The New Battlefront in Myanmar’s Economy: Fake News

The scarcity of information has raised the cost of economic decisions for the people of Myanmar. Now, a flood of fake news has added to their litany of problems. Months after the historic coup in February, ordinary people have no institutions they can turn to for credible information. In addition to severe political instability and a rapidly deteriorating economy, the junta’s clampdown on credible local media outlets has led to a steady stream of fake news both on social media and offline. The widespread use of social media in Myanmar has further intensified the level of uncertainty and led to diminished market confidence.

Soon after the coup on 3 February, the first rumour about the potential demonetisation of 5,000- and 10,000-thousand kyat banknotes spread on Facebook. There were also rumours about shutdowns of banks. All this compounded the already jittery mood in the country. On the same day, a press release from the military-controlled central bank of Myanmar (CBM) denied the rumour and called it out as fake news. This, however, did not stop the people from feeling a palpable sense of uncertainty.

From 3 February to 27 September, the military and the CBM have been intervening in the market by selling nearly US$184.8 million of greenbacks in the markets. They have arrested US dollar traders and suspected speculators, and placed restrictive measures on the holding of greenbacks. Nonetheless, the CBM’s actions failed to retain market confidence and will not be able to save the economy in the near future. The CBM’s failed intervention became apparent when the kyat-to-US dollar exchange rate surged by 7 per cent on 27 September. This happened despite the central bank selling US$15 million of US dollars on that day.

Since the junta had clamped down on many media outlets, there were no credible entities that could respond to the rumours promptly. The military has literally waged war on the media. It has arrested journalists and editors, raided the offices of media agencies and forced them to close down.  They also revoked the licenses of media agencies and restricted access to their web pages. As of 18 September, 102 journalists have been arrested, of which 47 remain in custody. Understandably, people do not trust news media outlets controlled by the military: Myanmar Radio and Television (MRTV), the state-owned broadcast channel, and Myawaddy Television (MWD), the military-controlled channel.

Starved of credible information, ordinary people have increasingly turned to Facebook and Twitter for news. On these platforms, they can share opinions and even encouragement. For security reasons, Facebook users — whether they are pro-democracy netizens or supporters of the junta — use nicknames. They usually copy and paste messages and photos on Facebook without citing the original content creators. This information free-for-all has also led to grief for all: once a piece of false information is created, it spreads quickly across social media networks. This happens even after Facebook has removed the original content.

With a paucity of credible institutions and sources inside the country, the rumours about bank shutdowns and the demonetisation of banknotes continue to haunt the country’s economy. When a rumour about the widespread use of counterfeit notes in the market spread on social media on 24 June,  thousands of people copied and re-posted the same message on Facebook. Instead of conducting a fact check, a local media outlet published it on their official social media page. This poured fuel on the fire — the post received more than 7,000 reactions and 1,700 seven hundred shares. All this led to diminished confidence in the market.

Given the political and economic chaos inside the country, restoring market confidence is no easy task. But the torrent of fake news has compounded the difficulty of the people and affected their livelihoods.

Given the lack of credible news sources, fake news tends to spread like wildfire. On 16 September, fake news about the demonetisation of 10,000-kyat and 5,000-kyat banknotes spread on social media. It was well disseminated online and offline within a few hours. Despite the CBM’s denials, the kyat’s value fell to an all-time low on 27 September, hitting 2,700 kyats to the US dollar. This means that the kyat has lost half of its value since 30 January. On the same day, the value of domestic gold soared by 62 per cent, from 1,355,000 kyats per tical (equivalent to 0.58 ounce) on 30 January to 2,200,000 kyats per tical on 27 September. The junta has arrested illegal gold traders, but this has not stopped people from buying the precious metal from unlicensed traders, given its recognised store of value in times of uncertainty.

In the face of economic uncertainties, often fueled by fake news, people with some savings have resorted to trading Myanmar kyats for hard currency such as US dollars, gold and real estate. This in turn has created price pressures, especially on imported goods. The price of diesel in Yangon has more than doubled since the coup, while that of imported cooking oil has surged from 3,100 kyats per viss (equivalent to 1.6 litres) in late January to 7,000 kyats on 28 September.

Given the political and economic chaos inside the country, restoring market confidence is no easy task. But the torrent of fake news has compounded the difficulty of the people and affected their livelihoods. The role played by fake news in creating economic uncertainty should not be discounted. To help the Myanmar economy recover, the well-advised route is to bring down on the costs of credible information. Ensuring the free flow of information and the existence of credible media outlets are fundamental, and will help restore some market confidence. This will be a big ask for the junta, given that a free flow of information always involves politics. To resuscitate Myanmar’s flailing economy, it might not have a choice.

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