Myanmar’s economy could take a significant hit following this week’s military coup, analysts say, as the U.S. mulls fresh sanctions and foreign investors appear rattled — potentially putting billions of dollars’ worth of business investments at risk for the Southeast Asian country.
Citing “fraud” in the November general elections, Myanmar’s military, known as the Tatmadaw, took control of the government on Monday — the same day the newly elected parliament was set to convene. Leaders of the National League for Democracy ruling party were detained, including State Counsellor and Nobel Peace laureate Aung San Suu Kyi, who has since been charged with illegally importing walkie-talkies. The military also announced blocks on Facebook, Instagram and Twitter.
The fate of the economy, which is already suffering because of COVID-19, will depend on what the military does moving forward, says Aye Min Thant, a journalist based in Yangon.
Before the pandemic, Myanmar’s economy, which depends heavily on agriculture, oil and natural gas, the garment industry and tourism, was expected to grow by over 6% for fiscal 2019-2020. The World Bank estimates it only grew by 0.5%.
Many countries were swift to condemn the coup, including the U.S.
“We will work with our partners to support restoration of democracy and the rule of law, and impose consequences on those responsible,” President Biden said in a speech at the State Department on Thursday.
A State Department spokesperson said the U.S. would conduct “a careful review of our current sanctions posture as it relates to Burma’s military leaders and companies associated with them.”
Analysts warn an imposition of broad U.S. economic sanctions in response to the coup could harm the country more by cutting it off from diverse foreign investment — while creating an opportunity for China to fill the vacuum.
“This changes everything”
The coup could lead to a “deep fear” in investors, a U.S.-based Myanmar trade expert says. The person did not want to be named for fear of retribution against family members in Myanmar by the military junta for talking to the media.
The coup instills a…
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