Kyat Falls to Historic Low, Signaling Lack of Confidence in Myanmar’s Stability

Prices are soaring and experts warn that the junta’s mismanagement could be catastrophic for the country.

Kyat Falls to Historic Low, Signaling Lack of Confidence in Myanmar’s Stability

Myanmar’s currency reached an all-time low Friday, signaling growing concerns about the stability of a nation beset by civil unrest and teetering on the brink of a full-scale civil war, nearly eight months after the junta orchestrated a coup d’état.

The value of the kyat fell to 2,200 to the U.S. dollar—its lowest level in history—down from 1,330 on Feb. 1, when the military seized power from Myanmar’s democratically elected government. The cost of a tical of gold (0.578 ounces) soared to a new record of 1.9 million kyats, up from 1.3 million on the day of the coup.

In the more than seven months since, security forces have killed 1,108 civilians and arrested at least 6,591, according to the Bangkok-based Assistance Association for Political Prisoners (AAPP)—mostly during crackdowns on anti-junta protests.

The junta says it unseated Aung San Suu Kyi’s National League for Democracy (NLD) government because the party engineered a landslide victory in Myanmar’s November 2020 election through widespread voter fraud. It has yet to present evidence of its claims and public unrest is at an all-time high.

Amid the nationwide turmoil, the cost of basic goods has skyrocketed.

A housewife in Myanmar’s largest city Yangon, who spoke on condition of anonymity, told RFA’s Myanmar Service that the depreciation of the kyat and rising food prices are having a severe impact on daily life.

“In the first few months, things were not so difficult, but recently, the cost of commodities has risen out of control, and you can’t buy nearly as much as you could before the coup,” she said.

When prices go up, the sellers can’t provide discounts like they once could.

According to the housewife, the cost of coffee has risen by 50 percent, while prices for condensed milk, cooking oil, and rice have doubled.

Soe Tun, a businessman in Yangon, said the rise in commodity prices was the result of a twinned depreciation of the kyat and the appreciation of the dollar.

A lot of people have been facing a hard time in the past few monthsmany have lost their jobs due to political instability and the COVID-19 outbreak,” he said.

Unemployment is quite high. People have no income,but the prices of consumer goods has risen. Almost all medicines have had to be imported and paid for in U.S.dollars during the coronavirus pandemic and, as the U.S. dollar appreciates, everything costs more.”

Rising demand for dollar

The need for U.S. dollars has grown significantly since the military seized power, following a halt in exports and foreign direct investment. U.S. sanctions leveled against the junta have also stopped the flow of U.S. currency into the country

The junta’s Central Bank sold a total of U.S. $144.8 million during the period from Feb. 3 to Sept. 15 to address the depreciation of the kyat against the dollar, according to the website Myanmar NowHowever, money changers said that a rising number of foreign currency buyers has pushed the price of the U.S. up to meet the demand on the black market.

The Central Bank, which is trying to meet foreign exchange demands, issued a decree on Sept. 3, ordering local banks to sell their unused foreign currency to export banks at market prices within four months. 

The depreciation of the kyat and soaring demand for U.S. dollars follows a World Bank report released at the end of July which said that the twin impacts of the military takeover and coronavirus pandemic could double the poverty rate in Myanmar, and suggested the economy is headed for a recession.

The Bank estimates that Myanmar’s economy will shrink by 18 percent between October 2020 and September 2021, pointing to domestic protests, labor shortages, telecommunications shutdowns, and a failing health sector as having the greatest impact.

Last month, a group of independent financial experts described the junta’s mismanagement of the country as catastrophic, and said it could spark a banking crisis.

Earlier this week, the shadow National Unity Government (NUG) estimated that the junta has lost some 2 trillion kyats (U.S. $1 billion) in revenue from its military-operated power company since February amid a widespread public boycott of the paying of electricity bills.

The junta’s Ministry of Electricity and Energy has acknowledged that it has had to purchase power from privately owned power plants to make up for shortfalls and warned that it would only be able to supply electricity to the country if the government can earn enough revenue.

Meanwhile, the military has stepped up offensives in remote parts of the country, triggering fierce battles with local People’s Defense Force (PDF) militias and some of the dozens of ethnic armies that control large swathes of territory along Myanmar’s periphery.

On Sept. 7, the NUG declared a nationwide state of emergency and called for open rebellion against junta rule, prompting an escalation of attacks on military targets by various allied pro-democracy militias and ethnic armed groups.

Need for urgent action

Joshua Kurlantzick, an expert on Southeast Asia with the Council on Foreign Relations, noted in an article Thursday that while prior to the pandemic, Myanmar’s economy was on track to expand by an additional six percent in 2019–20, the economy is now imploding.

Many banks have little cash and many multinational companies have left Myanmar as trade relations have soured between leading democracies and the country,” he wrote, adding that the country had lost 1.2 million jobs in the second quarter of 2021.

He called for “rapid, concerted action, given the suffering inside Myanmar and the risks it poses to the world,” pointed to warnings by international experts that rising infections, population flight, and misgovernance threaten the country’s neighbors.

Zaw Pe Win, an economist in Yangon, told RFA that the junta must act to shore up the value of the kyat, or risk total collapse.

The authorities are printing currency notes without any guarantees. The economic outlook is not optimistic and so domestic commodity prices will surely go up,” he said.

