##plugins.themes.academic_pro.article.sidebar##
Published
Mar 25, 2025
Download
Statistic
Read Counter : 61
Download : 24
Downloads
Download data is not yet available.
Main Article Content
Abstract
Prior to the February 1, 2021, coup, Myanmar experienced steady economic progress due to moderate political and economic reforms. However, the coup significantly disrupted this trajectory, placing the economy in a precarious state. This study examines the impact of political instability on Myanmar’s financial sector and economic growth from 2006 to 2023, with a focus on key macroeconomic factors: Political Stability, Inflation, and Unemployment. Using the Markov Switching Dynamic Regression (MSDR) model, the analysis captures how these variables influence economic growth under different economic regimes. The findings reveal that Political Stability and Inflation positively contribute to economic expansion, while Unemployment has a negative effect. The MSDR model uniquely identifies two distinct economic regimes: recessionary periods, where the effects of these variables are weaker or insignificant, and periods of economic boom, where all factors significantly drive growth. These results highlight the critical role of maintaining political stability, controlling inflation, and reducing unemployment to foster sustainable development. The study provides actionable policy recommendations for Myanmar and offers insights for neighboring economies and international policymakers on managing political and economic crises. Strengthening stability, promoting inclusive growth, and enhancing financial resilience are essential steps toward long-term economic progress
Article Details
This work is licensed under a Creative Commons Attribution 4.0 International License.
How to Cite
Soe, M. E. E., Panthamit, N., & Chaiboonsri, C. (2025). Analyzing the Impact of Political Instability on Myanmar’s Financial Sector and Economic Growth. International Journal of Multidisciplinary: Applied Business and Education Research, 6(3), 1398-1413. https://doi.org/10.11594/ijmaber.06.03.28
References
Alhamran, M., Loganathan, N., Sethi, N., & Has-san, A. A. G. (2023). Effects of political stability, oil prices, and financial uncer-tainty on real economic growth of Gulf Cooperation Council countries. Transna-tional Corporations Review, 15(3), 116-129. https://doi.org/10.1080/19186444.2021.1996192
Archer, G. E. B., & Titterington, D. M. (2002). Parameter estimation for hidden Markov chains. Journal of Statistical Planning and Inference, 108(1), 365–390. https://doi.org/10.1016/S0378-3758(02)00318-X
Baklouti, N., & Boujelbene, Y. (2020). An econ-ometric study of the role of political sta-bility on the relationship between de-mocracy and economic growth. Panoeco-nomicus, 67(2), 187–206. https://dx.doi.org/10.2298/PAN170308015B
Belford, A., Zaw, H. Y., & Slodkowski, A. (2016, August 3). Suu Kyi tackles military land grabs in test of new Myanmar govern-ment. Reuters. https://www.reuters.com/article/us-myanmar-military-land-insight/suu-kyi-tackles-military-land-grabs-in-test-of-new-myanmar-government-idUSKCN10E0JU
Çela, A., & Hysa, E. (2021). Impact of political instability on economic growth in CEE countries. Ekonomika Regiona, 17(2), 582–592. https://doi.org/10.17059/ekon.reg.2021-2-16
Devi, K. S. (2014). The impact of political in-stability on economic growth in Pakistan: Application of ARCH model. International Research Journal of Social Sciences, 3(10), 46–50.
Dickey, D. A., & Fuller, W. A. (1979). Distribu-tion of the estimators for autoregressive time series with a unit root. Journal of the American Statistical Association, 74(366), 427–431. https://doi.org/10.2307/2286348
Ford, M., Gillan, M., & Thein, H. H. (2016). From cronyism to oligarchy? Privatisa-tion and business elites in Myanmar. Journal of Contemporary Asia, 46(1), 18–41.
