Myanmar’s junta faces financial collapse with the kyat plummeting. Remittances are halved while hyperinflation surges. Junta crackdown targets funds flowing to Bangkok’s hot condo market, where Burmese buyers are now a key group.
Myanmar’s junta is facing a financial meltdown with remittances to the country halving in the last month. At the same time, the military generals are printing money, which has led to the kyat, its currency, collapsing. The result is hyperinflation, which the hidebound regime in Nay Pyi Taw is lying to the world about. However, as its armies retreat, leaving behind tales of torture, rape, and mutilation, there are growing reports of desertions from its ranks and a lack of essential supplies. A crackdown by junta officials in Yangon last week targeted the outflow of essential hard currency. In short, it was found flowing to Bangkok’s condominium market. In the Thai capital, Burmese purchases have risen to become the second most important investor group. While placed behind Chinese buyers, they are ahead of Russians, also in flight from the deprivations of war.
The National Unity Government in Myanmar last Monday gave a briefing on the true state of the crumbling national economy.
In short, it follows misinformation and propaganda being fed to the media by the junta in Nay Pyi Taw, the capital of the country.
The briefing was attended by representatives of the international media and senior UN officials. They were addressed by Tin Tun Naing, the Minister for Planning, Finance, and Investment in the shadow government.
Kyat has collapsed and on markets within Myanmar is worth far less than its official value against the US dollar. At this time, it faces further pressure
At length, this government, supported by ethnic groups and the nation’s People’s Defence Armed Forces (PDF), now controls 80% of Myanmar’s territory. However, the junta still controls key cities such as Yangon, Mandalay, and the capital Nay Pyi Taw.
In short, since the 2021 coup d’état, the Myanmar currency, the kyat, has collapsed. The top official said it has plummeted by 70% or even more. For instance, it may be quoted at approximately 2,100 kyats to the dollar. However, these figures are widely disputed and are linked to the junta printing money.
In effect, the market for the currency has become a closed circuit except for remittances and incoming foreign currency.
In turn, that has caused widespread inflation which is additionally not being properly reported by the embattled junta.
Certainly, reports from Myanmar suggest the real market value of the dollar in the country to be 5,020 kyats.
Previously in August 2022, it was quoted at 3,500 kyats. In contrast, in December 2020, just weeks before the military coup d’état, it was stable at between 1,330 and 1,400 kyats.
Junta’s economic grasp now slipping as with control of large areas of the country in a faltering military campaign against overwhelming public opposition
At the briefing on June 3rd, the National Unity Government minister estimated currency reserves for the failing junta regime at $3.8 billion or lower.
In summary, as it loses the battle on the ground across Myanmar, the junta’s official and essentially false economic facade is also slipping.
Its economic house of cards is toppling not least because foreign media is now embedded across the country to witness the extent of the collapse.
At the same time, foreign trade and access to revenue for it is drying up.
Minister Tin Tun Naing highlighted that remittances from Myanmar workers abroad have sharply dropped in recent weeks. He attributed this to more effective financial sanctions.
Before this, the junta’s central bank had seen $100 million a month in such funds, now it has fallen by over 50%.
Crackdown on funding for Bangkok condominium units begins with arrests in Yangon of property brokers and deal facilitators wiring money to Thailand
All this goes some way to explain the crackdown on June 3rd on Thai property sales within Myanmar.
It followed the arrest of the director of Minn Thu Co, a real estate firm specialising in the purchase of property in Thailand.
In particular, condominiums in Bangkok where Burmese nationals have risen to become the second biggest market in the first quarter of 2024.
Mr U Aung Kyaw Tun was taken into custody by junta police while his General Manager U Min Thu Kyaw was reported to be at large. In short, he was evading arrest and probably fleeing the junta’s jurisdiction.
Before the crackdown, the company had held an exhibition at a hotel in Yangon to advertise properties in Thailand and Bangkok.
In addition, the company and its executives were linked to the circuitous transfer of funds to pay Thai property developers.
Presently, Myanmar has strict capital controls which the property men had successfully circumvented.
Arrests linked to illegal transactions and account activity without approval for Myanmar’s central bank transferring payments to Bangkok condo developers
Certainly, one way this was achieved was through a cross-border transaction system called Hundi.
At the same time, the executives were accused of opening Thai bank accounts ‘without permission from the Central Bank of Myanmar’ to facilitate payments for the condo transfers in Bangkok.
At this time, the Myanmar junta is facing a precarious position. Many analysts believe it is on the precipice of financial collapse. In truth, there has already been a shortage of ammunition and materials to support its forces. For instance, there are reports of soldiers going without food or clothing.
Meanwhile, the People’s Defence Armed Forces (PDF) and ethnic armies in key strategic battlegrounds such as recently in Rakhine State, are making steady progress.
However, this is increasingly resulting in wholesale human rights abuses.
These include murder and widespread rape and torture of captured civilians whose families are linked to the revolutionary forces.
