Two and a half months after the coup, Myanmar’s economy lies in shatters

Closed shops in Yangon

Bad news for foreign investors who have set a lot of hopes on Myanmar’s economic opening some ten years ago and pumped billions of dollars into the long-secluded country: It’s all over now.

Since the February military coup, the country’s economy has deteriorated to an extent that it presently stands at the brink of total collapse. Most banks, factories, clinics, schools, retail stores are closed, the Internet is largely cut off and the public administration widely defunct.

The army generals with their actions have catapulted the country some 50 years back in time, mainly to secure their personal interests in the country’s lucrative gem and drug trade, transforming Myanmar back into a failed, unstable narco-state it used to be, with little to no prospects for its people.

The World Bank now expects Myanmar’s economy to contract by 10 per cent this year, a sharp reversal from the previous prediction of 5.9 per cent growth made in October 2020.

“Myanmar has been heavily affected by recent protests, worker strikes, military actions, reduced mobility and ongoing disruptions in essential public services, including banking, logistics and Internet services,” the World Bank said in its most recent country analysis.

One of Asia’s poorest countries becomes even poorer

To put that into perspective: Myanmar It is already one of Asia’s poorest countries. Six million people live on less than $3.20 a day, a poverty threshold for lower middle-income countries like Myanmar. A fourth of the nation’s children are far too small for their age because of inadequate nutrition.

And that comes on top of the Covid-19 pandemic which is certainly not sparing Myanmar, but data about the infection trajectory has been hard to come by after the coup. What’s clear is that Myanmar’s efforts to contain the pandemic have been crumbling after the generals took over and there are no updates about the country’s vaccination scheme which started in January 2021.

With no end in sight for the violence, chaos and economic disaster caused by the military coup, the foreseeable future only promises further downward revisions, putting an end to Myanmar’s highly promising economic resurgence from decades of military rule.

The army rule in the past was accompanied by disastrous economic policies such as the “Burmese Way to Socialism” in the 1960 which created a totalitarian commando economy which lasted until long into the 2000s, with annual inflation rates peaking beyond 30 per cent and corruption thriving at all levels of the state. Many worry that these conditions may return to some extent with foreign investors pulling the plug and the generals regaining economic leadership.

Large foreign investors face a totally unpredictable future

The question remains whether large foreign firms, such as Telenor, Total and Ooredoo, which invested billions into the country starting, will call it quits and move out, not only because the deteriorating situation locally, but also because of global economic restrictions and the reputational damage of doing business with the Myanmar junta.

In any way, it very much seems that the coup has created a few winners, namely military generals who are back at the trough, and millions of losers, the Myanmar people, who watch the economic gains of the past decade descend into the void.



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Closed shops in Yangon Bad news for foreign investors who have set a lot of hopes on Myanmar’s economic opening some ten years ago and pumped billions of dollars into the long-secluded country: It’s all over now. Since the February military coup, the country’s economy has deteriorated to an extent that it presently stands at the brink of total collapse. Most banks, factories, clinics, schools, retail stores are closed, the Internet is largely cut off and the public administration widely defunct. The army generals with their actions have catapulted the country some 50 years back in time, mainly to secure...

Closed shops in Yangon

Bad news for foreign investors who have set a lot of hopes on Myanmar’s economic opening some ten years ago and pumped billions of dollars into the long-secluded country: It’s all over now.

Since the February military coup, the country’s economy has deteriorated to an extent that it presently stands at the brink of total collapse. Most banks, factories, clinics, schools, retail stores are closed, the Internet is largely cut off and the public administration widely defunct.

The army generals with their actions have catapulted the country some 50 years back in time, mainly to secure their personal interests in the country’s lucrative gem and drug trade, transforming Myanmar back into a failed, unstable narco-state it used to be, with little to no prospects for its people.

The World Bank now expects Myanmar’s economy to contract by 10 per cent this year, a sharp reversal from the previous prediction of 5.9 per cent growth made in October 2020.

“Myanmar has been heavily affected by recent protests, worker strikes, military actions, reduced mobility and ongoing disruptions in essential public services, including banking, logistics and Internet services,” the World Bank said in its most recent country analysis.

One of Asia’s poorest countries becomes even poorer

To put that into perspective: Myanmar It is already one of Asia’s poorest countries. Six million people live on less than $3.20 a day, a poverty threshold for lower middle-income countries like Myanmar. A fourth of the nation’s children are far too small for their age because of inadequate nutrition.

And that comes on top of the Covid-19 pandemic which is certainly not sparing Myanmar, but data about the infection trajectory has been hard to come by after the coup. What’s clear is that Myanmar’s efforts to contain the pandemic have been crumbling after the generals took over and there are no updates about the country’s vaccination scheme which started in January 2021.

With no end in sight for the violence, chaos and economic disaster caused by the military coup, the foreseeable future only promises further downward revisions, putting an end to Myanmar’s highly promising economic resurgence from decades of military rule.

The army rule in the past was accompanied by disastrous economic policies such as the “Burmese Way to Socialism” in the 1960 which created a totalitarian commando economy which lasted until long into the 2000s, with annual inflation rates peaking beyond 30 per cent and corruption thriving at all levels of the state. Many worry that these conditions may return to some extent with foreign investors pulling the plug and the generals regaining economic leadership.

Large foreign investors face a totally unpredictable future

The question remains whether large foreign firms, such as Telenor, Total and Ooredoo, which invested billions into the country starting, will call it quits and move out, not only because the deteriorating situation locally, but also because of global economic restrictions and the reputational damage of doing business with the Myanmar junta.

In any way, it very much seems that the coup has created a few winners, namely military generals who are back at the trough, and millions of losers, the Myanmar people, who watch the economic gains of the past decade descend into the void.



Support ASEAN news

Investvine has been a consistent voice in ASEAN news for more than a decade. From breaking news to exclusive interviews with key ASEAN leaders, we have brought you factual and engaging reports – the stories that matter, free of charge.

Like many news organisations, we are striving to survive in an age of reduced advertising and biased journalism. Our mission is to rise above today’s challenges and chart tomorrow’s world with clear, dependable reporting.

Support us now with a donation of your choosing. Your contribution will help us shine a light on important ASEAN stories, reach more people and lift the manifold voices of this dynamic, influential region.

$
Personal Info

Donation Total: $10.00

 

 

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