Hunger Worsens in Myanmar due to Deteriorating Political Situation

17 March 2021 Phoebe Sleet, Research Analyst, Global Food and Water Crises Research Programme

Myanmar’s precarious food security situation has been thrown into almost as much chaos as the country’s political system.

 

Background

Protests and demonstrations have shaken Myanmar since 1 February, after the military seized power and several members of the National League for Democracy (NLD) were detained, including the State Counsellor Aung San Suu Kyi. The coup occurred after the NLD won November’s general election in a landslide, which the military claimed was marred by widespread fraud. The ongoing demonstrations are the biggest since the 2007 Saffron Revolution. More than 200 protesters have reportedly been killed by security forces since the start of the protests and over 2,000 have been arrested.

Comment

Myanmar’s ongoing political turmoil has plunged the country into uncertainty, which has had severe repercussions for its economy. The banking sector has almost shut down and businesses have closed across the country, as both public and private sector workers have stopped working as part of a civil disobedience campaign. Factory activity has hit a record low and new business registrations have fallen by 86 per cent. Foreign direct investment is also likely to have been affected, although the extent is not yet clear. This is largely due to falling business confidence, as international investors wait to see if the situation will stabilise and what the implications of anticipated European Union sanctions could be.

The economic shutdown has the potential to be particularly difficult for Myanmar, as one of the least-developed countries in the world and the least developed ASEAN country. While there has been a modest decline in poverty since the 2000s, around one-third of the population is poor, with poverty especially severe in rural areas. Even among those who are not currently impoverished, a significant number remain close to the poverty line – around another third of the country is within 50 per cent of the poverty line, putting them at high risk of falling into poverty if they experience any unanticipated shocks. The COVID-19 pandemic has already caused high rates of job and income losses, especially in urban areas. As a result, households have reported worsening levels of poverty and food insecurity since the start of the pandemic.

The United Nations has warned that Myanmar’s ongoing political and economic chaos could push the country into hunger if the situation becomes protracted. Civil disobedience has been effective in paralysing the banking system, as well as transport and logistics. That has stopped food supplies from leaving ports, which has helped to drive up the price of food. Since February, the price of palm oil has risen by 20 per cent in some places, while the price of rice has increased by 35 per cent in parts of Kachin State. The situation has also disrupted remittances, which are a vital source of income for many in Myanmar and a pillar of the economy that amounts to three per cent of the country’s GDP. Charities have further warned that increasing prices puts farmers in a difficult position, as they prepare for the upcoming planting season. With prices rising, many are unlikely to be able to afford agricultural inputs, such as seeds, fuel and machinery. As a result, there will be further challenges to Myanmar’s food security even in the improbable event that the current situation ends relatively quickly.

Myanmar’s food security has long been vulnerable to economic shocks but, with the economy expected to take a further battering, the country faces serious problems if the situation continues to worsen.

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