Myanmar Spring Chronicle – December 26 Scenes
MoeMaKa, December 27 2022
2022 with Recession, Inflation & Job Scarcity
We all know that there was an economic downturn due to being unable to operate as a result of the restrictions related to the COVID disaster in 2021, the first year of the military coup, and due to the difficulty of the bank issuing money, which started weeks after the military coup and the crisis in the circulation of money. In the middle of 2021, because the number of deaths from Covid Delta virus infection increased the most, factories and businesses that had not been operating due to the military coup previously were affected again during the peak of the Covid infection. These are the consequences of the coup, the pandemic and the economic situation last year.
In 2022, the impact of the Covid-19 disaster has lessened, but domestic political instability, a further decline in law enforcement, and the changing central bank orders due to the military council’s restrictive policies on foreign currency have significantly depreciated the Myanmar currency. So it was a year in which the value of the Myanmar kyat fell to less than half of what it was before the military took over, causing food prices to skyrocket and causing great suffering among the people. Due to inflation and the consequences of the military council’s mismanagement, the value of money plummeted, and those most affected by high prices were the lower classes, the factory workers, and those who had to work randomly. Due to the depreciation of the currency, other job fields have been adjusted slightly, but factory workers were the ones who suffered the most, with the minimum wage still at 4,800 kyats. The lack of political freedom causes workers to have no chance to demand their rights, and factory owners to exploit workers’ labor.
At the beginning of 2021, the banknote crisis that started about a month after the military coup due to the decline in confidence in banks had continued until this year, but it is seen that entrepreneurs had adapted to survive under that situation.
In early April 2022, the Central Bank of the Military Council issued the conditions for the first time to convert foreign currency into Myanmar currency from the foreign currency of export businesses, organizations, and those who worked abroad, such as sailors. This had a big impact on not only the financial market, but the entire economy, and the value of the Myanmar currency has fallen. The Central Bank of the military council issued a new order in August of this year to individually verify foreign remittances and check business licenses for each business that exports goods abroad, as well as whether there was an agreement MOU with the military council’s ministries. There was an instruction order that businesses that could not submit requirements were not accepted for foreign currency inflows.
As a result, the price of Myanmar’s currency has fallen sharply since the middle of August. The directive was not made public, but because it was sent to all private banks, the information had a major impact on the financial market and gold prices. The highest price of about 2500 kyats per dollar before the upheaval has now reached about 3,700 kyats. In August, the depreciation of the currency increased the price of fuel, medicine, and imported goods by almost doubling again. It is the worst depreciation of the Myanmar kyat since the military coup, and the depreciation of the currency has hit the lowest-paid workers again. The money in hand or the money from the daily wage has reached a point where it can only buy two-thirds of the rice or food that it could buy before.
In the year 2022, there were people who lost their lives due to wars, house burnings, and robberies. There will certainly be many deaths as a result of the economic recession, the severe depreciation of the currency, the loss of wages, the consequences of insufficient food, and medical treatment. These numbers are not easy to collect and record, but when Myanmar is suffering due to the military coup, the world is also in a situation where it is not possible to pay attention to the Myanmar issue due to the regional competition in the Ukraine-Russia war.