World must be prepared for Myanmar’s economic collapse

Short Url

The dire situation in Myanmar has taken a turn that could lead to a humanitarian catastrophe across Southeast Asia. According to a UN report published last week, Myanmar faces a stark economic collapse, with conditions especially severe in Rakhine State, where the Rohingya population has already been subject to years of discrimination, displacement and neglect. The international community, particularly Myanmar’s neighbors, must prepare to address the impending collapse of Myanmar’s economy — a collapse that will have far-reaching effects on regional stability and security.

Myanmar’s economy, crippled by years of military dictatorship, mismanagement and international sanctions, now teeters on the edge of complete collapse. With inflation soaring, critical shortages of essential goods and a currency in freefall, millions of people are falling into poverty and basic subsistence is increasingly out of reach for Myanmar’s most vulnerable populations.

This crisis is especially severe in areas like Rakhine State, home to a significant Rohingya population and other minorities who face barriers to accessing food, medicine and basic services. These conditions may soon lead to widespread famine and disease outbreaks, further straining the limited resources available.

Rakhine State is ground zero for what could become one of the worst humanitarian crises of our time. The Rohingya, already living under precarious conditions, face an even graver reality. Years of discriminatory policies, including restricted access to markets and government-controlled distribution systems, have left the Rohingya severely marginalized. As Myanmar’s economy plummets, food prices are skyrocketing and local production is increasingly disrupted by armed conflict and the military’s brutal crackdowns.

For the Rohingya, who are largely dependent on outside aid and have limited mobility to seek work or supplies, this means impending starvation. Even as humanitarian organizations attempt to provide relief, access to these vulnerable populations remains tightly controlled by Myanmar’s military, the Tatmadaw. The international community must be cognizant that, without intervention, Rakhine could see starvation levels not witnessed in the region for generations.

Rakhine State is ground zero for what could become one of the worst humanitarian crises of our time

Dr. Azeem Ibrahim

Regional powers — especially India, Thailand, Bangladesh and China — must recognize that Myanmar’s economic and humanitarian crisis will not be contained within its borders. Mass migration, infectious diseases and increased demand for resources could exacerbate tensions in countries already grappling with their own challenges.

The Association of Southeast Asian Nations, as a regional bloc, must take the lead in convening an emergency task force to manage Myanmar’s crisis. ASEAN’s long-standing policy of noninterference is counterproductive in the face of such a humanitarian disaster. Instead, a regional response plan that involves food distribution, humanitarian corridors and diplomatic efforts to engage Myanmar’s military is critical.

Countries like Thailand and Malaysia, which have hosted large numbers of displaced people from Myanmar, should be instrumental in establishing temporary safe havens, while also pressuring the Tatmadaw to allow access to aid.

China, a powerful neighbor with economic interests in Myanmar, also has a role to play. While Beijing has historically supported Myanmar’s military leadership, the extent of the economic collapse and its consequences may compel China to reevaluate its position. It has the leverage to pressure the Tatmadaw to open channels for humanitarian aid and it should prioritize stabilization over immediate profit. If the crisis escalates into a mass famine, China’s role as a stabilizing force in the region could be jeopardized. In addition, any significant displacement crisis along Myanmar’s borders will ultimately impact China’s domestic stability and interests.

India, too, must act as a responsible regional power. With its own eastern regions susceptible to influxes of refugees, India’s best move would be to support Bangladesh and Thailand in establishing temporary aid stations along the Myanmar border and to use diplomatic channels to urge Myanmar to accept international aid.

The international community has a moral imperative to step up its involvement in Myanmar’s crisis. Unfortunately, the current sanctions regime, while aimed at penalizing the Tatmadaw, has compounded the suffering of ordinary people. A new approach is necessary, one that includes targeted relief measures designed to bypass military control and reach those who need it most.

The current sanctions regime, while aimed at penalizing the Tatmadaw, has compounded the suffering of ordinary people

Dr. Azeem Ibrahim

The UN, working with ASEAN and other international organizations, should establish a coordinated aid program that prioritizes food and medicine distribution in Rakhine and other vulnerable areas. Additionally, there must be a strong diplomatic push to create a humanitarian corridor into Myanmar. A mix of incentives and sanctions could be offered to encourage Myanmar’s military leadership to permit this access. The program should emphasize accountability and transparency to ensure that resources are not co-opted by the Tatmadaw but go directly to at-risk populations.

International donors and development banks must also consider offering support to Myanmar’s regional neighbors to ease the strain caused by any resulting displacement and increased food and resource demands. By supporting these countries economically, the global community can help stabilize the entire region, creating a buffer against Myanmar’s spillover effects.

Beyond immediate relief, the international community must recognize that Myanmar’s crisis will require a long-term strategy. Even if the current economic collapse can be mitigated, rebuilding Myanmar’s economy and stabilizing its political landscape will take years. Sustainable solutions will require a concerted effort to address the root causes of Myanmar’s instability, including the military’s unyielding control over the state.

Myanmar’s regional neighbors and the wider international community must be prepared for the possibility that Myanmar could become a failed state if current trends continue. Establishing mechanisms for continuous aid, development assistance and support for democratic institutions in Myanmar will be crucial.

• Dr. Azeem Ibrahim is the director of special initiatives at the Newlines Institute for Strategy and Policy in Washington, DC. X: @AzeemIbrahim