Myanmar military takes responsibility for economic crisis

(Reuters) – Myanmar’s ongoing economic problems were caused by “outside factors” and two waves of COVID-19 infections, but the military government takes full responsibility and is working hard to address them, a spokesman said on Thursday.

Speaking after the kyat currency hit new lows this week, the ruling military council’s spokesman Zaw Min Tun said the central bank had been unable to meet local demand for dollars. Myanmar’s currency has lost more than 60% of its value since the beginning of September, driving up food and fuel prices in an economy that has tanked since a Feb. 1 military coup. “The government is working its best to solve this situation as best as possible,” Zaw Min Tun told a regular news conference. “As it is happened under this government, the current government will have to take responsibility.”

Many gold shops and money exchanges have closed in Myanmar due to the turmoil, while the slumping kyat has been a hot topic on social media networks, where users on Thursday posted images of panic-buying of fuel, or gas stations closing due to shortages. Rising prices of goods and fuel have posed major challenges to previous military governments in Myanmar, with the cost of cooking gas among the triggers of a monk-led “Saffron Revolution” in 2007.

Zaw Min Tun said the economy had worsened due to outside factors as well as the coronavirus, but did not specify what those were. “We have responsibility to build it back,” he said of the economy. The World Bank predicted on Monday the economy would slump 18% this year and Myanmar would see Southeast Asia’s biggest contraction in employment.

In August, the Central Bank of Myanmar tried tethering the kyat 0.8% either side of its reference rate against the dollar, but abandoned that earlier this month as pressure on the exchange rate mounted.