Myanmar is facing an economic and humanitarian disaster of epic proportions. There is an urgent need to protect the poorest and most vulnerable and provide assistance in a way that doesn’t entrench dictatorship. Equally important is to use this crisis to transform Myanmar’s incredibly unequal and singularly exploitative political economy. It’s the key to democratic change. It’s also the key to creating a fairer, as well as a freer and more prosperous, society.
The army’s coup d’état in February has been followed by strikes and protests, and intense repression. The army has not been able to consolidate its coup and has instead unwittingly unleashed revolutionary movements determined to end the military’s role in politics once and for all. Years of turbulence lie ahead.
Meanwhile, the economy has collapsed, with tens of millions of people descending fast into extreme poverty and the World Food Programme estimating that 3.4 million people will be unable to feed themselves properly within the next six months. The healthcare system has also collapsed, jeopardising the lives of many more, including the several hundred thousand people dependent on TB and HIV drugs and the 950,000 infants normally inoculated each year against measles, polio and other diseases. There is now next to no Covid-19 testing and no possibility of large-scale vaccination.
The proximate cause of the unfolding catastrophe is the coup and its aftermath but understanding the history of Myanmar’s political economy is critical for thinking about what may come next.
Myanmar’s economy under British rule was based on the immigration of Indian labourers and the export of primary commodities. After independence in 1948, politics was dominated by the left and efforts to overturn the colonial legacies. But in the late 1980s a new army junta ended the “Burmese way to socialism”, creating new markets, in particular around extractive industries tied to China’s industrial revolution next door. Taxation and social services were practically non-existent. Inequality skyrocketed and a mix of climate change and massive land confiscations drove millions to Thailand in search of work. In the uplands, alongside a patchwork of army battalions, militia and ethnic minority forces, were money-making networks far richer than even the men with guns, including a methamphetamine racket said by the UN to be worth billions.
The political reforms of the past 10 years were not accompanied by any structural change to the economy. The army took a big step back from business, and liberalisation led to more foreign competition as well as growth in a few sectors such as tourism, property and telecoms. A small middle class emerged but most Myanmar people continued to live on the edge of violence and extreme poverty, including the most vulnerable: upland farmers, landless villagers, new urban slum-dwellers, people of South Asian descent and other minorities. The ethnic cleansing of the Rohingya in 2017 was unmatched in scale and brutality. But the Myanmar state has long failed many of its peoples.
With the pandemic came an economic shock that sent an already fragile economy into a tailspin, the result of lockdowns and disruptions to foreign trade. The garment sector, the country’s one promising manufacturing industry, was brought to its knees. An international study last October found that income poverty (people making less than $1.90 (£1.36) a day) had risen from 16% to 63% of the population. There was almost no state support.
Now in the aftermath of the coup, the economy is at a virtual standstill. A general strike coupled with the army’s internet blockages have shut down much of the financial system, disrupting business and payroll payments worth the equivalent of billions of US dollars a month. With confidence plummeting and the central bank unwilling or unable to provide needed liquidity, families are hoarding as much cash as possible. It’s difficult to imagine how ordinary people will survive these coming months, especially the rural poor, most of whom are landless and entirely dependent on casual work.
However, the army regime is likely to survive any economic downturn because Myanmar’s system has never veered far from the one that grew up under past juntas and under the toughest possible western sanctions. The new businesses of the past decade, such as manufacturing, will wither, old ones, such as timber and mining, will gain renewed ground, and illicit ones in the uplands, from narcotics to money-laundering and wildlife trafficking will flourish in the protracted instability to come.
Whatever happens, the international priority should be to ensure that Myanmar’s poor and vulnerable communities are able to receive the assistance needed to stay alive, with special attention paid to children’s inoculations. But this must be done with political skill, so as not to undermine chances for the radical political changes to government that the vast majority of people desperately want.
Today’s revolutionary movements aim to cut revenues to the junta and are willing to pay a high economic cost. But a successful transition will come over years, not months, and it’s important to identify the economic landscape best suited for democratic change. Measures to weaken the junta that inadvertently strengthen the hand of transnational criminal networks may lead not to state collapse but a mutated political order, one that will take generations to unwind.
Dictatorship must be resisted but democracy is not enough. Over recent months, a new generation of leaders have come to the fore and many have rejected the ethno-nationalism at the heart of Myanmar politics, seeking fresh alliances across racial, ethnic and religious divides. This is not only welcome but essential for any future success. But there should also be a focus on issues of inequality and underdevelopment, protecting the vulnerable now, while reimagining and mobilising around a fairer political economy of tomorrow.
Thant Myint-U is the author of The Hidden History of Burma: Race, Capitalism, and the Crisis of Democracy in the 21st Century (Atlantic Books)