The coup d'etat is uncertain due to growing criticism from the international community, such as the United States announcing sanctions on executives including the top of the military and companies closely related to the military against the military coup d'etat in Myanmar. It is a further concern for the growing Myanmar economy.

Last week, the Biden administration in the United States announced sanctions on 10 executives, including the top military leader who led the coup, and three companies closely related to the military.



Myanmar citizens protesting the military have called for pressure from the international community, and a woman living in the largest city, Yangon, said, "This economic sanction is aimed at afflicting wealthy corrupt military executives. I think. "



The US sanctions are limited to some of the companies closely related to the military in order to reduce the impact on Myanmar's civilian life.



However, the Biden administration is willing to take additional sanctions depending on the military's response, and the coup d'etat has increased uncertainty, which has become a further concern for the Myanmar economy, which has been pointed out as a chill in investment.



On the other hand, the tightening of sanctions may trigger Myanmar to approach China, which does not clearly criticize the military coup d'etat, and the international community is forced to take difficult measures in terms of both politics and economy.

Military and related companies still influential in economic activity

In Myanmar, where the military government has continued for a long time, it is said that companies related to the military still have an influence on local economic activities.



A UN Human Rights Council investigative team investigated the situation of these companies in relation to the issue of persecution of Myanmar's minority, Muslim Rohingya, and published a report.



Among them, two major conglomerates of "Myanmar Economic Holdings" and "Myanmar Economic Corporation" are listed as companies controlled by military executives such as Commander Min Aung Hlaing of the military who executed the coup d'etat this time. I am.



He added that there are more than 100 companies under the umbrella of these two companies, and points out that the profits of those companies are also a source of funds for military activities.



The business covers a wide range of industries such as real estate, services such as hotels, finance and logistics, and specialty jewelry, and companies related to the military have a strong influence on local economic activities. You can see that.



Of these, Japan's Kirin Holdings, which had been conducting a beer joint venture with Myanmar Economic Holdings, has announced a policy of canceling the alliance in response to a military coup d'etat, and has significantly expanded its local business. I have to make a thorough review.



In addition, South Korean steel giants and Vietnamese telecommunications giants are said to have a tie-up relationship, and human rights groups are increasingly criticizing that the profits of companies related to the military are flowing into the military.



Under the US sanctions, the two major conglomerates were not directly subject to sanctions, but three companies dealing with rubies and jade.



However, the Biden administration is willing to give up additional sanctions depending on the response of the Myanmar military, and there is a possibility that the number of companies subject to sanctions will increase in the future.

Boycotts of Japanese

On the other hand, there is also a movement to call for not buying products of companies related to the military due to the opposition to the coup d'etat, and there are cases where products of beer companies funded by these companies have been removed at supermarkets in Yangon. ..



In addition, a list of companies such as telecommunications companies and tobacco companies that are said to be related to the military has been posted on SNS, and calls to stop purchasing products and using services are spreading.



In some posts, the products and services of these companies are introduced with a photo of military commander Min Aung Hlaing, with an ironic comment that "I recommend".



A man living in Yangon said, "The military has done a lot of business, but I don't think it should have been done. I welcome US sanctions focused on military executives." ..

Expert "U.S. economic sanctions may increase"

Regarding US sanctions, Professor Takashi Nemoto of Sophia University said, "We are seeing the reaction of the military by making small amounts instead of imposing a strong degree of sanctions suddenly. With sanctions at this stage, people's lives I'm not worried about this, but depending on the future response of the military, the sanctions of the second and third stages will become more severe. "



Regarding the fact that three companies closely related to the military were subject to sanctions, "The accounting of these companies is very unclear, and although defense spending is disclosed in the national budget, the profits of companies related to the military Seems to be another source of income. It is believed that it was subject to sanctions because it is unclear what the military is using it for. "



On top of that, Professor Nemoto commented on the impact on companies expanding into Myanmar, saying, "If US economic sanctions increase, companies that have joint ventures with companies related to the military may not be able to enter or leave the US market. Companies that have already entered the market will be forced to review their businesses, and in the worst case, they will have to consider withdrawing. Also, companies that are considering expanding into the future will be exposed to cold water. So I think it's more likely that you'll wait for a while or give up and decide to invest in another country. "

Japanese companies are also expanding due to the progress of democratization

Since 2011, Myanmar has continued to grow economically, driven by the progress of democratization, and the entry of companies from overseas such as Japan has accelerated.



In addition to the gradual lifting of economic sanctions from Western countries that had been implemented during the military junta, economic reforms such as the opening of the financial industry market have been promoted, and it is drawing attention as a new destination for companies. It became.



The administration of the NLD = National League for Democracy, led by Aung San Suu Kyi, has also strengthened its stance of attracting foreign investment.



Japan has also cooperated with the public and private sectors in the development of the Thilawa Special Economic Zone in the suburbs of Yangon, and more than 110 companies, including Japanese companies, have entered the market.



Japan is also supporting the establishment of Myanmar's first stock exchange and infrastructure development such as repairing aging railways.



The expansion of Japanese companies has expanded not only to manufacturing industries such as Toyota Motor Corporation, but also to industries such as banks and insurance, and the number was about 50 at the end of 2011 immediately after the transfer of civilian rule, but now it is 400. Is over.



Economic growth continues in Myanmar against the backdrop of the expansion of companies from overseas, and according to the IMF = International Monetary Fund, GDP = gross domestic product has continued to grow at around 6% for several years until 2019.



However, if Western countries take the lead in strengthening economic sanctions in the wake of this coup d'etat, foreign investment may cool and the growing economy may stagnate.