As Inflation Soars, Myanmar Shop Owners Are Jailed for Hiking Wages

With Myanmar’s currency plunging and inflation soaring, the owner of three cellphone shops in Mandalay announced he was giving his employees a raise. Word of his generosity quickly spread on Facebook, and his workers cheered the news.

But the military regime that rules Myanmar saw it differently. Soldiers and police officers arrested the owner, U Pyae Phyo Zaw, shuttered his three shops and charged him with inciting public unrest under a vaguely worded law often used to suppress dissent, his brother and an employee said.

Mr. Pyae Phyo Zaw is one of at least 10 business owners arrested in recent weeks after word circulated online that they were increasing their workers’ pay. Hiking wages has not been outlawed, but the business owners are charged with undermining the regime by making people believe that inflation is rising, one legal expert said. They all face three years in prison.

Soldiers posted a notice outside one of Mr. Pyae Phyo Zaw’s shops saying it was closed for disturbing “the peace and order of the community.”

The junta’s spokesman, Gen. Zaw Min Tun, declined to take repeated calls from The New York Times.

“We were very grateful for the salary increase, but now the shop is closed and I don’t get paid,” said the employee, who spoke on condition of anonymity to avoid arrest. “Ordinary people like us are suffering from high prices, almost to the point of despair.”

The military’s return to power in a 2021 coup and the ensuing popular rebellion against its rule have plunged the country into economic crisis, reversing progress achieved during a decade of quasi-democratic leadership.

The junta faces intense pressure from armed ethnic rebels and pro-democracy fighters who control more than half the country’s territory and continue to make steady gains on the battlefield, overrunning numerous army bases and outposts.

While battling rebels, the army burned villages and rice fields in Shwebo, the rice bowl of upper Myanmar, destroying the crop and contributing to a sharp rise in food prices. The rebels, by seizing major border crossings, have disrupted trade with China, India and Thailand.

Throughout the country — except for the generals’ capital city of Naypyidaw — electricity is usually available for less than four hours a day, curtailing manufacturing and spreading misery in a place where temperatures often reach 100 degrees. At least 250 people died of heatstroke in May in the regions of Mandalay and Magway, according to a nonprofit ambulance service that carted away the dead.

“Myanmar’s economy post-2021 has moved on from crisis, journeyed through chaos, and now arrives at what is surely its near collapse as a formally functioning, developing entity,” said the Australian economist Sean Turnell, a former adviser to the ousted civilian leader, Daw Aung San Suu Kyi. He now advises an opposition leadership group, the National Unity Government.

The World Bank reported in June that Myanmar’s economic output had shrunk by 9 percent since 2019, and poverty has soared to levels not seen for nearly a decade. A third of the population now lives below the poverty line.

The work force has shrunk as more than 3 million people have fled the fighting for safety in remote villages and jungle camps in Myanmar, and many young men and women have escaped overseas to avoid being drafted into the army. Many thousands more have abandoned the cities to join the resistance army.

With Western financial sanctions helping cripple the economy, Myanmar’s growing isolation has left it starved for foreign currency. The country’s own currency, the kyat, has plummeted on the black market to a third of its pre-coup value.

The kyat’s collapse amounts to wealth destruction “on an epic scale,” said Mr. Turnell, who himself was imprisoned by the regime for 22 months on trumped-up charges.

The generals’ economic policy is “a desperate scramble for the financial wherewithal to fund their war,” he said in a statement released by the National Unity Government. He noted that the regime has slashed funding for health and education while military spending has jumped 60 percent since the coup.

Many of the regime’s weapons come from overseas, with Thailand emerging as a major conduit, according to a report released Wednesday by Tom Andrews, the U.N. Special Rapporteur on human rights in Myanmar.

Mr. Andrews said the junta imported nearly $130 million in weapons and equipment from Thailand-registered suppliers in the past year, more than double the previous year. He urged Thailand to halt the flow of weapons.

The report also accused 16 banks in seven countries of helping Myanmar’s ruling junta evade Western sanctions. Mr. Andrews urged the banks to stop aiding “war crimes and crimes against humanity.”

To fund its war, the junta has printed nearly 30 trillion kyat since the coup, about $9.2 billion at the current official exchange rate, leading to the sharp devaluation of the currency and driving up inflation.

To counter inflation, the junta froze prices of key food items such as rice, meat and cooking oil; restricted the purchase of gold and foreign currency; and sought to curb the flow of money overseas.

In recent weeks, the authorities have rounded up dozens of people for violating the price and currency restrictions, including rice producers, gold traders and money changers. They also arrested brokers for selling condos in Thailand — a major outlet for investment — as well as buyers who opened bank accounts in Thailand to facilitate their purchases.

On Sunday, a junta media outlet announced that 11 more people, including the heads of four major grocery chains, and seven large rice producers, were arrested for charging more than double the junta’s fixed price for rice. One of those arrested is an executive with a Japanese grocery chain, the report said.

At a market in Mandalay, a video captured a local official using a megaphone to announce fixed prices for pork, beef and mutton. She urged customers to report anyone charging more.

“Arresting shop owners because of the increase in prices is not following any law,” said human rights lawyer U Kyee Myint. “In Myanmar, the law exists only in name, so from a legal standpoint, everything the junta is doing is absurd.”

For most people, rice is an essential part of their diet, and rising prices have hit the poor especially hard.

One woman shopping in Mandalay, Daw Nge Nge Tun, said the price at her market has tripled and she can no longer afford to buy decent rice. Now she buys cheap, broken rice usually used as chicken feed.

“I could buy and eat good quality rice before,” she said. “Come to think of it, the life of people in Myanmar is the same as the chickens on the farm that sit and wait their turn to be killed.”