Myanmar Economy Constrained
Myanmar’s economy continues to face significant challenges and growth is expected to remain feeble as conflict, macroeconomic instability, and dislocation constrain production.
Threat to Livelihoods Deepens as Myanmar Economic Outlook Remains Weak
Source: World Bank
Myanmar’s economy continues to face significant challenges and growth is expected to remain feeble as conflict, macroeconomic instability, and dislocation constrain production, according to a new report.
The World Bank’s Myanmar Economic Monitor, released Wednesday, projects gross domestic product will rise by 1 percent over the year to March 2025, in line with growth estimates for the previous year but down from the December 2023 forecast of 2 percent growth. Economic output is expected to remain about 9 percent below 2019 levels, in sharp contrast to the experience of other large economies in the region.
The report highlights a series of challenges facing Myanmar’s economy and people. Inflation and unemployment remain elevated, while poverty has become entrenched across the country. Shortages of imported inputs, labor market disruptions, and electricity shortages have curtailed manufacturing activity. Falling real incomes and stretched household buffers have constrained consumption and retail trade.
The poverty rate topped 32 percent in early 2024, rising to levels last seen in 2015, while an additional third of the population is classified as economically insecure. At the same time, poverty is becoming increasingly entrenched, with its depth and severity approaching 2015 levels. Myanmar is now estimated to have 7 million more people living in poverty than it did immediately prior to the COVID-19 pandemic.
“Displacement, job losses, and income losses have wiped out much of the previous progress in poverty reduction,” said Mariam Sherman, World Bank Country Director for Myanmar, Cambodia, and the Lao PDR. “The economic outlook remains very weak, with little respite for Myanmar’s households over the near to medium term.”
In addition to its direct impact on livelihoods, conflict is also disrupting land border trade and the movement of goods within the country. In the six months to March 2024, goods exports fell by 13 percent and imports fell by 20 percent compared to the same period a year earlier.
The agricultural sector has shown signs of resilience, with improvements in rice and other crop yields and increased farmgate prices. However, elevated input prices, limited access to credit, and conflict-related disruptions are expected to continue constraining output in the near term.
“Over the longer term, declining household investment in health and education, reductions in employment and job quality, and increased outward migration will hinder human capital accumulation and scar Myanmar’s future growth and development potential,” said Kim Edwards, Senior Economist and Program Leader for Myanmar, Cambodia, and the Lao PDR.
Washington’s Proxy War in Myanmar Continues Along China’s Borders
By Brian Berletic (New Eastern Outlook)
Overshadowed by ongoing fighting in Eastern Europe and the Middle East as well as growing tensions between the US and China, the ongoing conflict in Myanmar nonetheless constitutes a critical component of what is a larger global conflict.
Depicted by Western governments and Western media as an isolated, internal conflict between a “military dictatorship” and the forces of “democracy,” in actuality the conflict represents decades of Anglo-American attempts to reassert Western control over the former British colony.
Much of the fighting is taking place between the central government and armed ethnic groups that had at one point been a part of the British Empire’s occupation force, utilized by the US and UK during World War 2 against the Japanese, and used ever since to disrupt Myanmar’s ambitions for independence and self-determination.
Alongside these armed ethnic groups, the US has constructed a parallel political establishment, eventually installed into power through compromised elections in 2020.
In 2021, Myanmar’s military removed from power the US client regime headed by Aung San Suu Kyi, advised by literal British and Australian citizens, and supported by a collection of US government-funded and backed political organizations, media platforms, and educational institutions both within and beyond Myanmar’s borders. The US has been semi-covertly backing attempts by the ousted regime to retake power through armed violence ever since.
Psychological Warfare Aims to Break Central Government Resolve
The fighting has continued mainly along Myanmar’s frontiers, regions that have hosted US-backed armed ethnic groups pursuing separatism for decades, but also at times and to a lesser degree, inside some of Myanmar’s urban centers.
While the US-backed opposition has failed to oust the central government or even significantly threaten it militarily, Western governments and the Western media have attempted to pass off temporary (and eventually reversed) gains as an impending opposition victory. Opposition strikes on central government and military facilities, including in the nation’s capital have also been passed off as growing opposition competence.
The Diplomat in its May 1, 2024 article, “Myanmar’s Revolution Has Entered a New, More Complicated Phase,” claimed:
Naypyidaw, the capital, has also come under unprecedented attack. In early April, a dozen resistance drones breached the city’s defenses and attacked military facilities across the sprawling city. Days later opposition forces fired several rocket attacks which hit a junta airbase next to Naypyidaw’s International Airport.
Zachary Abuza, a professor at the National War College in Washington, D.C. who focuses on politics and security in Southeast Asia, said that the attack on the capital will have dented the junta’s morale.
“The drone and rocket attacks on Naypyidaw have caused little physical damage or casualties, but they have caused psychological damage; it is their fortress capital, and the physical manifestation of the bubble that the generals live in,” he said. “Attacks in Naypyidaw are meant to show that there is no place where the generals are safe.”
The very fact that Myanamr’s US-backed opposition must rely on symbolic gestures indicates its military deficiencies.
A similar strategy is being used by US-NATO-backed Ukraine. Missile and drone strikes are carried out against targets deep in Russian territory primarily to generate headlines for a proxy war Washington, London, and Brussels are otherwise decisively losing.
It is a strategy also used throughout the US proxy war in Syria from 2011 onward, with attempts to create psychological momentum designed to panic Damascus and its allies into breaking and fleeing. It too failed.
Another US Proxy War
US support for the opposition is a full spectrum. Political, media, and militant groups receive huge sums of money and support from the US government through the National Endowment for Democracy (NED) and United States Agency for International Development (USAID).
