The Unraveling Economy of Myanmar: Turmoil Threatens Trade and Livelihoods

Myanmar, once touted as a burgeoning economy, is now grappling with the harsh realities of a civil war that has thrown its progress off track. The World Bank’s recent report paints a grim picture of the country’s economic growth, estimating a sluggish 1% annual pace in the past year. This dismal performance falls short of earlier expectations, indicating the severe impact of ongoing conflicts on trade and livelihoods.

The report highlights a stark truth – nearly a third of Myanmar’s population is currently living in poverty, with the economy shrinking by about 10% post-pandemic. The political turmoil following the military’s seizure of power from the elected government of Aung San Suu Kyi in early 2021 has further exacerbated the situation. Pro-democracy fighters and ethnic minority armed groups continue to clash with the military, plunging the country into deeper turmoil.

The repercussions of the civil unrest are far-reaching, with over 3 million people displaced from their homes due to widespread armed conflicts. Moreover, the devaluation of Myanmar’s currency, the kyat, coupled with shortages of imported goods, has added to the economic woes. The report also reveals that a significant number of factories are grappling with electricity outages, hindering production and further dampening economic prospects.

Prior to the military takeover, Myanmar’s garment industry thrived, providing employment opportunities, particularly for young women, and generating substantial export revenues. However, in the aftermath of the political upheaval, global brands have started to withdraw from the country, leading to a steep decline in manufacturing exports. The labor market has been severely impacted, with labor shortages worsening as workers flee to rural areas or overseas to evade military conscription.

The dwindling exports and imports paint a grim picture of Myanmar’s economic landscape, with a 13% decline in exports and a 20% drop in imports in the half-year leading up to March. The report underscores the urgent need for stability and a conducive environment for economic recovery in Myanmar. As the country grapples with internal strife and economic challenges, the road to recovery appears long and arduous, requiring concerted efforts from both domestic and international stakeholders to steer Myanmar back on the path to prosperity.