If things continue in this fashion, low-income families are certain to face even harder times than they are now. If we cannot control the situation, the country will spiral downward uncontrollably. 

Reported by RFA’s Myanmar Service. Translated by Khin Maung Nyane. Written in English by Joshua Lipes.

Source : Radio Free Asia More   

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Vietnam’s President to Visit Cuba for COVID-19 Vaccine Assistance

The once exemplary Vietnam has been brought to its knees by a fourth wave of the coronavirus.

Vietnam’s President to Visit Cuba for COVID-19 Vaccine Assistance

Vietnam’s President Nguyen Xuan Phuc, whose country is in the throes of its worst coronavirus outbreak, will travel to Cuba this weekend to enlist the Caribbean fellow communist country’s help in fighting against the pandemic, Hanoi’s Ministry of Foreign Affairs announced.

Phuc’s three-day visit comes at the invitation of Cuban President Miguel Díaz-Canel, who agreed during a phone discussion in August that Cuba would donate 10 million doses of its homegrown COVID-19 vaccine, Abdala, before the end of the year. Phuc will also attend the United Nations General Assembly in New York.

Cuba, which has said Abdala was 92.28% effective against SARS-CoV-2 during clinical trials in June, also will send a team to Vietnam to transfer its vaccine production technology.

The meeting follows a trip by National Assembly Chairman Vuong Dinh Hue to Europe to seek vaccine assistance earlier this month, part of a campaign to step up vaccinations rates in Vietnam. Hanoi has so far fully inoculated only five percent of its 98 million people.

Vietnam had been among the most effective countries in tackling COVID-19, reporting no deaths among its 95 million people through late July 2020—a record that was attributed to effective contact tracing, strict quarantines, and early testing.

After successfully weathering three separate waves of the virus with confirmed cases numbering in the low thousands, a fourth wave arrived in April 2021. As of Friday, the country has reported 663,232 cases of the deadly virus and 16,637 deaths.

During the fourth wave, the country locked down its largest cities and forbade residents from leaving their houses except to procure food, a move that has led to widespread unemployment and loss of income.

But even as the harsh measures dragged on, reported cases continued to climb.

Looking beyond COVAX

Most of the vaccines administered in Vietnam so far come from the World Health Organization’s COVAX program. Now Hanoi is looking to procure more from other countries.

Cuba has fully vaccinated 38.5 percent of its population using doses from China’s SinoPharm as well as its own vaccines, for which it is seeking WHO approval.

Vietnam is also racing to roll out its own homegrown vaccines, with four under development, two of which are undergoing clinical trials.

Vietnam’s National Steering Committee for COVID-19 Prevention and Control and the Vietnam Fatherland Front Central Committee on Thursday launched a fundraising website which called on the Vietnamese diaspora to contribute to the country’s fight against the pandemic.

The Committee’s President Do Van Chien said the government had limited resources, so is calling on society to join hands in combating the epidemic, particularly ensuring the wellbeing of the poor, the disadvantaged, the unfortunate and unemployed by making contributions to the national vaccine fund.

“This will help bring the country back to normalcy,” he said. 

Running out of money

 Also at the event, Pham Quang Hieu, the vice minister of foreign affairs and chairman of the Vietnam State Committee for Overseas Vietnamese Affairs, handed over a donation of one billion dong (U.S. $44,100) collected from people of Vietnamese descent living in Britain, Japan, Ukraine, and the U.S.

According to Vietnam’s state media, the overseas Vietnamese community has contributed over 60 billion dong ($2.65 million). 

The fundraising efforts came as Vietnamese Finance Minister Ho Duc Phoc told the National Assembly that Vietnam’s budget was so tight that it “almost has no money left.”

The widespread lockdowns and social distancing measures decreased the government’s tax revenue in half, as the most restricted areas were the highly populated industrial hubs, the minister said.

The revelation comes ahead of discussions over an assistance package for businesses, possibly hinting that the package will be smaller than what business owners are expecting. 

The minister also said that the most urgent thing to do now was to find a way to open for business as soon as possible. 

Vietnam has shifted from eliminating COVID-19 completely, which authorities dubbed the “Zero F0” strategy, to accepting that the virus would be among the population and trying to live in a way to protect public health, state media reported.

Many people in Vietnam have lost their jobs and income due to the measures, and staying locked down indefinitely is unsustainable, state media reported Deputy Prime Minister Vu Duc Dam as saying at a meeting between the government’s Special COVID-19 Taskforce and the leaders of the country’s largest city, Ho Chi Minh City.

He recommended that Ho Chi Minh City, Binh Duong province and other pandemic hotspot areas discontinue the “Zero F0” strategy and prepare to live with the ongoing pandemic.

In the capital Hanoi, Nguyen Khac Dinh, head of the National Assembly Standing Committee’s Working Group on Implementing Resolutions related to COVID-19 Prevention and Control, told state media that his outfit had begun discussing a plan on “living safely with the COVID-19 pandemic.” 

 As of Friday, Vietnam has reported 663,232 cases of the deadly virus and 16,637 deaths.

Reported by RFA’s Vietnamese Service, Nawar Nemeh and Eugene Whong. Translated by Anna Vu. Written in English by Eugene Whong.

Source : Radio Free Asia More   

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