Worldbox Business Intelligence Risk Rating – October 2025
MYANMAR
Summary
| Overall Risk Score 12/40 (Negative)
Political risk: Negative 3/10 Economic risk: Negative 3/10 Commercial risk: Negative 3/10 Technology risk: Negative 3/10 The risk assessment of a country is made up of four components, being Political, Economic, Commercial and Technological. Each component is scored out of 10 with 1 being the highest risk and 10 the lowest. |
ESG Risk: 3/10 (Negative)*
*Environmental, social and governance (ESG) issues are becoming increasingly important to companies, investors and consumers in Southeast Asia. That is why we are now preparing a separate ESG score and section with our quarterly country risk reports. We explain how each country rates, looking at the E, S and G individually, and outline recent developments. |
Political Risk – Negative at 3
The rebellion against the military, which has been in power since 1962, intensified significantly in 2023. Momentum continued to move towards the rebels in 2024. By the end of the year, Myanmar’s junta forces reportedly controlled less than half the country after suffering major battlefield setbacks – including the loss of command headquarters in Shan and Rakhine states.
Even where the military is nominally in control, including the major cities of Yangon, Mandalay and the capital, Naypyidaw, security is far from stable and the army is vulnerable to rebel attacks. Moreover, the military looks likely to lose further ground in 2025, according to a March report by the Voice of America.
It quoted experts as saying that the rebels are positioned to keep gaining ground in 2025, closing in on more cities and weapons factories vital to the military despite mounting efforts by China, which has billions of dollars invested in the country, to keep the junta afloat.
According to a BBC report, the junta now controls just 21% of the country. Ethnic armies and other opposition forces controlled 42% of the country, while the remaining areas were contested. Moreover, the military seems to be having problems with it conscription efforts.
It is now difficult to see the war ending in any other way than a defeat for the military. The question is now simply of how long it could last. The end could be swift as per the Assad regime in Syria, or going back in time the Lon Nol regime in Cambodia and the South Vietnamese government in 1975.
And then of course there is the question of what happens after that. China could well be key. China had good relations with Aung San Suu Kyi’s government and craves stability in the country, having invested heavily in infrastructure and other projects. It has expanded high-level engagement with the military regime on issues of concern. But it has refrained from normalizing relations or recognizing regime leader Min Aung Hlaing as head of state. China continues to prefer that the regime enter dialogue with Aung San Suu Kyi on a path back to constitutional rule, however unlikely that may be.
In February 2025 the International Institute for Strategic Studies published a bleak assessment of Myanmar’s prospects should the civil war end. It argued that the balance of power among opposition forces will matter greatly for any post-regime scenario. While the National Unity Government, which represents lawmaker and politicians ousted in the 2021 coup) and its allies, propose democratic federalism as a solution to Myanmar’s lasting conflict, other ethnic groups like the Ta’ang National Liberation Army and the Arakan army “show less interest in federalism or broad coalition-building and are overtly authoritarian”.
The IISS says that as the NUG and its allies become less influential, “the chances are decreasing that any actor or coalition will be able to step in to fill the vacuum at the centre and deliver democratic reforms should the junta collapse.” The IISS concludes that instead, “the current trend of incremental regime decline is coinciding with a rise in factionalism, ethno-national military autocracy and state failure”.
Economic Risk – Negative at 3
Given the civil war raging in the country, it’s very difficult to gain an accurate picture of what is happening to the economy. The junta hasn’t published monthly economic data since mid-2022, and figures from the World Bank and other organizations are at best “guesstimates” of what is happening in the country. They could well be wildly inaccurate.
It is known that war is severely disrupting economic activity, which was already badly hit by the pandemic. The military takeover in February 2021 has caused foreign investment and tourist numbers to plummet, and exports have also been hit. Moreover, rolling blackouts are disrupting economic activity.
The UN Development Programme (UNDP) issued a report in January 2025 warning that the country is facing an unprecedented “polycrisis,” marked by economic collapse, intensifying conflict, complex climate hazards and deepening poverty. It added that with no political resolution in sight, the crisis is expected to worsen in the coming year and that Myanmar’s resilience will be tested to its limits.