Ford, M., Gillan, M., & Thein, H. H. (2023). Po-litical regimes and economic policy: Iso-lation, consolidation, reintegration, and rupture. https://doi.org/10.4324/9781003386063-10
Fujita, K., & Okamoto, I. (2009). Overview of agricultural policies and development in Myanmar. In K. Fujita, F. Mieno, & I. Okamoto (Eds.), The economic transition in Myanmar after 1988: Market economy versus state control (pp. 169–215). NUS Press.
Government of Myanmar. (2018). Myanmar sustainable development plan (2018–2030).
Government of Myanmar. (2020). Overcoming as one: COVID-19 economic relief plan.
Htet, Z. (2023, February 5). The military gov-ernment's macroeconomic performance after the coup. ResearchGate. https://www.researchgate.net/publication/371291647
International Labour Organisation (ILO). (2022). Employment in Myanmar in 2021: A rapid assessment. ILO Regional Office for Asia and the Pacific.
International Monetary Fund. (2021). Policy responses to COVID-19: Myanmar. https://www.imf.org
Japan External Trade Organization (IDE-JETRO). (n.d.). Institute of developing economies. http://www.ide.go.jp
Jiang, W., Jiang, K., Zhang, Z., Martek, I., Ruan, C., & Lu, G. (2025). The impact mecha-nism of political risk on foreign renewa-ble energy investment in developing countries: The mediating role of vulnera-bility. Energy Policy, 198, 114467. https://doi.org/10.1016/j.enpol.2024.114467
Mamba, E., Wonyra, K. O., & Evlo, K. (2024). Regional (economic) integration, political stability uncertainty, and (intra-African) exports. Economic Systems, 101266. https://doi.org/10.1016/j.ecosys.2024.101266
Meyer, K., & Thein, H. H. (2014). Business un-der adverse home country institutions: The case of international sanctions against Myanmar. Journal of World Busi-ness.
Mohamed Maher, & Zhao, Y. (2022). Do politi-cal instability and military expenditure undermine economic growth in Egypt? Evidence from the ARDL approach. De-fence and Peace Economics, 33(8), 956–979. https://doi.org/10.1080/10242694.2021.1943625
Mustafa, G., Nawaz, A., & Rubab, M. (2017). The impact of political instability on eco-nomic growth in Pakistan: Application of ARCH model. Propel Journal of Academic Research, 1(2), 13–20.
Nikkei Asia. (2022a, December 11). Myan-mar’s urban hangouts recover as people tire of politics. Nikkei Asia. https://asia.nikkei.com/Spotlight/Myanmar-Crisis/Myanmar-s-urban-hangouts-recover-as-people-tire-of-politics
Nikkei Asia. (2022b, April 22). Myanmar ex-empts foreign investments from currency conversion rule. Nikkei Asia. https://asia.nikkei.com/Business/Markets/Currencies/Myanmar-exempts-foreign-investments-from-currency-conversion-rule
Nikkei Asia. (2022c, November 23). Foreign companies in Myanmar bide their time with eye on long view. Nikkei Asia. https://asia.nikkei.com/Spotlight/Myanmar-Crisis/Foreign-companies-in-Myanmar-bide-their-time-with-eye-on-long-view
Noonari, H. B., & Dashnyam, A. (2022). Propel Journal of Academic Research, 2(2), 53–73. https://doi.org/10.55464/pjar.v2i2.40
Radu, M. (2015). Political stability - A condi-tion for sustainable growth in Romania? Procedia Economics and Finance, 30, 751-757. https://doi.org/10.1016/S2212-5671(15)01324-6
Strangio, S. (2022a, April 5). Myanmar’s mili-tary junta tightens control over foreign currency flows. The Diplomat. https://thediplomat.com/2022/04/myanmars-military-junta-tightens-control-over-foreign-currency-flows/
Strangio, S. (2022b, November 24). Australia’s ANZ bank exits Myanmar due to post-coup turmoil. The Diplomat. https://thediplomat.com/2022/11/australias-anz-bank-exits-myanmar-due-to-post-coup-turmoil/
Thawnghmung, A., & Robinson, G. (2017). My-anmar’s new era: A break from the past, or too much of the same?