Fears in Bangkok that the crackdown will cause chaos in Quarter 2 and 3 sales activity as developers exploit foreign demand while local demand is weak
Meanwhile, back in Bangkok, there are fears that the junta’s crackdown may stall momentum as Myanmar buyers have become a key cohort within the market.
It comes as Bangkok’s property market continues to post price gains based on foreign demand.
In particular from China, Russia, and Myanmar. In the first three months of 2024, Myanmar nationals made up 12% of buyers while Chinese buyers topped the table at 42%. Russian buyers made up 8-9% as the figures fluctuate.
However, the demand for Thai properties with the exception of the ultra-wealthy is in decline. This means strong demand for high-end condominium developments with wealthy foreign and Thai buyers snapping up units. In the meantime, prices are actually falling in adjacent provinces to Bangkok.
These include provinces such as Nonthaburi and Samut Prakan. In 2023, prices in these provinces fell by 1%. Nonetheless, they were up in Bangkok overall by 3.5% giving gains for the year of 2.7%.
Sales are also slowing with a falloff in demand from China. In addition, sales to Myanmar buyers may be underestimated as many are using Thai nominees
At this time, there is concern in the Bangkok condo market with demand also slowing from China. Mr Prasert Taedullayasatit is the President of the Thai Condominium Association.
Consequently, he fears a significant decline in quarters 2 and 3 of 2024. Additionally, he foresees confusion over deals that may not be able to be finalised.
‘This will definitely have an impact on developers’ condo transfers in the second and third quarters as the crackdown will cause difficulties for Myanmar customers, who are an emerging market among foreign buyers, in purchasing Thai condos,’ Mr Prasert explained.
Similarly, Mr Vichai Viratkapan noted the involvement of Myanmar buyers may be even bigger than thought.
Undoubtedly, it is thought that a larger proportion of buyers from Myanmar have been using Thai nominees. This is achieved through companies and trusted individuals who purchase property in the kingdom.
This was due to fear of action at home and also to avoid potential difficulties in Thailand
Certainly, this might explain how, with weaker local demand, developers are managing. They must ensure that 49% of the condo developments are still Thai-owned. This is required by law under the 1979 Condominium Act.
Growing number of Myanmar purchasers in the market rising from 2-3% in 2021 to 12% in the first quarter of 2024 when they spent ฿2.1 billion on 366 units
‘The Myanmar buyer market has been on the rise since the political turmoil in 2021,’ disclosed acting Director-General of the Real Estate Information Centre (REIC), Mr Vichai. ‘Recently some developers reported half of their condo transfers to foreigners were from Myanmar.’
In the first quarter of 2024, even without nominees, Myanmar nationals bought 366 units in Bangkok valued at ฿2.1 billion. Their influence in the market has risen from 2-3% in 2021 to over 12% in 2024.
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Meanwhile, the number of Thai nationals purchasing condominiums is falling. It fell 14% in the first quarter of this year.
At the same time, back in Myanmar, there are many who are convinced that the end of the military junta is near. Certainly, the financial implosion we are witnessing is confirmed by what is happening in the field and on the ground.
Local Chin leader or regional PM says the junta will certainly lose. He could not say when but he felt his forces would not be fighting in 2-3 years time
In recent weeks, a BBC team including renowned Bangkok correspondent Jonathan Head toured the war-torn country. He spoke with key political and military leader Pa Thang in Chin State. This is in western Burma bordering Bangladesh.
In that state, a vicious and all-out war between the ethnic militias and the People’s Defence Armed Forces (PDF) on one side and junta forces on the other, is being played out.
In short, the junta is losing in every part of the country.
Pa Thang spoke of plans for a new federal state. Like many others, he was confident of victory. In short, the momentum was on the side of what is a genuine revolution by ordinary people against oppression.
‘It won’t be long,’ he said. ‘It’s not good to make predictions about such things but I have faith that we won’t be fighting for more than two to three years.’
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Further reading:
Tyrant of Nay Pyi Taw’s days are numbered as Karen soldiers burn the hated Myanmar flag in Myawaddy
Outgoing Foreign Minister defends his two days of regional dialogue with Myanmar held in Pattaya
Hated Burmese junta regime seeks peace talks as its grip on power across the country unravels
Bangkok sends delegation to meet Myanmar’s pariah junta regime in its eerie capital Nay Pyi Taw
UN official slams ‘Distorted’ international response to Myanmar after Horrific junta atrocity
Myanmar’s junta crumbles along with Russia’s war in Ukraine as US progresses in the Indo Pacific
Desperate Myanmar junta executes 4 including a former MP and pro-democracy activist by hanging
Intensive clashes in Myanmar near Tak ease leaving locals near the border rattled and on guard
A second war raging in Myanmar unlike anything seen since World War Two with over 12,000 dead
Thailand calls for Myanmar talks as besieged coup leader is barred from the ASEAN summit in Brunei
