Myanmar’s economy will shrink 18% in the fiscal year ending Sept. 30, the World Bank said in a report published Monday. The bleak forecast is almost double the World Bank’s March prediction of a 10% contraction and reflects the worsening conditions in the country that’s languishing under the compounding crises of a military coup and a surge in COVID-19.
“This economic deterioration will be hugely damaging to livelihoods, which for many were already under severe strain,” the World Bank said in its report, estimating 5% of the working population will lose their jobs and that the number of people living in poverty will double from 2019 to 2022.
The economic downturn threatens to “unwind much of the progress” that Myanmar has made since democratic reforms began in 2010, the World Bank says.
Myanmar’s economic upheaval began when the military seized power in a coup on Feb. 1 and deposed an elected government led by Nobel laureate Aung San Suu Kyi. The military arrested Suu Kyi during its takeover and charged her with illegally importing walkie-talkies. The junta’s power grab sparked widespread protest from citizens, many of whom engaged in civil disobedience movements including strikes, boycotts, and roadblocks. The junta responded with force. Security forces killed more than 900 protesters as of July, according to the Association for the Assistance of Political Prisoners (AAPP.)
As stability in Myanmar deteriorated, foreign businesses began to exit operations in the country. Japan’s Kirin beer company quit a joint venture with the military-owned Myanmar Economic Holdings in February. Oil giants Chevron and Total, which operate a Burmese gas project, stopped paying dividends to the junta in May, and Norwegian telecoms operator Telenor sold its Burmese operations in July.
“The situation in Myanmar has over the past months become increasingly challenging for Telenor for people security, regulatory and compliance reasons. We have evaluated all options and believe a sale of the company is the best possible solution,” Telenor CEO Sigve Brekke said in a statement. Telenor wrote off its $708 million investment in Myanmar earlier this year.
According to Kim Alan Edwards, World Bank Senior Economist for Myanmar, Myanmar began to show signs of returning stability in June as people adjusted to life under the military regime. But the rapid spread of COVID-19 in July is likely to cause “further contraction.”
The February coup derailed Myanmar’s vaccine rollout and pushed many health care workers to strike in protest, crippling Myanmar’s already ailing medical system. The military exacerbated the situation by raiding hospitals and attacking medical staff, reportedly in retribution for health care workers opposing the coup and aiding injured protesters.
Now the country is suffering an oxygen shortage as case numbers of COVID-19 spike. Myanmar, with a population of 54 million, has recorded over 77,000 new COVID-19 cases in the last two weeks, although analysts expect totals are far higher. Too afraid or unable to enter hospitals, many patients are being treated by relatives at home, but Reuters reports the military has banned oxygen manufacturers from selling tanks to individual buyers, ostensibly to prevent hoarding.
Last week, the Chinese embassy in Myanmar said China had donated 3,000 tons of liquid oxygen to the country, as Myanmar’s spiraling crisis risks expanding to neighboring regions. China has been busy installing a 400-mile fence along its border with Myanmar since Myanmar suffered a “second wave” of COVID-19 infections in September last year.
“You cannot assume that Myanmar is an island,” World Bank Vice President for the East Asia and Pacific Region, Victoria Kwakwa, told a press conference last week. “It’s going to spill over to the other countries. That’s a regional issue that needs to be looked at very carefully.”
