Myanmar faces growing chaos as the fallout from the Feb 1 military coup intensifies. Protests and civil disobedience have hammered the economy as citizens continue to take to the streets to demand a return to democracy.
Those same citizens are bearing the brunt of the turmoil as food prices have skyrocketed, banks are closed, the internet is down, and businesses have halted operations amid fears of more violence.
Chinese factories in Yangon have been set ablaze by protesters who see China as complicit in the generals' trampling of electoral democracy, a claim Beijing denies. Also targeted was a supplier of Fast Retailing, the Japanese parent of the clothing chain Uniqlo.
Such actions could lead to a large exodus of foreign investors as they seek to save whatever they have left. That could leave thousands of Myanmar workers without jobs.
But the first and most serious impact on the general population has been the rising price of food and fuel, according to the UN World Food Programme (WFP).
"These initial signs are troubling, especially for the most vulnerable people who were already living meal-to-meal," WFP Myanmar director Stephen Anderson warned last Tuesday. "Coming on top of the Covid-19 pandemic, if these price trends continue, they will severely undermine the ability of the poorest and most vulnerable to put enough food on the family table."
The retail price of palm oil has risen 20% since the start of February in Yangon, while rice prices there and in Mandalay are up 4% in the past three weeks. In a few townships in northernmost Kachin state, rice is up as much as 35%.
The cost of fuel has risen 15% since Feb 1, while in northern Rakhine, the price of petrol has risen 33%, and cooking oil surged by 27% from January to February.
Before the current political crisis, the pandemic had resulted in the closure of many factories and job losses due to lockdowns. In addition, there had been declining remittances from struggling Myanmar workers stranded abroad.
According to the WFP, prior to the pandemic, six out of 10 Myanmar households could not afford a nutritious diet. Poverty rose further as a result of Covid, and by the second half of 2020, four out of five households reported they had lost nearly half of their income.
"If the situation protracts, I think, increasingly, the economic side of this crisis is going to be a very serious one," Mr Anderson said.
The ongoing turmoil could be worse if Chinese investors start to publicly express their opposition to the coup and subsequent violence. For now, though, the Global Times insists Chinese state firms are not ordering nonessential staff to evacuate, contrary to earlier reports.
Despite efforts to diversify its economy since 2011 and attract international partners, Myanmar still relies heavily on Chinese investment. In the fiscal year to Sept 30, China including Hong Kong was Myanmar's biggest source of foreign direct investment, at nearly US$2 billion.
Public distrust of China continues to fuel a backlash from the protest movement. Products of Chinese companies -- particularly Huawei and ZTE, which have provided technology to the military -- are key targets of boycott movements.
Honestly, I don't see any real benefit from the Tatmadaw taking power while everyone else and the whole country are suffering. At the current rate, Myanmar will see global isolation before long. Manufacturing output has already contracted drastically and banking has been nearly paralysed.
But international sanctions, or other forms of economic pressure, tend to have limited impact on Myanmar's generals, who in any case don't care what anyone thinks of them.
All 15 members of the UN Security Council recently unanimously backed a statement that "strongly condemns the violence against peaceful protesters" and calls on the military to "exercise utmost restraint". But many in Myanmar are becoming frustrated with mere words of condemnation and are demanding more meaningful action.
Hard decisions have to be made to fit the harsh reality. A global arms embargo would be a good start, as suggested by a group of 137 NGOs from 31 countries. In addition to withholding any recognition of the junta as a legitimate government, experts recommend multilateral sanctions on senior leaders, military-owned and controlled enterprises.
Sanctions on natural gas exports are also an option because they increase the cost to the military's international enablers, to the point where their silence in the face of the regime's abuses becomes too costly to endure.