decades, as political unrest and violence disrupted banking, trade and livelihoods and pushed millions into poverty.
The Southeast Asian country was already in recession when the pandemic paralyzed its lucrative tourism sector in 2020.
The political turmoil after the military removed its civilian government on February 1 has inflicted further misery on its 62 million people, who are increasingly demanding food and other necessities as the value of the national currency, the kayat. Paying the price.
With no end to the political deadlock, the outlook for the economy remains unclear.
a Humanitarian chief Martin Griffiths last week appealed to Myanmar’s military leaders to allow unhindered access to more than 3 million people in need of “life-saving” aid due to escalating conflict and insecurity, COVID-19 and a failing economy. Griffiths said he was concerned about reports of rising levels of food insecurity in and around cities.
Due to skyrocketing inflation in Myanmar, hundreds of thousands of people have lost their jobs and poverty has deepened in the country.
“The price of imported food items and medicines doubles as compared to earlier. , , That’s why people buy what they need to buy. And when traders sell an item for 1,000 one day and 1,200 the next, it means the seller is making a loss while selling,” said Ma San San, who sells Thai goods.
According to the Asian Development Bank, Myanmar’s economy is projected to shrink by 18.4 percent in 2021, one of the deepest recent contractions.
The civilian government, ousted in February after decades of semi-isolation under the previous military regime, was making slow but steady progress in weaving poor Myanmar into the global economy.
Exports increased in the last decade, when generals loosened their decades-long hold on power.
Eager to tap a young and low-cost workforce, foreign investors set up factories manufacturing textiles and other light manufactured goods.
Yangon, the former capital and largest city, was transformed into a form of casting buildings from the British colonial days, being razed or demolished, making way for new streets, industrial areas, shopping malls and modern apartments. Gaya.
Private businesses popped up, created jobs and met long-deprived demand for products like cellphones and new cars.
But the military still controlled major government ministries and many industries, and corruption and cronyism flourished.
In the months of Myanmar’s political crisis, the country has returned to the days of black market trading and dollar hoarding.
“Now most people are losing confidence in buying Myanmar’s currency and dollars, so prices are going up,” said So Tun, president of the Myanmar Automobile Manufacturers and Distributors Association and an official of the Myanmar Rice Association.
Global shortages, and rising costs of shipping containers and China closing its border to exports from Myanmar to help control the coronavirus outbreak, have hampered trade.
Myanmar’s overall trade fell 22 percent in the 10 months from October 2020 to July 2021 from a year earlier, senior general Min Aung Hling, who led the military takeover, told his military-founded cabinet recently. He said that the country has registered a trade deficit of USD 368 million.
The less Myanmar exports, the less it earns in foreign currency – mainly dollars – making the greenback more rare and valuable than the kyat.
In January, the dollar bought 1,300-1,400 cuits. In late September, it hit a record high of 3,000 kts among money changers in downtown Yangon’s Shwebontha Street, informally known as Broker Street.
This has pushed up prices for imports using the dollar, such as cooking oil, cosmetics, food, electronics, fuel, and other expensive supplies, in Kyats.
The authorities suspended vehicle imports from October 1 to conserve foreign exchange. To prevent a dip in kayat, the Central Bank of Myanmar has intervened in the market 36 times since February.
But such actions have had little effect, traders say, because most of the dollars sold by the central bank go to pro-military businesses.
“Some people say that central bank-issued dollars do not meet domestic demand, and we accept that to be true,” Major General Jae Min Tun, the military administration’s chief spokesman, told reporters.
“As a government, we have to take responsibility for what happened in our times instead of blaming the past,” he said.
“I want to say that our government is working hard to find the best solution.” Some have set up money-change groups to swap kyat for dollars online despite the risks, and the central bank recently issued a notice banning such non-official transactions. .
“Online is easy these days. You can easily find people who want to buy or sell. But you need to build trust between sellers and buyers. There are also online scammers,” said Ko Thurin, who frequents Myanmar. Posts dollar sales at Money Changer Group.
Fuel shortage has become a major problem. Partly thanks to rising global oil prices, the cost of gasoline, which is imported because Myanmar has less refining capacity, has more than doubled from a record nearly 700 kyat in January to nearly 1,500 kilos per liter.
Army spokesman Zaw Min Tun said Myanmar was working on long-term hydropower and wind power projects while trying to conserve energy and cut imports because it “cannot cover fuel demand.”
Top leader Min Aung Huling has called on the public to help reduce energy use.
“It’s hard to buy dollars, and oil companies are no longer selling us on credit,” said an official at Max Energy, a leading conglomerate that operates dozens of filling stations.
“You can’t buy everything you want and we have a hard time building trust with them. So we’re trying not to lose too much at the moment.”
He blamed the political crisis.
Speaking on the condition of anonymity, the official said, “Even in our country, people do not trust each other, and there is no doubt that foreigners do not trust us. This is also because The banking system is in turmoil.” Of the subject
“Gasoline prices have skyrocketed, so we have to increase the fare. But the passengers don’t want to pay. I know everyone is poor right now, so people are using buses instead of taxis,” said Mo Myint Tun, a taxi driver in Yangon. “When we have high fuel prices, we get a lot of commuters. lose it.”
Like many other modern facilities, bank services have been disrupted from time to time by protests and strikes, prompting people to use mobile banking apps to access their cash and at so-called Pay Money shops providing financial services. Percentage-force to pay -7 percent fee.
“Due to inflation, the money in our hands automatically decreases in value. Once the money cannot be withdrawn in the bank, we have to pay a commission at Pay Money shops. In the end, we have nothing left,” said su yi win ang, sales clerk in a telecommunications company in Yangon.
