[EAI Myanmar Special Commentary] ② Myanmar's Socioeconomic Crisis Post-Coup: A Repeat of History or a New Chapter?

1. Introduction

As of December 31, a total of 1,384 people had been killed and 11,289 arrested since the military coup on February 1, 2021. Furthermore, from February 1, 2021, to January 2022, the military attacked civilians and the People's Defence Force (PDF) 8,647 times, a 762% increase (1,003 cases) compared to the same period in 2020 (ALTSEAN 2022/02/09, 2). Approximately 593,000 internally displaced persons (IDPs) were recorded, with 223,000 of them displaced after the coup (OCHA 2021, 17).

While the coup was a military decision, its causes can be explained by the government-military relationship. Specifically, the civilian government led by Aung San Suu Kyi neglected the military, and emotional confrontations between leaders of each camp occasionally surfaced. The military, as a patriotic group defending the union, acted on its will to regain its status and function, even through the use of force. However, the claims of national division and public conflict, as asserted by the military, were not explicit, making the argument that they seized power by borrowing the justification for past military interventions seem rather flimsy.[1]

If the military interventions in 1958, 1962, and 1988 occurred on a continuum of political decline and national underdevelopment, the 2021 military coup is a historical backlash attempting to revert a nation in a completely new political and social phase back to the past. If a formal representative system is established through general elections in August 2023, Myanmar will return to a military-dominated society, and the nation's reconstruction may incur greater social and political costs than at present.

The regressive behavior of the military observed during the process of normalizing the state does not merely signify political decline. It will expose the structural social problems that Myanmar has been grappling with, leading to crises in all sectors of society. Myanmar had already become a failed state during the more than half a century of military rule, yet the military seeks to rebuild its own dynasty, reigning over the people once again. Currently, Myanmar stands at a turning point, replaying a cyclical crisis in its history.

2. An Economy Worsened by Snowballing Crises: The Impact of the Military Coup Overwhelming the COVID-19 Pandemic

From 1988 to March 2011, the military government announced an average annual economic growth rate of over 10%, but no one believed it. During the military government, statistics officials distorted data to avoid displeasing their superiors and to preserve their positions, a behavior that was a significant characteristic of military culture and bureaucratic society. In response, the Thein Sein government (2011-16) made the establishment of an accurate statistical system a national policy objective to address the chronic ills of the bureaucracy and to promote reforms and openness appropriate to the situation.

However, the military's tendency to distort reality appears to be reviving. For instance, on December 7, 2021, U Aung Naing Oo, Minister of Investment and Foreign Economic Relations, dismissed statistics indicating a GDP growth rate of minus 18% as unreliable data from anti-government elements. He claimed the GDP growth rate was around minus 8-9%, and that post-pandemic growth would exceed the IMF's forecast of 2.5% (Duangdee 2021/07/26; Nitta 2021/12/10; World Bank 2021/07/23). Major institutions predict Myanmar's economic growth rate for 2022 to be between minus 4-5%, also diverging from his prediction.

Contrary to Minister U Aung Naing Oo's claims, the economic recession in Myanmar since the coup is severe, and it is highly likely that the people's living standards will revert to the military government era. According to the UNDP, since February 1, 2021, 75% of respondents cited the coup as the most significant factor affecting household income, while the COVID-19 pandemic accounted for 25% (UNDP 2021, 35).

Already, due to the COVID-19 pandemic, 3.2 million people lost their jobs from late 2019 to July 2021, and millions more had their working hours reduced (ICG 2021, 8). Since the coup, the value of the Kyat against the US dollar fell by 33% from January to November 2021, driven by increased cash withdrawals and purchases of gold and US dollars (OCHA 2021, 14). The international community has sounded the alarm over Myanmar's crisis. The UNDP warns that by early 2022, nearly half of Myanmar's population of approximately 55 million will be living below the national poverty line, a situation reminiscent of pre-2005 living standards (UNDP 2021/12/01).

Myanmar's economic red flags are expected to be exacerbated by exchange rate issues. The Central Bank of Myanmar sold $88 million in December 2021 alone, across six instances, to mitigate sharp fluctuations in the exchange rate (GNLM 2021/12/25). At the time of writing, the exchange rate has not surged (see Figure). However, facing reduced tax revenue and the need to fund military expenditures, the government imported 35 tons of banknote paper from Uzbekistan in December 2021. If the money supply increases, inflation will become a certainty. The additional issuance and circulation of currency without considering market conditions was also a common policy during the past military government.[2]

<Figure> Myanmar Kyat Exchange Rate Trend (vs. USD)

※Source: https://www.xe.com/currencycharts/?from=USD&to=MMK

Due to the coup, the number of business registrations decreased by 44% in 2021 alone (Walker 2021/12/01). However, the military is pursuing economic cooperation with China, mobilizing military-affiliated and crony enterprises to circumvent intensified Western sanctions and pursue their own interests. For example, when the border reopened in November 2021, Chinese companies restored exchanges in extractive industries monopolized by the military, including rare earths, rubies and jade, crude oil, and natural gas. The West, including the United States and the European Union, has imposed targeted sanctions on high-ranking military officials and military-affiliated companies, and domestic and international NGOs are demanding the withdrawal of investments and severance of ties with companies cooperating with the Myanmar military. Western countries have already imposed comprehensive sanctions on Myanmar for over 20 years with little effect.

