Myanmar: Junta Takes Desperate Measures To Stem Capital Flight – Analysis


By Zachary Abuza

The rumors were everywhere: A politically connected crony, U Thein Wai, better known as Serge Pun, was called in for questioning. 

While he was not arrested, the military’s questioning of the CEO of Yoma Bank and eight directors of other subsidiaries under his control is another indicator of just how dire Myanmar’s economic situation is. 

The 71-year old Sino-Burmese tycoon sits atop a massive business empire of some 50 different interrelated companies. The most important of these are First Myanmar Investment Company (FMI), Serge Pun and Associates (SPA), and, of course, Yoma Bank. 

While largely invested in real estate through Yoma Land, SPA is one of the largest conglomerates in the country, with investments in real estate, construction, banking and financial services, Suzuki automobile assembly, the KFC franchise and healthcare. 

Yoma Bank is one of the largest private banks in Myanmar and has been in important overseas conduit, especially after the US government sanctioned two state banks in June 2023.

Yoma Bank has ties to the military, lending to both the military-owned Mytel and Pinnacle Asia, which is owned by Min Aung Hlaing’s daughter, Khin Thiri Thet Mon.

In November 2022, the State Administrative Council, as the junta is formally called, bestowed on him the honorific Thiri Pyanchi, granted for outstanding performance. 

Pun’s ties to the military are deep enough that the World Bank’s International Finance Corporation divested their 4.55% equity stake in Yoma Bank in December 2022, selling it to FMI.

This is not to say that Pun has been completely pro-military. Compared to other cronies, he’s been much less so. He’s hedged his bets and incorporated holdings in Singapore and Hong Kong. Arguably he would be a lot wealthier were it not for the coup, but he’s worked within the reality of the coup.

So what prompted the Office of the Chief of Military Security Affairs, the feared military intelligence service, to come calling?

In short, facilitating capital flight. 

Real estate roadshow

In late May, a group of five executives of a real estate firm, Minn Thu Co., held an unauthorized roadshow, selling Bangkok condominiums. Minn Thu had allegedly established unauthorized bank accounts in Thailand to facilitate the sales. 

Thai real estate is being pitched to Burmese as a safe investment at a time when the kyat has fallen to a record low of over 5,000 kyat per dollar, while soaring inflation eats into the currency’s purchasing power. 

Gold has reached record rates: 5.8 million kyat per tical (15.2 grams, .54 oz) – 4.5 times the pre-coup rate of 1.3 million kyat. Over 20 gold dealers have been arrested recently, accused of engaging in speculation. 

The beleaguered middle class is desperately searching for a place to park what’s left of their assets after more than three years of conflict.

Four of the five businessmen who staged the roadshow have been arrested, and one other executive is at large. 

To serve as a deterrent to others, the junta arrested three people who purchased the condos, having illegally transferred assets overseas.

Yoma Bank is believed to have assisted in financing the purchases by  transferring assets to Bangkok in violation of the junta’s currency controls.

Military intelligence officials are also investigating whether Yoma Bank is offering what are de facto mortgages for overseas real estate, as an investment vehicle, in contravention of Myanmar law.

In recent days, the junta has expanded their investigation into over 100,000 private bank transfers.

Capital flight began immediately after the coup. Radio Free Asia reported the purchase of THB2.5 billion (US$69 million) and THB 3.7 billion (US$100 million) in Thai real estate in 2022 and 2023, respectively. 

In the first quarter of 2024, Burmese were the second largest group of foreign nationals to invest in Thai real estate, according to the Bangkok Post, having purchased at least 384 units, worth THB2.2 billion ($60 million).

Estimates, though, are far higher, as many properties are believed to have been purchased using Thai nominees. 

Focus on funds

And of course, the revelation that junta leader Min Aung Hlaing’s own children have moved their own assets to Thailand was a huge embarrassment for the regime. Aung Pyae Sone owns a condominium worth around $1 million in Bangkok, while Khin Thiri Thet Mon has two accounts at Siam Commercial Bank. 

Reports are emerging that Khin Sri Thet Mon purchased a condo in the ultra swank SCOPE Langsuan, which was completed in May 2023, and where a three bedroom unit sells for $4.2 million to over $15 million.

The SAC has deployed uniformed personnel to both public and private banks since mid-2021 to block transfers to the civil disobedience movement, the National Unity Government, and ethnic resistance organizations. But soon after that, they also began monitoring capital flight.

The junta is increasingly cracking down on the informal banking sector, known as hundi, that is used by at least 40 percent of overseas workers.

In early June, the regime froze the accounts of 39 additional hundi dealers, following the crackdown on 20 others in January. 

The hundi system keeps desperately needed foreign exchange out of the formal banking system, where people and companies are forced to convert it to kyat at artificially low exchange rates.

Given the state of the economy, capital flight is the rational choice for Burmese with the means..

The World Bank has reported on the dire state of the economy, which has shrunk by nearly 20% since the coup. The poverty rate is now 32%, while 2024 GDP growth estimates have been halved to 1%. 

The NUG estimates that the junta has printed 30 trillion kyat (US$11.5 billion) since the coup, a leading – though not the only – cause of inflation, which is now at 30%. The kyat has lost 22% of its value.

Public debt is soaring. Currently at 63% of GDP, compared to 42% under the ousted Aung San Su  Kyi  government, and it is expected to worsen as revenue collection is collapsing. 

A recent report by the Special Advisory Council-Myanmar shows that only one of 51 townships that have border crossings is under stable junta control, with four more under their proxy militias, which has led to a loss of significant amounts of customs duties. 

Pinching trade

More importantly, the junta has restricted the volume of trade that can be transacted in local currencies. The World Bank reported that exports fell by 13% and imports by 20% in the first six months of 2024, but that cross border exports, except for gas, fell by 44%, while imports fell by 71%. 

In early June, the junta announced further restrictions and controlson importers to stop the outflow of hard currency. 

Military losses have forced the Ministry of Oil and Gas Enterprise to abandon two oil fields. Oil and gas production generates some $1.5 billion, half of the regime’s foreign exchange earnings.  

Meanwhile, attempts to increase the number of tourists have largely faltered.

The junta has burnt through its foreign exchange reserves to support its war effort. 

At the time of the coup, those reserves stood at $6.8 billion. Immediately after the coup, the United States government froze $1.1 billion. The NUG estimates reserves to be just over $3 billion, further imperiling any hope of macroeconomic stability.

The dire state of the economy comes as the military needs additional resources to build up their arsenal, induct 5,000 conscripts a month, and recruit demobilized soldiers, in order to resume the offensives in the next dry season. 

Lacking an economy to support a sustained conflict, the junta appears set to match its desperate crackdown on tycoons with drastic steps to dramatically turn the military tide. 

Under the Tatmadaw doctrine, this means intensified targeting of civilians.

  • Zachary Abuza is a professor at the National War College in Washington and an adjunct at Georgetown University. The views expressed here are his own and do not reflect the position of the U.S. Department of Defense, the National War College, Georgetown University or Radio Free Asia.


Radio Free Asia’s mission is to provide accurate and timely news and information to Asian countries whose governments prohibit access to a free press. Content used with the permission of Radio Free Asia, 2025 M St. NW, Suite 300, Washington DC 20036.

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