The BGA Myanmar Team, led by Managing Director Dr. Zaw Oo, wrote an update to clients on the state of Myanmar looking ahead as the country marked two years since experiencing a coup.

Context

  • On the eve of the second anniversary of the military takeover in 2021, the National Defense and Security Council, the constitutionally mandated grouping of Myanmar’s top security officials, convened a special meeting on January 31 and extended the country’s “state of emergency” for another six months, citing persistent “unusual circumstances.” 
  • In his report to the Council, Commander-in-Chief and ruling State Administrative Council (SAC) Chairman Senior General Min Aung Hlaing admitted that the armed forces were only able to secure complete stability in 198 townships – 60 percent of the country’s 330 townships. He also acknowledged the heightened risk of slow economic growth and rising trade deficits.

Significance

  • The SAC is unlikely to hold new elections within its six-month deadline, which ends July 2023. The council’s chairman expressed the need to restore stability in all states and regions of the country because election integrity depends on the simultaneous holding of voting across the country.
  • The SAC recently projected an economic growth rate of 3.7 percent in FY 2022-23, attributing it to sustained agricultural growth and the performance of small and medium-sized enterprises. However, on-the-ground conditions are restraining such growth potential.

Implications

  • Despite macroeconomic instability, the Central Bank of Myanmar was focused on foreign exchange management in early 2022, resulting in major operational challenges for the business community. The continued application of financial suppression tactics – such as arbitrary fixed exchange rates, forced surrender of U.S. dollar income by exporters and overseas workers and rationing of foreign exchange through import licensing – is hurting the confidence of domestic businesses and foreign investors.

BGA will continue to keep you updated on developments in Myanmar as they occur. If you have any questions or comments, please contact BGA Myanmar Managing Director Zaw Oo at zaw.oo@bowergroupasia.com.

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Senior Advisor

Zaw Oo has a proven track record working with government, civil society and academia across Southeast Asia. He has been instrumental in turning around projects under complex regulatory and policy environments and finding new opportunities for businesses in Myanmar. His work has led to substantial policy changes and mobilized growth for the public and private sectors. Zaw Oo is one of the most respected economists in Myanmar and regularly provides critical insights and seasoned advice to key stakeholders. Prior to joining BGA, he was a senior executive of a think-tank and an advisory service, offering research and analytical services on ... Read More