ASEAN win | Economie | Southeast Asia
The bank, which was awarded a banking license in Myanmar in 2014, said it pulled out due to “increasing operational complexity” in the country.
Australia’s ANZ Bank has announced it will cease operations in Myanmar by early 2023, the latest international company to exit due to the economic and political turmoil that followed the coup last February.
In a brief statement Tuesday, the bank said it had been facing “increasing operational complexity” in Myanmar over the past several months and was “working with its institutional clients to transition to alternative banking arrangements.”
“The decision comes after careful consideration of local operating conditions,” Simon Ireland, ANZ’s international managing director, said in the statement. “Our international network and support for trade and capital flows for our clients across the region is an important part of our strategy, and will continue to be so for the long term.”
“Increased operational complexity” is certainly one way to describe how the situation in Myanmar has evolved in the nearly two years since the military seized power, toppling the elected NLD government. The coup aroused immediate resistance and sparked a series of ongoing civil conflicts in the country into a nationwide conflagration.
This crippled Myanmar’s economy, devaluing the kyat, inflating the underground economy, and causing a sharp contraction in the country’s gross domestic product. Fitch Solutions’ latest forecast, published this week, predicted that the country’s economic growth rate would rise from 0.5 percent this year to 2.5 percent next year, but “that would still leave production 15 percent lower than it was before the Civil War.”
For these reasons, and the daunting public relations challenges of continuing to do business with the SCAF or its lieutenants, a number of international firms have pulled out of this exit. Chief among them are oil giants TotalEnergies, Chevron Corp, and Norwegian telecoms provider Telenor.
In 2014, ANZ became one of the first international banks to receive a banking license from the Central Bank of Myanmar, one of many foreign companies whose arrival was symbolic of Myanmar’s opening to the world under a quasi-civilian government led by former general Thein Sein.
The bank’s surprisingly belated decision to pull out of Myanmar comes nearly three weeks after local advocacy group Justice for Myanmar (JFM) disclosed the bank’s dealings with Innwa Bank, a subsidiary of the military-owned Myanmar Economic Corporation (MEC) which it described as “a key financial institution for the cartel”. army in Myanmar,” which has been sanctioned by the United States, the European Union and the United Kingdom, and said it facilitated customer payments to the junta. She said ANZ was able to do this because of the Australian government’s refusal to sanction the military department.
It also follows the decision last month by the Financial Action Task Force (FATF) to add Myanmar to its money laundering and terrorist financing blacklist, along with North Korea and Iran. With this move, the FATF for the first time effectively placed Myanmar’s banks and financial entities outside the mainstream of the international financial system, and forced companies doing business with Myanmar nationals or businesses, including ANZ, to meet onerous reporting requirements.
Earlier this week, JFM spokesperson Yadanar Maung said the group welcomed ANZ’s decision, but called on the bank to ensure its exit would not benefit the country’s military ruling class. “This should include mitigating and addressing the impact on their staff and ensuring that they return all funds, so as not to leave a windfall to the terrorist junta,” Yadanar Maung said.
While ANZ’s operations in Myanmar have been relatively modest, its withdrawal is perhaps the first indication of the economic effects the FATF list could have on the country. As ABC reported this week, “The decision means that by early next year there will be no major Western banks left in the country.”