The report said that since 2020, Myanmar’s economy has contracted by 9%, reversing the economic progress of the previous decade. Inflation reached 25.4% in 2024, further eroding household purchasing power. The trade deficit ballooned to 2.2% of GDP, exacerbated by severe restrictions on cross-border commerce, and the currency plummeted over 1,330 kyat per US dollar in 2021 to 4,520 in 2025, making imports unaffordable and sending prices soaring.
The economic situation worsened further, says the UNDP, as the country was blacklisted by the Financial Action Task Force (FATF) for failing to combat money laundering and terrorist financing.
The UNDP added that fertilizer shortages, skyrocketing fuel prices, and trade disruptions have driven the price of the staple rice up by 47% in some regions. The western state of Rakhine is particularly vulnerable, with food production projected to meet only 20% of local needs by mid-2025, raising fears of famine-like conditions according to the UNDP.
Commercial Risk – Negative at 3
Myanmar was rated as one of the most difficult countries in the Asia–Pacific region in which to do business even prior to the military coup and escalating civil war.
Since the coup, the banking system has been disrupted significantly. Sending money out of Myanmar is extremely difficult, with much stricter oversight by the central bank, harming international trade and commerce. Access to and use of the internet has also become more difficult, with internet shutdowns common, and the disruptive effect on business activity has been magnified by the coronavirus and the associated need for remote working. Privacy and data-security concerns have also increased. Entering, leaving and moving around the country are difficult, with staff safety concerns a major issue given the deteriorating security situation in many areas of the country.
Meanwhile, government decision-making and the administrative process are much slower and less predictable, affecting even routine matters such as tax administration and visa processing. Senior government personnel in many positions have changed, while new policies have been adopted, and the civil disobedience campaign has severely disrupted administrative processes.
The rule of law has suffered further setbacks. Even prior to the pandemic, businesses reported very low trust in the independence of the judiciary, with bribes and irregular payments in exchange for favourable judicial decisions very common.
In terms of corruption, Myanmar ranks 168th out of 180 countries in Transparency International’s 2024 Corruption Perceptions Index, moving down 16 places over the course of the year. According to a January article in Fulcrum, “paying bribes has become a reality ingrained in people’s daily lives”. It adds that there is now an assumption that these ‘unofficial contributions’ are necessary for obtaining any service, whether administrative permissions or essential public services.
A lack of adequate infrastructure also provides significant challenges to operating in Myanmar. Sanctions levied since the 1960s have caused Myanmar’s infrastructure to become outdated. Much of the country’s electrical grid relies on hydropower, and factory operation, for example, becomes unreliable during dry seasons. While there has been significant growth in the country’s paved road network, the vast majority of the network – around 60% – remains unpaved. Meanwhile, port capacity is limited and the railway service depends on ageing and unreliable equipment.
Technology Risk – Negative at 3
A report by the World Economic Forum, published in November 2024, found that the current education system focuses too much on rote learning, at the expense of critical thinking and creativity. It added that after five decades without investment in education, these challenges are numerous, and there is a desperate need to reform the system. However, the report argues that these challenges also present an opportunity because “the sheer scale of the education reforms and capacity building that need to take place mean that Myanmar can effectively start its education reforms from scratch, and avoid making the same mistakes as the Western education system”.
Government policies
Decades of military rule and civil war have hindered economic and technological progress in Myanmar. Even prior to the 2021 military coup, the army maintained a tight control on the internet. Following the coup, it imposed total internet blackouts, and adopted a series of legal manipulations and abuses to exert power over the internet. The army has also raised internet prices, erecting barriers to accessibility.
Rest of the World, a US-based non-profit publication, argues that Myanmar ties with China for the worst internet environment in the world. In addition to the problems detailed above, VPN bans have greatly affected small businesses and workers who rely on online platforms, as well as students, aid groups and journalists, said the publication, citing Wai Phyo Myint, Myanmar lead at the digital-rights non-profit Access Now.
