Myanmar steps backward in time
The country’s lost decade appears to be assured: the military coup hit the financial system and the economy – and it is scaring away many investors.
US president Joe Biden marked the first anniversary of Myanmar’s coup by slapping fresh sanctions on its military government in February. But sanctions aside, the real threats to Myanmar’s economy are internal: its self-imposed disruption of the banking system, financial markets and trade are pushing tens of millions of people deeper into poverty.
This southeast Asian nation had become the toast of frontier-market investors thanks to its democratic awakening in recent years. But when Aung San Suu Kyi’s National League for Democracy (NLD) party won the general election in 2020 by a landslide, the military alleged that voting was rigged and seized power in a coup in February 2021. Since then, many investors have fled, while others are looking for ways to bail out.
Kim Edwards, the World Bank’s senior economist for Myanmar, says gross domestic product is now at least 30% smaller than it would have been without the double-whammy of the coup and the Covid-19 pandemic.
“The absence of a strong rebound in the economy over the coming year will continue to be hugely damaging to livelihoods, which for many have been under severe strain since the beginning of the pandemic in early 2020,” Edwards says.
The only good news for Myanmar’s military, led by Min Aung Hlaing, is that Russia’s invasion of Ukraine now dominates the global headlines, diverting attention away from what is going on in Myanmar.