A soldier talks to one of the 131 job seekers from Myanmar who were caught after illegally crossing the border in Sai Yok district of Kanchanaburi on Saturday morning. (Photo supplied: Piyarat Chongcharoen)
KANCHANABURI: A total of 131 illegal migrants from Myanmar were caught near the border in Sai Yok district on Saturday morning while waiting for transport to take them to workplaces.
A patrol of soldiers from the Lat Ya Task Force, local police and officials found a large group of people hiding in a forested area in Ban Thung Chang village of tambon Sri Mongkhol at around 6am.
The group comprised 72 men and 59 women, all Myanmar nationals. Health workers were sent to check their temperatures and all were normal.
The detainees told officials that they had travelled from Dawei, Yangon, Mawlamyine, Bago and other Myanmar townships to work in Thailand. They walked along natural trails at night to enter Thai territory before hiding in the forest to await transport to other provinces.
They said they were destined for jobs in Bangkok, Samut Sakhon, Kanchanaburi, Chon Buri and Prachin Buri. They were to pay between 17,000 and 20,000 baht each to job brokers upon arriving at their destinations.
All of them were handed over to Sai Yok police to be charged with illegal entry and deported.
The number of migrants crossing into Thailand from Myanmar has been rising steadily in recent weeks as the economy in their home country deteriorates, nine months after a military coup. On Thursday, 101 job seekers from Myanmar were caught after they crossed the border into Sai Yok district.
A demonstrator observes a moment of silence during a protest outside the United Nations Building in Bangkok. (Photographer: Andre Malerba/Bloomber
(Bloomberg) — Facebook Inc. appealed part of a Washington judge’s order to turn over internal documents related to accounts that helped incite genocidal violence against the Muslim minority in Myanmar. The company is challenging U.S. Magistrate Zia Faruqi’s September directive to release content from government-backed accounts that helped spark violence against the Rohingya Muslims, as well as related documents from an internal investigation into the platform’s role in instigating the Rohingya.
Facebook said in a court filing late Wednesday that it’s willing to work with Gambia “to produce tens of millions to hundreds of millions of pages of relevant public information and non-content metadata to help” the case against Myanmar. But the company argued that Faruqi went too far in ordering the broad release of non-public information, including records from Facebook’s internal probe, in light of a federal law protecting the privacy and free-speech rights of internet users.
In his ruling, Faruqi found that most of Gambia’s request was permissible under the Stored Communications Act, the law Facebook invoked. “Locking away the requested content would be throwing away the opportunity to understand how disinformation begat genocide of the Rohingya,” Faruqi wrote.
Facebook argued Wednesday that Faruqi’s “sweeping and unprecedented ruling is inconsistent with the text and purpose” of the privacy law and would have “severe unintended consequences that go far beyond the facts of this matter.”
In a statement, Rafael Frankel, Facebook’s director of south and southeast Asia policy, said the company had already made voluntary disclosures to investigators and plans to share more information with Gambia. “We support international efforts to bring accountability for atrocity crimes committed against the Rohingya people,” Frankel said.
The role of Facebook in the genocide in Myanmar is well established. A 2018 report commissioned by Facebook found that the platform was used to incite violence against the Rohingya. That August, Facebook banned 20 organizations and individuals in Myanmar, including a military commander. In a statement accompanying the report, a Facebook executive said, “We can and should do more.”
The Norwegian telecoms firm is awaiting regulatory approval for the sale of its Myanmar operation.
Myanmar’s military junta confirmed that it asked executives from the Norwegian telecommunications company Telenor not to leave the country, pending the authorities’ approval of the company’s deal to sell its operation in the country.
In an interview with Reuters published yesterday, Aung Naing Oo, the military-appointed investment minister, said that the military administration wanted “to have discussions physically with some of the Telenor management.” He admitted, “It’s kind of a request not to leave the country.”
Aung Naing Oo’s comment confirms the claim, also reported by Reuters in July, that senior telecoms executives had been barred from leaving the country. The news agency reported at the time that Myanmar’s Department of Posts and Telecommunications had issued a confidential order in mid-June stating that senior executives of telecoms firms, both foreigners and Myanmar nationals, must seek special authorization in order to leave the country.
In his interview with Reuters this week, Aung Naing Oo said that the move only applied to Telenor, “not to foreign telecoms officials from all foreign telecom companies.” He said the restriction was in place because the junta “want to have discussions physically with some of the management in Telenor.”
In July, the Norwegian firm, announced the sale of its mobile operations in Myanmar to M1 Group, a Lebanese company, for the knockdown price of $105 million, two months after booking a loss of nearly $800 million on its investment. The company stated that “further deterioration of the situation and recent developments in Myanmar form the basis for the decision to divest the company.”
In addition to the severe deterioration in the business environment that followed the coup, the sale may also have been motivated by the junta’s attempts to force Telenor, along with the country’s other three telecoms firms, to implement special intercept technology in order to permit the authorities to spy on calls, messages, and web traffic.
