Compass Money: International Companies Condemn Myanmar Coup

People protesting the military coup in Myanmar in February. (Wikimedia Commons)

Following the coup in Myanmar on February 1, the military, known as the Tatmadaw, has faced both sanctions and condemnation from the international business community. 

The Tatmadaw has a wide variety of assets that it uses to support its operations in Myanmar. These ventures range from telecommunications to real estate to mining. The majority of these companies fall under a couple of conglomerates, Myanmar Economic Corporation and the Myanmar Economic Holdings Public Company Limited (MEHL). In total, the UN Fact-Finding Mission on Myanmar estimated that in 2019, between the two, they controlled more than 107 subsidiaries and were closely affiliated to 27 more companies. 

Subsidies that MEHL allegedly owns or controls across various industries according to information from the Independent Fact-Finding Mission on Myanmar in 2019. (Information from UN, OHCHR)

These economic networks both do business internationally; they have the most known joint ventures with Japan and South Korea. The recent military coup has had some negative repercussions for their businesses. In late February, Kirin Holdings, a Japanese beer company, scrapped its plans with MEHL and joint venture Myanmar Brewery Ltd., citing the “recent circumstances” in Myanmar. 

Other organizations such as Posco C&C, a South Korean steel-manufacturing company, although yet to officially announce plans to end business in Myanmar, have expressed concerns about the threat that the coup may pose. While production remains intact, a Posco C&C spokesman, Min Ji-Hyeon, stated that the company was worried that demand for their product would fall in the region.

“We’ll closely examine how the situation changes and try to deal with changes in a timely manner,” Min added.

Criticism of the military’s actions has primarily come from Western countries. The United States imposed sanctions against Myanmar military officials in response to the coup. The EU also recently signaled that it is preparing to levy sanctions against the Tatmadaw and its economic interests. However, despite Western appeals, China, which has major investments in Myanmar, has not shown any signs of joining the sanctioning efforts.

More than 160 companies, including Coca-Cola, Heineken, and Facebook, have signed a statement condemning the Tatmadaw’s actions, writing, “Our companies, as investors in Myanmar, have watched with a growing and deep concern the developments in Myanmar since the declaration of a state of emergency on 1st February.” 

Facebook recently announced that it would ban Myanmar’s military accounts, an action that suggests wide-reaching implications. Not only did the Tatmadaw use the platform to spread hateful rhetoric against the country’s minorities (in particular, the Rohingya Muslims), but it also served as a crucial platform for advertising businesses directly linked to the military. 

Facebook expressed its position in a blog post: “Events since the February 1 coup, including deadly violence, have precipitated a need for this ban. We believe the risks of allowing the Tatmadaw on Facebook and Instagram are too great.” 

The removal of military-linked accounts from the site represents the loss of a major opportunity for ads and their influence. Last year, Mytel, a telecoms company closely linked to the Tatmadaw, spent more than $1 million on Facebook ads smearing rival companies.

A social media management platform NapoleonCat reported that in January of 2020, 40 percent of the population in Myanmar were Facebook users. In a country with limited access to computers and laptops, the internet is often primarily accessed through cell phones and the Facebook app directly.

Despite the threat of Myanmar simply turning to China to replace its loss in foreign investment, the economic consequences are expected to be substantial. Christopher Sidoti, a human rights lawyer who works for the UN and wrote a report on foreign investment in Myanmar, believes that the fallout from the coup will deal significant damage to the Tatmadaw’s economic assets. 

Sidoti said in an interview with Voice of America, “I think it would cause an enormous amount of financial hurt… You just have to look at the way the arms of this octopus spread through the Myanmar economy, what they own, the key roles that they play in a number of sectors.”