Myanmar junta privileges military-owned entities, targets private companies

The Myanmar military council is extending preferential treatment to junta-owned entities amid an ongoing crackdown on private businesses for allegedly destabilising markets, analysts and business sources said. Military authorities have made a series of arrests targeting employees and owners of private companies, interrogating them about alleged manipulation of the United States (US) dollar exchange rate and rising prices for gold, fuel, cooking oil, and other commodities. The military council announced on June 30 that they would take legal action under the Important Goods and Services Act against seven rice mill owners and eight company officials from the City Mart, Aeon Orange, One Stop Mart, and Sein Gay Har supermarkets. Following volatility in the gold market, the military also arrested 21 gold traders including some of the most prominent gold business owners from Yangon and Mandalay, then announced in regime-controlled media on June 2 that they planned to arrest ten more. The military later detained and interrogated 14 foreign currency exchange agents and issued arrest warrants targeting businesses and individuals involved in purchasing condos in Bangkok, Thailand, including the manager of the Minn Thu Company that had sold the condos. Authorities also arrested the company’s director. Double standard for military-owned companies Amid the continuing arrests and interrogations, businesses owned by and connected to the military-owned conglomerates Myanma Economic Corporation (MEC) and the Myanma Economic Holdings Limited (MEHL) have largely escaped the crackdown. The two giant, military-owned conglomerates are economic pillars of the regime, owning and operating businesses in a number of sectors throughout the country. They were also both among the first targets of sanctions from the US, United Kingdom, and European Union in response to Myanmar’s 2021 military coup. However, these sanctions have had limited or no impact on commerce between Myanmar and key trading partners like China, India, Russia, and Thailand, allowing the two regime-run giants to continue to serve as vital sources of foreign revenue for the military. Shortages of basic goods, dramatic rises in commodity prices, and diminishing sources of revenue have been persistent problems in Myanmar since the 2021 military coup. The military has placed most of the blame for these economic woes onto the private sector while ignoring the role of junta crony enterprises, according to a businessman who spoke with Myanmar Now. “It has evolved from a capitalist economy to a fascist system,” said the businessman, who operates import/export businesses, referring to the change since Myanmar’s civilian government was ousted in 2021. “They hold the power and the weapons, and they have used them to the fullest degree,” he added. “They squeeze out profits from everywhere. They blame every negative consequence on others, while taking all the benefits for themselves as usual.” An employee of a popular supermarket noted that junta officials scrutinised and questioned the managers of the largest private supermarkets and shopping centres but overlooked any that were linked to the junta in their investigations. “They didn’t do it to junta-owned malls. Of course they wouldn’t dare,” the employee said. Gandamar Wholesale and Ruby Mart, which are well-known among the public as junta-owned businesses, are among those military-affiliated businesses that seem to have avoided increased scrutiny from military authorities. Poster promoting a boycott against junta-owned businesses and products (Supplied) MEC Myanmar Rice and Adipadi Brand rice, which are also junta brands, are widely distributed across the market without any hindrance, according to a private sector rice trader, and Adipadi Agricultural Products Trading Limited, a subsidiary of MEHL, exports rice as well as producing and distributing it inside the country. MEC owns the Myawaddy and Star High retail outlets, and other MEC-owned entities have authorisation from the junta to import, store, and distribute cooking oil, fuel, and other staple goods. The junta issued a statement on July 1 promising legal action against seven domestic private banks for defying the junta’s orders by issuing too many home loans. The banks they named were Yoma Bank; Myanmar Citizens Bank; Ayeyarwady Bank; Small and Medium Enterprises Development Limited Bank; UAB Myanmar Metro Bank; and the Construction, Housing and Infrastructure Development Bank. Inwa Bank and Myawaddy Bank, both of which are owned by the junta, did not appear on the list. Shades of the disastrous Ne Win years An economist, who asked to remain anonymous, commented that the arrests of business owners reminded him of the “Zuzakar Operation” conducted during Ne Win’s dictatorship in 1968, during which regime officials branded private business owners as “corrupted by greed” and took control of their commodities and assets. “Now they are trying to create a situation where the public has to depend on the military to get basic commodities,” the economist said. Tin Tun Naing, the minister of investment for the publicly mandated National Unity Government (NUG), said that the military council may be implementing a plan to privilege junta-owned entities and even take over private business. “I think this only highlights the fact that they are prioritising their own survival above everything else and sacrificing the economy of the entire country for it,” the minister said. He added that the military has been treating MEHL and MEC preferentially in allotting US dollars, and most other companies in the country were no longer on the priority list. The military has also drastically curtailed the issue of import licences to businesses that are not junta-owned. “They need to keep the businesses owned and operated by the military thriving to make good their future escape,” said Zaw Ram, a political activist. “However, no one can manage a country’s economy at gunpoint.”

Myanmar junta privileges military-owned entities, targets private companies

Traders, entrepreneurs, and economic analysts are comparing the military authorities’ recent actions against private companies to the years of economic mismanagement under Myanmar’s previous military dictator Ne Win

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