Telenor reportedly resisted the requests to install the technology. In its May statement announcing that it was fully impairing its Myanmar operations, the company called on the military administration “to immediately reinstate unimpeded communications and respect the right to freedom of expression and human rights.”
The departure of Telenor, whose entry to the Myanmar market in 2014 symbolized the optimism of the political and economic opening then underway, points to the increasingly severe and challenging operating environment facing foreign firms.ADVERTISEMENT
The confirmation from Aung Naing Oo also comes amid similar reports that the military junta has begun to impose broader restrictions on departures from the country. According to a report yesterday by Coconuts Yangon, Myanmar citizens are being turned away from Yangon’s airport in order to prevent them from leaving the country. Citing travelers and tourist agencies, it reported that 17 travelers were blocked from embarking on flights at the airport last weekend. It cited an airport employee as stating that new restrictions have been put in place to prevent people from leaving the country.
For what exact reason one can only guess. But with Myanmar junta’s coming under increasing international censure, foreign nationals and capital slowly draining out of the country, and the popular resistance to the junta spreading, the country’s cloistered military rulers seem set on battening down the hatches, and returning the country to its close-woven cocoon of isolation.
People sit on the ground while waiting for hours to withdraw cash from ATMs at the CB Bank branch at Myanmar Plaza in Yangon, Myanmar, May 11, 2021. Credit: AP Photo
The February coup has rapidly unwound a decade of economic progress, while foreign investors are headed for the exits.
The precipitous collapse of the Myanmar kyat, which has lost more than 60 percent of its value in recent weeks, is the latest sign of the plight facing the country’s economy, which has already been pushed to the verge of total collapse. High inflation, rising food prices, and an acute cash shortage have plunged the population into economic desperation. The Asian Development Bank and the World Bank estimate that Myanmar’s GDP shrank by 18 percent in the fiscal year to September 30, the worst in Myanmar’s recent history.
Eight months after the February coup, an increasing number of foreign businesses have now jumped ship. The latest example is the closure of the $45 million Kempinski Hotel in Myanmar’s capital Naypyidaw, which hosted President Barack Obama during his state visit in 2014. The Geneva-headquartered international luxury hotel chain revealed this month that the flagship hotel would cease operations starting October 13.
Also this month, British American Tobacco announced that it would leave the Myanmar market at the end of 2021, with business sources in Yangon attributing its departure to commercial decisions. Having begun operating in the country in 2013, with a $50 million investment, BAT’s exit from Myanmar after less than a decade reflects the extent to which the business environment has deteriorated in just a few months.
The junta has continued its bloody crackdown against civilians all over the country as the generals have yet to consolidate their grip. Fighting continues to surge in the heartlands and the border regions, including Chin State – a hotbed of anti-military resistance – where the junta has reportedly imposed internet blackouts across large portions of the state.
“Many companies came into Myanmar not for the immediate return but for the fact that there was a brighter future ahead of them… but now that’s gone,” said a Japanese investor, who came into the country in 2015, lured by the prospect of profiting from Asia’s “last frontier market.”
“Big problems keep popping up every few months and it’s really devastating for business. It’s very difficult to plan in such an unstable environment,” the investor added. “We were quite confident in making investments in Myanmar in the past but now with such uncertainty it’s bringing too high [of a] risk to make investments.”
In the economic powerhouse Yangon, the regime has sought to create a façade of normality by inviting foreign business groups for an in-person meeting. On September 24, the military-appointed Minister of Investment Aung Naing Oo chaired a meeting organized by the disgraced national business lobby, the Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI). The Diplomat confirmed this confidential meeting with an internal memo from a major Asian business group as well as multiple diplomatic and business sources briefed on the matter.
Despite initial pushback from the foreign and local business community against the junta, the generals could find comfort that some foreign business groups said nothing about the crisis and had no problem meeting and greeting a minister appointed by the military.ADVERTISEMENT
AustCham Myanmar, China Enterprises Chamber of Commerce in Myanmar (CECCM), the Myanmar-Hong Kong Chamber of Commerce and Industry (MHKCCI), the India-Myanmar Chamber of Commerce (IMCC), the Thai Business Association of Myanmar, the Korea Chamber of Commerce in Myanmar (KoCham), and Israeli and Malaysian business groups joined the meeting, multiple sources confirmed to The Diplomat. In contrast, business groups from the United States, United Kingdom, Japan, and European countries did not attend.
In a rare break from the usual practice, Myanmar state media did not disclose this particular meeting, a move that indicates that the State Administration Council (SAC) is aware of the potential huge backlash facing the attendees. There is also little transparency from these chambers to their members and public about their policy of engagement and their justifications for it.
Business sources in Yangon pointed out that among the attendees, AustCham Myanmar is the only entity that had spoken out against the regime earlier. For the rest, critics say their silence over the coup and ensuing crisis, while quietly meeting with the junta, amounts to active support of the military authorities.
AustCham chair Chris Hughes said the business organization has been “very clear” about its position and that its “statements on the political situation have been more direct and concrete than most other chambers.”
