Myanmar headed for collapse as agricultural sector sinks: Analysts

This comes amid cash shortage, lack of access to financial services

A night-time protest against the military coup in Kachin, Myanmar, on Tuesday. The country is lurching towards state collapse and state failure, an analyst says. PHOTO: AGENCE FRANCE-PRESSE
A night-time protest against the military coup in Kachin, Myanmar, on Tuesday. The country is lurching towards state collapse and state failure, an analyst says. PHOTO: AGENCE FRANCE-PRESSE

In a worrying sign of deepening economic collapse in Myanmar, the military-ruled agricultural sector is sinking fast, as cash runs short and access to mobile-based financial services that were a lifeline is cut off.

After the Feb 1 coup, Myanmar reverted in large part to a cash-based economy - but cash itself is short.

The United Nations Development Programme warned recently that over 83 per cent of households have reported a drop in income since the start of last year.

In a worst-case scenario, about 26 million additional people next year could be living in poverty, defined as US$1 (S$1.33) a day.

"Right now is actually the beginning of the… growing season," said Ms Pwint Htun, a telecommunications policy expert who advised the previous Myanmar government and is now a non-resident fellow at Ash Centre's Myanmar Programme at Harvard University.

"Normally around this time is when farmers get access to a loan from the Myanmar Agriculture and Development Bank so that they can buy seed, so that they can buy fertiliser, and enough funds for them to be able to farm for this coming year ahead" Ms Pwint Htun told The Straits Times' Asian Insider video and podcast.

"With the banking collapse and the currency in free fall… I am especially concerned for the agriculture sector," she said.

Myanmar is lurching towards state collapse and state failure, analyst Richard Horsey told a UN Security Council meeting last month.

Mr Horsey, a former senior UN official in Myanmar and now a senior adviser on Myanmar at the International Crisis Group, also spoke on the Asian Insider podcast.

He said: "What we've seen since the coup is the risk that the country will tip into a new level of violence, not only in areas which have seen armed conflict in previous years... but also in new areas, including the centre of the country."

Broadly, three scenarios lie ahead: the military succeeds in imposing its will by force; the revolution against it succeeds in toppling the military; or the country remains mired in years of struggle between the two.

The fallout from the third scenario will be catastrophic, Mr Horsey said. "This is a battle that is being waged not only in the remote border lands of Myanmar, but also in towns and cities across the country. And if the government is unable to deliver services, is unable to keep the country somehow functioning, then health, education, food security, all of those things are imperilled and the country could be facing a really grave situation going forward."

Ms Pwint Htun said that the international community, including the UN's World Food Programme, must gear up to deal with the looming economic catastrophe.

It is also important, she stressed, that aid agencies not allow the military to use donations to empower themselves. "Myanmar has had many decades of entrenched corruption… and there has been a long tradition of leakage and people who use these emergency food disbursements to enrich themselves."

Mr Horsey also warned that bad actors will capitalise on a worsening economic crisis.

The Golden Triangle area, of which Myanmar is a part, is already the methamphetamine factory for the entire Asia-Pacific.

"As the economic crisis deepens and bites, I think illicit economic actors, transnational criminal organisations that are already well entrenched in parts of Myanmar... will capitalise on this," he said.

A version of this article appeared in the print edition of The Straits Times on May 13, 2021, with the headline 'Myanmar headed for collapse as agricultural sector sinks: Analysts'. Subscribe