Current State of Affairs
I doubt anyone with a basic understanding of economics would dispute a negative economic growth for this calendar year. We cannot simply take the official accounts and take the balance of trade surplus as an accurate indicator of the economy. With severe restrictions on imports, the official current account is always likely to be in surplus. Yet imports continued to flow in like a tidal wave across a large number of porous borders. Without considering these unofficial statistics, we will not be able to judge the economy correctly and we would be misinterpreting the economic signals on most fronts.
Because of the downturn or recession, whatever you might want to call, many companies and factories are trying to reduce working hours as of now. Lack of raw materials due to import restrictions, high price of them caused by Kyats depreciation, specific and qualified labor shortages, general increases in cost of production from electricity, diesel to accessories are all causing them to lower their production targets and runs compared to previous years. The resultant impact is lesser need for production hours and workers.
Most of them have already reduced working hours and salaries. The most common cutback method so far has been one week off, one week work or alternate day off technique, to cater for lesser activity. All of them MI spoke to were trying to avoid having to retrench workers. Some are resorting to getting the workers work to from home at half wage. Hiring has also been stalled. None of the companies we spoke to said they would be adding additional headcount before the year end.
All these convey bad news for staff, caught among the dearth of jobs in the market place, increasing cost of living, and inability to go and venture out overseas to end up working as a maid or menial labourer.
With the dearth of credible economic statistics being publicised, it does not help but accentuate the bombardment of negative news coming out via fake news circles encamped within the perimeters of Chiang Mai, Thailand. How would we be able to take the correct remedy, if we do not know of genuine facts and figures!
Yet, we are still dragging each other down, oblivious of the fact that other countries, especially those neighbouring us, are treating us like dirt. We cursed and swore at our leaders online, attacked Myanmar own brands, businesses and companies if there is a slightest hint of them supporting our own government and military, shoved our competitors into the trench vengefully for even the slightest of the mistakes. Myopic, as blind as a bat, tunnel vision would come to our minds. Do they not know that our destiny is all tied by the same red passport that we have to hold when we get out of this land! Nonetheless, the majority fall under the trap of those instigators who wanted the country failed and the economy wrecked, because they no longer shared our destiny. Holding passports of the western countries (US, UK, Australia, etc.) they called for upheaval and continuing revolution, bestowing distrust among our nationals and promoting the mass murders of one another.
Without the unity on the inside, we will always be of lowest of the rock-bottom class people in view of other countries.
I do not want to dwell much on the military fronts. Reading the ‘Lashio Incident’ would probably help you better understand the circumstances. The latest update has been the fact that the the Colonel wanted for treason has been captured on September 27.
Murphy’s Law
Worst things always happen at the worst possible times! That’s what the Murphy’s Law said. You can convince yourself easily; on the day you have left the umbrella at home, there would be a downpour. When you are eating KFC with your fingers, there will be an itch on your body where you cannot possibly reach or scratch. Sounded familiar?
When the country is feeling despondent on the economic, security and military fronts, suddenly, once in a century floods will extensively inundate our farmlands and homes. The impact is going to last beyond this year. The standard of living has already gone down due to Kyat depreciation and excessive inflation. What more could we possibly suffer?
Notwithstanding, the recovery efforts are expected to be long and arduous. Families are already desperate need of help. NNCP terrorist groups claimed they are all for the people, then they all vanished from sight once the floods came in. Donations they collected are all for themselves only.
There are even news report of them shooting at Tatmadaw soldiers on the flood rescue missions. I don’t know if Kipling would be able to say the same phrase now, if he were alive: “I love the Burman with the blind favouritism born of first impression. When I die I will be a Burman”. What an irony, considering how things are now.
Getting the Inflation Wrong
CBM and MOF stated the last FY inflation at 27%. But no one really believe that figure. When the price of the eggs, e.g., has gone up from around 200 Kyats the year before to nearly 500 Kyats now, you know the figure is a hogwash. With the $ rates going up nearly 300% within the last three years, you know for sure, the imported inflation is somewhere around that figure. (Fret not, inflation in the UK, from 2019 to 2022 was six times the average figure of the previous ten years)
Electricity bills are going up from September 2024 onwards. The diesel and petrol are heading north all the time. These two costs would definitely be passed on the prices of locally produced goods and services.
The danger here is that inflation is becoming unanchored; with no third party or credible confirmation on inflation figures, the headline figure becomes flexible without any publicised targeted number by CBM or MOF. This long period of inflation would lead to both individuals and companies, expecting more price rises in the future.
