COUP TO WORSEN MYANMAR’S DIRE STRAITS

The military coup in Myanmar is unlikely to do the country’s struggling economy, once considered a promising “last frontier,” any good at all, Elaine Kurtenbach and Victoria Milko reported for the Associated Press (AP).

The economy already was faltering before the pandemic. Sian Fenner of Oxford Economics estimates the coup will likely cut growth this year by half, from an earlier forecast of 4.1% to 2%.

The past decade’s average annual growth rate of 7.6% had slowed to just 2.9% in 2019. Last year, the World Bank (WB) estimates the economy grew 0.5%.

Many US companies have held back on major direct commitments, instead opting for local partnerships.

Fast food giant Yum! Brands Inc., for example, opened its first Kentucky Fried Chicken outlet, a franchise with local partner Yoma Strategic Holdings, in downtown Yangon last year.

The potential impact of sanctions would depend on how far-reaching they are. Many Western brand names, including Samsonite, LL Bean, H&M and Bass Pro, have suppliers in Myanmar, based on shipping data from Panjiva.

Exports of clothing, shoes and other consumer goods are a vital source of growth. They doubled after the European Union in 2015 began allowing preferential imports from Myanmar under an “everything but arms” arrangement in recognition of the country’s progress toward democracy.

The garment and textiles sector employs 450,000, mostly women, in more than 600 factories, according to the Myanmar Garment Manufacturers Association. “The development of a competitive low-end manufacturing sector has traditionally been the route out of poverty for low-income countries in Asia, so throttling textiles would have lasting repercussions,” Gareth Leather of Capital Economics said in a report.

Japan’s Kirin Holding Co. announced Friday it was ending its joint venture with the military-linked conglomerate Myanma Economic Holdings PLC, whose board is entirely composed of military leaders.

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