Foreign commerce falls by more than 11 percent

Data made public by the military council’s ministry of commerce this week showed that total imports and exports had decreased by more than 11 percent from the previous year. A total of US $28.8 billion worth of goods were traded through maritime routes and overland border crossings in the 2023-2024 financial year, as compared with US $32.6 billion in 2022-2023, a decrease of US $3.6 billion. According to international traders, the decline occurred not only because of constant battles causing land routes to shut down, but also due to difficulties in securing trade licences after the regime established requirements to exchange a certain proportion of export revenue into kyat. These requirements have also been an impediment to traders working through maritime routes. A cargo ship on the Yangon River (SAC) Although the junta’s records show an 11-percent drop, the real decrease may have been greater. Lower revenues are likely to harm others on the supply chain besides traders, especially farmers, according to a trader from Mandalay Region who spoke with Myanmar Now on condition of anonymity. “This could even affect the farmers. Even now, prices for fruits, vegetables, and pulses are dropping, which causes trouble for everyone. There are so many ramifications and the farmers and manual labourers that carry and transport the goods will suffer most,” he said. After the coup, the military regime responded to the growing limitations on its access to foreign currency by restricting imports, leading to shortages in cooking oil, fuel, and even medicines. In an attempt to build up its dollar reserves, the junta-controlled Central Bank of Myanmar also imposed a requirement for traders to exchange a certain percentage of export revenue into kyat. According to the Mandalay Region trader, a shortage of vessels and containers needed to transport goods has also created difficulties. “Shipping companies have designated Myanmar as a ‘high-risk’ country. On top of that, the military council withheld import licences, which held up both imports and exports. Some couldn’t even export pulses to India anymore, so the prices dropped,” he added. An economist, who also asked that his identity be withheld, said that consumption had also fallen due to rising commodity prices within the country, which in turn was the result of volatile exchange rates for the kyat. “The people have seen no increase in income, so with commodity prices rising, they just chose cheaper options,” the economist said. Myanmar conducts two-thirds of its foreign trade via maritime routes, and the remaining third across overland borders. However, crossings along all of Myanmar’s land borders—with China, Thailand, India, Bangladesh, and Laos—have shut down due to battles between the military and ethnic armed groups. If Karen armed organisations succeed in capturing the remaining open crossings on the Thailand-Myanmar border, only maritime routes will remain open. An official in the junta-run commerce ministry, who spoke with Myanmar Now on condition of anonymity, confirmed that trade was down due to the shutdown of vital border trade crossings, the scarcity of foreign currency to pay for imports, and the military regime’s push for a “focus on domestic production.” “We were forced to limit the import of certain items. Exports also dropped for their own reasons,” the official said. He added that trade with China had stopped almost completely due to battles near Muse and other border crossings. Battles have occurred frequently in recent months near Muse and other parts of northern Shan State, near the China-Myanmar border, because of a major anti-junta offensive by the Brotherhood Alliance of ethnic armed organisations that began in late October 2023. Although the hostilities came to a halt in January, clashes resumed between junta forces and a member group of the Brotherhood Alliance last week. The military regime has also declared martial law in areas captured by another alliance member, prompting apprehension about a potential junta counteroffensive. Despite the decline shown by his commerce ministry’s data, on March 18 junta chief Sen.-Gen. Min Aung Hlaing told Russian news service ITAR-TASS in an interview that the economy was rebounding three years after the coup even amid declining trade and investment. “Our economy is back on the rise due to our consistent efforts. We struggled a lot for this,’ the junta chief said.

Foreign commerce falls by more than 11 percent

The decline is not only due to violent conflict in Myanmar’s border areas, but also the regime’s restrictions on all international traders, which has impeded trade via maritime routes as well

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