Talking to business owners across a variety of sectors in Yangon in January this year, the mood was universally glum.
Big-spending Western tourists were staying away in droves, concerned over human rights abuses. Bureaucratic red tape was clogging up business and investment, and the country remains a logistics nightmare. More than halfway through its five-year term, it is clear Aung San Suu Kyi’s National League for Democracy (NLD) was chronically under-prepared for government and has strikingly failed to get a grip on the economy.
Yet Myanmar’s increasingly troubled economy tends to get overlooked, amid the armed conflicts that could tear the country apart. In particular, headlines are dominated by the Rohingya tragedy that has seen more than 700,000 flee to Bangladesh, and the ongoing civil war across Kachin and Shan states in the north of the country.
The World Bank, in its half-yearly update on Myanmar in December, cited softening consumption, slowing investment. and rising production-cost pressure from fuel price increases and the depreciation of the local currency, the Kyat, which has fallen by 16% against the US dollar in the past 12 months. Myanmar’s GDP growth is also forecast to fall, while almost every other measure of economic activity is also softening. The risks, the World Bank says, are all on the downside.
Domestically, many problems can be sheeted home to Aung San Suu Kyi’s government.
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