Researchers from the Western world have provided that an unexpected 1% increase in CPI or RPI (Consumer/Retail Price Index) produces 0.7% rise in inflationary expectations for the future and the fact that the unexpected increase continued to exert influence over future pricing decisions.
Once this expectation has set in, it would become increasingly more difficult to control inflation. A dire warning for the CBM/MOF perhaps, but getting the truth out, setting the targets and garnering support especially from the business community would be an excellent start. Else, the future looks grim.
Pulse of the Foreign Believers
One Singapore businessman who has been operating in Myanmar for the past thirty years, complained of having to fund the operations out of his savings and having no new products to sell to customers because of the ban on imports.
One Indian businessman who is a major exporter of beans and pulses as well as owner of a number of restaurants, whines of the same issue. He has made Myanmar his home since his father’s times. Now, his moans has become meows and he decided to spend more of this times back in India and elsewhere.
One Frenchman, who is a permanent resident of Myanmar, has deserted Myanmar after his 20 years old travel and tour businesses has to stay shut due to the absence of any inbound European tourists into Myanmar. To rub salt into his wounds, his boutique hotel in Inn Lay that he wanted to put up for sale, got devastated so much by recent floods that he is returning to Myanmar to assess and repair the damages.
Korea chamber of business here similarly complained of import license and many transfer issues as their #1 complaint about current business environment.
The ‘last to arrive and the first to leave’ Japanese are still trying to find buyers for their factories in Thilawa and around Yangon, to totally abandon Myanmar.
Investors from the West are also moaning in distress, complaining incessantly of incurring losses year after year and difficult economic environment.
The Chinese want certainties in political situation and the scarcity of information is making all of them nervous, especially the shortage of those credible information by government news agencies.
Bringing the Confidence Back
The good proportion of investments and consumption in a country depends on the confidence that businesses and people have on that country and its economy. So what’s the recipe to increase confidence across the board?
1) Communication: We need the top leaders and ministers from the government talking about the State of the Union at least every month. There are many of us who believe in the current leaders and trust that they are doing their best for the country. With a little bit of top down communication, they cannot help but feel motivated about the need to move in the same direction with the government and help accomplish its policies. Best of all, they will help persuade others who lean towards the dark side to get themselves back to the mainstream, thereby reducing terrorism and destructive behaviours along the way.
2) Moral Leadership: If you look at Facebook and Tiktok right now, Myanmar pages are full of impoliteness, impertinence, impudence and insolence, highlighting the lack of moral guidance and leadership from elderly statesmen and alike. Akin to Lee Kuan Yew and Goh Chok Tong giving moral guidance for Singapore civil service and general population, we also need moral leaders who cared enough about the social apathy and lack of concern about the deterioration of moral values and standards, across the board. We need those who are not chicken out to talk about these degrading of moral principles in public and media.
3) Timelines and Specific Actions: Instead of using the wishy-washy phrase such as the government is doing what is necessary, ministry is doing the needful, the department will do the essential,would it not be a change for the better, if time lines and specific actions are included. Instead of just saying we will try to bring peace in Mandalay, e.g., would it not be build more confidence if the public hear that the Mandalay Region would be free of terrorists be the end of the year, by hook or by crook. Or something equivalent perhaps.
With such confidence being built up, businessmen would no longer be buying gold and USD. Foreign investors would not be thinking of turning their back on Myanmar. General population would be more supportive of the government actions. More people would start re-investing and hiring people. These confidence building exercises alone would bring much needed uplift to the economy, without costing anything to the State.
When would be the right time for youth?
The current Thai Prime Minister is 38. Singapore Prime Minister is 51. Last year, when Cambodia Ambassador to Myanmar left the country, he was 34. The new Ambassador is 39 years old. I believe you be hard pressed to find any ambassadors or ministers of Myanmar below the ripe old age of 55. Majority of them have been on this earth over more than six decades. Being older may equate to being wiser with better judgement, but it also means that they would be unwilling to make changes, slow in decision making, ‘cheugy’ in in technology and reluctant to upset the status quo. Worst of all, they are likely to be ‘yes’ men and avoid publicity, challenges and controversies. Even in a recent elections in a statutory board (council), the people wanting to occupy the top posts are 73 and 71 years old. Both of them are competing with another 50 year old, whom they deemed to be young to take on the responsibility. Opportunity for youth only exists in books and words in Myanmar perhaps.
Would it not be better if the youth are given a chance to face challenges, while being guided by the experienced? Would it not be preferable for the country to generate youthful and contemporary ideas from the qualified youth (of those around 50 years old)?
Probably I have to repeat the phrase of the day from Trump – Well, we have concepts of a plan (to promote youths)!
