Myanmar blames economic turmoil partly on foreign-backed sabotage

Myanmar’s military-appointed authorities are doing their best to stabilise the kyat currency and support an economy in turmoil since a February coup, a minister said on Tuesday, blaming the crisis partly on foreign backers of its opponents.

The currency lost more than 60% of its value in September after the southeast Asian nation was roiled by months of protests, strikes and economic paralysis after the coup.

Inflation has risen to 6.51% since the military took power from 1.51% previously, and foreign reserves stand at 11-trillion kyat, or $6.04bn at the central bank’s official rate,  investment and foreign economic relations minister Aung Naing Oo said in a rare interview.

It was the first time Myanmar had disclosed its level of foreign currency since the coup, and compares with a World Bank figure of just $7.67bn at the end of 2020.

The junta’s investment minister said Myanmar was suffering, as were most countries, from Covid-19 pandemic fallout.

But he attributed its economic troubles to sabotage by opponents of the junta, a strategy he said was backed by some foreign elements.

“The pandemic has posed in Myanmar a serious threat. It has led to an economic slowdown that has been worsened by sabotage and civil disobedience that has affected national stability,” said the key former policymaker in the reformist, army-backed government that ran Myanmar after the end of a half-century of direct military rule in 2011.

Asked which countries had backed “economic sabotage” and what evidence there was, he declined to specify, saying only: “We have received a number of evidence of how they interfere.”

Six foreign companies had applied for permission to leave Myanmar since the coup and others had suspended their business, he said.

International media had exaggerated the crisis, he said. “Hopefully, in a few months, we will be able to restore our normal situation.”

The fall in the value of the kyat has driven up food and fuel prices in a fragile economy the World Bank forecasts to contract 18% this year, slumping far more than its neighbours.

Steps had been taken to build confidence in the currency, said Aung Naing Oo, a former member of the military who served in the ousted government of Aung San Suu Kyi.

Authorities will encourage use of online payment, loans for farmers and debt moratoria, among other efforts to help the economy, he said.

The ratio of tax to GDP fell to 5% to 6%, down from 8.4% in 2020, he said.

Reuters