Infrastructure
Freedom House reports that, as of January 2024, internet penetration in Myanmar was just 44%, the lowest rate in Southeast Asia after East Timor. Average mobile download speeds in Myanmar declined by nearly 10% during the 12-month period to 31 May 2024. It added that the fixed-line and wireless broadband penetration rate remained low at 6.7%, representing just 0.5% of all subscriptions in 2020.
Freedom House says that Myanmar’s telecommunications infrastructure has been damaged as a consequence of the armed conflict, while the expansion of infrastructure has similarly been curtailed by physical insecurity. More than 400 cell towers were destroyed in 2021 and an unknown number are not regularly serviced or refuelled due to physical risk, it adds.
Education and skilled staff
The 2021 military coup devastated Myanmar’s education system through widespread violence and school closures. Many teachers and students fled the country. Over 5 million children – more than half of Myanmar’s school-age population – dropped out of school, according to The Diplomat. Moreover, according to the United Nations, up to 90% of university students boycotted classes to protest the military regime.
Myanmar is also experiencing a severe brain drain, according to The Diplomat, which argues that this poses long-term challenges to the country’s potential for academic restoration, economic recovery and scientific development, as many of those leaving are among the country’s most talented and skilled individuals.
However, there is some hope. As the junta loses territorial control, the NUG and ethnic revolutionary organizations are establishing alternative schools that promote multilingual education and local autonomy, the Australian-based East Asia Forum reports.
Prior to the military coup, educational environments had undergone substantial changes, with the democratically elected government seeking to raise the standard of both basic and higher education. These efforts included the provision of additional opportunities for research funding, the expansion of access to international academic cooperation, and the provision of a wide range of choices for students and teachers. Critical thinking and freedom of speech were also encouraged.
October Bulletin
Political Risk – Negative at 3
The government is pressing ahead with national elections to be held in December, even though independent observers have labelled the vote a ‘sham’.
The military ended the state of emergency on 31 July after four years of extensions. Power was transferred to an interim “civilian” government, with national elections scheduled for December 28. However, the military remains firmly in control of the country. Junta chief Min Aung Hlaing was designated the acting president and also serves as the chief of the armed forces. In addition, almost immediately after ending the state of emergency, the government introduced martial law in 63 townships considered opposition strongholds.
The junta has effectively gamed the system in its favour, in terms of institutional electoral mechanisms and a legal framework to enforce repression, according to the Fulcrum publication based in Singapore. However, it adds China and India have backed the election plans.
It is difficult to see the elections achieving anything in terms of halting the civil war. The opposition will continue to fight on and the results are unlikely to be recognised by Western governments. The opposition will almost certainly boycott the vote too.
Economic Risk – Negative at 3
According to the World Bank’s Myanmar Economic Monitor, published in June 2024, the impact of the March earthquake will cost 4% of GDP in the fiscal year ending March 2026. The World Bank says that worst-affected regions (Mandalay and Nay Pyi Taw) are expected to lose about a third of their production between April and September, with significant losses also in Sagaing and Bago. It adds that activity is expected to partially recover in the second half of the year, supported by reconstruction efforts.
Over 3.7 million hectares of cropland across key agricultural regions – Sagaing, Magway, Mandalay, and Shan – were exposed to the earthquake. These regions produce one-third of Myanmar’s cereals and nearly 80% of its maize, and account for a significant share of the country’s livestock, according to the UN.
Meanwhile, the widening conflict continues to take a toll on the economy. The World Bank says that since the first quarter of 2025, the conflict has spread further to Ayeyarwaddy region, an important agricultural area.
The United Nations estimates that a total of 3.5 million people (around 6% of the population) have been displaced by conflict as of May 2025, up from 3.4 million as at the end of 2024. Conflict continues to disrupt critical trade routes and economic activity in affected areas.
Power shortages also continue to take a toll on the economy. Three quarters of firms surveyed by the World Bank reported experiencing power outages in April 2025, up from 42% during the same period last year. The losses attributed to these outages were on average equivalent to 16% of monthly sales.
