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Month: September 2023

Myanmar’s post-coup economy comes crumbling down

Editor012 mins

Amid the news of escalating violence, it’s easy to lose sight of two events in August 2023 that exposed the Myanmar military regime’s vulnerability.   First, in a video message to the Moscow International Security Conference, coup leader Min Aung Hlaing complained about the weaponization of the dollar.  Second, the August appointment of Lt Gen Nyo Saw to two special commissions on trade and foreign exchange that report directly to junta chief Min Aung Hlaing. Saw is a close confidant, but as the chairman of military-owned conglomerate Myanma Economic Corporation (MEC) and a director of military’s other holding company, Myanma Economic Holdings Ltd (MEHL), he’s also the military’s most experienced economic and business expert.  It’s hard to overstate just how bad Myanmar’s economy is. Although the World Bank predicts GDP to grow at 2 to 3% this year, the economy has contracted by 12% since January 2021. A decade’s worth of economic growth was eviscerated.  Myanmar junta leader Senior Gen. Min Aung Hlaing during a military exercise in Ayeyarwady delta region, Myanmar, Feb. 2018. Credit: Lynn Bo Bo/Reuters pool Nearly 60% of the population is now living beneath the poverty line, and the World Bank is warning about food insecurity across the country. Between war, climate change, and currency controls that limited the amount of the imports of fertilizer and pesticides, agricultural production is down. Although 2022-23 saw $1.6 billion in pledged foreign investment – almost all of which was from China or boomerang Myanmar investment via Singapore and Hong Kong – far less was actually realized. Other foreign investors are pulling out, citing poor market conditions, pressure from activists, and reputational costs. This has diminished the corporate tax base. With the exception of gas and oil sales to Thailand and China, exports have been hard hit. According to the military government’s Ministry of Commerce, in the first eight months of 2022, total exports reached $6.57 billion, giving the country a $172 million trade surplus.  In the same period in 2023, total exports dropped by 9.8% to $5.93 billion, with a $500 million trade deficit. But if one disaggregates border trade, it’s even worse.  Currency control confusion Exports to overseas markets fell by 21%. And it will worsen as key manufacturers, such as clothing makers H&M, Primark, and Inditex,- have left. Some retailers are now shunning Myanmar gemstones.  Trade has been hard hit by a series of hastily implemented currency controls that change regularly, upsetting businesses. Some of the more recent currency controls have forced any individual or business with more than $10,000, without a permit, to purchase the kyat currency at the official exchange rate of 2,100 to the U.S. dollar.  The black market rate for the greenback is 3,900 kyat , a 300% decline in the value of the currency since the Feb. 1, 2021 coup.  Headquarters of the military-owned Myanmar Economic Corporation in Yangon, one of the country’s main military conglomerates. Photo: Ye Aung Thu/AFP Myanmar’s banks are increasingly isolated. U.S. sanctions on Myanma Foreign Trade Bank and Myanma Investment and Commercial Bank, which were responsible for the clearing of most U.S. dollar transactions, have forced costly workarounds, such as establishing new shell companies and bank accounts. Singapore’s United Overseas Bank Limited (UOB) announced that they would close the accounts of Myanmar, and had already stopped providing banking services for Myanmar Airways International. Other Singapore banks are expected to follow suit, following signaling from the Monetary Authority of Singapore and the additional reporting requirements due to the Financial Action Task Force blacklist. A Bangladesh bank froze the accounts of the two sanctioned banks.  Government revenue is flat or declining. While officially a secret, projections built into the annual Union Taxation Law paint a grim picture. The Internal Revenue Department has warned that revenue from lotteries, income tax, corporate taxes, natural resource rents, and customs duties have all stayed flat or contracted since the coup; only rents from oil and gas exports have gone up. Tax authorities are now specifically hitting medical professionals with preemptive taxes. According to data compiled by the opposition National Unity Government (NUG), the Central Bank of Myanmar has compelled banks, state-owned enterprises and insurance companies to buy an estimated 26.5 trillion kyat in bonds, $3.1 billion at the black market rate, since the coup. With an inability to repay, and an NUG pledge that the bonds will not be honored, these are additional liabilities for banks that are already saddled with non-performing loans. The regime is broke and may have turned on the printing presses. The NUG estimates that the military government has printed up to 20 trillion kyat, roughly $5.1 billion at black market rates, since the coup, partially explaining the high inflation.   Sanctions take a bite In July 2023, the junta issued a K20,000 note, the highest denomination, creating an inflationary spike and a further decline in the currency’s value. It’s supposed to be a limited issue currency, but with 14% inflation, a higher denominated note may be required. While international sanctions have not resulted in a massive seizure of funds, they’ve not been insignificant either. The U.S.immediately froze $1.1 billion of Central Bank of Myanmar assets following the coup. The European Union froze $503 million when it sanctioned the Ministry of Oil and Gas Enterprise. More importantly, the sanctions have made everything harder for the junta.  The NUG has identified 13 other banks around the world that are holding some $5.5 billion in Central Bank of Myanmar assets, 67% of which are in nine banks in Singapore. Should the NUG ever convince the Singapore government to freeze those assets, it would deliver the coup de grâce.  A jetty for oil tankers at Madae island, Kyaukpyu, Rakhine state, Myanmar. With the exception of gas and oil exports to Thailand and China, Myanmar’s exports have been hard hit. Credit: Soe Zeya Tun/Reuters This degree of economic mismanagement is a crime in itself, right up there with the military’s daily war crimes. The economy is the regime’s Achilles heel and they don’t have…

