Myanmar junta minister says foreign-backed 'sabotage' partly to blame for economic woes

Yangon

MYANMAR'S military-appointed authorities are doing their best to revive an economy in turmoil since a February coup and stabilise the kyat currency, a minister told Reuters on Tuesday (Oct 19), blaming the crisis partly on foreign backers of its opponents.

The currency lost more than 60 per cent of its value in September after the nation was roiled by months of protests, strikes and economic paralysis following the coup.

Inflation has soared to 6.51 per cent since the military took power from 1.51 per cent previously, and foreign reserves stand at 11 trillion kyat, or S$7.94 billion at the central bank's official rate, the minister, Aung Naing Oo, said in an interview.

It was the first time Myanmar had disclosed its level of foreign currency since the coup, and compares with a World Bank figure of just US$7.67 billion at the end of 2020.

The junta's investment minister said Myanmar was suffering from the fallout of the Covid-19 pandemic but attributed its economic troubles to sabotage by opponents of the junta, a strategy he said was backed by some foreign elements.

"The pandemic has posed in Myanmar a serious threat. It has led to an economic slowdown that has been worsened by sabotage and civil disobedience that has affected national stability," said the key former policymaker in the army-backed government that ran Myanmar after the end of direct military rule in 2011.

Asked which countries had backed "economic sabotage" and what evidence there was, he declined to specify, saying only: "We have received a number of evidence of how they interfere."

International media had exaggerated the crisis, he said, adding: "Hopefully, in a few months, we will be able to restore our normal situation."

Six foreign companies had applied for permission to exit Myanmar since the coup and others had suspended their business, he added.

They include one of the biggest investors, Norwegian telecoms company Telenor, which announced in July it was selling its Myanmar operations to Lebanese investment firm M1 Group for US$105 million.

Telenor executives had been requested not to leave the country while the deal is pending approval, Aung Naing Oo said.

The fall in the value of the kyat has driven up food and fuel prices in a fragile economy the World Bank forecasts to contract 18 per cent this year, slumping far more than its neighbours.

Steps had been taken to build confidence in the currency, said Aung Naing Oo, a former member of the military who had served in the ousted government of Aung San Suu Kyi.

Authorities will encourage use of online payments, loans for farmers and debt moratoria, among other efforts to help the economy, he added.

The ratio of tax to gross domestic product had fallen to 5 per cent to 6 per cent, down from 8.4 per cent in 2020, he said. Opponents of the coup have been refusing to pay tax to the junta, which has sought to crush resistance in an attempt to consolidate power. REUTERS