The military takeover in Myanmar has set its economy back years, if not decades, as political unrest and violence disrupt banking, trade and livelihoods and millions slide deeper into poverty.
The Southeast Asian country was already in recession when the pandemic took hold in 2020, paralyzing its lucrative tourism sector. Political upheavals after the army ousted its civilian government on Feb. 1 have heaped further misery on its 62 million people, who are paying sharply higher prices for food and other necessities as the value of the kyat, the national currency, plummets.
With no end to the political impasse in sight, the outlook for the economy is murky.
U.N. humanitarian chief Martin Griffiths appealed last week to Myanmar’s military leaders to allow unimpeded access to more than 3 million people needing “life-saving” aid “because of growing conflict and insecurity, COVID-19 and a failing economy.”
Griffiths said he was increasingly concerned about reports of rising levels of food insecurity in and around the cities.
Hundreds of thousands of people in the country have lost their jobs and poverty has deepened as Myanmar’s inflation has skyrocketed.
“Imported foods and medicines cost double what they used to . . . so people buy only what they need to buy. And when traders sell an item for 1,000 kyats one day and 1,200 the next, it means that the seller is losing while selling,” said Ma San San, a trader in Mawlamyine township who sells Thai goods.
Myanmar’s economy is forecast to shrink by 18.4% in 2021, according to the Asian Development Bank, one of the deepest recent contractions anywhere.
The civilian government ousted in February had been making slow but steady progress toward weaving impoverished Myanmar into the global economy after decades of quasi-isolation under past military regimes. Exports surged over the last decade, after the generals relaxed their decades-long hold on power. Eager to tap a young and low-cost workforce, foreign investors set up factories making garments and other light manufactured goods.
Yangon, the former capital and largest city, was transformed as moldering buildings dating back to British colonial days were spruced up or demolished, making way for new roads, industrial zones, shopping malls and modern apartments. Private businesses popped up, creating jobs and meeting long-deprived demand for products like cellphones and new cars.
But the military still controlled key government ministries and many industries, and corruption and cronyism thrived. Months into Myanmar’s political crisis, the country has returned to the days of black market trading and dollar hoarding.
“Now most people are losing faith in the Myanmar currency and buying dollars, so prices are soaring,” said Soe Tun, chairman of the Myanmar Automobile Manufacturers and Distributors Association and an official of the Myanmar Rice Association.
Trade has been hindered both by the global shortage, and surging costs, of shipping containers and by China’s closure of its border to exports from Myanmar to help control coronavirus outbreaks.
Myanmar’s total trade fell 22% from a year earlier in the 10 months from October 2020 to July 2021, Senior Gen. Min Aung Hlaing, who led the army’s takeover, recently told his military-installed cabinet. He said the country logged a trade deficit of $368 million.
The less Myanmar exports, the less it earns in foreign currency — mainly dollars — making the greenback all the more scarce and valuable versus the kyat.
In January, the dollar bought 1,300-1,400 kyats. In late September, it hit a record high 3,000 kyats among money changers on downtown Yangon’s Shwebontha Street, informally known as Broker Street.
That has driven up prices in kyats for necessities such as cooking oil, cosmetics, food, electronics, fuel and other increasingly costly supplies that have to be imported using dollars.
The authorities suspended vehicle imports from Oct. 1 to conserve foreign exchange. To stanch the kyat’s plunge, the Central Bank of Myanmar has intervened in the market 36 times since February. But such operations have had scant impact, traders say, since most dollars sold by the central bank go to pro-military businesses.
“Some say the dollars issued by the central bank do not meet domestic demand, and we accept that is true,” Maj. Gen. Zaw Min Tun, the military administration’s chief spokesperson, told reporters.
“As a government, we have to take responsibility for what happened in our time rather than blaming the past,” he said. “I want to say that our government is working hard to find the best solution.”
Some people have set up money changing groups to swap kyats for dollars online despite the risks, and the central bank recently issued a notice banning such non-official dealings.
“Online is easier these days. You can easily find people who want to buy or sell. But you need to build trust between sellers and buyers. There are also scammers online,” said Ko Thurein, who often posts dollar sales in the Myanmar Money Changer Group.
Fuel scarcity has become a major problem. Partly thanks to rising global oil prices, the cost of gasoline, which is imported since Myanmar has scant refining capacity, has more than doubled to a record of about 1,500 kyats per liter from about 700 kyats in January.
Zaw Min Tun, the military’s spokesperson, said Myanmar was working on long-term hydropower and wind power projects while trying to conserve energy and cut imports since it could not “cover the demand for fuel.”
Top leader Min Aung Hlaing has exhorted the public to help reduce energy use.
“It’s difficult to buy dollars, and oil companies are no longer selling us on credit,” said an official from Max Energy, a major conglomerate operating dozens of filling stations. “You cannot buy everything you want and we have a hard time building trust with them. So we are just trying not to lose too much at the moment.”
He blamed the political crisis. “Even in our country, people do not trust each other, and there is no doubt that foreigners do not trust us. It is also because the banking system is in turmoil,” said the official, who spoke on condition of anonymity given the sensitivity of the topic.
“Gasoline prices have skyrocketed, so we have to raise fares. But passengers don’t want to pay. I know everyone is impoverished right now, so people are using buses instead of taxis,” said Moe Myint Tun, a taxi driver in Yangon. “When we have high fuel prices, we lose a lot of passengers.”
Like many other modern amenities, bank services have been periodically disrupted by protests and strikes, forcing people wanting to access their cash to use mobile banking apps and pay 5%-7% fees at so-called Pay Money shops providing financial services.
“Because of inflation, the money in our hands automatically decreases in value. Once the money in the bank can’t be withdrawn, we have to pay a commission at the Pay Money shops. Finally, we have nothing left,” said Su Yee Win Aung, a sales clerk at a telecommunications company in Yangon.
“It can be said that it is the most difficult time for us,” she said.
OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.
Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.
Business, building and support services saw the largest gain in employment.
Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.
Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.
Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.
Friday’s report also shed some light on the financial health of households.
According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.
That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.
People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.
That compares with just under a quarter of those living in an owned home by a household member.
Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.
That compares with about three in 10 more established immigrants and one in four of people born in Canada.
This report by The Canadian Press was first published Nov. 8, 2024.
The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.
The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.
CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.
This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.
While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.
Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.
The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.
This report by The Canadian Press was first published Nov. 7, 2024.
Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.
As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.
Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.
A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.
More than 77 per cent of Canadian exports go to the U.S.
Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.
“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.
“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”
American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.
It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.
“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.
“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”
A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.
Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.
“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.
Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.
With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”
“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.
“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”
This report by The Canadian Press was first published Nov. 6, 2024.