“Our views haven’t changed and we decided that it would be appropriate to make these same comments at this regular meeting of foreign chambers that the UMFCCI organizes, and that was attended by the relevant Minister, so that these influential parties knew where we stood and could see that we were sincere about working for change,” he said.
“We certainly weren’t signaling that the political and business situation was acceptable and that we were back to business as usual, and no one present was in any doubt about where we stood,” he added.
The presence of KoCham at the September 24 meeting was a particular source of embarrassment for the South Korean government, which last month became the first foreign government to allow the parallel National Unity Government (NUG) to set up an official representative office abroad. While KoCham representative Jerry Kim told The Diplomat it did not consult the embassy over the decision to attend the meeting, the issue is bound to taint the tenure of outgoing South Korean Ambassador Lee Sang-hwa, who didn’t respond to a request for comment and who is known to be reluctant to engage with journalists since the coup.
But other chambers have more explicit government connections: The CECCM is chaired by senior state-owned Bank of China representative Liu Ying while the Hong Kong Trade Development Council’s official Shirley Ng is MHKCCI’s secretary-general. These chambers as well as Indian, Israeli, Malaysian, and Thai business groups, have either not responded to the Diplomat’s request for comments or declined to comment.
The September 24 meeting has drawn the ire of Myanmar activists and protesters.
“Foreign chambers joining this meet-and-greet with the military junta are effectively legitimizing an unlawful, terrorist entity. The military junta is courting business in an attempt to entrench rule and increase revenue to finance its campaign of terror,” said Yadanar Maung, spokesperson for the activist group Justice for Myanmar. “Foreign chambers must stand for human rights and responsible business, but these chambers engaging with SAC are doing the opposite. This also reflects a failure of the government policies of the respective chambers, none of which have imposed targeted sanctions since the military’s illegal coup.”ADVERTISEMENT
She branded it “deplorable” for the Australian, Chinese, Hong Kong, South Korean, Indian, and Thai chambers to “have members with enduring business ties to the Myanmar military and its conglomerates, who have ignored the findings of the U.N. Fact-Finding Mission and stand complicit in the military’s crimes.”
“For instance, IMCC chairman Sunil Seth is an Adani Ports executive, responsible for paying military conglomerate Myanmar Economic Corporation $90 million to lease land for a port, while the Myanmar-Hong Kong Chamber of Commerce and Industry includes board members from VPower and Shangri-La, which hold respective land leases with MEHL and the Myanmar army,” Maung told The Diplomat.
“Meeting with the SAC – even if it is for a ‘meet-and-greet’ – will be seen as a political act, and that comes with significant risks,” said Jared Bissinger, a development economist and independent consultant specializing in Myanmar. “Could Myanmar consumers promote a boycott against companies that met with the SAC? How will foreign buyers react? Businesses and business organizations should probably spend their time on better things than networking with the military government.”
Rights groups have criticized the move as an affront to human rights, with some warning of a public backlash. Some of the companies who lead these chambers are regional firms, such as law firm VDB Loi and Siam Cement Group.
“It’s really outrageous and unacceptable that these various chambers of commerce think that offering succor to the junta would be in any way acceptable at this critical time,” said Phil Robertson of the U.S.-based organization Human Rights Watch. “Foreign companies need to recognize that the Burmese people are not blind, and they will hold companies responsible for their uncritical engagement with the Myanmar military junta. For companies trying to sell goods or services in Myanmar, domestic consumer boycotts are the biggest threat.”
One of the Asian business leaders whose chamber attended the meeting acknowledged the criticisms and said “the least” the attendees could do to “mitigate the damage done” is to be transparent about their motives and the meeting. “AustCham at least has an explanation and raised their concerns over the military’s atrocities and actions,” the business figure said. “The rest are simply a disgrace.”
Since the military takeover, anti-coup protesters across the country have called for a boycott of products from military-linked or military-run companies. Among the most prominent of the latter are Myanma Economic Holdings Limited (MEHL) and Myanmar Economic Corporation, which are run by the Myanmar military and boast diverse portfolios that span the banking, property, construction, mining, and food and beverages sectors, among many more. Shortly after the coup, a successful boycott was launched against Myanmar Beer, a joint venture between MEHL and the Japanese beer giant Kirin, which saw its sales fall by half in May amid boycotts, which eventually forced Kirin to write off $193 million for the joint venture in August.
The Tatmadaw’s telecom company, Mytel, a partnership with the Vietnamese defense ministry, has also been the target of a boycott, while its telecom towers have come under attacks by civilian militias known as People’s Defense Forces. One industry source estimate suggests more than 100 Mytel towers have been damaged over recent weeks.
Unlike the foreign attendees, the UMFCCI is no stranger to public backlash. Two days after the coup, the business body met with the military chief, Senior General Min Aung Hlaing. It then issued a memo forcing its own striking staff to return to work, which got leaked to the public, prompting protesters to launch a boycott campaign against the chamber and its associated companies. The UMFCCI denies the accusation that it forced striking staff to return to work.
