US Sanctions Lead to Fuel and Medicine Price Increases in Myanmar
Since the implementation of US sanctions on two Myanmar banks controlled by the military junta, the country has experienced a significant rise in fuel and pharmaceutical prices. The Myanma Foreign Trade Bank and Myanma Investment and Commercial Bank, which primarily served as foreign currency exchanges, were hit with sanctions, causing the value of the Myanmar kyat to plummet against the US dollar. As a result, there are now approximately 3,200 kyats per dollar, compared to the stabilized rate of 2,800 kyats since last August.
The consequences of the currency devaluation have been particularly harsh for the pharmaceutical and healthcare sectors. A pharmaceutical wholesaler in Yangon reported that the price of medicines had increased across the board, with all types of drugs witnessing a rise of at least 500 to 1,000 kyats. This has created confusion among pharmacists, who are unsure whether to sell their existing stocks at higher or current prices. They are now forced to purchase medicine at higher prices to restock.
The increase in medicine prices is hitting those with chronic conditions, such as diabetes, liver, and kidney problems, the hardest. Yangon residents have disclosed that the cost of medication for these ailments has nearly doubled. Even common over-the-counter drugs like vitamin supplements and paracetamol have seen price hikes.
Myanmar heavily relies on imports for around 85 percent of its medicines, as domestic production remains inadequate. With the rising costs, accessing essential healthcare is becoming increasingly challenging for the general population.
In addition to medication, fuel prices have also skyrocketed this month. Currently, the price of fuel stands at around 2,100 kyats per liter. The scarcity of US dollars has hampered fuel importers and dealers, as the junta has detained dollar and gold currency traders for market manipulation. This shortage makes it difficult for importers to buy fuel on the market, further exacerbating the problem.
The impact of the US sanctions is not limited to medicine and fuel. Gold prices have seen a sharp increase, reaching 3.2 million kyats per tical (16 grams) in the domestic market. Although the price has somewhat stabilized around 3 million kyats, the volatility has raised concerns among the population.
In light of these developments, it is clear that the US sanctions have had a detrimental effect on Myanmar’s economy, particularly on sectors crucial for the well-being of its citizens. The rising cost of medicine and fuel compounds the already existing challenges faced by the country’s healthcare system. The junta-controlled banks’ inability to provide US dollars is contributing to the scarcity and the subsequent price increases. It remains to be seen how the situation will evolve and whether alternative solutions can be found to mitigate the hardships experienced by the people of Myanmar.
