Myanmar Spring Chronicle – July 23 Scenes
MoeMaKa, July 24, 2023
Who will be the most affected by the impact of inflation, the consequences of the political crisis?
The military council announced that it would issue 20,000 kyat banknotes, and the next day, the gold price and foreign currency exchange rates changed dramatically, and some gold shops closed the sales for the day and only bought gold. In Myanmar, every time there is news, actions, and restrictions that can affect the value of money, depending on gold, cars, houses, and land, other products, such as fuel prices, rice prices, cooking oil, house building materials, etc., suddenly increase and sales are usually closed.
However, at a time when the country has been seized by a military coup and armed conflicts are taking place everywhere, when hundreds of thousands of locals are displaced from local villages and towns, when international development aid has been suspended, and when many international companies have left Myanmar, the question arises as to who will suffer the most from the consequences of this sudden rise in inflation.
The value of assets of the middle class, such as those who rush to buy gold, and those who try to buy land, houses, and dollars currently, will decrease, but they are not in a position where they will face difficulties in making a living overnight.
It’s just trying to find a way to not reduce the value of their property. The ones who will really feel the impact of this serious decline in the value of money are those who fled the war, manual laborers in the city, those who work as day laborers or wage earners in factories, the elderly who have no income from regular work and are dependent on pensions or the support of family members, and ordinary retired employees who are dependent on their pensions.
The military council will continue to print banknotes of the existing value until one year after the coup, but it is still able to avoid the method of printing new high-value banknotes. In 2021, they denied the rumors that they would print and publish more valuable banknotes than 10,000 kyat. Almost 2 years later, it is estimated that the path of issuing high-value banknotes could not be avoided.
Military expenses is the largest expenditure of the country, many regions of the country are unstable and there is no position to farm reliably. Armed conflicts have caused many working youth and middle-aged people to work abroad at neighboring countries and foreign countries, making it difficult to hire workers in many areas where agriculture works. At present, rather than economic problems, the agricultural and livestock industries are being greatly affected because they are fleeing to escape the danger of their lives due to armed conflicts.
During the Shwe Phi tea leaves picking season in northern Shan State, which began in late April, workers from central Myanmar are no longer able to come, and Shwebo, famous for the production of fine rice, and other townships in Sagaing Region, are not in a position to hire workers because of the poor security situation, according to residents. The wage earners and manual labor families living in these areas will be at the top of those who will be hurt by inflation due to the new currency notes.
The other people who will be badly affected are the garment factory workers based in Yangon, Bago, and Pathein. As a result of the political crisis, more and more large international companies are no longer sending orders to Myanmar garment factories, and factory owners are ignoring the demands of workers to increase their wages while employment opportunities are decreasing. Recently, an incident occurred where the military council arrested those who led a protest over wage issues and prosecuted by the political section.
Therefore, under such political oppression, they are unable to demand labor rights and wages, so they continue to work according to the rates set by the factory owners in previous years. Therefore, these hundreds of thousands of factory workers are among those who will suffer the effects of inflation.
Another class is the day laborers who live and work in the cities. For day laborers who work in fields such as construction, cleaning, security and transportation, the cost of living has suddenly risen and daily wages are significantly lower than before inflation. The situation has come where we will have to save more on food, which has already been in tight situation.