Myanmar coup and crisis cause major damage to its economy
The continued civic unrest after the military coup has ravaged Myanmar and its economy, with massive losses across all economic indicators, including Thailand’s exports to its troubled neighbour. This year’s exports from Thailand to Myanmar predicted to lose between 60 and 96.5 billion baht, between 51 and 82%, according to the University of the Thai Chamber of Commerce. The UTCC’s Center for International Trade Studies released a number of findings about Myanmar’s economy and its relation to Thailand and the countries of ASEAN.
The study found the coup had caused major damage to the Burmese economy, starting with a 2.5% drop in GDP this quarter, compared to a growth of 6.4% in the first quarter of 2020. 600,000 jobs were lost due to the decline of foreign direct investment. The massive unemployment helps explain the staggering 83% decline in household income.
Foreign direct investment was down about 187.6 billion baht costing about 600,000 Burmese jobs. those figures are expected to fall further to between 203 and 228 billion baht, a drop of 76-85% depending on the continued military and civilian clashes. Many sectors have been severely damaged including transportation, oil and gas, energy, property, industry and industrial estate. Foreign investment abandonment is expected to continue to pummel the Myanmar economy as investors reallocate to Cambodia, Indonesia, Laos, Malaysia, Thailand and Vietnam.
The Burmese economy has experienced an 18% foreign exchange loss and with Thailand’s reduced exporting, an overall export decline of 0.8 to 1.3% is expected. China is expected to be hit hardest by the export loss, with ASEAN countries (particularly Singapore, Thailand and Vietnam), South Korea, Japan, India and the US all experiencing shortfalls.
Industrial and consumer exports are also massively declining with rubber, oil, plastics, computers, ceramics, pharmaceuticals, fabrics, steel and machinery all suffering on the industrial side. Consumer products like rice, sugar, vegetable oil, shrimp, drinks, soap and cosmetics, TVs and animal feed are facing the same economic losses.
Thailand has actually seen a decade-long gradual decline in exports to Myanmar, but the current state of crisis and freefall of the Burmese economy has caused a much sharper fall-off. From 2018 to 2019, exports fell 8.8% and the next year they fell 13% from 2019 to 2020. This year’s fall off a cliff of over 50% is a drastic toll from the humanitarian crisis and military rule destroying Myanmar.
SOURCE: Bangkok Post