However, the UMFCCI has continued its engagement with the junta by holding regular meetings with Investment Minister Aung Naing Oo. It also provided feedback to the junta’s Myanmar Economic Recovery Plan (MERP), released in September, which aims to revitalize the economy following the impacts of COVID-19. Its business leaders have never sought to explain or justify to the public their continued engagement with the SAC.
The Diplomat also spoke to Tin Tun Naing, the NUG’s Minister of Planning, Finance, and Investment about the meeting and the junta’s actions. Tin Tun Naing said that the SAC is “an unlawful body which has brought nothing but pain and hardship to Myanmar,” offering as a thinly-veiled swipe at the foreign chambers that met with Aung Naing Oo. “Whatever benefits them [the junta] is detrimental to our people,” he added.
In late July, the NUG Finance Ministry published a framework for investment in which it said it would not “recognize or honor investment agreements or approvals” made with the military regime since the coup. Those who had invested in the country over the past decade, though, would be treated differently.
“We also note that not all investments are the same. It is one thing to open a garment factory but quite another to set up an energy business or to get into extractive industries,” Tin Tun Naing told the Diplomat. “Garment factors bring jobs to people who are otherwise vulnerable to exploitation. Oil and gas or extractive industries bring revenue to the junta with which they line their own pockets or to buy weapons to oppress our people.”
The minister recently told Yangon-based media outlet Frontier Myanmar that the NUG was opposed to a campaign launched by Myanmar Labor Alliance to pressure and persuade brands to stop sourcing from Myanmar and for all investors to exit the country. The Alliance includes the Confederation of Trade Unions Myanmar (CTUM) and Industrial Workers’ Federation of Myanmar (IWFM). These campaigners justified their call for comprehensive economic sanctions and a garment brand boycott by saying these moves are needed to “break down the military.”
The NUG has requested the EU not to suspend Myanmar’s access to European markets through its Everything But Arms program, Frontier Myanmar said, citing official sources in both the EU and NUG.
In addition to boycott movements on the ground, military-linked companies and supporters of the regime are already facing sanctions by foreign governments. On September 2, the U.K. government slapped sanctions on Htoo Group, whose owner Tay Za is notorious for being an arms dealer and having close ties to former dictator Than Shwe. Tay Za is known in Yangon’s business community for spending millions of dollars in Singapore’s casinos, notably the Marina Bay Sands.
“Through his extensive links with the former and current junta regimes and has provided support for serious human rights violations in his role in assisting the military to procure arms,” the U.K. Foreign Office said in announcing the move. It froze all of Htoo’s UK assets and banned Tay Za from entering the country. Htoo Group days later said that “it does not agree with the stated grounds for the sanctions.”
A Myanmar-based corporate executive from Hong Kong told the Diplomat that the U.K.’s sanction against Tay Za indicates that the international community would penalize or “clip the wings” of business supporters of the military. “The message from the British government is clear: ‘we don’t want to work with irresponsible businesses.’ Past practices of sanctioning prominent businessmen who seem to be doing the junta’s bidding may be resurrected. Multilaterals, donors, and responsible investors may also stay away from business groups such as the Indian chamber and the UMFCCI.”
Robertson of Human Rights Watch, as well as Yangon-based executives, expect pressure for international sanctions to continue building in the West.
Myanmar is now heading toward a full-blown banking and currency crisis, with the kyat inflating from around 1,300 to the U.S. dollar pre-coup to nearly 2,800 at its peak in mid-September, a a loss of more than 60 percent.
The junta’s restrictions on cash withdrawals and attempted heavy monitoring of cash flows, coupled with the growing economic desperation of the public, have prompted massive withdrawals of cash from bank accounts. Efforts by the Myanmar Central Bank to intervene, such as by selling dollars into the market or instructing exporters to repatriate dollar profits within a month, are not a long-term solution, business people say, as confidence in the system has collapsed resulting in the record depreciation of the kyat.
Multiple Yangon-based senior corporate executives, who all requested anonymity for security reasons, noted that the depreciation of the kyat is not temporary and said business confidence is now so low that some investors who were hunkering down have started to reconsider their positions.
Several multinational companies have either suspended their operations or left Myanmar since the February coup as security conditions and business operations have worsened. So far Norway’s telecom giant Telenor, Germany’s wholesale firm Metro, and British American Tobacco have decided to call it a day, among others.
“I’m not sure what magical economic cure the military can do to fix the economy as a whole,” one executive said. “[Drafting a] policy is one thing but the practical disruption of the realities is another.
“Right now the people’s appetite to do business in Myanmar and confidence here has changed. Even if the policies are supposed to be the same as the National League for Democracy [NLD] administration, the realities of doing business here are just now totally different,” he added.
The regime’s proposed Myanmar Economic Relief Plan and budget plan have not effectively responded to the crises either. The MERP is primarily copied from the ousted administration’s economic plan, minus the reforms. The budget plan, meanwhile, committed over 15 percent of the budget to defense spending, the highest among all categories.