For sanctions against Myanmar to be successful, it would be necessary to minimize the influence of countries with significant economic leverage in Myanmar, such as China, and to implement simultaneous sanctions by participating parties. The Biden administration has faced lobbying and objections from oil companies in Singapore and Thailand, including Chevron, and the funds of high-ranking Myanmar military officials are held in Southeast Asian countries, not in the United States or the European Union. In this context, it seems impossible to tighten the military's finances. Although it is recognized that cooperation with Chinese capital is not beneficial to the military in the medium to long term, there is no realistic alternative. The close relationship with China will further strengthen anti-Chinese sentiment not only within the military but also among the general populace.

The military's response to the COVID-19 pandemic has not deviated from the pattern of past military governments, which were weak in crisis management. The military reportedly began implementing COVID-19 measures in earnest after August, when large-scale civil resistance subsided. As a result, as of December 28, 2021, the Ministry of Health announced that 13.45 million adults had completed their vaccinations, achieving the 2021 target of vaccinating 50% of the population (GNLM 2021/12/28). However, there is no objective statistical data showing that over 10 million people were vaccinated in approximately three months, and the military's claims warrant further scrutiny, given that a significant portion of the vaccines supplied to Myanmar are Chinese-made, which the public is reluctant to receive. The military's claim that the Omicron variant has not been detected domestically also requires verification. Furthermore, although the military plans to produce vaccines domestically with Chinese support in 2022, specific plans regarding production facilities and personnel are unclear.

In July 2021, households began displaying yellow flags, signaling that the entire family had contracted COVID-19 and requesting assistance. However, the military blocked the supply of oxygen tanks needed for their treatment and offered the absurd solution that chanting Buddhist scriptures would cure the disease. At the time, the military was focused on seizing power rather than the lives of its citizens, and had already designated those participating in anti-coup protests as terrorists. One must question whether the military intended to embrace its citizens if they did not participate in the protests.

3. Regional and Generational Divides: Social Conflict and Potential for Integration

The military's confidence in seizing power through a coup stems not only from its monopoly on weapons but also from the conviction that national unity and uprising are impossible. Since 1962, the military has consistently argued that ethnic armed organizations (EAOs) are seeking to divide the union and that they must remain in politics to prevent this. The majority Burman population has shown no support, interest, or sympathy towards ethnic minorities, who have been subjected to thorough oppression and treated as outsiders within the union. Consequently, ethnic minorities are indifferent to who holds power, be it the military or civilians, viewing the military coup as a conflict among Burman political elites (Ardeth Maung Thawnghmung and Noah 2021, 301). This perspective was consistent during the 1988 pro-democracy movement and the 2007 Saffron Revolution. Had ethnic minorities allied with the protesters during these two periods of political upheaval, Myanmar might have entered a new phase.

From 2011 onwards, both governments prioritized national reconciliation and integration as national policy objectives through ceasefire agreements with EAOs. As a result, by the end of the Thein Sein administration, ceasefire agreements at the union level had been signed with eight out of fifteen armed organizations. The Aung San Suu Kyi government, changing the existing approach, implemented four rounds of ceasefire negotiations under the banner of the "21st Century Panglong Conference."

While there is no evidence that ethnic minorities supported the Aung San Suu Kyi government, they at least expected a different path than the military, which had consistently resorted to violence and forced annexation. Although the government, military, and EAOs were negotiating parties at the 21st Century Panglong Conference, the government maintained a high-handed stance, disregarding the EAOs, and the military sowed discord between the government and the EAOs. Consequently, the ceasefire agreements yielded no results. Furthermore, the National League for Democracy's (NLD) defeats in by-elections in ethnic minority regions in 2017 and 2018 raised doubts about the government and ruling party's intentions for national integration.

In this context, the aspiration of the National Unity Government (NUG) to form a federal army in alliance with EAOs is unrealistic. While some EAOs are providing military training and weapons to the PDF, the likelihood of EAOs fully joining a federal army is very slim. Had the NLD government genuinely approached ethnic minorities, trust-building between the two sides might have been possible.

