According to campaign group Progressive Voice, the Myanmar junta’s cruel disregard for the people of Myanmar and their greed for power and money is fueling an economic and food crisis that adds to its extreme, direct forms of violence towards the Myanmar people.
The ruination of Myanmar’s economy at the hands of the junta is exemplified by soaring commodity prices, unfair exchange rate controls, rising inflation, and a record low value for the Myanmar Kyat of 4,200 Kyats to the US dollar on 31 August, despite the junta-controlled Central Bank of Myanmar (CBM) setting an ‘official’ exchange rate of 2,100 kyats to the US dollar.
So, in addition to the cruel violence inflicted by the junta, people are facing huge difficulties in making ends meet.
Yet it is not simply incompetence that is making life almost unbearable for the people of Myanmar, it is the greed, corruption and cronyism of the junta, which is enriching itself at the expense of people’s ability to put food on their plates.
The junta hoped that inflicting economic hardship and misery on the people of Myanmar would make their lives so precarious that they would end their resistance and concentrate on feeding themselves. Unfortunately, that plan has failed due to the people’s tenacious and effective resistance.
The CBM was one of the junta’s first targets after the military coup, with the junta arresting and imprisoning the CBM deputy director, Bo Bo Nge, who is now facing trumped-up corruption charges. It is clear that the junta wanted to control foreign reserves, monetary policy, and the financial sector, reflecting one of their first priorities – trying to consolidate their economic position.
Subsequently, they have attempted to run monetary policy by appointing to the CBM military personnel, who do the bidding of the top generals.
This has resulted in a series of inept and deeply damaging policies. One of these was the order that any foreign currency had to be converted to Myanmar Kyats at the artificially lowered official exchange rate within one day of foreign currency being received.
This was an attempt by the junta to control any foreign currency coming into the country. Several selfish foreign governments including Japan and Singapore lobbied for their companies, (but not the Myanmar people) to be exempt from this policy. They received a brief reprieve from the junta, which has now been overturned.
Though the value of the Kyat reached a record low last month, it has been steadily decreasing for the last few months. This has severely impacted local businesses which rely on imports and massively pushed up their operating costs.
According to Frontier Myanmar’s weekly newsletter which is based on local reporting, the Deputy Director of the CBM, without irony, blamed small traders’ use of black-market money exchangers using unofficial exchange rates for the depreciation of the Kyat, despite junta-controlled companies such as Myanmar National Airlines and crony businesses such as KBZ also using the unofficial exchange rate.
This reflects a broader approach of the junta, in which its’ allies in the business world are favored and those perceived to be friendly with the previous, National League for Democracy-led government, are either marginalized or actively persecuted.
For example, an investigation by Myanmar Now, shows that companies owned by the children of two of the junta’s top generals have received lucrative tenders from Naypyidaw for construction and other projects. This is part of a broader trend of corruption and nepotism in which the generals, their families, and their friends enrich themselves while the rest of the country suffers.
People are suffering because they are unable to afford fuel, food, or other daily essentials. People are skipping meals, unable to buy medicine, or provide for their families.
Rising inflation and the depreciation of the Kyat, means that farmers, many of whom are already in debt, are unable to afford enough fertilizer, which has doubled in cost, and pesticide, which has tripled in cost. This means that yields are going to be lower, creating higher demand which will create higher prices and more suffering. Already, domestic rice prices have doubled since the coup in February 2021.
According to Progressive Voice, in another example of corruption, palm oil, which is imported and used for cooking, has tripled in price, yet while the junta ‘capped’ the price, in reality, only those close to the military can buy at the lowered price.
In Sagaing Region, one of the most significant rice-growing regions of the country, the ferocity of junta violence against a mostly rural population, including the burning of homes and whole villages, widespread murder and torture, means that even when farmers can afford to grow rice, they do not because to do so would endanger their lives.
This food poverty and hunger is not going to be solved by a quick-fix, and the junta’s disastrous economic policy and disregard for the people of Myanmar is going to have severe long-term impacts on food security and therefore hunger and malnutrition.
During the years of economic liberalization between 2011 and 2021 the Myanmar military and its cronies, already had significant stakes in many sectors of the economy and benefitted greatly from the international investment that flowed into Myanmar as it integrated into global markets.
However, the coup has harmed these economic interests, and the junta’s desperation to control the economy is a reflection of its vulnerable position.
Without foreign reserves and cash flowing directly to the junta and its cronies, they cannot buy the weapons to use against the people of Myanmar. They cannot buy the loyalty of officers, or feed and pay rank-and-file soldiers.
Not only is the junta trying to collect all the foreign currency entering the country and control monetary policy, it is also deepening economic ties with Russia, another international pariah, as evidenced by Min Aung Hlaing’s visit to Russia for the Eastern Economic Forum.
This dangerous liaison between the repressive dictatorships of Putin and Min Aung Hlaing only harms the people of both countries, with the cash from weapons purchased for use against the Myanmar people fueling Russia’s war against Ukraine.
Progressive Voice believes that the international community could have a positive impact, by doing all it can to stop the flow of cash to the murderous junta. Setting up targeted economic and financial sanctions against junta-controlled entities and crony businesses, including Myanma Oil and Gas Enterprise (MOGE), would significantly weaken the junta’s ability to function.
Tired arguments about such policies having a deleterious impact on the people of Myanmar ignore the fact that the junta has already made the economic conditions and livelihoods in the country unbearable.
Furthermore, Progressive Voice believes that a new Myanmar, with the military’s economic and political power dismantled, would mean an opportunity to create a new model of development for the country.
It says that Myanmar should go to a more sustainable model of development beyond the precarious exploitation and destruction of natural resources exemplified by the corruption and self-serving greed of the junta, its chief Min Aung Hlaing, previous military regimes and even, to a lesser degree, the NLD-led government.
But, Progressive Voice believes the only way to achieve that is by cutting off the junta’s cashflow and stripping the military of all economic, political and military power.
