10 - The Destabilization of Myanmar: The Coup and its Impact on Economic Conditions and International Business Investment

Summary

At the turn of the new decade, Myanmar was on a pathway towards a more robust economy with prospects for sustained aggregate growth, increased employment opportunities in labour-intensive sectors such as manufacturing, and further economic policy and institutional reforms under an elected civilian government. In 2020 and 2021, this trajectory was disrupted by two profoundly destabilising crises that caused immense economic damage and human misery. First, in early 2020, the COVID-19 pandemic hit hard, with workers and the poor especially hurt by lockdowns, enterprise closures and job losses. Then, in February 2021, the misery caused by the pandemic was compounded and intensified by a coup staged by the Myanmar military (Tatmadaw), which has profoundly destabilised both politics and economic life.

The political implications of these events are explored elsewhere in this volume, whereas in this chapter, we will provide a summation and perspective on the economic damage done. Nonetheless, the military's brutal and violent suppression of pro-democracy protests, persistent violations of fundamental human rights, and disruption of Myanmar's incomplete journey towards democratic governance demonstrate that politics cannot be separated from economics because damage to the latter has clearly flowed from the destabilisation of politics after the coup.

The coup, as we will explore in a later section of this chapter, may have a profound and long-term impact on Myanmar's international investment environment and economic integration, inclusive of the effects of international sanctions. However, the most significant and immediate economic impacts were driven by internal rather than external factors. Widespread protests and the civil disobedience movement (CDM) impacted both public and private sector industries, with government, healthcare, finance, banking, and transport workers participating in great numbers to push for a restoration of democracy. They rejected the legitimacy of the military junta to govern and effectively shut down most sections of the domestic economy in the early phase of resistance. The military junta, largely via coercion, pushed for a resumption of economic and industrial activity over the course of 2021. Still, most sectors have continued to be impacted by ongoing CDM activity, protest actions, financial crisis, and later by armed resistance and conflict.