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Myanmar lurching towards state collapse, analysts say

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More than 83 per cent of households in Myanmar reported a drop in income since the start of 2020. AFP

Myanmar lurching towards state collapse, analysts say

In a worrying worrying sign of deepening economic collapse, military-ruled Myanmar’s agricultural sector is sinking fast as cash runs short and access to mobile-based financial services that were a lifeline is cut off.

After the February 1 coup d’etat, Myanmar reverted in large part to a cash-based economy – but cash itself is short.

The UN Development Programme (UNDP) warned recently that more than 83 per cent of households reported a drop in income since the start of 2020. In a worst-case scenario, about 26 million additional people next year, compared with 2017, could be living in poverty, defined as $1 a day.

“Right now is actually the beginning of the … growing season,” said Pwint Htun, a telecommunications policy expert who advised the previous Myanmar government and is currently a non-resident fellow at Ash Centre’s Myanmar Programme at Harvard University.

She told The Straits Times’ Asian Insider video and podcast: “Normally around this time is when farmers get access to a loan from the Myanmar Agriculture and Development Bank so that they can buy seeds, so that they can buy fertiliser, and enough funds for them to be able to farm for this coming year ahead.

“With the banking collapse and the currency in free fall … I am especially concerned for the agriculture sector.”

Myanmar is lurching towards state collapse and state failure, analyst Richard Horsey told a UN Security Council meeting last month.

Horsey, a former senior UN official in Myanmar and currently a senior adviser on Myanmar at the International Crisis Group, spoke alongside Pwint Htun on Asian Insider.

He said: “What we’ve seen since the coup is the risk that the country will tip into a new level of violence, not only in areas which have seen armed conflict in previous years and decades, but also in new areas, including the centre of the country.”

Broadly, three scenarios lie ahead – the military succeeds in imposing its will by force; the revolution against it succeeds in toppling the military; or the country remains mired in years of struggle between the two.

The fallout from the third scenario will be catastrophic, Horsey said.

“This is a battle which is being waged not only in the remote border lands of Myanmar, but also in towns and cities across the country.

“And if the government is unable to deliver services, is unable to keep the country somehow functioning, then health, education, food security, all of those things are imperilled and the country could be facing a really grave situation going forward,” he said.

Pwint Htun said the international community, including the UN’s World Food Programme, needs to gear up to deal with the looming economic catastrophe.

It is also important, she emphasised, that aid agencies not allow the military to use donations to empower themselves.

“Myanmar has had many decades of entrenched corruption … and there has been a long tradition of leakage and people who use these emergency food disbursements to enrich themselves,” she said.

Another major risk is that as the normal economy sinks, the illicit economy will thrive. The Golden Triangle area is already the methamphetamine factory for the entire Asia-Pacific.

Horsey said: “As the economic crisis deepens and bites, I think illicit economic actors, transnational criminal organisations that are already well entrenched in parts of Myanmar, will get stronger and will capitalise on this.

“I’m worried that we could see larger parts of Myanmar being captured by these criminal economic agendas. And once these very powerful, very rich criminal networks have managed to work out how to operate in the new normal, they will be very resistant to any attempts to improve the situation and bring it back to better governance and a more normal situation.”



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