Editorial: Post-Coup Economic Fallout Hits Harder in Poverty

By DMG 12 Mar 2022

Editorial

In the months since the military coup on February 1, 2021, commodity prices have skyrocketed in Myanmar. Not only basic foodstuffs produced locally but also fuel and building materials imported from abroad have gone up significantly in price. 

Basic foodstuffs like rice, cooking oil, salt and onion are a necessity for every household. As the prices of basic foodstuffs have soared, low-income families and casual workers are bearing the brunt of the inflationary effects. 

Even among low-income families, migrants in urban areas are suffering more than rural people. The majority of internal migrants working in urban areas do not own a house and are tenants who have to spend a significant amount of their incomes to rent accommodation. 

Arakan State is the second poorest state in Myanmar, with correspondingly poor transportation infrastructure. As the state does not produce enough food for local people, it has to bring in basic foodstuffs from the mainland to meet demand. 

Food price hikes in Arakan State are often directly tied to increases in fuel prices. Transportation costs have increased as a result of rising fuel prices, and food prices have increased consequently. 

Given the current food prices, it is difficult for a low-income worker to sustain even just his or her own existence, far from supporting a family. While consumer prices have doubled and more in some cases, pay has not increased commensurately, forcing many into severe hardship. 

Meanwhile, recent long power cuts are also responsible for higher prices. Small and medium enterprises have been forced to run their businesses with electricity generators due to the power outages, and higher production costs mean increases in the prices of their products. 

Restaurants and small eateries have also had to increase the prices of their dishes as they are being forced to use firewood for cooking as a result of blackouts. In the end, average consumers have to spend more. 

When imbalances occur between their incomes and expenditures, many resort to gambling in hopes of “earning” easy money. In addition to existing legal and illegal lotteries, online gambling has also been rampant in the country. Some are even selling counterfeit money online.  

As counterfeit banknotes arrive in the market, inflation and commodity prices will increase further, leaving low-income families locked into a struggle for day-to-day survival. Under such circumstances, the fact that many working folks say they can’t be bothered (read: afford) to take an interest in politics is both understandable and lamentable.  

Over time, the rich will get richer and the poor will get poorer. Corruption and bribery will be rampant as low-level government employees inevitably determine that they can barely eke out a living on their salaries alone.  

As poverty worsens over time, educational standards will fall. And dictators, some say, will rule a poorly educated country as they wish. These trends are not a new prospect for Myanmar; indeed the Myanmar people have experienced this sequence on repeat, to varying degrees, since the first coup in 1962. 

The people of Myanmar know better than most that economic fortunes and political systems are inextricably linked. The dividing line determining poverty or affluence is often an international border.  

There is also the question of economic resilience, which directly relates to a country’s political past and its legacy institutions, or lack thereof. It’s worth noting that neighbouring Thailand has endured more than a dozen coups, but generally businesses and Thai society as a whole have been relatively little-affected by the more recent military takeovers. Does it help that Thailand has managed to keep the lights on in factories and homes across the country in its post-coup periods? Undoubtedly.  

When it comes to changes of administration, whether it be by democratic vote or military coup, a lack of infrastructure (in multiple senses including transportation, political and educational infrastructures) makes upheaval at the highest levels of power that much harder on a nation’s people. Hardest hit are the poorest classes, who bear the brunt of the economic fallout — as is too often the case in so many other cases.  

As we have witnessed over the past six decades in the Myanmar context, a higher poverty rate seems to correspond to greater wealth for the ruling elites and their cronies. DMG calls on all those who can afford to take an interest in politics to speak out for those who can’t, and in support of greater protections for the poorest among us.