The MERP focuses on salvaging plummeting business confidence by streamlining business regulations, digitizing government services, and reducing taxes. It also seeks to revive the tourism industry and stabilize the banking sector, in addition to supporting agriculture, livestock, and fisheries. But it omits the state-owned enterprises and structural reforms put forward by the ousted NLD government, and does not mention the political and economic turmoil that has engulfed Myanmar as a result of the coup.
“With businesses and the economy affected severely by the COVID-19 pandemic, the Myanmar Economic Recovery Plan of the State Administration Council aims to revive the affected businesses, attract international and local investors, and have firms be able to restart their operations,” reads the still-confidential document, a copy of which was seen by The Diplomat.
Industry sources point to the similarities between MERP and the plans formulated by the ousted administration. Tin Tun Naing said the generals “have plagiarized while stripping elements of reform from the original [document]. It just shows both their lack of ideas and scruples.”
Branding MERP as being “detached from reality,” the NUG finance minister said, “It fails to recognize the root causes of the country’s economic calamity. The COVID-19 pandemic has been devastating, but it was the military’s reckless coup and its consequences that destroyed Myanmar’s economy.”
“This so-called MERP fails to recognize, let alone address, the issues of post-coup economic paralysis, precariousness of the banking sector, acute cash shortage, the plummeting kyat against the dollar, lack of public and investor confidence, and of course increasing risk of conflict as people in some areas have had to resort to arms to defend themselves against the junta forces,” Tin Tun Naing commented.
Myanmar political analyst Khine Win echoed the same view. “The military regime cannot salvage the economy no matter with any sort of business or investment policy layout because at the end of the day it’s a political problem and a large amount of damage has been done to the people’s trust,” he said.
It’s unclear, however, if the junta is aware of the scale of the economic calamity brought on by its seizure of power eight months ago. Junta chief Min Aung Hlaing appeared in person for the opening of Myanmar’s first underpass in Yangon earlier this month and spoke dreamily about manufacturing electric cars and building a subway system in Naypyidaw. As a senior diplomat in Yangon remarked, “The generals know nothing about the economy.”
Royal Australian Navy sailors throw heaving lines from a submarine returning to Fleet Base West near Perth, Australia, on March 19, 2020. AUSTRALIAN DEPARTMENT OF DEFENCE
The bloc is struggling to preserve unity—and can’t decide what to do about the new U.S.-China rivalry.
For about two decades after the end of the Cold War, the Association of Southeast Asian Nations (ASEAN) enjoyed a golden age. The organization’s 10 member states as well as China and the United States saw the bloc as key to the region’s security and economic integration. ASEAN as a collective entity worked hard to put itself at the center of regional architecture through a complex web of security institutions and relationships. At the height of its golden age, ASEAN believed it was in the driver’s seat of the region’s fortunes.
That golden age is over. Last week, ASEAN, which usually needs unanimous agreement to function, was struggling to preserve unity. After an emergency meeting about the crisis in Myanmar on Oct. 15, the bloc excluded Myanmar’s junta leader from an upcoming ASEAN summit, a rare move for the organization. As a loose organization without a clear strategic vision of its own, it is floundering as individual members break ranks and realign in the new U.S.-China rivalry. The recent announcement of the new so-called AUKUS military and technology pact among Australia, the United Kingdom, and the United States has raised the region’s geopolitical stakes even further, casting yet another spotlight on ASEAN’s strategic paralysis.
It wasn’t supposed to be that way. In one of the world’s most dynamic regions, a system led by either the United States or China would be untenable; ASEAN therefore made its virtue out of its desire to stay out of superpower conflicts. Because of its multilateral nature, consensual decision-making, and lack of strategic ambitions beyond its borders, ASEAN was seen as an honest, neutral broker. For the region’s diplomats, so-called ASEAN centrality—that ASEAN will speak for the region as a whole when outside powers are involved—became an article of faith.
In recent years, however, the edifice of centrality has crumbled. As former Singaporean diplomat Bilahari Kausikan argued, the great powers are fine with ASEAN centrality as long as it serves their interests. Individual member states have also made a mockery of the bloc’s unity by cutting their own deals with outside powers and blocking joint ASEAN action.
The first notable crack in ASEAN’s armor came in 2012. Cambodia, which held the organization’s rotating chair at the time, torpedoed an important ASEAN communiqué because drafts had mentioned the dispute between several member states and China in the South China Sea. Phnom Penh is seen to be closely aligned with Beijing.
But it’s not just China that’s working around ASEAN to achieve its goals. The Free and Open Indo-Pacific Strategy espoused by Australia, India, Japan, and the United States is a case in point. The strategy has innocuous-sounding principles: freedom of navigation and overflight, adherence to international law, and regional connectivity. But its power is it highlights principles China rejects. Most ASEAN members are maritime states and would strongly support these principles, but supporting the U.S.-led strategy publicly would rile China. For fear of enraging Beijing, ASEAN has struggled to take a collective position.
