Western countries and international NGOs like to portray themselves as promoters and protectors of human rights, democracy, justice, fairness and equality. Their humanitarian and development aid often comes with conditions for recipients: take a human rights-based approach, be gender sensitive, socially inclusive, etc.
However, the treatment of employees by embassies and some INGOs is indicative of their hypocrisy.
This analysis is based on interviews with several employees of western embassies and INGOs in Yangon.
The people of Myanmar are suffering real hardship driven by ever rising food prices, plummeting value of the kyat, lack of opportunities, and worsening political and security turmoil. Everyone is feeling the pain one way or another, with no telling when it will end.
But as the saying goes, “the best thing about the worst time in your life, is that you get to see the true colors of everyone.”
Seeing the true nature of a person or organization is a valuable insight because it can act as a guide for future relations.
Not practicing what you preach
Western countries and INGOs have provided or supported training in human rights, democracy, women rights, gender equality, and labor rights in developing countries for decades. However, the rights training is often limited to teaching citizens how to challenge authority in their own countries. Rights-promoting countries and organizations often refuse to tolerate any challenge to their own influence or authority.
When local staff at some western embassies in Myanmar recently complained that their salaries have not been raised to match soaring inflation, bosses told them they could find work elsewhere, according to sources at two embassies.
Elsewhere, the Geneva-based Lutheran World Federation (LWF Myanmar) fired 80 staff from its Sittwe branch on September 4 after they demanded their euro salaries be paid at the real market rate rather than the overvalued kyat rate set by the junta-controlled central bank.
Those fired included pregnant women, married women and staff whose job contracts ranged from one to three years. The report on the sackings was among the outlet’s top five most-read articles that week.
LWF Myanmar later told the fired staff, except the protest leaders, that they could return to work – an invitation many were forced to accept amid the soaring cost of living and limited job opportunities.
Ironically, LWF Myanmar does not seem to practice what it preaches.
The organization’s website cites “Dignity, Human Rights, and Justice; Compassion and Commitment; and Humanitarian Principles” as its “Core Values”. It also aims to promote human rights of vulnerable communities in Myanmar by empowering communities to effectively claim land rights, right to legal identity, rights of women and the right to education.
However, the move to fire its entire Sittwe staff prompts us to ask just how committed LWF Myanmar is to its own stated core values.
The Sittwe workers went on strike after being paid at the official exchange rate of 2,100 kyat per euro instead of the real rate of nearly 4,000.
“We have been asking for the market exchange rate for nearly two years. They [LWF Myanmar] did nothing, so our entire Sittwe staff stopped coming to the office from August 14,” said one of the sacked staffers.
“They did not negotiate anything with us. On September 4, they unfairly fired the entire Sittwe office staff by email.”
LWF’s reported refusal to negotiate – and then summary sacking of the workers after they withdrew their labor in protest – is surely at odds with the labor rights it loudly espouses.
Soaring inflation
“Personally, I feel bad about asking for a raise,” said an INGO staffer. “But I had to do so to keep my family afloat as the kyat’s value plunges.”
Surging commodity prices have soared even higher since the central bank introduced the 20,000-kyat note at the end of July.
The Yangon price of 1 pyi (1.9 kg) of low-grade Aemahta rice – the staple for millions in Myanmar – rose 38 percent between July 19 and August 21, according to a survey by the state-run Myanmar Alinn newspaper. It continued to rise by another 10 percent from August 21 to September 11. Similar rises were recorded in Mandalay (14 percent and 20 percent) and Myitkyina (14 percent and 23 percent).
The Yangon price of onions over the same period rose 15 percent, then skyrocketed 54 percent. Meanwhile, the onion price rose 9 percent and 64 percent in Mandalay and 7 percent and 54 percent in Myitkyina.
Purchasing power collapsing as kyat plunges
The market exchange rate on June 19, before the announcement of the 20,000-kyat banknote, was 2,970 kyat per dollar (the official rate is 2,100). On July 25, after the announcement, the kyat plunged to 3,300 per dollar. It was 3,690/dollar on Aug. 31, then 3,500 on Sept. 13, and is now around 3,400.
On Aug. 22 the junta announced that exporters must sell 50 percent of their foreign-currency earnings to the central bank at the official rate 2,100 kyats per dollar. Plus, any of the remaining 50 percent not recycled through export-import connections had to be sold to the central bank at a rate of 2,900 kyats/dollar. Importers of key goods like medicine and fuel could then buy greenbacks from the central bank at the rate of 2,922 kyats/dollar.