In early 2022, the military unilaterally announced a ceasefire until the end of the year without seeking the consent of the EAOs. However, the military continues its indiscriminate attacks on areas presumed to be PDF strongholds. The approximately 8,000 PDF forces are no match for the over 400,000 regular troops. After the failure of the 1988 pro-democracy movement, some youths formed the All Burma Students' Democratic Front (ABSDF) and went into the jungle to fight the military through armed struggle. Their armed struggle did not last even five years. The clashes between the regular army and the PDF will only exacerbate the suffering of the local population.

On February 17, 2021, "88 Generation" leader Min Ko Naing asserted, "This revolution is a combination of Generation X, Y, and Z resisting military dictatorship," demanding unity among all members (Jordt et al. 2021, 18). However, the citizens who actually filled the streets and the individuals arrested as protest leaders were all from Generation Z. While some from the "88 Generation" participated in protests, leaders refrained from political statements or actions. Instead, young people, despite their parents' dissuasion, took to the streets to perform the traditional gesture of respect, kadaw. Why were only the youth filling the streets?

Myanmar's Generation Z is a product of political reform and economic liberalization. Over the past decade, Myanmar's economy has shown an annual growth rate of 6-8%, and the fruits of this economic growth have benefited the people. The proliferation of mobile phones has enabled the expression of political opinions online. Since the opening up, citizens have had increased opportunities to interact with foreigners, directly experiencing international standards and foreign ways of thinking. In particular, Generation Z has firmly established principles of justice.

In contrast, the older generation is accustomed to a livelihood-first moral lifestyle, not challenging the military, and resisting only when faced with immediate threats to their lives, rather than immediate threats. This behavior was repeated in 2021; as prices of daily necessities such as cooking oil and gasoline surged after the coup, 76.2% of all households reduced non-food consumption to maintain their livelihoods (ICG 2021, 8; UNDP 2021, 31). For example, in August 2007, when the military government increased fuel prices five to tenfold, the majority of the public accepted it, unlike the monks who protested. That is, monks who had experienced or directly witnessed the military's brutality, and the older generation, did not easily take to the streets, whereas the youth in their twenties were confident that they could change the world. However, the absence of leadership to consolidate and express their will aligns with the shortcomings of past pro-democracy movements.

Meanwhile, in April 2021, the ousted democratic forces established the National Unity Government (NUG) with popular support, aiming to end military rule and rebuild democracy, but its achievements have been unsatisfactory. First, it is questionable whether the NUG, in its capacity, is closely connected with the people opposing military rule. The NUG expressed condolences upon the death of senior NLD officials from COVID-19, but did not react to casualties on the streets. In September 2021, after declaring war on the military, it incited the public by stating that those who sacrificed would become heroes or patriots, while the NUG itself maintained a passive stance, issuing only a few statements. One wonders if the NUG is not a group that seeks to rule over the people, rather than being detached from them.

Second, the NUG's activities. The individuals comprising the NUG cabinet are predominantly NLD members and Burmans, lack experience in administrative or legislative work, and confine their activities to the online sphere due to fear of arrest by the military. Lacking professional capacity and with an opaque decision-making structure, the NUG is solely focused on demanding international recognition as the official government of Myanmar, rather than the military. This approach seems to follow in the footsteps of the exiled government, the National Coalition Government of the Union of Burma (NCGUB), whose sole achievement from its founding in 1990 to its dissolution in 2012 was promoting the name "Burma" over "Myanmar."[3]The NUG is not a symbol of Myanmar's democratization, nor does it have the right to monopolize leadership of the democratic forces; it is not a group that enjoys the full support of the people. Instead of slogans and incitement, it must present realistic alternatives that can defeat the military and implement them in conjunction with the people.

4. Conclusion: Finding Hope Amidst Crisis

Since the military coup, Myanmar has been mired in socioeconomic crises, and without a change of heart or resignation from the military, there is no clear solution in sight. Nevertheless, this coup has brought about an unexpected outcome: the awakening of the people. This includes internal criticism of the democratic camp and an objective understanding of the history of oppressed ethnic minorities. Aung San Suu Kyi was a symbol of Myanmar's democratization, but her achievements as a politician were limited. Criticism of her, already deified, was not tolerated, and the NLD government became a government by, for, and of Aung San Suu Kyi. Generation Z has criticized the concentration of power in a single individual, and their strong resistance to the military is not for the restoration of Aung San Suu Kyi, but for the restoration of democracy.

