8 - The Myanmar Economy, Covid-19 and the Military Coup: Issues and Prospects for Recovery

Summary

COVID-19 triggered an economic shock in Myanmar and the world over. The pandemic disrupted the economy of many countries, affecting not only their domestic environment, but also their connections with other countries through trade, foreign investment and aid, migration, and remittances. Travel bans and border controls, supply chain disruptions, and economic slowdown in many outward investing countries has blocked trade and production, causing economic turmoil. This matters for livelihoods in the short- and long-term: not only does international trade, investment and aid support job creation and income generation, but earning foreign exchange is also crucial to managing debt and stimulating economic recovery. As such, countries’ connection to the global economy can shape their prospects for recovery. This can take different forms: it can bring the country back to its pre-pandemic path, for a ‘business as usual’ approach; or it can aim to build the foundations of a more resilient, climate-compatible, gendersensitive and transformative growth.

Consider the case of Myanmar. While the official number of recorded cases of COVID-19 was small compared to surrounding nations,1 the country experienced great economic damage due to the disruption to its international linkages, in particular through the impact on trade, investment and development finance (Turnell 2020). Moreover, on 1 February 2021, the military overthrew the country's elected government. The junta remains in power at the time of writing, generating political and economic instability and substantially undermining any prospects for recovery.

This study examines the impact of COVID-19 and the coup on the Myanmar economy through the country's international economic linkages, while also assessing its prospects for recovery. Rather than assessing the overall impact of the pandemic, it focuses on international trade, investment, aid and migration as transmission channels for the impact of COVID-19 and the coup. Therefore, this study does not aim to be a comprehensive assessment of the impact of these challenges, but rather to highlight some key areas that the international community can contribute to.

The study relies on analysis based on secondary data provided by national and international sources and on grey literature. The authors worked on the Myanmar economy, in particular on economic transformation, foreign direct investment and manufacturing, prior to the military coup.