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Bangkok/Yangon – For Aung Thet, a successful entrepreneur in Yangon, running a business under Myanmar’s military rule has felt like a “rollercoaster ride”.

The Southeast Asian country’s economy has been brought to its knees by the struggle it started army seized power two years ago,

Foreign investors are headed for an exit and the generals have forced companies such as Aung Thet to convert their foreign currency accounts into Myanmar kyat. Can’t tolerate criticism of military administration

“It is a very hostile environment for businessmen and the risks of speaking out on policy issues are high,” Aung Thet, who asked to speak under a pseudonym, told Al Jazeera. “Even the national business lobby does not have much influence on the junta’s economic policies. They can be brutal towards businessmen who criticize them.

In some ways Aung Thet is relatively fortunate. His company is in the agriculture export sector and there is no threat to its existence as long as farmers continue to produce the crops they sell in countries including Africa and Europe.

since toppling Aung San Suu Kyi On February 1, 2021, the democratically elected government, the military cracked down on the civilian population opposing the coup and filled the country’s prisons with people critical of its regime.

but army protest The military—led by the National Unity Government (NUG), installed by elected politicians who were overthrown—remains strong and the generals have been unable to regain full control of the majority Bamar heartland. Meanwhile, ethnic armed groups – some aligned with the resistance – have consolidated their rule over areas of the country.

While Yangon’s streets remain busy, the climate for business has worsened since the coup [AFP]

A massive civil disobedience movement and consumer boycotts have also weakened the military’s grip on government machinery and damaged military-owned companies with well-known brands.

Under senior general Min Aung Hlaing, Myanmar has also suffered its worst power cuts ever and joined Iran and North Korea on global watchdog Financial Action Task Force’s financial terrorism blacklist.

Economically, Myanmar has experienced considerable banking and currency volatility as well as an exodus of big foreign names. Telenor of Norwayalibaba of china french giants total and Ooredoo of Qatar.

Gross domestic product (GDP) shrinks by about a fifth in 2021 and grows only 3 percent the following year from a much smaller base.

The World Bank this week projected Myanmar’s growth rate for the fiscal year ending in September at 3 percent, but warned that per capita gross domestic product would remain about 13 percent below levels before the COVID-19 pandemic. This means that Myanmar’s 2023 GDP will still be smaller than the pre-coup economy.

Recovery from the shocks of COVID-19 and the coup, the World Bank said in its update, “is expected to be constrained in the near term by significant macroeconomic and regulatory uncertainty, persistent conflict and ongoing power outages.”

Myanmar’s poverty rate has also more than doubled Compared to pre-COVID levels, according to the International Labor Organisation. Household income has further reduced and food insecurity has worsened.

rising prices

Undoing a decade of economic progress, combined with the military government’s failure to crush the resistance poses a threat to Min Aung Hlaing’s ability to complete strategic projects for China and other backers. He also risked the general’s plan for elections later this year, which are widely seen as a way for the military to tighten its grip on politics through its proxy, the Union Solidarity and Development party. Is.

The military regime has detained some Myanmar businessmen and seized passports of foreign corporate executives. Chief’s last year’s gelding Foreign Trade Advocate Vicky BowmanThe former United Kingdom ambassador to Myanmar and her husband, in particular, have raised concerns among international investors.

In April, the administration ordered banks and other holders of foreign currency to convert all deposits into the local currency, the kyat, giving foreign currency holders a day to exchange their holdings at licensed banks. Business groups and diplomats, including the Chinese ambassador, complained about the policy.

A bowl of Mohinga soup, a popular breakfast for people in Myanmar.  The dish consists of noodles and fish.  There is a slice of lime on the edge and green herbs are scattered on top.
Rising prices are affecting people across Myanmar Mohinga, a traditional breakfast rice-noodle dish with fish soup, has now become more than twice as expensive as at the time of the coup [File: Ann Wang/Reuters]

The move made it impossible for suppliers to buy United States dollars to settle payments. Businesses have to rely on informal remittances, such as persuading suppliers to accept IOUs. There is the option of going through middlemen, which involve a fee of up to 5 per cent.

“Let me be very clear. The generals fixed the USD in April and this is a bad move,” Aung Thet said. “From 2022 onwards, policies on imports are untenable even for essential goods. One day they said it was their top priority and the next day they came out with a different take. It is extremely volatile and difficult. This forces us to consider downsizing our businesses in order to survive.

While Aung Thet’s company laid off 5 percent of workers after the coup, he was able to keep the rest – a few hundred people – on the payroll without cutting off their income. Revenue in the millions of dollars before the coup has stagnated since late last year.

