Originally published on Mohinga Matters
According to the regime, the past month has been a truly auspicious period: the white elephant (whose name means “bringer of peace and prosperity” turns one year old, and the much publicized huge Buddha statue commissioned under the patronage of 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 the former issue, this article focuses on the latter.
Since the 2021 military coup, the economy has been in disarray, with institutions meant to promote stability and prosperity working most arduously to adhere to every whim of the regime, no matter how contradictory it is. In mid-2021, after a few months after the coup, the World Bank and the U.N. reported that it had undone development gains of the past two decades as half the population is now under the poverty line. Deaths, destruction and costs have become a lot higher since then.
The biggest shock people have to face when it comes to prices is the sudden and huge episodes of kyat’s (MMK) depreciation. The currency value has been declining since the coup, however it is such falls, with consequences ranging from higher costs of everyday items to disappearance of essential items (with medicine shortages reported) from the market, that has hit the people hardest.
In the past two years, while such a decline in currency value lasted only 1-2 weeks, the higher prices stabilized. For example, in September 2022, the MMK to USD exchange rate suddenly fell from K2,100 = $1 USD to K4000-5000, the higher costs and disappearance of essential items kick in at once, yet when the MMK stabilized at K2,800 = US$1, these high prices hardly came down again.
However, the current months-long fall in MMK could be an 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 the U.S. government sanctions on two biggest state-owned banks is responsible for the rapid economic decline. A huge impact of the sanctions is Singaporean banks (which holds more than two-third of Myanmar’s foreign reserves) announcing termination of operations with Myanmar banks and individuals starting Sept. 1.
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) declaration of issuing K20,000 bank notes to commemorate (i) the completion of the aforementioned Buddha statue, and (ii) the one-year birthday of the aforementioned white elephant.
With the announcement of K20,000 bank notes, the currency value which remained stable around K2,800-3,000 = $1 USD for more than a year jumped towards K3,100 for $1 USD on the same day and never fell back. Then, with the Singapore banks deciding to alienate the Myanmar economy, currency value fell further till it reached around K4,000 for $1 USD.
As a result, higher prices have affected everyone, rich, poor, urban, rural, internally displaced or those with homes untouched, in the country. With unending poverty, dissatisfaction by military families have also increased. The ongoing economic woes become too big to be unacknowledged that the regime had to hold a press conference (the first of 2023) in late August dedicated to this issue, and the impact of U.S. sanctions was acknowledged.
However, when it comes to facing problems, the regime ends at acknowledging the existence of the problem, and puts 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 regime has put further actions to root out “unscrupulous” merchants and stifle the market even more so.
It’s not that the regime (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, 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 arrests of businesspeople, from money-changers and jewelers to rice and edible oil traders followed suit. And every step of these interventions opened 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 the current economic crisis is remote as long as the conflict and political crisis continues. The regime 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 it did during the COVID-19 pandemic, the economic and humanitarian crises could even be weaponized to ransom international support and aid.
For the need of the revolution to be a success, this is just another reason for how removal of military dictatorship is essential for the well-being of the people. For the regime, 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.
*This story has been edited for brevity. To read the entire story go to Mohinga Matters, a platform where aspiring writers share their thoughts, ideas and opinions freely.