Thein, H. H. (2011). Myanmar: Economy. In L. Daniel (Ed.), The Far East and Australa-sia 2012 (pp. 811–819). Routledge.
Thein, H. H., & Gillan, M. (2021, June 22). Sanc-tions against Myanmar’s junta have been tried before. Can they work this time? The Conversation. https://theconversation.com/sanctions-against-myanmars-junta-have-been-tried-before-can-they-work-this-time-158054
World Bank. (2018). World Bank Open Data. https://data.worldbank.org
World Bank. (2020a). Doing business 2020. Washington, DC: World Bank Group.
World Bank. (2020b). Myanmar economic monitor, December 2020: Coping with COVID-19. Washington, DC: World Bank Group.
World Bank. (2021). Myanmar economic moni-tor, July 2021: Progress threatened; resili-ence tested. Washington, DC: World Bank Group.
World Bank. (2022). Myanmar economic moni-tor, January 2022: Contending with con-straints. Washington, DC: World Bank Group.
Archer, G. E. B., & Titterington, D. M. (2002). Parameter estimation for hidden Markov chains. Journal of Statistical Planning and Inference, 108(1), 365–390. https://doi.org/10.1016/S0378-3758(02)00318-X
Baklouti, N., & Boujelbene, Y. (2020). An econ-ometric study of the role of political sta-bility on the relationship between de-mocracy and economic growth. Panoeco-nomicus, 67(2), 187–206. https://dx.doi.org/10.2298/PAN170308015B
Belford, A., Zaw, H. Y., & Slodkowski, A. (2016, August 3). Suu Kyi tackles military land grabs in test of new Myanmar govern-ment. Reuters. https://www.reuters.com/article/us-myanmar-military-land-insight/suu-kyi-tackles-military-land-grabs-in-test-of-new-myanmar-government-idUSKCN10E0JU
Çela, A., & Hysa, E. (2021). Impact of political instability on economic growth in CEE countries. Ekonomika Regiona, 17(2), 582–592. https://doi.org/10.17059/ekon.reg.2021-2-16
Devi, K. S. (2014). The impact of political in-stability on economic growth in Pakistan: Application of ARCH model. International Research Journal of Social Sciences, 3(10), 46–50.
Dickey, D. A., & Fuller, W. A. (1979). Distribu-tion of the estimators for autoregressive time series with a unit root. Journal of the American Statistical Association, 74(366), 427–431. https://doi.org/10.2307/2286348
Ford, M., Gillan, M., & Thein, H. H. (2016). From cronyism to oligarchy? Privatisa-tion and business elites in Myanmar. Journal of Contemporary Asia, 46(1), 18–41.
Ford, M., Gillan, M., & Thein, H. H. (2023). Po-litical regimes and economic policy: Iso-lation, consolidation, reintegration, and rupture. https://doi.org/10.4324/9781003386063-10
Fujita, K., & Okamoto, I. (2009). Overview of agricultural policies and development in Myanmar. In K. Fujita, F. Mieno, & I. Okamoto (Eds.), The economic transition in Myanmar after 1988: Market economy versus state control (pp. 169–215). NUS Press.
Government of Myanmar. (2018). Myanmar sustainable development plan (2018–2030).
Government of Myanmar. (2020). Overcoming as one: COVID-19 economic relief plan.
Htet, Z. (2023, February 5). The military gov-ernment's macroeconomic performance after the coup. ResearchGate. https://www.researchgate.net/publication/371291647
International Labour Organisation (ILO). (2022). Employment in Myanmar in 2021: A rapid assessment. ILO Regional Office for Asia and the Pacific.
