Junta waging war on Myanmar’s doom-loop economy

Myanmar’s freefall into failed state status is starkly evident across the multiple battle zones of the countryside but arguably the most alarming decline is being felt in the fast-collapsing economy.

The post-coup State Administration Council (SAC) junta has transformed what was once a promising “last frontier” Asian developmental state into a war economy predicated on regime survival.

The opposition National Unity Government (NUG) presented grim findings on the state of the economy in a lengthy press conference on May 3, with Minister of Planning, Finance and Investment Tin Tun Naing and ministry advisor Sean Turnell outlining the doom loop of decline the SAC has orchestrated.

In recent weeks, the Myanmar kyat has fallen to 5,000 to the US dollar, marking a historic low. The kyat is now at 25% of its 2019 value, just before the twin disasters of the Covid-19 pandemic and the February 2021 coup.

The military has responded to the economy’s collapse by rolling the monetary presses, printing an estimated 25 trillion kyats since the coup, fueling inflation and economic instability. Myanmar’s currency reserves have fallen by US$3 billion over three years.

According to Turnell, “(w)ith the kyat in freefall, the main plank of SAC economic policy is now very simple – to secure as much foreign exchange as possible to allow it to buy the weaponry and munitions it needs to survive.”

Military spending is now estimated to consume 60% of the national budget, with disastrous effects for health and education allocations.

People living in dire poverty now represent 40% of the population, with an average household “food basket” increasing by 140% over the past three years. Many basic items are now beyond the reach of many Myanmar people.