“Farmers should do what they can,” he said. “If they miss a month growing the crop, they will struggle to survive on a large scale, especially small farmers.”

But farmers in active fighting areas such as Sagaing and Kayah states have suffered heavy losses, Aung Thet said.

“Kaya’s agricultural industry has been destroyed, while Sagaing – another hotspot between the resistance and the regime – has lost around 30 per cent of its harvest. But others have soldiered on because farmers need to grow crops to survive,” he said.

While the depreciation of the kayat has made farmers’ exports more competitive overseas, rising prices driven by rising petrol prices have eaten into their profits.

Mohinga, a traditional breakfast of rice noodles and fish soup, has more than doubled in price in Yangon tea shops after the coup.

Farmers are also struggling to access loans as micro-finance institutions and banks have cut lending.

“Marginal and small, poor farmers cannot afford to buy fertilizers because their prices have tripled,” Aung Thet said. “It’s extremely difficult.”

The military administration has downplayed the economic difficulties since the coup.

During a meeting with military officers and families in western Rakhine state last month, Min Aung Hlaing said, “If everyone strives to boost the state’s economy with speed, Myanmar will become middle-class among ASEAN countries in a short time.” will reach the economy of

The army chief has claimed that the economy had declined under Aung San Suu Kyi’s government and that the army had led its revival.

GDP is expected to grow by 2.4 per cent during the first half of the 2021-22 fiscal year and 3.4 per cent in the second half, he told fellow officials at a meeting in Naypyidaw on January 6, higher than the numbers given by the World There is more. Edge.

NUG rejects Min Aung Hlaing’s rosy prediction.

“The generals have pushed the economy off a cliff by terrorizing the workforce, destroying labor rights and implementing disastrous policies such as foreign exchange embargoes,” NUG cabinet minister Dr Sasa told Al Jazeera.

He said that despite rising prices, the minimum wage has not increased and the illegal economy has expanded. This was in reference to last week’s report by the United Nations Office on Drugs and Crime, which showed opium production in Myanmar was low. nine years old,

“The generals have seriously damaged business confidence and pushed half the population below the poverty line,” Sasa said.

Minimum wage remains at 4,800 Myanmar kyat [$2.30] One day – a level set in 2018.

Min Aung Hlaing has also emphasized “domestic manufacturing” and called for less reliance on imports and foreign aid.

Shwe’s shadow

The general’s economic plans – including proposals to build a metro system in the capital Naypyidaw and to turn Myanmar into a hub for electric car manufacturing despite frequent blackouts – have drawn comparisons with the US. former stronger than shwewhose infrastructure focus included the development of NapyDaw, which was built in secret, and the construction of The controversial Myitsone Dam,

Myanmar approved $1.45 billion in foreign direct investment during the first seven months of the 2022-23 fiscal year, according to official data, most of it from Singapore, a drain for foreign funds into Myanmar and China. The military administration has stopped disclosing projects it has approved since the coup, eliminating or restricting access to many corporate registries.

Chinese energy companies are among the few foreign firms that appear ready to make new investments in the country, participating in the administration’s plan to expand solar power.

Still, given the scale of the problems affecting the industry, experts say the project is unlikely to address the root cause of the country’s chronic blackouts, which include the collapse of stable governance, conflict and currency volatility.

“Myanmar’s energy system is in shambles and there are no plans to fix it. Not today, not in five years,” Guillaume de Langre, an energy expert who advises the Myanmar government, told Al Jazeera. The junta is lying to investors, while local resistance forces are launching sophisticated attacks on vital points of the power grid.”

The state of emergency imposed after the coup was extended again on Wednesday for six months, suggesting the election army had said held until august There may be delay.

A woman crossing an empty street in Yangon.  she is carrying an umbrella to protect herself from the sun
The streets of Yangon, Myanmar’s largest city and commercial capital, were almost deserted on Wednesday as people took part in a ‘silent strike’ to protest the coup. [AFP]

Even if the elections go ahead, they are unlikely to do much to reassure investors.

“The ‘elections’ are not ready to inspire any noticeable investor confidence in Myanmar,” said a source in Yangon who has access to the military and declined to be named for fear of retribution. refused. They expect business processing times to be slower now that the state of emergency has been prolonged.

,[The] In the post-election period the repression will intensify in an attempt to portray the resistance as hindering a return to ‘business as usual’.

But unlike multinationals, Myanmar’s businessmen, shopkeepers and farmers have nowhere to go.

“Livelihoods matter,” Aung Thet said. “Right now Myanmar is in the worst state I have seen in my life: broken economy, broken society, broken everything. But you will be surprised to know that I have confidence in the future of the country. I am worried yet ahead Committed to growing

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