By Ramon Abarca
Bangkok, Apr 6 (efe-epa).- Myanmar is on the verge of an economic collapse as the gross domestic product is estimated to contract by 20 percent amid unrest following a military coup that has sparked civil war risks.
A civil disobedience movement paralyzing the banking system and administration has fueled economic risks after the military seized power and ousted an elected government on Feb.1.
Two months since the coup, the country is in chaos with daily protests, worker strikes, and brutal military repression against anti-coup demonstrators that has left more than 570 civilians killed and generated a wave of international sanctions.
“Tensions have increased significantly in March with the army intensifying the use of lethal force against protesters and civilians. The high social instability in the country will paralyze all aspects of GDP,” Fitch Solutions said Monday.
The rating agency said the situation in the country of 54 million inhabitants had “exceeded the point of uncertainty.”
A conservative forecast for the Myanmar economy would be a contraction of 20 percent in the fiscal year that began in October instead of a 2 percent fall as predicted before the coup.
The World Bank, last month, also did not make a very optimistic projection and predicted a 10 percent fall.
Myanmar, one of the poorest countries in Southeast Asia, opened up to foreign investment in 2011 when it began a democratic transition after decades of military rule.
The country had experienced rapid growth since then.
“Myanmar’s economy is not large, but it had performed well in recent years. Between 2011 and 2018, the GDP maintained an average real growth of seven percent per year,” Steve Cochrane, the chief Asia-Pacific economist at Moody’s Analytics, told EFE.
Cochrane said the growth slowed down in 2020 due to the Covid-19 pandemic, but recovery was expected this year.
The military junta seems unconcerned by the debacle.
Deadly military repression against civilians continues amid an unending internet blockade that has crippled an increasingly significant digital economy in the country.
The protesters, on the other hand, are relentless amid daily demonstrations across the country.
The civil disobedience movement to trigger an economic collapse, its key weapon of resistance against the military junta, has also paralyzed the administration and various sectors like the critical banking services.
The closure of most banks since the coup has impeded payrolls and transaction payments.
“The situation with the banking sector is pretty bad. We cannot withdraw funds paid into accounts by customers, meaning we are unable to pay our employees,” said Aye Tun, who heads the car and petroleum products dealership Aung Thein Than.
Aye Tun told the Frontier Myanmar news portal that his business employing 400 workers would have no choice but to minimize the operations to save costs if the situation continued.
Yin Yin Moe, secretary of the Myanmar Garment Manufacturers Association, said hardly any workers come to factories.