VI News Staff 2 years ago
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Myanmar political standoff leaves economy in tatters

The military takeover in Myanmar has set its economy back years, if not decades, as political unrest and violence disrupt banking, trade and livelihoods and millions slide deeper into poverty.

The Southeast Asian country was already in recession when the pandemic took hold in 2020, paralyzing its lucrative tourism sector. Political upheavals after the army ousted its civilian government on Feb. 1 have heaped further misery on its 62 million people, who are paying sharply higher prices for food and other necessities as the value of the kyat, the national currency, plummets.

With no end to the political impasse in sight, the outlook for the economy is murky.

U.N. humanitarian chief Martin Griffiths appealed last week to Myanmar’s military leaders to allow unimpeded access to more than 3 million people needing “life-saving” aid “because of growing conflict and insecurity, COVID-19 and a failing economy.”

Griffiths said he was increasingly concerned about reports of rising levels of food insecurity in and around the cities.

Hundreds of thousands of people in the country have lost their jobs and poverty has deepened as Myanmar’s inflation has skyrocketed.

“Imported foods and medicines cost double what they used to . . . so people buy only what they need to buy. And when traders sell an item for 1,000 kyats one day and 1,200 the next, it means that the seller is losing while selling,” said Ma San San, a trader in Mawlamyine township who sells Thai goods.

Myanmar's economy is forecast to shrink by 18.4% in 2021, according to the Asian Development Bank, one of the deepest recent contractions anywhere.

The civilian government ousted in February had been making slow but steady progress toward weaving impoverished Myanmar into the global economy after decades of quasi-isolation under past military regimes. Exports surged over the last decade, after the generals relaxed their decades-long hold on power. Eager to tap a young and low-cost workforce, foreign investors set up factories making garments and other light manufactured goods.

Yangon, the former capital and largest city, was transformed as moldering buildings dating back to British colonial days were spruced up or demolished, making way for new roads, industrial zones, shopping malls and modern apartments. Private businesses popped up, creating jobs and meeting long-deprived demand for products like cellphones and new cars.

But the military still controlled key government ministries and many industries, and corruption and cronyism thrived. Months into Myanmar’s political crisis, the country has returned to the days of black market trading and dollar hoarding.

READ MORE: ABC NEWS

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