Kyaw Hein* is caught in a bind. As an employee of a car repair garage in Yangon, his loss of a job means he is considered an employee – not a daily wage earner – and therefore not able to receive donations of food given to unemployed daily wage earners.
“I was working for the sales of tyres. When the tyre shop could not run properly due to the falling demand, I lost my job,” he told Mizzima, noting that the garage’s car wash service is now manned by daily wage earners, not employees or former staff like himself.
“We understand our employer is trying to survive in the business. We are considered as employees who get regular income, and that we do not get the donation of food supplies although we have no more job,” said Kyaw Hein.
DOUBLE-WHAMMY
The Myanmar economy is in dire straits due to the effects of the military coup and the ongoing “on-and-off” restrictions surrounding the COVID-19 pandemic, a “double-whammy” so to speak that is turning the country’s economy into a basket case.
Thousands of people like Kyaw Hein have lost their jobs as businesses continue to suffer due to the Myanmar crisis. He represents the face or personal toll of the 18 per cent drop in GDP that Myanmar has suffered over the last eight months, as tallied by the World Bank.
Kyaw Hein’s employer is struggling to keep his business afloat and choosing to take in daily wage earners to keep his car wash afloat, rather than take on the deeper financial burden imposed by providing a weekly or a monthly salary to employees.
Businesses big and small are suffering and it is no surprise that car owners – in this case – are putting off tyre changes or car washes. This garage is still open but shuttered shops and offices in Myanmar’s commercial capital are the obvious signs that business people are holding their breath – hoping for the best but worried about the worse as the political and economic situation in the country goes from bad to worse.
PANDEMIC RESTRICTIONS
Myanmar was setting itself up to fail even before the 1 February coup due to an overreaction to the COVID-19 virus threat. An economy that for many was just scraping by in the best of times was badly impacted by poorly thought out COVID-19 pandemic restrictions that panicked the public over a virus that could have been handled more sensibly.
Myanmar is viewed as being hit by “three waves” of COVID-19 that rattled the National League for Democracy-led government in 2020 and into 2021, with pandemic restrictions, mask-wearing and social distancing damaging business and the normal interactions of society, particularly large meetings,
entertainment, sports and education, even to the point where people put up road blocks and checks on their neighbourhoods. Pandemic panic dramatically hit foreign investment, the movement of foreign business people, and the growing tourism sector, when gateways into the country were battened down.
COUP-PROMPTED CRISIS
The actions of the Military on 1 February put the final nail in the coffin of a decade of cautiously optimistic growth and foreign investment begun under the Thein Sein regime.
According to the World Bank, an increasing unemployment rate has seen the loss of at least 1 million jobs, which contribute to 4 to 5 per cent of the overall employment in the country. Employees like Kyaw Hein and daily wage earners were badly hit by the combination of pandemic restrictions and the societal disturbances prompted by security force clampdowns and public protests – including the voluntary walkout by people under the Civil Disobedience Movement (CDM), and the descent into a “people’s defensive war” promoted by the National Unity Government (NUG).
The increase in unemployment and the drop in work options for daily wager earners has led to a sharp rise in Myanmar’s poverty rate and more people lining up for food handouts in the country’s cities.
Some employers have sympathized with their staff members and sought in what way they can to keep their employees on the books. But the effect of the security crisis on the back of the mishandling of the pandemic has prompted many to pull down their shutters. One of the latest closures is of Metro Wholesale Myanmar, owned by German investors, which recently stopped its operations in the country.
Some businesses are giving a certain per cent of salaries to their employees although there is no regular work.
“We have been unemployed. We are experiencing a painful situation. Although we look comfortable, we are suffering financial hardships,” said Maung Maung Tar* who is a member of the marketing staff at a company in Yangon.
Given the downturn in business due to the dual crisis of the pandemic and the coup, some private companies have reduced the salaries they pay their employees. As a result, the employees have faced problems with paying their rent.
Ironically, construction workers, vendors and trishaw workers have relatively regular income compared to the employees.
JUNTA ‘SEEKS REBOUND’
Coup leader Min Aung Hlaing said that the economic decline was caused by the COVID-19 pandemic which began in the third quarter of the 2019-2020 financial year of Myanmar and that the national planning law will be drafted to ensure an economic rebound in the next six months.
