Myanmar’s military may have access to more than $5bn in foreign exchange reserves that it could use to further strengthen its hold following a coup on February 1, according to an activist group.
Justice for Myanmar – self-described as a group of covert activists campaigning for justice and accountability for the people of Myanmar – released a statement on Monday asking the global community to locate and freeze these funds, about $5.7bn of the country’s foreign currency reserves.
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“The brutal and corrupt Myanmar military generals are relying on access to our foreign reserves and the global financial system to fuel their repression of the people and cement their illegitimate military junta,” the group said in a statement, asking the international community and the banking industry take “immediate action” to prevent the army from using the funds.
According to a World Bank report in December, the country’s foreign exchange reserves stood at $5bn in the financial year 2019-2020 which ended September 30. A January report by the International Monetary Fund (IMF) estimated the country’s gross reserves at $6.7bn.
Emergency aid package
The statement comes less than two weeks after a report by the Reuters news agency that the IMF had sent $350m to Myanmar last month to help the government battle the coronavirus pandemic as part of a no-strings-attached emergency aid package, taking its total aid to fight the virus in Myanmar to $700m in the past seven months.
The latest cash infusion was made days before the military coup of February 1, the day Myanmar’s parliament was due to begin a new session following elections in November, which the National League for Democracy (NLD) won by a landslide. The military has said that it detained NLD founder and civilian leader Aung San Suu Kyi as well as senior members of her government because of alleged election fraud. Election officials have said they found no evidence of electoral fraud.
Unlike the IMF’s regular financing programmes – which disburse funds in smaller increments as performance benchmarks are met for agreed policy reforms – coronavirus emergency aid has been sent quickly, often in one tranche. There appears to be little the IMF can do to claw back the funds, Reuters reported earlier this month, citing sources familiar with the payments and international finance experts.
On Friday, the United States, which has condemned the coup, imposed the first new sanctions on military chief Min Aung Hlaing and other senior generals. The US action blacklisted eight individuals, including the defence and home affairs ministers, and imposed additional sanctions on the top two military officials. It also targeted three companies in the jade and gems sector, Reuters reported.
Apart from freezing the country’s foreign reserves, Justice for Myanmar has asked the international community to suspend all business with military-controlled banks in Myanmar and prohibit them from using the SWIFT communication network; suspend all non-humanitarian support to state economic agencies and state banks in Myanmar, including the central bank, which are now under military control; and impose immediate targeted sanctions on military-owned businesses, including banks fully and partially owned by the state.
“Without an immediate response now, the military will continue to commit atrocities against the people and transfer assets into their private hands,” the statement said.