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Scavengers risk landslides at Kachin jade mines, where the earth is ‘like a sea’

Editor09 mins

Myanmar’s jade mining center of Hpakant is a lawless township where the less fortunate gather to gamble on making it big, but with little oversight, the stakes are high and losing means being swallowed up by the earth at the digging pits. Nearly 600 people – mostly scavengers – have died in at least 10 landslides at the mines in Kachin state since 2018, according to data compiled by RFA Burmese, though residents say the death toll is likely higher because many go unrecorded. Among the accidents over the past year, a 2020 landslide at Hpakant’s Hway Hkar jade mining site – located 150 kilometers (95 miles) west of the Kachin capital of Myitkyina – was the worst, claiming the lives of around 190 people. More than 80 died in a landslide at the Hmaw Si Zar site the following year, while a similar number were killed in one at the Met Lin Chuang site in 2022. One resident of Hpakant who, like others interviewed for this story, declined to be named citing security concerns, said that massive, unguarded piles of earth cast off by mining companies and digging pits of more than 300 meters (1,000 feet) in depth make for deadly conditions at the sites. Scavengers must wait to enter the sites until companies suspend mining operations during the rainy season, but with the rains come even greater risks of being buried alive. “You can’t stop them – they do it every year,” he said. “Since they can’t search for jade during the operating season, people in Hpakant have to scavenge during the rainy or cold seasons. If not, there are no other jobs.” According to the U.K.-based rights group Global Witness, nearly 400,000 people in Myanmar rely on scavenging precious stones in the Hpakant region to earn a living – most of whom work under unsafe conditions. The resident said when it rains in Hpakant, the earth is “like a sea” in some places, and that work in such conditions is “terrifying.” Miners search for jade at a Hpakant mine dump in Kachin state, Myanmar Nov. 25, 2015. Credit: Soe Zeya Tun/Reuters Additionally, he said, several abandoned pits in Hpakant put the township at risk of flooding, as rain can build up and overflow at the sites. Others blamed excessive use of explosives and companies’ failure to follow prescribed methods of mining that make sites safer and more sustainable. On Aug. 13, a landslide triggered by heavy rains left 42 people missing at a site near Hpakant’s Mana village, although 33 bodies were later recovered. Video of the aftermath of the incident, obtained by RFA, shows brown water surging up the sides of muddy embankments that circle the caldera of the mine as people look on. In the background, a steep, dark stain runs down the side of a nearby cliff, where scavengers were washed away by a torrent of moving earth. A man who lost his cousin in the landslide said companies are partially to blame for such accidents because they leave their sites unprotected while operations are shut down. “[Mining companies in Hpakant] are all doing it without any rules and regulations,” he said, adding that “not all of them are legal.” Loosened restrictions under junta Under the deposed National League for Democracy, or NLD, jade mining concessions had been suspended in Hpakant and around 90% of mining rights had expired by the end of 2020. However, residents of the area told RFA that since the military seized power in a February 2021 coup, jade companies have illegally restarted mining operations and skirted scrutiny by paying taxes to the Kachin Liberation Organization, an ethnic army in the area, and the junta. “We prohibited [mining] in dangerous places like this,” said parliamentary representative Aung Hein Min, who won a seat in the legislature in Myanmar’s November 2020 election. “We banned high piles of discarded earth … [and] we relaxed the rules outside of the rainy season. Similar measures should be adopted given the current situation.” Rescue workers carry a body shrouded in plastic sheeting, in Hpakant, Kachin state, Myanmar, July 2, 2020, after a landslide killed more than 160 people. Credit: Zaw Moe Htet/AP An environmental conservationist in Hpakant told RFA that in the last decade the number of discarded earth piles have been growing, leading to more landslides that have made the area’s rivers and creeks too shallow. “The rivers, lakes, flora and fauna have been seriously damaged and they need to be restored,” he said. Meanwhile, five of Hpakant’s mountains have “disappeared” due to excavation within the last two decades, the conservationist said. Scavengers at risk When asked about the dangers of mining in the township, junta Social Affairs Minister Win Ye Tun, who is also the spokesperson for Kachin state, said that the regime has been making efforts to protect residents by digging diversion channels at sites where there is a risk of landslides. He also said those who dig illegally are partly to blame for the accidents. Miners search for jade at a Hpakant mine dump in Kachin state, Myanmar, Nov. 25, 2015. Credit: Soe Zeya Tun/Reuters A representative of the NGO Myanmar Mine Monitoring Network said that small-scale mining companies should be given priority to dig for jade in Hpakant. “[Migrant workers] depend on excavating precious stones to earn a living, since there are no jobs,” he said. “The use of heavy machinery needs to be reduced and licensing also needs to be properly verified [to ensure the safety of the sites].” Translated by Htin Aung Kyaw. Edited by Joshua Lipes and Malcolm Foster.