During the meeting of the National Planning Commission held in Nay Pyi Taw on 22 September this year, Min Aung Hlaing said his regime will change the months in each financial year from October-September to April-March beginning 2022-2023 FY.
The remaining six months from September to April under the new fiscal year coincided with the open season of the country, and the ongoing projects in industrial, construction and electricity sectors could be finalized, and new projects will be implemented, he added.
However, the report of the World Bank on Myanmar’s economic index has estimated the poverty rate of the country will reach its highest point in 2022, and increase to more than double the figure seen during the pre-pandemic period.
LABOUR RIGHTS VIOLATIONS
Foreign investment, trade and humanitarian assistance from the international community have decreased in Myanmar after the military coup, and the country is listed in the top 10 countries of labour rights violations, according to the 2021 Global Rights Index of International Trade Union Confederation. Those top ten countries are Bangladesh, Belarus, Brazil, Columbia, Egypt, Honduras, Myanmar, the Philippines, Turkey and Zimbabwe. The ITUC is a confederation linked with labour unions of different countries, representing over 200 employment categories from 163 countries.
Political instability, the departure of foreign investment and the plunge in the trade sector are the consequence of the military coup, Ma Thet Htar, a senior member of a labour union, told Mizzima.
“It is difficult to do investment in a country with political instability. The main reason for the departure of foreign investment is the military coup. The decline of the trade sector also resulted from the coup. For the recovery of the country’s economy, a legitimate government must be formed,” she added.
Protection of labour rights will be ensured through the rule of law under all circumstances to improve employment and salaries, and this needs to happen with a sense of mutual understanding between employees and employers.
“In this situation, the employers should avoid unfair treatment of their employees to ensure their rights. The workers could not enjoy their rights even in an ordinary situation, and they are trying to withstand labour abuses to prevent hunger from joblessness. However, the employers are trying to protect their businesses amid the departure of foreign investment, the skyrocketing price of fuel and the decline of the Myanmar currency rate. Concisely, the future of the country depends on the effective management and decisions of the administrative sector,” Ma Thet Htar said.
‘TIME FOR ACTION’
One of the many economic planning mistakes in Myanmar is the tendency to “sit-and-wait” for a long time, according to Dr Khin Maung, an economics scholar, in an assessment of a way out.
As Myanmar is an agriculture-based country, it needs to produce more agricultural products for export to India and China, representing two powerful neighbouring economies.
“Our country should produce agricultural products. As we cannot compete with China in the production sector, it is more appropriate for us to produce goods to fulfil Chinese demand. The country’s economy has dwindled due to the pandemic and military coup, followed by an increase in the gold price and currency exchange. The Myanmar currency value will surely decline with the decrease in the production sector of the country. It is also important to address the current banking crisis. The country needs to prioritize solving the economic problems,” the scholar noted.
Dr Khin Maung also emphasizes quality education to reduce the unemployment rate, comparing Myanmar with Singapore which created many employment opportunities for its citizens and foreigners due to emphasis on its education system.
“It is necessary to focus on quality education in the long-term to prevent a higher unemployment rate. As the education level of Singapore is higher than that of other ASEAN countries, its citizens have more chances to secure jobs in the world. Myanmar should imitate it. The participation of international experts plays a crucial role in it. So, immediate measures should be taken without delay until all the political problems can be solved entirely,” he added.
Economist Ko Ko Hein* stressed there was a need to focus on economic recovery and stability.
“It is undeniable that the country is in chaos, going downwards in various sectors, due to the pandemic and the political turmoil. The declining rate of the local currency, skyrocketing gold prices and commodity prices are caused by economic instability. The existing economic problems must be solved in the first phase, then must be carried out for its recovery.”
Improvement in the foreign exchange rate is vital for the economic rebound of the country, especially in the US currency.
“Some people remarked that the increasing price of vegetables is not related with the US currency exchange rate. It is not true because its rate is the key to market prices of the goods such as various household commodities. So, economic stability is essential for the recovery of the country’s economy,” he added.
In addition, the relaxation of the rules and policies for trade, foreign investments and the industrial sector could help the economic recovery of the country in the future.
Long-term planning is crucial. But at this point, policymakers and businesses also need to focus on the short term and the challenges posed for workers like garage worker Kyaw Hein who is struggling to make ends meet.
*Names changed for security reasons