The same goes for the Quadrilateral Security Dialogue—known as the Quad and formed by those same four states—which ASEAN countries fear is another red flag to China’s bull. Although the Quad, innocuously enough, is working on tangible deliverables—such as vaccine delivery, climate measures, and emerging technologies—it can also bring power to bear in and around the South China Sea in the form of joint military exercises and training. In August and October, the four Quad members’ navies conducted maritime exercises in the Philippine Sea and the Bay of Bengal, respectively. As a testament to these drills’ growing importance, the United States announced plans to possibly include Britain’s Royal Navy in the future. That non-ASEAN powers in the region are moving forward in the critical area of maritime security highlights ASEAN’s failure to push back against Chinese assertiveness.
But nothing has shaken ASEAN as much as AUKUS. The new pact announced last month involves the United States and Britain supplying Australia’s navy with nuclear technology to power a new generation of attack submarines that could definitively shift the region’s balance of power.
By: William Choong, a senior fellow at the ISEAS-Yusof Ishak Institute and the managing editor of Fulcrum, and Sharon Seah, a senior fellow at the ISEAS-Yusof Ishak Institute and the coordinator of its ASEAN Studies Centre.
Coronavirus vaccines have been sent to Nepal, Bangladesh, Myanmar and Iran according to the government’s decision to resume their supplies, the Ministry of External Affairs said
Coronavirus vaccines have been sent to Nepal, Bangladesh, Myanmar and Iran according to the government’s decision to resume their supplies, the Ministry of External Affairs said on Thursday.
External Affairs Ministry Spokesperson Arindam Bagchi said the government has decided to send the supplies to the neighbourhood initially.
India, the world’s largest producer of vaccines overall, suspended exports of COVID-19 vaccines in April to focus on inoculating its own population following a sudden spike in infections.
Last month, Union Health Minister Mansukh Mandaviya announced that India will resume the supplies abroad.
“Prime Minister Narendra Modi said recently at the UN General Assembly that India will resume supply of coronavirus vaccines. We have decided to start with the neighbourhood,” Bagchi said.
“As far as I know, vaccines have already gone to Nepal, Bangladesh, Myanmar and Iran. We are constantly monitoring and reviewing the situation,” he said.
Bagchi said the decision on further supplies will be based on India’s production and demand.
“We will decide on further supplies based on our production and demand,” he said.
A pause in development assistance has led to a foreign exchange crunch in Myanmar [File: SeongJoon Cho/Bloomberg]
Myanmar is battling a plunging local currency amid an unprecedented dollar shortage, driving up the cost of imports and worsening the economy’s struggle with dual challenges of the pandemic and post-coup financial isolation.
The kyat has tumbled about 50% since the military seized power in February that triggered a freeze on parts of Myanmar’s foreign reserves held in the U.S. and suspension of multilateral aids — both key sources of foreign currency supplies. Restrictions on cash withdrawals have fueled worries about the safety of money in banks, prompting people to seek more widely used currencies such as the U.S or Singaporean dollars or Thai baht, analysts said.
The Central Bank of Myanmar’s efforts to quell the rush for dollars, including stepping up foreign currency supplies and ordering exporters to repatriate earnings within 30 days, have failed to stem the kyat’s slide. The currency may plunge further to 2,400 to a U.S. dollar by the end of this year and 3,200 by end-2022, according to Jason Yek, senior Asia country risk analyst at Fitch Solutions.
The currency sell-off is the latest crisis to hit the country that’s still grappling with street protests following the ouster of the civilian government led by Aung San Suu Kyi. Nationwide Covid restrictions and a civil disobedience movement by Suu Kyi’s followers have hit normal economic activities, shrinking exports of everything from textiles to agricultural commodities, another source of foreign exchange.
“It is really hard to predict when this financial crisis will end,” said Khine Win, a public policy analyst focusing on economic governance in Myanmar. “Only the restoration of democracy and a legitimate government will unlock the international assistance Myanmar needs to address this crisis, but it’s really hard to see that happening.”
The plunging currency is already taking its toll on Myanmar’s economy, with some businesses shutting down as they are unable to cope with rising costs of imports and raw materials. The economy is estimated to have contracted 18.7% in the fiscal year ended on Sept. 30, according to the ASEAN+3 Macroeconomic Research Office. While the official exchange rate for a dollar was at 1,965 kyat last week, local money managers were quoting 2,200-2,300 kyat, Fitch Solutions’ Yek said.
Though the central bank doesn’t divulge its foreign reserve levels, the recent slide in kyat suggests that “it has likely fallen to a precariously low level” after trying to prop up the currency for months, Yek said.
The currency volatility is expected to ease soon due to recent steps taken by the authorities and higher export earnings seen in November and December, Win Thaw, a deputy governor at the Central Bank of Myanmar, said Monday.
Myanmar’s reserves dwindled after the U.S. froze $1 billion held in the New York Federal Reserve days after the coup, while the World Bank and the International Monetary Fund suspended funding for projects. To preserve the foreign currencies onshore, authorities last month suspended imports of passenger cars and amended the forex law last week.