Reduced gas-powered supply, increased reliance on aging hydropower infrastructure, disruptions to transmission networks, shortages of spare parts, and reduced investment in operation and maintenance has hit power generation. The earthquake also damaged power lines, substations, and transformers.
Myanmar’s trade has also been badly affected by the government’s August 2025 decision to close nearly all border crossings with Thailand. The move has halted over 80% of bilateral trade between the two countries, which was valued at over 208 billion baht (US$6.5bn) in 2024. Myanmar’s government cited the need to regulate illegal imports, address tax revenue leakage, and increase foreign exchange reserves as reasons for the closures.
Commercial Risk – Negative at 3
Commercial risk has increased significantly since the coup, amid a deterioration in the ability of government ministries and the banking and legal systems to function effectively.
According to Fulcrum, which is published by the ISEAS-Yusof Ishak Institute in Singapore, the Ministry of Commerce has introduced a process for cross-border barter trade transactions with India, Thailand and China as the junta seeks to de-dollarize its cross-border trade.
Thailand has announced plans for a task force to help Thai banks vet business with Myanmar’s military regime for possible arms deals. The move followed a report by the United Nations’ special rapporteur on human rights in Myanmar, Tom Andrews, saying that Thai banks had taken a leading role in financing arms purchases for the military regime.
Technology Risk – Negative at 3
Myanmar has rapidly become the global epicentre of a burgeoning cyberfraud industry, according to the Australian Strategic Policy Institute (APSI). In areport, called Scamland Myanmar, APSI describes the “explosive growth of dedicated scam compounds along the Thailand-Myanmar border since 2021”. It says the number of these dedicated compounds has increased from 11 to 30 with each covering an average of 13.5 acres. APSI adds that the military junta openly permits and facilitates the scam centres to enrich their military allies.
Environmental, Social and Governance (ESG) – Negative at 3
The United Nations’ Sustainable Development Goals (SDGs) are recognized as a beneficial framework for responsible investment. The Sustainable Development Report from Cambridge University Press assesses the progress of all 193 UN Member States on the SDGs. It provides a useful means of ranking Southeast Asian countries on their ESG progress.
Myanmar is ranked 120 out of 166 in the 2024 report, with a score of 62.8.
Environment – Myanmar faces a huge range of environmental problems. For example, it is now one of the world’s most deforested nations due to its long-standing civil conflict, and persistent military dictatorship, according to the London School of Economics (LSE). It adds that illegal logging activities have boomed since the coup, with satellite data showing that extensive areas in the central rainforest have been chopped down since February 2021.
Flooding is also a significant problem. The LSE estimates that around 28 million people live in vulnerable districts, including Yangon, the capital.
Social – Workers and trade unions have faced relentless repression, making Myanmar one of the 10 worst countries in the world for workers, according to the International Trade Union Confederation. It adds that since the coup workers have endured extremely harsh living and working conditions, and face escalating threats and oppression, with reports of forced labour highlighting their growing exploitation. The organisation adds that the junta has effectively banned most trade unions, stripping workers of their fundamental right to freedom of association.
Governance – This is another area where Myanmar scores very poorly, reflecting high levels of corruption and the lack of rule of law. The IFC – a sister organization to the World Bank – reported in 2018 that the current level of governance standards in most firms in Myanmar was very low. It added that governance structures at Myanmar firms remained largely underdeveloped, with poorly functioning boards, antiquated management control processes, and low levels of transparency. Governance levels are likely to have deteriorated even further since then.
October Bulletin
Environmental, Social and Governance (ESG) – Negative at 3
In April 2025, the UN reported that the military government has prevented aid from reaching opposition-held areas, exacerbating the devastation from the March 2025 earthquake. Over 3,100 people have died, and millions lack basic necessities. In June, the ADB approved “US$100 million aid package from the Asian Development Fund (ADF) to deliver integrated humanitarian assistance and build long-term community resilience”.
Latest economic data
f – forecasts
Source: World Bank Economic Monitor June 2025
Source: Worldbox
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