Myanmar’s Military Coup Four Years On: Economic Difficulties and a Fierce Civil War

The “Last Frontier” that Caught the World’s Imagination

I remember the events of four years ago as if they took place yesterday. The scenes I witnessed in Myanmar at the time were truly worthy of the description “hellscape.” The telephone lines and internet were cut off and I could not access any information. I felt genuinely isolated from the rest of the world.

What brought me to Myanmar in the first place was US President Barack Obama’s visit in November 2012—the first ever visit by a sitting American president. I watched in wonder as President Obama firmly shook hands with Aung San Suu Kyi, the leader of Myanmar’s prodemocracy movement, at her Yangon residence. At that moment, I had a gut feeling that Myanmar would transform into a country of great opportunity. Wanting to see it with my own eyes, I decided to make my way there.

In July 2013, All Nippon Airways introduced daily commercial flights between Narita and Yangon, the largest city in Myanmar and its former capital. Prior to this, people could only travel to the country on smaller business jets that departed every few days. The Japanese media at that time was also running a series of articles that positioned Myanmar as the “last frontier” in Asia. With improved accessibility and raised interest, Japanese businesspersons seeking opportunities began to come to Myanmar in droves.

The Japanese Chamber of Commerce and Industry, Myanmar (JCCM) had more than 400 active member companies at its peak. There were perhaps 5,000 Japanese people either residing in Yangon or visiting on short-term business trips at any one time. Before the shift to democratization, there was a single Japanese restaurant in Yangon. By 2016, this number had grown to around 200. Even so, the popularity of these restaurants made it almost impossible to get a reservation.

The Devastated Postcoup Economy

While Myanmar faced economic difficulties during the COVID-19 pandemic, it appeared to be returning to normality near the end of 2020. However, the February 2021 coup d’état changed everything. Myanmar’s economy even today remains stagnant and beset by the twin evils of low growth and high inflation.

Foreign currency reserves have also been depleted. The lack of American dollars at one point resulted in massive energy shortages, even though full oil tankers were docked at Yangon port. There were long daily lines at gas stations and some people stood in line for two whole days before they could fulfil their energy needs.

Fuel shortages have been temporarily resolved, but other problems persist. For example, Myanmar’s own currency, the kyat, cannot be freely withdrawn from savings accounts. Prolonged inflation is also putting Myanmar citizens under intense daily pressure. When I first arrived in Myanmar, one American dollar purchased around 1,500 kyat. Following the massive issuance of government bonds, Myanmar’s national currency weakened to 7,000 kyat to the dollar by the summer of 2024. The weakening of the kyat and of government administration has in turn resulted in the disruption of trade. Prices have since doubled overall and fuel prices have surged to five times the cost prior to the 2021 coup.

As a result, the military government has begun imposing strict restrictions on dollar withdrawals from financial institutions and greenback-denominated imports to prevent the outflow of dollars. Import licenses are only being issued to companies in the Thilawa Special Economic Zone near Yangon—no other companies are allowed to import products.

The impact of this was made clear to me by the exasperated head of a major Japanese car dealer in Myanmar. Despite significant demand for his sole sales product, the dealer said that he is completely unable to import and sell people the cars they want. These inflation and currency-related problems not only impact foreign companies doing business in Myanmar but also domestic firms doing business with foreign countries. Until this situation is resolved, Myanmar’s economic problems will persist.

Rising Electricity Costs Exacerbate Stagnation

Exacerbating these problems was the government’s sudden announcement in June 2024 that it would raise electricity rates to address “supply stability” problems. As it is, electricity is only available for eight hours at a time every two days. Despite the announced rise in prices of around 2.5 times, we have seen no improvement in the availability of electricity—a matter of life and death for factory operators. As the cost of fuel for generators has risen alongside increased electricity costs, energy bills for manufacturers have ballooned to tens of thousands of dollars per month. This completely offsets any advantages to be gained from Myanmar’s low labor costs.

In light of these developments, Japanese companies are withdrawing from the JCCM one after another. Although the registered number of JCCM members sits at around 300, in reality only about half of these companies are active. Furthermore, only about 500 Japanese remain in Yangon doing business. There is no trace of the Myanmar that was once so popular. A friend of mine who has lived in Myanmar for over 30 years told me that “this is the worst I have ever seen things”—a statement made despite having lived through the previous period of military rule in Myanmar.

Young Boys Forcibly Sent into Combat

Nevertheless, Yangon, where I live, is relatively safe compared to other parts of Myanmar. If you venture out of the city, however, you will be faced with a different reality. Some areas have been decimated by military operations like air strikes, and it isn’t uncommon to see almost all residents of a community living on the streets.

To resist the military junta, the People’s Defence Force was set up as the armed wing of the National Unity Government. A fierce civil war still rages on in various parts of the country. The military government’s forces have suffered major losses of personnel and territory and may now be outnumbered by the PDF.

Evidence of the seriousness of the personnel situation is the drastic step taken by the military government to activate Myanmar’s conscription law in June 2024. Although most of the conscripts are young men aged 18 to 45, there have been cases of women being drafted into the military for logistical support. Furthermore, people younger than 18 are also being forced into duty.

Recent reports suggest that 14- and 15-year-old boys who are out at night are being forcibly taken away to be soldiers after they are compelled to drink alcohol and smoke tobacco to make them look like adults. These adolescents, who know nothing about handling weapons, are sent straight to the front lines and soon lose their lives in combat. An increasing number of young people are looking to escape conscription, including by fleeing to other countries, including Japan.

Many schools in conflict areas are also not holding classes because teachers are refusing to commute due to the bombing of schools and the killing of teachers on their way to work by the military. This obviously raises concerns about the fate of the current generation of children who will not receive fundamental education.

Hopes for the Future of the “Last Frontier”

Despite the coup, the Japanese government had kept a diplomatic presence in Myanmar, including an ambassador, to ensure communications with the military junta. It was particularly reassuring to have Maruyama Ichirō, a Myanmar hand who has served as a diplomatic specialist on Myanmar on five occasions over 27 years, continue his role as ambassador that he started in 2018. However, Ambassador Maruyama’s return home at the end of September 2024 and the decision by Tokyo to not send a replacement removed even this comfort. For foreign citizens residing overseas, nothing is more disconcerting than the absence of an ambassador.

Myanmar has gone from being the “Last Frontier” to the “Lost Frontier.” Will Myanmar ever have a bright future again? Will it be able to make its way back to being a democracy? We can only hope that Myanmar will be blessed by God and that it will one day be known as the “Newest Frontier.”

(Originally published in Japanese. Banner photo: A police officer is surrounded by journalists outside the gate of the family home of detained Myanmar democracy leader Aung San Suu Kyi. Yangon, February 5, 2025. © AFP/Jiji.)