But putting more controls will further undermine investor confidence in Myanmar and exporters will find ways to keep hard currency offshore, said Vicky Bowman, director of Myanmar Center for Responsible Business.
“The fundamental cause for forex crunch is the collapse in investor confidence in Myanmar and the suspension of development assistance since February,” Bowman said. “Without a political solution which leads to the resumption of lending and restores confidence in the country, it will be difficult for the kyat to recover.”
Foreign direct investment into Myanmar had dwindled with multinational companies becoming increasingly wary of doing business with the military regime and some heading for the exit. Reversing that trend will be key to reversing the kyat’s fortunes.
“We don’t see any FDI coming in and the trend for kyat depreciation may prolong as long as the military remains in power,” Khine Win said. “This could drag more middle class people below the poverty line.”
Unsplash/Alexander Schimmeck Dusk approaches in Yangon, the commercial hub of Myanmar (file photo).
United Nations independent rights experts on Wednesday urged businesses in Myanmar to uphold their human rights responsibilities and apply pressure on the military junta to halt grave human rights violations against its own people.
While some businesses have reiterated their public support for the rule of law and human rights, and cut ties with the junta in the aftermath of the 1 February coup, many continue to engage in business with the military as if nothing has happened, Tom Andrews, UN Special Rapporteur on the situation of human rights in Myanmar, and members of the Working Group on Business and Human Rights, said in a news
As military leaders are intensifying their campaign of repression, companies must act in line with the Guiding Principles on Business and Human Rights to avoid contributing to human rights violations, or becoming complicit in crimes if they continue to operate in the country, the experts highlighted.
Surya Deva, Vice-Chair of the Working Group, said that because “the risk of gross human rights violations has greatly increased in Myanmar, action by States and human rights due diligence by business, and investors, should be rapidly and proportionately heightened”.
“Businesses, both individually and collectively, should exert the maximum leverage on the military in Myanmar to halt what the High Commissioner for Human Rights has said may amount to crimes against humanity”, Special Rapporteur Tom Andrews added.
Crackdown continues
Into its fourth month, the crisis in Myanmar – marked by near daily pro-democracy protests and a brutal crackdown by security forces – has reportedly claimed at least 782 lives. Countless more have been wounded and over 3,700 people are in detention, including many in situations that may amount to enforced disappearances.
Furthermore, over 1,500 arrest warrants have been issued against civil society activists, journalists, academics and others who oppose the coup, and military authorities are reportedly taking relatives of wanted people into custody to force them to turn themselves in.
“The revenues that the military earns from domestic and foreign businesses substantially enhances its ability and capacity to carry out these grave violations”, Mr. Andrews said.
A 2019 report by the Independent International Fact-Finding Mission on Myanmar outlined several economic interests of the military in the country, including links with private and foreign companies and conglomerates.
In it, the Mission concluded that no business should enter into an economic or financial relationship with the security forces of Myanmar, in particular the Tatmadaw (as its military is known), or any enterprise owned or controlled by them or their individual members, until and unless they are restructured and transformed.
Suspend operations or consider exit
The experts also reiterated the Human Rights Council’s call for home States of businesses investing in Myanmar in any way, to take appropriate measures so that those businesses ensure their activities do not cause or contribute to rights violations.
Businesses which continue to operate in Myanmar should take all possible measures to protect their employees, support the exercise of all human rights by citizens, including the right to peaceful protests, and speak up to preserve civic space and the independence of the media, they said.
“There may come a point at which businesses might need to suspend operations or even consider exit from the country if risks of involvement in human rights abuse cannot be reasonably managed, while doing so in a manner to safeguard the well-being of workers and affected communities”, Mr. Deva said.
The Special Rapporteurs and Working Groups are part of what is known as the Special Procedures of the Human Rights Council. The experts work on a voluntary basis; they are not UN staff and do not receive a salary. They are independent from any government or organization and serve in their individual capacity.
State Counselor Daw Aung San Suu Kyi addresses the US-ASEAN Business Council in Washington in 2016. / US-ASEAN Business Council
The US-ASEAN Business Council has called for Washington to appoint a special envoy for Myanmar, saying bold US leadership could help resolve the crisis.
A US special envoy could coordinate a strategic approach involving smart, targeted sanctions and create room for effective dialogue in tandem with allies, said the business council.
It urged President Joe Biden to empower a special envoy with a support base in the region by also swiftly filling US ambassadorial posts in Singapore and Thailand and for Asean, the 10-member regional body which includes Myanmar.
The council said: “The military coup threatens to reverse the political and economic progress made, as well as the country’s future trajectory.”
Recently, the United Nations Development Programme warned that all financial reports since the coup indicated Myanmar is approaching economic collapse.
Alexander Feldman, chairman of the business council, said: “The unfolding situation in Myanmar threatens economic collapse and imperils the lives of the people of Myanmar.
