According to the junta, past one-month is truly auspicious period: the white elephant (whose name means “bringer of peace and prosperity” turns one year, and the much publicized huge Buddha statue commissioned under the patronage of junta chief Min Aung Hlaing was opened at a national ceremony. Peace and prosperity are destined. Yet the reality couldn’t be further from either of those. With much of the magazine discussing on the former issue, this article focuses on the latter.
Since the military staged coup, the economy got thrown into disarray, with institutions meant to promote stability and prosperity working most arduously to adhere every whips and whims of the junta, no matter how contradictory to their original purpose. In mid-2021, after a few months into coup, the World Bank and the UN reported that the coup had undone development gains of past two decade and half the population got thrown under poverty line. Deaths, destructions and costs have become a lot higher since then.
The biggest shock people has to face when it comes to prices is the sudden and huge episodes of Myanmar Kyat (MMK) depreciation. The currency value is ever declining since the coup for sure, however it is such falls, with consequences ranging from higher costs of everyday items to disappearance of essential items (with medicines being laterally life-impacting shortages) from the market, that hit the people hardest. In past two years, while such decline in currency value lasts only 1-2 weeks, the higher prices hardly fall back. To provide an example, in September 2022, MMK to US$ exchange rate suddenly falls from MMK2100 = US$1 to MMK4000 ~ MMK5000, the higher costs and disappearance of essential items kick in at once, yet when MMK gets stronger and stabilized at MMK2800 = US$1, these high prices hardly came down again.
However, the current episode of month long fall in MMK could be indication of more economic woes. At least the sudden rise and fall could be attributed towards speculators to a degree, nonetheless the current episode is the result of chronic mismanagement and political instability. Most notably, the effects of US government’s sanctions on two biggest state-owned banks responsible for foreign currency trading began to kick in. A huge impact of this sanction is Singapore banks (which holds more than two-third of Myanmar’s foreign reserves) announcing termination of operations with Myanmar banks and individuals starting September 1st.
To be fair, even before such decision by Singapore banks, MMK was already taking a dive since the announcement of the Central Bank of Myanmar (CBM)’s declaration of issuing 20,000MMK bank notes to commemorate (i) completion of the aforementioned Buddha statue, and (ii) one-year birthday of the aforementioned white elephant. With the announcement of 20,000MMK bank notes, the currency value which remained stable around MMK2,800 ~ MMK3,000 = US$1 for more than a year jumped towards MMK3,100 for US$1 at the same day and never fall back. Then, with the Singapore banks deciding to alienate junta-usurped Myanmar economy, currency value falls further till it reached around MMK4,000 for US$1.
As a result, higher prices and other economic hardship affect indiscriminately to everyone, rich or poor, urban or rural, internally displaced or those with homes untorched, in the country. With unending poverty, dissatisfaction by military families have also increased and the junta became even more alarmed of ongoing predicament. The ongoing economic woes become too big to be unacknowledged that the junta’s administration had to held a press conference (the first press conference in 2023) in late August dedicated to this issue, and impacts of US sanctions were acknowledged.
However, when it comes to facing problem, the junta ends at acknowledging the existence of problem, and put the blame on the dishonest merchants manipulating the market for personal gain. Since the MMK began to fall, on the contrary to reviewing the market-hostile policies, corruption and mismanagement of his administration, the junta has put further actions to root out “unscrupulous” merchants and stifle the market even more so.
It’s not that the junta (who have repeatedly and baselessly claimed of its intention to correct economic hardship under ousted civilian administration as one of the main motives for the coup) has any intention or acumen to create a thriving economy, with successive policy mistakes, mismanagements and corruptions leading to the current state of affairs. However, with the sieged mentality and by declaring unscrupulous merchants as the enemy behind the economic crisis, the pace of counterproductive interventions became more and more frequent. Nonsensical directives on fixing prices, restricting trades and arbitrary arrest of businesspeople, from money-changers and jewelers to rice and edible oil traders follow suit. And every step of these interventions open new doors for further corruption. These irrational responses push up prices further and in cases where prices cannot be raised due to strictly monitored fixed-prices, led to complete shutdown of markets.
The way out of current economic crisis is remote as long as the conflict and political crisis continues. The junta who have repeatedly demonstrated that they do not care for the people’s lives will not care whether they die from bullets or from diseases or from malnutrition. Instead, just as the junta did it with COVID, the economic and humanitarian crises could even be weaponized to ransom international support and aids.
For the need of the revolution to be a success, this is just another reason of how removal of military dictatorship is essential for the well-being of the people. For the junta, a rational being would reflect on his policies, make necessary amends and get a lifeline for himself, even when he has zero sympathy for the people’s suffering.
But is he rational?
The path he has taken so far proves otherwise.