As soon as he heard that the army had seized power on Feb 1, Myanmar entrepreneur Samuel, who owns a construction material company with 10 employees, rushed to Yangon bank to withdraw most of the money in his business account and convert the kyats to US dollars.
“I never trust the military. We took the risk,” the 36-year-old said. “We actually lost some money because of the currency exchange policy set by the bank. But that’s OK. It’s better to keep the USD.”
The move proved prescient. Over two months into the crisis, business activity has plummeted and many of his counterparts are struggling with severe cash shortages.
Myanmar’s purchasing managers index (PMI) last month fell to a record low 27.5, according to business information provider IHS Markit.
Fitch Solutions is projecting a “conservative” 20 per cent contraction for the 2020-21 financial year. “There is no worst-case scenario on the economy which we can rule out,” it said.
The World Bank forecasts Myanmar’s GDP to contract 10 per cent this year, while the UN World Food Programme on Thursday (April 22) warned that food insecurity is rising sharply in the country in the wake of the coup and the Covid-19 pandemic.
It said up to 3.4 million people will struggle to afford food in the next six months as job losses mount in the manufacturing, construction and services industries.
The military junta, whose attempt to move about US$1 billion held at the Federal Reserve Bank of New York was reportedly blocked by the US government, has frozen withdrawals from US dollar accounts without conversion into local currency at an exchange rate stipulated by the Central Bank of Myanmar.
The official rate is much lower than the market rate, which went from about 1,350 kyat to the US dollar before the coup to 1,600.
Local banks have pegged daily ATM withdrawals at 200,000 to 300,000 kyats (around S$189 to $282.66), while counter services are only available for those who manage to secure one of the 20 – 50 tokens per day handed out by each branch.
Cash withdrawals through mobile payment or informal financial service providers are charged service fees ranging from 1.5 to 10 per cent.
“[The Myanmar kyat] depreciated a lot, and so people are scared and taking out money,” said Nectar Aung, a founder of a small tech enterprise which works to enhance the computer skills of Myanmar’s youth.
“Corporations are only allowed to withdraw around US$15,000 (S$20,000) per week. The amount is very little for bigger companies.”
The co-owner of a parcel delivery company, who preferred to remain anonymous, said they sometimes had to use hundi payment, or informal banking services. “We pay cash to someone in Yangon, and their proxy will give money to our payee in Mandalay. We have to rely on trust.”
Most people in Myanmar are also struggling to access the internet.
In the first week after the coup, the army blocked Facebook, Twitter and Instagram, and this later extended to other apps and sites such as Wikipedia.
The junta has routinely shut down the internet between 1am and 9am since Feb 15, and entirely cut off mobile data – the way most Myanmar citizens access the internet – from mid-March and wireless broadband from early April.
Internet entrepreneur Honey has been unable to access the cloud server of her corporate website, a prominent platform dedicated to connecting employers and jobseekers, since the internet firewall blocked Amazon Web Services (AWS) in February.
Only users from specific IP addresses in Myanmar were allowed to access the server as part of corporate security measures.
Honey and her colleagues managed to enter the AWS console using a Virtual Private Network (VPN), but could not access the cloud server.
“We will have to erase all these restrictions to be able to get access to the cloud server again. It is risky,” she said. “We are still waiting to see the situation. If [military rule] goes on for a while, we will need to find ways to rebuild all these security measures.”
Htet Htet Aung, 28, who started an event management business and online shop in 2019, has also been affected by the internet curbs.
The Facebook ban meant she could not market her products online and people are also choosing to save their money instead of buying luxury items.
“I have many stock items. Some cosmetics are nearing their expiration date,” she said. “If the situation continues, all these items will go to the trash bin.”
Her event business ground to a halt last year because of the pandemic, but her e-commerce venture boomed as consumers were forced to shop digitally.
She had also been planning to organise virtual events and start a delivery business in March.
“On the morning of Feb 1, we all got shocked,” she said. “All my projects were cancelled and my new business was postponed.”
The junta’s tightening grip on the internet is also making businesses nervous.
Since early February, an enterprise that sells productivity products to farmers has stopped publicly posting anything on Facebook, according to a manager who identifies herself as Aye.
“It’s a precaution. We want to obey the law because using Facebook is now illegal,” she said, adding that her colleagues had communicated with farmers through Facebook Messenger and Viber until the mobile internet was cut off.
“But [the regime has] started to use excuses to accuse people and organisations that [it does] not like. Using Facebook could be a problem.”
What worried Aye more was the security of her staff. “Our staff are not feeling safe any more,” she said.
In early February the company halted staff visits to rural villages but still opened its branches in towns because farmers needed their products and services.
But operations became increasingly challenging after the armed forces’ crackdown turned violent.
“[The staff] wanted to go back to their hometowns, and their family members were also worried.” she said.
“We closed the branches and let them go back. We couldn’t really say what would happen on the other day or within the week. We just dealt with it as much as we could.”
The firm temporarily closed its branch operation in late March.
Nectar Aung, the tech entrepreneur, halted her operations for two months starting from April, but still checks up on her staff by phone every few days.
In early April, she temporarily disabled a staff member’s email and his access to work data because his laptop was seized by security forces that raided the Yangon hostel where he lived. He hid it under his bed.
“I was very worried about the company data. I can’t blame him. He had to run for his life,” she said, highlighting that even if she resumed operations, her staff would not come in because “it is not safe”.
Myanmar just saw a quiet new year holiday as many vowed to celebrate only after democracy was restored.
While some enterprises have suspended operations, Samuel said he would keep his staff and pay a basic salary even if there are no projects.
“We are also involved in the anti-military coup [movement],” he said. “We aren’t politicians or activists. We just want justice.”
This article was first published in South China Morning Post.