The Myanmar civil war, which was initiated by a military coup in 2021, has caused immense economic damage to the country. Three years later, the situation continues to worsen, with the GDP dropping by 17.9% after the coup and only showing a minimal recovery of 3% last year. Projections for this year indicate a growth rate of only 1%, suggesting that it will take decades for the economy to return to pre-coup levels. The country is currently facing a collapsing currency, decreasing exports, rising unemployment, and a severe humanitarian crisis, with three million people internally displaced.
The situation has been exacerbated by international sanctions, economic mismanagement, and poor governance, which have further weakened the Myanmar economy. The regime’s focus on military spending to maintain control has diverted resources away from essential services, leading to nearly a 50% reduction in spending on public health and education.
The value of the Myanmar kyat has depreciated by 55% against the dollar since the coup began, resulting in a banking crisis. Government-imposed currency controls have made it challenging for businesses to access US dollars for imports, aggravating the food crisis by hindering the importation of necessary agricultural equipment and fertilizer. In April 2022, the military government mandated the conversion of US dollar accounts to kyat, limiting access to US dollars at an inflated government exchange rate for certified importers and making them scarce and expensive. Permission is now required to send money out of the country.
Overall, the economic situation in Myanmar is dire, with nearly half the population living below the poverty line and 18 million people in need of humanitarian assistance. The ongoing conflict and economic instability have created a grim outlook for the country’s future.