Money shortage crisis looming in Myanmar as protests carry on
The generals have already been hit with sanctions by the United States, Britain, Canada and the European Union
Early bird customers of a military-owned bank queued anxiously as dawn light crept over Yangon, after a strict new limit on daily cash withdrawals fuelled rumours of a money shortage in post-coup Myanmar.
Myawaddy Bank is among scores of military-controlled businesses in Myanmar facing boycott pressures since the generals ousted civilian leader Aung San Suu Kyi from power on February 1.
Nationwide protests have called for employees – including bank workers – to skip work, seizing up a banking sector heavily dominated by the military and its cronies before the monthly payday this Friday.
For those in need of cash, it does not help that no clear information has been released.
In commercial hub Yangon, private banks remain mostly closed, government banks seem partly open, and getting cash from ATMs appears to be a touch-and-go endeavour.
The uncertainty has fuelled worries of cash shortages, said businessman Tun Naing, 43, who has queued daily for the past week to withdraw six million Myanmar kyat – about $4,500 – from his Myawaddy bank account.
Despite the irregular opening schedules of banks across Yangon, a notice in state-run newspaper New Light of Myanmar claimed daily services were still being provided.
"People are requested to take part in this process for ensuring economic stability of the country," read the Central Bank notice.
While the risk of cash shortages in the country is high, the time frame is unpredictable, said Myanmar-born international business expert Htwe Htwe Thein from Australia's Curtin University.
"In the past under the previous military government, they had been known to print money and that of course hyped up inflation," she told AFP.
The pre-coup Myanmar economy was already facing severe economic headwinds from the coronavirus pandemic and lockdown measures.
And the situation is expected to get worse because of a civil disobedience movement that has government employees boycotting work.
The generals have already been hit with sanctions by the US, Britain, Canada and the EU, and the larger economy is also at risk of suffering reputational damage and a decline in foreign direct investment.
International credit ratings agency Fitch swiftly revised the country's growth estimates for most of 2021 down from 5.6 per cent to 2 per cent on the day of the coup, citing "elevated political risks".
A potential pause on foreign cash inflow has raised the alarm for activist group Justice for Myanmar, who say the generals could now dip into some $6.7 billion worth of Myanmar's foreign reserves.
So far, US sanctions have included a $1 billion asset freeze.
"If foreign banks continue to do business with these banks under military-control, they will be complicit in propping up the military regime," Justice for Myanmar said.
Meanwhile, the country was set for more street protests on Wednesday against military rule while Indonesia's efforts steer a path out of the crisis with the help of other Southeast Asian countries appeared to falter with a proposed diplomatic visit scrapped.
This week saw huge rallies and a general strike on Monday to denounce the military's Feb. 1 coup and demand the release of elected leader Aung San Suu Kyi, despite a warning from authorities that confrontation could get people killed.
On Tuesday, gatherings were smaller overall but a rally by members of members of different ethnic minorities was taking place in the commercial hub of Yangon, with civil servants from the energy ministry joining in.
"We ethnic minority people haven't had the chance to demand our rights but now we do," said San Aung Li, 26, a member of the Kachin minority.
"So I'm supporting the protest as all ethnic people are, with one voice."
With the protest and a civil disobedience movement paralysing life in Myanmar, Indonesia has been trying to find a way out.
Sources said it proposed a plan centred on members of the Association of South East Asian Nations sending monitors to ensure the generals stick to their promise to hold fair elections.
The military has not given a time frame for a new election but it imposed a one-year state of emergency when it seized power so it would likely be after that.
But Suu Kyi's party, which swept a November 8 election that the military says was marred by fraud, and its supporters want its victory recognised.
Indonesia's foreign minister, Retno Marsudi, is in Thailand and had been expected to fly to Myanmar but that trip was off, her ministry said.
"After taking into account current developments and the input of other Asean countries, this is not the ideal time to conduct a visit to Myanmar," Indonesian foreign ministry spokesman, Teuku Faizasyah, told a briefing in Jakarta.
On Tuesday, hundreds of protesters gathered outside Indonesia's embassy in Yangon to voice opposition to a new election, demanding that the votes they cast in November be recognised.
The army seized power after alleging fraud in the November elections, detaining Suu Kyi and much of the party leadership. The electoral commission dismissed the fraud complaints.
Indonesia's efforts to resolve the crisis comes as international concern is growing.
The Group of Seven rich nations on Tuesday condemned intimidation and oppression of those opposing the coup. "Anyone responding to peaceful protests with violence must be held to account," group foreign ministers said in a statement.
Western nations sought to increase pressure on the junta this week with the EU warning it was considering sanctions that would target businesses owned by the army.
The US imposed sanctions on two more members of the junta and warned it could take more action.
China, which has traditionally taken a softer line, said international action should contribute to stability, promote reconciliation and avoid complicating the situation, media reported.
Military chief General Min Aung Hlaing has called for state spending and imports to be cut and exports increased to revive what he called an ailing economy.
He did not link the protests to economic problems but said the authorities were following a democratic path in dealing with them and police were using minimal force, such as rubber bullets, state media reported.
Security forces have shown more restraint compared with earlier crackdowns against people who had pushed for democracy during almost half a century of direct military rule.
Even so, three protesters have been shot and killed. The army has said one policeman died of injuries sustained during the protests.
Updated: February 24, 2021 12:31 PM