“The hardest hit will be poor urban populations and the worst affected will be female heads of household,” says Kanni Wignaraja, the UNDP’s assistant secretary-general for the region.

Anti-coup protesters chant slogan during the demonstration against the military coup in the rain at Pabedan township in Yangon, Myanmar, April 30, 2021.
Anti-coup protesters chant slogan during the demonstration against the military coup in the rain at Pabedan township in Yangon, Myanmar, April 30, 2021. (AP)

Half of Myanmar’s population could be living in poverty next year, driven by the combination of the pandemic and the political crisis sparked by the military coup, the UN has warned.

The dire warning came as renewed fighting between the Myanmar military and armed ethnic rebels sent more refugees fleeing across the jungle border with Thailand.

The report by the UN Development Program, or UNDP, said 12 million people could fall into dire economic straits as businesses remain shuttered in a standoff between the junta and a mass civil disobedience movement.

“The hardest hit will be poor urban populations and the worst affected will be female heads of household," Kanni Wignaraja, the UNDP's assistant secretary-general for the region, told The Associated Press via a Zoom recording.

The February 1 coup wrested power from the elected government of Aung San Suu Kyi, who has been detained along with more than 3,400 other people. Since then, the military has severely restricted internet access and gradually stepped up violent repression of protests.

Many factories, offices, banks and other facilities have closed and trade has been disrupted by work stoppages and other disruptions at ports, economists and others familiar with the situation inside Myanmar say. That has worsened already bleak conditions due to the pandemic.

Possible contraction by 20 percent

The UNDP said conditions could deteriorate by early 2022 to a level of poverty last seen in 2005.

The economy grew rapidly after a previous military regime initiated a partial transition to a civilian government, while keeping control of key ministries and industries and seats in parliament.

Foreign investment in garment manufacturing, tourism and other industries helped create millions of jobs, providing a lifeline of support for many families living in rural areas.

But that progress has ground to a halt as the coup added to troubles from the pandemic.

“With the effects of the political crisis, we could see these gains removed in just a few months," Wignaraja said.

The research agency Fitch Solutions has forecast that the economy will contract 20 percent in the current fiscal year, which ends in September. In a report released last week, economist Jason Yek noted that food insecurity is rising due to hoarding and inflation, while people struggle to access cash to pay for necessities due to the closure and cash limits put on ATMs.

A weakening of the Myanmar kyat to about 1,600 kyat per dollar from about 1,350 kyat before the coup also hinders the country's ability to import much needed medicines and other supplies.

“We really cannot rule out any worst-case scenario," Yek said in an online briefing.

Protesters march with a banner during a demonstration against the military coup in Yangon on April 30, 2021.
Protesters march with a banner during a demonstration against the military coup in Yangon on April 30, 2021. (AFP)

Sanctions on exports

So far, foreign governments and businesses have sought to levy pressure on Gen. Min Aung Hlaing and others in the junta through targeted sanctions meant to cut off financial support to the army, or Tatmadaw.

The UNDP report's findings suggest that ordinary people already are suffering regardless of sanctions.

The magazine Nikkei Asia Review said Thursday that the group Independent Economists for Myanmar issued a report urging the targeting of sources of foreign exchange, such as Myanmar's exports of natural gas, its biggest revenue earner, and of gems and jade.

Sanctions could freeze deposits linked to the state-owned Myanmar Foreign Trade Bank and Myanmar Investment and Commercial Bank, it said.

It said targeting the junta's sources of hard currency with international sanctions could reduce its revenues by roughly $2 billion annually.

It said the military was prioritising spending on weapons and security operations over providing desperately needed public services.

The US recently ordered sanctions against the company that controls most of Myanmar's gems, pearls and jade sales, though a huge share of that trade is done illicitly.

So far, foreign energy companies involved in Myanmar's natural gas industry have resisted calls for them to stop paying revenues to the government, saying such moves might endanger their employees and hurt access to already scarce electricity.

EU ready to help restore democracy to Myanmar – high representative

The European Union is ready to offer its support to all parties to help restore democracy in Myanmar, the bloc's high representative told ASEAN states on Friday.

Southeast Asian leaders said after an emergency ASEAN summit last week that they had reached consensus with Myanmar's junta on ending violence there.

"The European Union stands ready to support ASEAN... in facilitating a constructive dialogue with all key stakeholders with a view to bringing Myanmar/Burma back to its democratic path," the high representative said in a statement published on Friday.

READ MORE: ASEAN leaders urge Myanmar's junta to end killings

Thousands of Myanmar villagers poised to flee violence to Thailand

Thousands of ethnic Karen villagers in Myanmar are poised to cross into Thailand if, as expected, fighting intensifies between the Myanmar army and Karen insurgents, joining those who have already escaped the turmoil that followed a February 1 coup.

The UN humanitarian office said on Friday that in all about 56,000 people have been displaced by conflict in Myanmar this year.

Karen rebels and the Myanmar army have clashed near the Thai border in the most intense fighting in the area in 25 years, in the wake of a military coup that ousted an elected government led by Aung San Suu Kyi.

READ MORE: Myanmar military hits Karen rebel territory with air raids

Source: TRTWorld and agencies