Thais face biggest Covid wave, while Myanmar crisis intensifies

Thailand has set up field hospitals in Bangkok as it faces its most serious Covid advance; meanwhile, Fitch Solutions expects Myanmar's economy to shrink by at least 20% this fiscal year and says the political upheaval could cause the country to 'be ostracized like North Korea'

Thais face biggest Covid wave, while Myanmar crisis intensifies
Health workers pose for photographs inside a Covid field hospital, recently set up to combat the spread of the coronavirus, on the outskirts of Bangkok on April 10, 2021. Photo: Lillian Suwanrumpha / AFP.

(ATF) Mainland Southeast Asia faces the threat of greater economic grief in coming months – and possibly much longer – driven by the deepening crisis in Myanmar and a resurgence of the coronavirus pandemic in Thailand.

A third wave of Covid has spread to at least 40 of Thailand's 77 provinces and the Prayut Chan-ocha government has set up 10 field hospitals for thousands of people in Bangkok, which appears to be the epicentre of the latest outbreak.

On Sunday the government announced 967 new infections, bringing the overall tally to more than 32,000. Thai authorities confirmed that they have detected a highly infectious variant of the virus originally found in Britain, but to date only 97 people have died from coronavirus in Thailand, according to official figures.

Bars and entertainment outlets in the capital and other provinces have been shut down for two weeks as the country prepares for the Thai New Year, dampening the traditional Songkran festive season when millions of people usually return to their home provinces and splash water over their family and friends.

The clampdown has come amid claims that the latest surge was exacerbated by scandalous behaviour by a small group of politicians who visited a high society nightclub notorious for its risqué live shows and exorbitant prices.

But far more disturbing were analyst reports released by Fitch Solutions last week, which warned that they "expect the political upheaval in Myanmar to last for many years, with the situation set to get worse before it gets better".

Myanmar economy in freefall

In their report 'Economic Collapse Awaits Myanmar in FY2020/21', Fitch Solutions said they now expect the Myanmar economy to shrink by at least 20%.

"We have revised our FY2020/21 (October-September) real GDP forecast for Myanmar to a conservative 20% contraction for the fiscal year, from a 2% expansion previously, with risks to our forecast still heavily weighted to the downside."

That forecast was endorsed by a panel of four experts in Bangkok on Thursday, who all agreed that a long-term crisis was the most likely outcome of the widespread opposition to the military takeover and its hated strategy of using 'total violence' to attain power. The latest example of this brutal bid for control was the military's use of heavy weapons that led to the slaying of more than 80 protesters early on Friday in the town of Bago, near Yangon.

The bloody and distressing change in Myanmar was been extraordinary. Tens years ago Myanmar was being hailed as one of the best economic prospects in Asia – relatively virgin turf for investors in a whole range of sectors. But the coup that ousted the government of Aung San Suu Kyi on February 1 – and the massive opposition it has created – has destroyed these hopes and cast a dark shadow on the country's prospects.

Fitch Solutions was direct about this in their report on Myanmar's political upheaval.

"We see Myanmar likely becoming a failed state over the medium term," it said. "The escalating violence on civilians and ethnic militias show that the Tatmadaw (as the military is known locally) is increasingly losing control of the country. With workers from the private and public sector not turning up for work in protests, the economy will also collapse.

"In our view, the crisis is evolving into one involving two or more warring factions, with the Tatmadaw on one end, and on the other, a new ‘federal army’ formed with the backing of existing ethnic militias (and possibly also foreign actors)."

'Like North Korea – or worse'

Fitch said soft diplomatic pressure by Western governments had been ineffective, so there were two broad possibilities, both of which could yield severe economic repercussions. The first scenario was a 'win' by the military, similar, perhaps to winding the clock back to the late 2000s.

"Should the Tatmadaw emerge victorious, we believe that Myanmar, especially after all the bloodshed and perhaps even war crimes by the Tatmadaw during the process, will see a fate not dissimilar to North Korea and be ostracised by most of the international community.

"Second, should the revolutionaries succeed in toppling the Tatmadaw. We believe that this scenario could get complicated as it might then mark the end of any incentive for the disparate forces to band, with their common enemy defeated. An agreement to secure the support of ethnic militias by the CRPH (Committee Representing Pyidaungsu Hluttaw – formed by NLD members elected in the 2020 election) may involve allowing them self- determination post-conflict. This could see many states breakaway from Myanmar at the time. Alternatively, the country could re-enter civil war should the post-conflict civilian government not honour this agreement, prolonging the political turmoil."

Thomas Kean, editor of Frontier magazine in Yangon, who spoke in the Inside Myanmar panel at the Foreign Correspondents Club in Bangkok on Thursday morning, said: "Everything is so uncertain right now and you can’t rule anything out... I think we could see a lot of macroeconomic instability around the exchange rate, inflation and so on.

"The big takeaway from this is, already because of Covid we’ve heard that millions of people are going to slide back into poverty and already have – and this (coup impact) is just going to turbocharge that process. There’s going to be huge amounts of poverty in Myanmar for the next few years because of this, and huge humanitarian needs, and it’s not very clear how those people can be helped."

At the same event, James Rodehaver, head of the UN Office for the High Commissioner for Human Rights (OHCHR), said it was impossible to determine how many people in Myanmar had Covid-19 "because the healthcare system has collapsed". Many doctors, nurses or other staff had fled because they had played a huge role in the protest movement, while the military has been occupying hospitals and launching attacks on healthcare facilities.

"You’ve had over 40 hospitals that have been occupied by the Tatmadaw, so it’s created a dissuasive effect – people don’t want to go to hospitals. So, the whole Covid vaccination effort has stopped… it is a huge problem."

UN to list companies linked to Myanmar military

Rodehaver revealed that the UN Human Rights Council had asked the OHCHR to update a list drawn up by the  Independent International Fact-Finding Mission on Myanmar several years ago on corporations with ties to the Myanmar military, noting that businesses were particularly sensitive about such ties.

"The business community in particular don’t like bad press, they don’t like what that says about them. And, so that’s why this needs more attention. There needs to be many more public advocacy efforts to convince these companies to distance themselves from the Tatmadaw, and to adhere to the guiding principles for business and human rights, because these people have a lot of influence," he said. 

"The money is probably the most potent weapon right now against these people, because that is why they launched this coup to begin with, to protect their money interests."

All four panelists at the panel discussion believed a long-term stalemate was the most likely outcome of the crisis, unless the United Nations acts more decisively to force a negotiated outcome. So, the risk of refugees or economic migrants crossing into Thailand or China – both of which have long borders with Myanmar – will remain a threat to these neighbouring states if people get in undetected and bring the coronavirus.

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Thailand Covid-19 Myanmar coup upheaval coronavirus Fitch Solutions economic impacts