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Troops kill 2 men in Myanmar’s Kachin state

Editor03 mins

Three men from Kachin state’s Momauk township died on the same day after running into junta troops, locals told Radio Free Asia on Friday. On Wednesday, a column of around 250 troops stormed Au Htan Yang village. They stopped two men who were riding a motorcycle to the village, according to a local who didn’t want to be named for safety reasons. “When the column was entering Au Htan Yang village, two young men riding down from Pang Kawng Mu village were arrested and interrogated,” the local said.  “One was tied up on his back and killed. The other one was killed at the garbage dump of Dawt Hpon Yan village [Yin Kwe Taung village].” The troops then took another 10 people to use as human shields, according to the local. As they headed towards the headquarters of the anti-junta Kachin Independence Army, one man in his 40s, identified as Chit Min, was killed by a shell explosion. “The young people were crouching down when the heavy artillery landed,” the local said. “Chit Min was not able to crouch and was hit. His body was found on the morning of August 31.” The other nine hostages were released on Thursday evening, the resident added. Kachin state-based news organization 74 Media reported Friday that around 100 people from villages in the township fled to a Christian church and other ‘safe places’ while the battle between the troops and the Kachin Independence Army continued. Translated by RFA Burmese. Edited by Mike Firn and Taejun Kang.

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Once free of charge, North Korean eBooks will cost money to access

Editor04 mins

For a country closed off from the global internet, North Korea does offer its citizens at least a few high-tech conveniences.  In the Miraewon electronic library system, for example, far-flung rural residents can visit their local library to read an electronic copy of any book in the national collection in Pyongyang. The service was free of charge – until now. Authorities are telling patrons that starting in September, they must pay 1 million won, or US$120, a year – a huge sum in North Korea – angering people who use it most frequently, a resident of South Hamgyong province, north of Pyongyang, told RFA Korean on condition of anonymity for security reasons. “These measures were recently delivered to each city and county Miraewon through local party organizations, ” she said. The Miraewon, which can be translated into English as the “Future Institute”, has a portal in every city and county in North Korea, and residents can use it to access books housed in Pyongyang’s Grand People’s Study House via the intranet, an online system separate from the global internet. The Grand People’s Study House and the Kim Il-Sung Square in front of it are seen in Pyongyang, North Korea, in  2009. Credit: Reuters For some residents, this is the only way they can access materials on science and technology. The system has been a godsend for agriculture students looking to read up on farming techniques, animal husbandry, or for factory technicians in search of technical manuals or ways to improve efficiency. So the move would deprive readers of knowledge they need to more effectively do their jobs, a resident of the eastern province of South Pyongan said. “Here in Sukchon county, we’re an agricultural district, so there are farm technicians and students studying things like breed cultivation and wetland farming,” she said. “The Miraewon has physical copies of propaganda novels and the country’s masterpieces like the Complete Collection of the Works of [former leader] Kim Jong Il, but for anything related to science or technology, they must be read through the National Data Communication Network.”   College students and technicians are complaining that the country prioritizes the propaganda pieces, which aren’t useful to their daily lives. “They complain … that the authorities are monopolizing the most important science and technology books and force them to access them only through the National Data Communication Network, and now they are even charging fees for it,” she said. “How can a county that hides knowledge like this ever develop economically?”   Translated by Claire Shinyoung Oh Lee. Edited by Eugene Whong.

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Investigative Journalism Reportika © March 2022 by Ij-Reportika is licensed under CC BY 4.0