Myanmar Economy through the Military Coup and Pandemic

Myanmar

YANGON , Myanmar : Foreign investments flooded Myanmar a decade ago in 2011 when the country underwent drastic political reforms and economic liberalization. Many businesses were eager to grab a slice of what was viewed to be a high-risk yet potentially highly lucrative growing economy due to a combination of the country’s rising consumer demand and a lack of stability in its economy.

Fall in economic growth even before the military coup.

Many experts have opined on the drastic and long lasting economic effects of the ongoing military coup. The economic progress and gains made by the country could potentially be clawed back. Yet, it appears that Myanmar’s shine to foreign businesses peaked in 2016. Poor infrastructure and the aggressive clampdown on the Rohingya minority were cited as the two key barriers to greater economic growth.

Amata suspends ambitious USD 1 billion development of a major industrial complex

Thai industrial property developer Amata suspends works on its USD 1 billion major industrial complex project in the face of potential sanctions from the West. The project is expected to provide a massive boost to the country’s industrial infrastructure and to attract more foreign investments. Construction had begun in December 2021 despite difficulties caused by the COVID-19 Pandemic. Now, with added uncertainties contributed by the military takeover , Amata has little choice but to halt work to “wait and see” what happens next. According to Amata’s spokesperson, the company has already spent USD 4.7 million on the initial phase of the construction.

Not all losers in the coup as some enterprises are insulated

Although Myanmar’s overall economic growth has been dampened by the ongoing military coup, not all sectors are equally affected. Sectors where the military hold strong interests in are expected to be spared from the uncertainties. Foreign companies such as global mining powerhouses that already rely on the military for security, are also unlikely to be affected by the coup.

Myanmar economy still expected to grow despite the military takeover

Although Myanmar’s gross domestic product (GDP) forecast has dropped from an expected growth rate of 4.5% to 3% for the financial year 2021/22, such projections remain positive. Some economists do not expect a recession despite Western sanctions largely due to the absence of any trade restrictions from Myanmar’s largest FDI investors in Asia (being Singapore, China and Hong Kong).

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