Weapons and military training are provided by Americans and Europeans working with “humanitarian aid and advocacy organization” like the “Free Burma Rangers,” headed by a US Army veteran revealed to be in direct contact with the US Consulate in Chiang Mai in neighboring Thailand, according to US diplomatic cables published by Wikileaks.
Despite the flow of resources into Myanmar’s opposition, the nature of post-colonial Myanmar constitutes vicious ethnic, religious, and political divides, meaning opposition forces are just as likely to fight with one another as they are the central government.
See-Sawing Battles
At the moment, the fighting remains stagnant despite headline-grabbing developments like the opposition’s seizure of the town of Myawaddy along the Myanmar-Thailand border. The New York Times reported the capture of the town by opposition fighters in an April 12, 2024 article titled, “Myanmar Rebels Take Key Trading Town, but Counteroffensive Looms.”
By April 24, 2024, less than two weeks later, the New York Times would publish an article titled, “Myanmar’s Junta Recaptures Town That Was a Significant Gain for Rebels.”
The see-sawing nature of the fighting is depicted by the Western media and the Western officials and analysts they interview as a sea change in the opposition’s favor, however Myanmar’s post-colonial history has consisted of decades of such fighting, including the changing of hands of various towns and cities along the edges of the central government’s control.
Just as the opposition is using drones and rockets to symbolically strike at key government and military facilities because they lack the military means to actually threaten them, it is taking vulnerable frontier towns and cities where government forces are spread out thinnest precisely because of its inability to fight and defeat Myanmar’s forces in pitched battles.
Target China
While ultimately the US seeks to re-install its client regime into power in Myanmar, preventing peace and development in Myanmar is a secondary objective.
The Southeast Asian country serves as an important partner for China’s Belt and Road Initiative (BRI) which includes a port and hydrocarbons pipeline running the length of the country to China’s Kunming region. This allows China to move hydrocarbons from the Middle East to China without transiting the Strait of Malacca and other waters that could potentially be blockaded by the US’ growing military presence in the Asia-Pacific region.
China’s BRI infrastructure has been repeatedly targeted by the US-backed militancy several times since 2021 as have Chinese businesses operating across Myanmar. Far from a battle between “democracy” and “dictatorship,” the conflict instead is one part of a much wider strategy of encirclement and containment by the United States of China stretching back to the end of World War 2. The US seeks to either control or destabilize nations along China’s periphery either creating US client regimes hostile to Beijing, or security crises along China’s border preventing trade, development, and economic growth of China itself.
An Ambiguous End Game
The final conclusion of Myanmar’s current conflict is far from clear.
While similar fighting has ebbed and flowed for decades, always ending in the central government’s favor, there are several factors that will determine whether or not this cycle will continue. While Myanmar’s military possesses resources and capabilities beyond the reach of the US-backed militants it is fighting, the ability and will to use them effectively is up to Myanmar’s central political and military leadership.
In terms of the opposition, among the many weaknesses of US-backed armed groups is their inability to work together with other ethnic and political fronts the US is sponsoring. Just as was the case in Syria, while at times the central government was overwhelmed by large numbers of militant operations across the country, the inability to coordinate them allowed government forces to defeat in detail each organization involved before moving on to the next.
A similar strategy appears to be in use by Myanmar’s military. Government forces withdraw where they are stretched, then return in force when resources can be redeployed effectively against opposition deployments. That the opposition is essentially engaged in “hit-and-run” operations exploiting gaps in the central government’s force deployments demonstrates a fundamental weakness requiring asymmetrical strategy and tactics.
Unless the opposition acquires more manpower and resources and/or can coordinate better among themselves, it is unlikely they will get the upper-hand over the central government, barring a fundamental mistake made by the government itself.
Of course, much depends on the wider global conflict the fighting in Myanmar fits into. With the US losing its proxy war in Ukraine, its influence eroding in the Middle East, and the disparity between a rising China and a waning United States continues to grow, Washington’s ability to sustain support for opposition groups within and beyond Myanmar’s borders may come into question. Should that happen, the cycle of deadly, destructive fighting debilitating Myanmar’s development as a nation for decades could begin coming to an end.
The above-mentioned Diplomat article would note the inability of opposition groups to work together.
It cited Aung Thu Nyein, director of the US government-affiliated “Institute for Strategy and Policy Myanmar” based in Chiang Mai, Thailand, saying:
Aung Thu Nyein says that the coming phase of the war could be tricky, and that more junta defeats could paradoxically divide the country further. He says the NUG remains popular in Myanmar among the general population but some of the ethnic groups are moving away from its leadership, forging their own paths and pursuing their own political agendas.
“The problem is a common agenda against the common enemy and building an alliance to fight together,” he said. But “the ethnic armed organizations can’t do that, and the National Unity Government can’t lead that.”
This means that even if the US-backed opposition was successful in ousting the central government and military, Myanmar itself would only descend further into chaos. The central government stands the only real chance of unifying the nation and moving it forward together with the rest of a rising Asia, but only if US-sponsored subversion and militancy ends or is successfully overcome.
Just as is the case with Eastern Europe, the Middle East and elsewhere in the Asia-Pacific region, Myanmar’s fighting is among an array of conflicts presented to the general public as spontaneous, unrelated crises the US must respond to, when in reality it is the US primarily driving them all, and all in order to preserve its ability to determine the outcome of regions around the world rather than the people actually living in these regions themselves.
The outcome of Myanmar’s ongoing fighting depends largely on the rest of the world’s ongoing efforts to either aid and abet US hegemony, or confront, oppose, and ultimately dismantle it. Until then, Myanmar’s fate remains suspended in perpetual armed conflict.
NB: Brian Berletic is a Bangkok-based geopolitical researcher and writer, especially for the online magazine “New Eastern Outlook”.