Violence Taking Major Toll on Arakan Economy

By Nyein Nyein 1 November 2012

Months of communal clashes in Arakan State have already claimed scores of lives and thousands of homes, but now they’re creating another casualty: an economy that is struggling to recover from the worst outbreak of violence in decades.

Traders in the state say that business has dropped by half since ethnic Arakanese Buddhists and Rohingya Muslims started attacking each other in June. Unemployment is also rampant, as tens of thousands have lost not only their homes, but also their livelihoods.

Besides the loss of lives, property and jobs, the greatest problem facing the state’s economy now is continuing insecurity, which affects everything from fishing and agriculture to transport and construction.

Transport companies plying the roads linking the state to other parts of the country say they must now travel in convoys, often with security forces as escorts, as they pass through Mrauk-U and Minbya townships, the scene of the latest intense flareup of hostilities.

“It’s taking a lot longer to make the trip,” said Thar Htun Hla, the owner of a shipping company that carries goods from Rangoon to the Arakan State capital Sittwe. “Before it took about three days, but now it takes at least an extra day.”

While trucks continue to bring medical supplies and other necessities to Arakan State to help cope with the aftermath of the clashes, traffic in the opposite direction has fallen off dramatically.

As a coastal state, one of Arakan biggest money-earners is seafood, a product that is consumed in many parts of the country. Now, however, fishermen are too fearful to go out to sea, as tensions between the Buddhist and Muslim communities—which both engage in commercial fishing—remain high.

“There has been a sharp decrease in the supply shrimp, fish and crabs since June,” said Myo Swe, a businessman who regularly travels between Rangoon and Sittwe.

Agriculture has also suffered, as farmers stay away from their fields for fear of being targeted. In Maungdaw and Buthidaung townships, where riots first broke out in June, farmers were unable to plant rice, while last week’s violence has prevented many from harvesting their crops.

However, when contacted by The Irrawaddy on Thursday, an official from the state’s Agriculture, Livestock and Breeding Ministry declined to comment on the impact of the fighting, saying the state’s chief minister is still surveying the damage.

Although it’s difficult to put an exact price tag on the effects of more than four months of intermittent mob violence and persistent tensions between the state’s two largest communities, anecdotal evidence suggests that the final tally will be high.

“Several Arakanese businessmen I spoke to said they have already lost about US $3-4 million since the fighting started,” said Aung Naing Oo, a member of a government-appointed commission formed in mid-August to probe the causes of the conflict.

He added that this probably represents only a small fraction of the overall impact. “The amount would be much higher if small- and medium-sized businesses were included,” he said.

Border trade with Bangladesh has also taken a hit. The scarcity of commodities to trade and Bangladesh’s determination to keep out Rohingya refugees fleeing from the violence has brought cross-border commercial activity almost to a standstill.

“I’ve heard that even cow and wood smugglers are suffering, because their illegal trade routes have also been closed,” said Myo Swe.