Cyclone Nargis hits Burmese economy

Phanida-Mizzima

13 June 2008, Chiang Mai – Economists and merchants feel that devastation caused by Cyclone Nargis will slow down Burma's economy.

The cyclone caused unprecedented damage in major rice and fishery producing Irrawaddy Division and Rangoon the economic hub of the country, resulting in Burma's economy being severely affected.

"The monsoons and the stagnating economy marks a drastic fall in demand. Farmland and roads are severely damaged. The most important factor is the soaring price of staple food, rice. These affect the demand side. This is the season for growing and planting rice, banana, and tapioca in lower Burma. But the farmers cannot grow these crops as their fields and even the ponds are inundated with saline water," Rangoon based economist U Khin Maung Nyo told Mizzima.

Soaring commodity prices and economic stagnation are usual phenomena of disasters or drastic and sudden change of situation in a country, U Khin Maung Nyo said. There will be fall and rise in prices as the situation is exploited by the merchants at such times," he added.

The price of rice rose by over 15% in Rangoon. 'Pawsanhmwe' rice rose from Kyat 36,000 per bag (about 110 lbs) to 42,000, 'Zeyar' rice rose from Kyat 24,000 per bag to 28,000. Even the wet rice, which were damaged rice with the colour turned yellow fetches Kyat 17,000 per bag.

The price of cooking oil rose by over 40%, from Kyat. 4,200 per viss (approximately 1.5 Kg) to 4,700.

Fuel price also rose by over 30% from Kyat 4,500 to 6,000 per gallon of petrol while diesel rose from Kyat 4,200 per gallon to Kyat 4,700.

A leading merchant of the 'Myanmar Chamber of Commerce and Industry' (MCCI) conceded that Burma's economy is on a downward slide.

"The cyclone made the sale sluggish. A lot of money has to be spent on relief, reconstruction and rehabilitation. The cyclone left about 2.5 million people homeless. We have to arrange all the necessary things for the survivors, food, clothing and shelter. It has hit the economy hard," he said on condition of anonymity for fear of reprisal by the authorities.

The downfall of the economy affects everybody, both in retail and wholesale trade and also odd job workers according to economists.

The brokerage firms (wholesale trade) in Theinzaygyi vegetable market are getting only Kyat 30-40,000, compared to the previous usual sale of Kyat 200-300,000 per day, according to the 'MYO Family' vegetable brokerage firm.

"Business is not good these days. We rely on our customers from rural areas. They have suffered a lot in the cyclone and it hit our business hard. A few customers come and buy from our firms these days. The business was brisk earlier. Rural people cannot buy when they are in trouble," a shop owner said.

All the vegetables in this market come mainly from townships in Irrawaddy Division, mainly Labutta, Bogale and Pathein.

"The number of customers has gone down drastically. Sometimes only one or two come and buy. We do not know what to do next. Yesterday someone came and supplied readymade Rakhine Vermicelli but I did not buy as the sale is sluggish these days. The clothing and apparel shops are worst-hit. Many shop owners want to sell their shops as the sale is sluggish," a grocer from Hledan market said.

Apart from soaring essential commodity prices, most of the ordinary people cannot make ends meet with their meagre income. They have to save while shopping for food as they want to donate some money for the cyclone survivors, a housewife from Rangoon said.

"We cannot make both ends meet with our small income. We have to pay tuition fees and admission fees in schools. My daughters are government employees and can barely survive. We have stopped buying fish, pork and chicken after the cyclone. Many people have tried to donate for the cyclone victims as much as they could. We must share what we have with those who have lost everything in the cyclone," the housewife from Rangoon said.

"There are many sale and sale promotions in this monsoon season. But the customers cannot buy because they have to buy essential commodities first with their small income. So they must desist from buying unnecessary goods. Government employees and poor people have to suffer more. They cannot buy most goods," a housewife in Tamwe Township said.

The school uniform and stationery shop in Latha Township also had poor sales figures. Sales fell by 50% in the school re-opening season. This shop usually does brisk sale in this season.

"We must take some time to recover from the economic stagnation and sluggishness. This is some sort of recession. We must take give at least six months. We cannot expect foreign aid to help us recover from the current situation. We need good economic management and good leadership to recover from the current crisis. We must rely on ourselves. The economy will improve a little bit when we have such a leadership and management," U Khin Maung Nyo said.