“The US government must fully equip and deploy its diplomatic arsenal in ASEAN to confront this crisis, which includes filling key ambassador posts in Southeast Asia and appointing a dedicated special envoy for Myanmar,” Feldman added.
“American leadership is necessary in this critical moment to realize a viable path forward for Myanmar and ensure stability in the region,” the chairman said.
The council plays an advocacy role for US corporations operating in ASEAN. In 2019, the council visited Myanmar to expand investment in the country along with the representatives of Amazon, Google, Coca-Cola, Chevron, Chubb, Diageo, Ford, Jhpiego, MasterCard, Visa, Abbott and BowerGroupAsia.
“The sooner the situation in Myanmar is seen and treated as an Indo-Pacific challenge on all fronts – political, security, humanitarian and economic – the better off all parties concerned will be”, said Jack Myint, country manager for Myanmar on the business council.
“Beyond the scope of great power competition, what we’re really looking at is a failed state waiting to happen at the heart of one of the most dynamic regions of the world. The US must do more and do better to tackle this head-on. There’s simply too much at stake,” Myint said.
Following the coup, the US imposed targeted sanctions on Myanmar’s military leadership. Trade sanctions followed in March against the defense and home affairs ministries and military-controlled conglomerates Myanma Economic Holdings Public Company Limited and Myanmar Economic Corporation Limited.
In April, US Treasury Department imposed sanctions on a state-owned gems firm, Myanma Timber Enterprise and Myanmar Pearl Enterprise in a bid to cut financial lifelines for the junta.
The Association of Southeast Asian Nations (ASEAN) has faced criticism that it has not acted strongly enough against Myanmar’s junta.
A special meeting in Jakarta on April 24 with junta chief Min Aung Hlaing was widely seen as ineffective.
ASEAN’s leaders reached a five-point consensus, urging the junta to seek a political resolution through dialogue, accept the appointment of a special envoy to engage with pro-democracy groups and grant access to humanitarian assistance from ASEAN.
However, the junta responded that it would consider the proposals after the situation stabilizes and if its five-step roadmap was followed. The regime claimed its roadmap served Myanmar’s national interests.
Telenor’s logo is seen in central Belgrade, Serbia, March 21, 2018. REUTERS/Marko Djurica/File Photo
Norway’s Telenor (TEL.OL) wrote off the value of its Myanmar operation in light of the country’s deteriorating security and human rights situation, plunging the group into a first-quarter loss and sending its shares lower on Tuesday.
While it will continue to operate in Myanmar, Telenor’s mobile business in the Asian country, where it has had a presence since 2014, remains severely restricted following the military’s seizing of power in a Feb. 1 coup. read more
The new regime imposed network restrictions for all operators, and on March 15 ordered a nationwide shutdown of mobile data that has since cut Telenor’s subscription and traffic revenues in the country in half, the company said.
However, it still added some 2 million users in Myanmar during the quarter as call volumes rose, increasing its local customer base to 18.2 million.
“Telenor calls on the authorities to immediately reinstate unimpeded communications and respect the rights to freedom of expression and human rights,” the company said in a statement.
While Telenor saw an “irregular, uncertain, and deeply concerning situation” with “limited prospects of improvement going forward”, Telenor would stay in Myanmar for now, CEO Sigve Brekke said.
“We still believe we are making a difference when keeping our operations running,” he told an earnings presentation. “We strive to continue to do so to the best of our ability.”
The company declined to comment on whether it was realistic to expect any cash flow from the Myanmar operation for the time being, with Brekke adding that the current uncertainty made it impossible to comment on future options.
“Our continued presence will depend on the development in the country and the ability to contribute positively to the people of Myanmar,” he said.
WRITE-OFF
Telenor fully impaired Telenor Myanmar in its first-quarter accounts, booking a loss of 6.5 billion crowns ($783 million) and removing the operation from its overall corporate outlook for 2021.
As a result of the writedown, the Telenor group’s net earnings slumped to a loss of 3.9 billion Norwegian crowns in the first quarter from a year-ago profit of 698 million crowns.
Telenor shares were down 2.0% at 0913 GMT, lagging a flat Oslo benchmark index (.OSEBX).
Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) fell 8% year-on-year to 13 billion crowns, in line with an analyst forecast of 13.1 billion crowns.
Telenor reiterated full-year guidance for overall organic revenue and earnings to remain unchanged year-on-year from 2020, excluding the Myanmar impact. It repeated that capital expenditure would amount to between 15% and 16% of sales.
Credit Suisse, which holds a neutral rating on the stock, said the guidance technically amounted to a downgrade due to the exclusion of Myanmar, which represented 6% of group revenue and 7% of EBITDA last year.
“The Asian operations otherwise delivered a decent performance in Thailand and Malaysia offset by Myanmar and there was some weakness in the Nordics as the competitive environment remains tough in markets like Sweden and Norway,” the bank said.
The company, which serves 187 million customers in nine countries across Europe and Asia, a net gain of 5 million since the start of the year, last month announced plans to merge its Malaysian unit with competitor Axiata (AXIA.KL), seeking to form a new market leader. .