“It can be said that this is the most difficult time for us,” she said.
The Southeast Asian country was already in recession when the pandemic paralyzed its lucrative tourism sector in 2020.
The political turmoil after the military removed its civilian government on February 1 has inflicted further misery on its 62 million people, who are increasingly demanding food and other necessities as the value of the national currency, the kayat. Paying the price.
With no end to the political deadlock, the outlook for the economy remains unclear.
a Humanitarian chief Martin Griffiths last week appealed to Myanmar’s military leaders to allow unhindered access to more than 3 million people in need of “life-saving” aid due to escalating conflict and insecurity, COVID-19 and a failing economy. Griffiths said he was concerned about reports of rising levels of food insecurity in and around cities.
Due to skyrocketing inflation in Myanmar, hundreds of thousands of people have lost their jobs and poverty has deepened in the country.
“The price of imported food items and medicines doubles as compared to earlier. , , That’s why people buy what they need to buy. And when traders sell an item for 1,000 one day and 1,200 the next, it means the seller is making a loss while selling,” said Ma San San, who sells Thai goods.
According to the Asian Development Bank, Myanmar’s economy is projected to shrink by 18.4 percent in 2021, one of the deepest recent contractions.
The civilian government, ousted in February after decades of semi-isolation under the previous military regime, was making slow but steady progress in weaving poor Myanmar into the global economy.
Exports increased in the last decade, when generals loosened their decades-long hold on power.
Eager to tap a young and low-cost workforce, foreign investors set up factories manufacturing textiles and other light manufactured goods.
Yangon, the former capital and largest city, was transformed into a form of casting buildings from the British colonial days, being razed or demolished, making way for new streets, industrial areas, shopping malls and modern apartments. Gaya.
Private businesses popped up, created jobs and met long-deprived demand for products like cellphones and new cars.
But the military still controlled major government ministries and many industries, and corruption and cronyism flourished.
In the months of Myanmar’s political crisis, the country has returned to the days of black market trading and dollar hoarding.
“Now most people are losing confidence in buying Myanmar’s currency and dollars, so prices are going up,” said So Tun, president of the Myanmar Automobile Manufacturers and Distributors Association and an official of the Myanmar Rice Association.
Global shortages, and rising costs of shipping containers and China closing its border to exports from Myanmar to help control the coronavirus outbreak, have hampered trade.
Myanmar’s overall trade fell 22 percent in the 10 months from October 2020 to July 2021 from a year earlier, senior general Min Aung Hling, who led the military takeover, told his military-founded cabinet recently. He said that the country has registered a trade deficit of USD 368 million.
The less Myanmar exports, the less it earns in foreign currency – mainly dollars – making the greenback more rare and valuable than the kyat.
In January, the dollar bought 1,300-1,400 cuits. In late September, it hit a record high of 3,000 kts among money changers in downtown Yangon’s Shwebontha Street, informally known as Broker Street.
This has pushed up prices for imports using the dollar, such as cooking oil, cosmetics, food, electronics, fuel, and other expensive supplies, in Kyats.
The authorities suspended vehicle imports from October 1 to conserve foreign exchange. To prevent a dip in kayat, the Central Bank of Myanmar has intervened in the market 36 times since February.
But such actions have had little effect, traders say, because most of the dollars sold by the central bank go to pro-military businesses.
“Some people say that central bank-issued dollars do not meet domestic demand, and we accept that to be true,” Major General Jae Min Tun, the military administration’s chief spokesman, told reporters.
“As a government, we have to take responsibility for what happened in our times instead of blaming the past,” he said.
“I want to say that our government is working hard to find the best solution.” Some have set up money-change groups to swap kyat for dollars online despite the risks, and the central bank recently issued a notice banning such non-official transactions. .
“Online is easy these days. You can easily find people who want to buy or sell. But you need to build trust between sellers and buyers. There are also online scammers,” said Ko Thurin, who frequents Myanmar. Posts dollar sales at Money Changer Group.
Fuel shortage has become a major problem. Partly thanks to rising global oil prices, the cost of gasoline, which is imported because Myanmar has less refining capacity, has more than doubled from a record nearly 700 kyat in January to nearly 1,500 kilos per liter.
Army spokesman Zaw Min Tun said Myanmar was working on long-term hydropower and wind power projects while trying to conserve energy and cut imports because it “cannot cover fuel demand.”
Top leader Min Aung Huling has called on the public to help reduce energy use.
“It’s hard to buy dollars, and oil companies are no longer selling us on credit,” said an official at Max Energy, a leading conglomerate that operates dozens of filling stations.
“You can’t buy everything you want and we have a hard time building trust with them. So we’re trying not to lose too much at the moment.”
He blamed the political crisis.
Speaking on the condition of anonymity, the official said, “Even in our country, people do not trust each other, and there is no doubt that foreigners do not trust us. This is also because The banking system is in turmoil.” Of the subject
“Gasoline prices have skyrocketed, so we have to increase the fare. But the passengers don’t want to pay. I know everyone is poor right now, so people are using buses instead of taxis,” said Mo Myint Tun, a taxi driver in Yangon. “When we have high fuel prices, we get a lot of commuters. lose it.”
Like many other modern facilities, bank services have been disrupted from time to time by protests and strikes, prompting people to use mobile banking apps to access their cash and at so-called Pay Money shops providing financial services. Percentage-force to pay -7 percent fee.
“Due to inflation, the money in our hands automatically decreases in value. Once the money cannot be withdrawn in the bank, we have to pay a commission at Pay Money shops. In the end, we have nothing left,” said su yi win ang, sales clerk in a telecommunications company in Yangon.
“It can be said that this is the most difficult time for us,” she said.
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