Some politicians have apologized for the Aung San Suu Kyi government's human rights abuses in ethnic minority regions, including the Rohingya, based on political calculations. However, particularly among the youth, there is a growing movement to correct the distorted history concerning ethnic minorities and to resist being manipulated by the military's strategy of maintaining power by exploiting ethnic conflicts between Burmans and minorities. Myanmar youth residing in Korea have begun to build a discourse advocating for coexistence as members of a union, shedding their ethnic identities. This coup has served as a catalyst for laying the foundation for future national reconciliation and integration by confirming solidarity and a sense of community among groups who have lived like strangers within the union.

The common thread amidst the crises in various sectors seems to be that the military clings to the past, while the people are preparing for the future. If the military is to survive longer in politics, displaying force, like their predecessors, will not be of much help. The military should reflect on why former military President Thein Sein was supported by the people. ■

References

ALTSEAN. Coup Watch Special Edition: A Year of Struggle in Burma. Bangkok: ALTSEAN. 2022/02/09.

Ardeth Maung Thawnghmung and Khun Noah. 2021. “Myanmar`s Military Coup and the Elevation of the Minority Agenda?” Critical Asian Studies. 53(2). 297-309.

Duangdee, Vijitra. “World Bank: Coup and Coronavirus Shrink Myanmar’s Economy by 18%.” VOA(Voice of America). 2021/07/26.

GNLM(Global New Light of Myanmar). 2021/12/25; 2021/12/28.

ICG(International Crisis Group). 2021. The Deadly Stalemate in Post-coup Myanmar. Asia Briefing No.170. Yangon/Bangkok/Brussels: ICG.

Jordt, Ingrid, Tharaphi Than and Sue Ye Lin. 2021. How Generation Z Galvanized a Revolutionary Movement against Myanmar’s 2021 Military Coup. Trends in Southeast Asia Issue 7. Singapore: ISEAS.

Nitta, Yuichi. “Myanmar to End Kirin Row Based on Law: Investment Minister.” Nikkei Asia. 2021/12/10.

OCHA. 2021. Humanitarian Needs Overview: Myanmar. https://reliefweb.int/sites/reliefweb.int/files/resources/mmr_humanitarian_needs_overview_2022.pdf

Steinberg, David I. 2021. The Military in Burma/Myanmar: On the Longevity of Tatmadaw Rule and Influence. Trends in Southeast Asia, Issue6. Singapore: ISEAS.

UNDP. 2021. People’s Pulse: Socio-economic Impact of the Events since 1st February 2021 on Households in Myanmar. Yangon: UNDP Myanmar Office.

_____. “Myanmar Urban Poverty Rates Set to Triple, New United Nations Survey Finds” 2021/12/01.

Walker, Tommy. “Myanmar’s Coup Economy is ‘Boom and Bust’.” VOA. 2021/12/01.

World Bank. “Myanmar Economy Expected to Contract by 18 Percent in FY2021: Report.” 2021/07/23.

[1] For background on the coup, see Steinberg (2021, 30).

[2] The current military government's policy of restricting information access also follows past practices. From the late 1990s to the early 2000s, before the commercialization of smartphones, the military proposed limiting online information access by maintaining SIM card prices at $2,000-$3,000. In December 2021, the military doubled mobile data prices to weaken the communication networks of anti-government forces, including the People’s Defence Force (PDF), and in January 2022, imposed a 20,000 kyat tax on SIM card activation and further increased data prices by 15%.

[3] The pro-democracy movements that operated abroad after 1990 yielded virtually no results. During the Saffron Revolution in 2007, the author attended a press conference held in Bangkok. At this event, democracy activists were preoccupied with promoting themselves and their organizations and appealed for external financial support. When asked by reporters about cooperation and solidarity with domestic democracy activists, they offered only principled responses about working for democracy. A journalist active in Thailand defined their behavior as a “refugee industry.” Although the Myanmar government announced a general amnesty in 2011, many democracy activists who had been active abroad did not return to their home country.

■ Author: Jang Jun-young_ Obtained a Master's degree in Southeast Asian Studies and Political Science from Sogang University (2003) and a Ph.D. in Political Science from Hankuk University of Foreign Studies (2009) with research on the Myanmar military. His major works include "Changes in Myanmar's Foreign Policy and Relations with Major Powers," "Myanmar's Rentier Economy and Reform and Opening: Achievements and Challenges," "Harp and Peacock: A 70-Year History of Modern Myanmar Politics," and "First Steps in Burmese: Language Equality." He consistently contributes articles on Myanmar to numerous media outlets, including major daily newspapers. He has served as a senior researcher at the Institute for Southeast Asian Studies, Hankuk University of Foreign Studies, a research professor at the North Bay of Bengal Research Group, and a research professor at the Institute for Indian Studies, and is currently a research professor at the Institute for Southeast Asian Studies and a faculty member at the Minerva College of Liberal Arts.

■ Editor: Jeon Ju-hyeon _EAI Researcher

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