International Monetary Fund. (2021). Policy responses to COVID-19: Myanmar. https://www.imf.org
Japan External Trade Organization (IDE-JETRO). (n.d.). Institute of developing economies. http://www.ide.go.jp
Jiang, W., Jiang, K., Zhang, Z., Martek, I., Ruan, C., & Lu, G. (2025). The impact mecha-nism of political risk on foreign renewa-ble energy investment in developing countries: The mediating role of vulnera-bility. Energy Policy, 198, 114467. https://doi.org/10.1016/j.enpol.2024.114467
Mamba, E., Wonyra, K. O., & Evlo, K. (2024). Regional (economic) integration, political stability uncertainty, and (intra-African) exports. Economic Systems, 101266. https://doi.org/10.1016/j.ecosys.2024.101266
Meyer, K., & Thein, H. H. (2014). Business un-der adverse home country institutions: The case of international sanctions against Myanmar. Journal of World Busi-ness.
Mohamed Maher, & Zhao, Y. (2022). Do politi-cal instability and military expenditure undermine economic growth in Egypt? Evidence from the ARDL approach. De-fence and Peace Economics, 33(8), 956–979. https://doi.org/10.1080/10242694.2021.1943625
Mustafa, G., Nawaz, A., & Rubab, M. (2017). The impact of political instability on eco-nomic growth in Pakistan: Application of ARCH model. Propel Journal of Academic Research, 1(2), 13–20.
Nikkei Asia. (2022a, December 11). Myan-mar’s urban hangouts recover as people tire of politics. Nikkei Asia. https://asia.nikkei.com/Spotlight/Myanmar-Crisis/Myanmar-s-urban-hangouts-recover-as-people-tire-of-politics
Nikkei Asia. (2022b, April 22). Myanmar ex-empts foreign investments from currency conversion rule. Nikkei Asia. https://asia.nikkei.com/Business/Markets/Currencies/Myanmar-exempts-foreign-investments-from-currency-conversion-rule
Nikkei Asia. (2022c, November 23). Foreign companies in Myanmar bide their time with eye on long view. Nikkei Asia. https://asia.nikkei.com/Spotlight/Myanmar-Crisis/Foreign-companies-in-Myanmar-bide-their-time-with-eye-on-long-view
Noonari, H. B., & Dashnyam, A. (2022). Propel Journal of Academic Research, 2(2), 53–73. https://doi.org/10.55464/pjar.v2i2.40
Radu, M. (2015). Political stability - A condi-tion for sustainable growth in Romania? Procedia Economics and Finance, 30, 751-757. https://doi.org/10.1016/S2212-5671(15)01324-6
Strangio, S. (2022a, April 5). Myanmar’s mili-tary junta tightens control over foreign currency flows. The Diplomat. https://thediplomat.com/2022/04/myanmars-military-junta-tightens-control-over-foreign-currency-flows/
Strangio, S. (2022b, November 24). Australia’s ANZ bank exits Myanmar due to post-coup turmoil. The Diplomat. https://thediplomat.com/2022/11/australias-anz-bank-exits-myanmar-due-to-post-coup-turmoil/
Thawnghmung, A., & Robinson, G. (2017). My-anmar’s new era: A break from the past, or too much of the same?
Thein, H. H. (2011). Myanmar: Economy. In L. Daniel (Ed.), The Far East and Australa-sia 2012 (pp. 811–819). Routledge.
Thein, H. H., & Gillan, M. (2021, June 22). Sanc-tions against Myanmar’s junta have been tried before. Can they work this time? The Conversation. https://theconversation.com/sanctions-against-myanmars-junta-have-been-tried-before-can-they-work-this-time-158054
World Bank. (2018). World Bank Open Data. https://data.worldbank.org
World Bank. (2020a). Doing business 2020. Washington, DC: World Bank Group.
World Bank. (2020b). Myanmar economic monitor, December 2020: Coping with COVID-19. Washington, DC: World Bank Group.
World Bank. (2021). Myanmar economic moni-tor, July 2021: Progress threatened; resili-ence tested. Washington, DC: World Bank Group.
World Bank. (2022). Myanmar economic moni-tor, January 2022: Contending with con-straints. Washington, DC: World Bank Group.