However, importers complain they are unable to buy dollars from banks at the stated rate and must pay the market rate. As a result, prices of many imported goods have soared by more than 100 percent, with increased costs transferred to consumers.
Hence, in terms of purchasing power, Myanmar has become a happy hunting ground for diplomats and leaders of INGOs who get paid either in euros or dollars. In contrast, Myanmar citizens are finding their income can no longer keep up with ever-rising living costs.
Since the new banknote’s introduction, fuel prices have soared at an unprecedented rate, worsening living conditions as transport costs surge for millions of citizens.
In Yangon, the retail price of diesel has increased by 21 percent, according to the Myanmar Alinn survey from July 21 to Sept. 12. Meanwhile, the price of premium diesel rose by 20 percent, Octaine 92 by 9 percent, and Octane 95 by 8.7 percent. Similar rises were seen across the country.
The price of goods is also being driven up by the ongoing civil war. All major roads are now dotted with checkpoints controlled either by junta troops or resistance forces who collect toll fees that add to transport costs.
Labor rights and salary disputes
Labor rights empower workers to protest and insist on being paid in a universally recognized currency. For example, the International Labor Organization (ILO)’s Declaration on Fundamental Principles and Rights at Work includes the “right to collective bargaining”. Even jurisdictions that have not ratified the Conventions in question are obliged to ensure workers can exercise their basic rights.
In the case of LWF Myanmar in Sittwe, local staff merely exercised their “right to collective bargaining” when they refused to work after their repeated requests were ignored.
Moreover, it is also legal to demand salaries be paid in US dollars. The Payment Wages Law (2016) stipulates that employers can pay their staff either in local currency or foreign currencies that are recognized by the Central Bank of Myanmar.
Some western embassies in compliance
Some embassies in Myanmar do pay local staff in US dollars exchanged into kyats at the market rate. Others pay half in dollars and half in the local currency. Staff at these embassies have expressed gratitude toward their employers, as well as sympathy for colleagues who do not enjoy similar treatment.
Since the coup, UN agencies have considered Myanmar a high-risk security environment and paid staff including drivers a monthly $400 “danger-payment”. The payment is reportedly reviewed every month.
Budget in euros or dollars, spend in local currency
Salary is a fixed cost for embassies and international agencies and is usually budgeted in advance in either dollars or euros.
However, local exchange rate volatility coupled with cuts in international aid since the coup are taking a heavy toll on local staff.
Several European embassies have told their local staff that development aid to Myanmar has been cut because of the war in Ukraine and changes in government policy, according to interviews with several staff members. The staff are told that economic hardship is a global phenomenon and Myanmar is not the only country in crisis. The implied message is that local staff should not complain or make demands.
In real terms, local staff are not demanding salary increases but only to be paid either in dollars, or at the market exchange rate, or in line with inflation, according to INGOs and embassy staff interviewed.
Who is benefiting from exchange-rate gains?
There are currently at least three exchange rates in Myanmar – two official rates set by the junta (2,100 and 2900 kyats per dollar) and the market rate of around 3,400 per dollar.
Of the international organizations contractually obliged to pay local staff in dollars, some calculate kyat salaries at the official exchange rate while others offer the market rate.
At the organizations and embassies that do not pay locals in dollars or the market-rate equivalent, it is unclear who benefits from gains made on the exchange rate. It would be interesting to know if those gains are returned to the donor government, heads of missions, or senior leaders of the organizations.
No protections for Myanmar workers
A local staffer at a western embassy in Yangon queried whether his colleagues in neighboring countries such as Singapore, Thailand and Malaysia get the same treatment. He wondered whether western missions were exploiting Myanmar employees because they lack legal protections.
Another embassy staffer said, “They [donors] look down on local staff because we do not have a good government. The exploitation might not occur if we had an elected government to protect us, rather than a military regime.”
Embassies take the attitude that local staff have few if any alternatives but to continue working for survival, so refuse to address their grievances, according to an embassy employee.
The bleak outlook extends to workers across the whole economy amid the erosion of labor rights since the 2021 military takeover.
In an interview with BBC Burmese last year, Yangon factory worker Hay Man spoke for many when said she was active in the labor rights movement before the military coup but is now more careful for fear of being laid off.
She said that since the coup, workers have been routinely fired without reason, denied leave and holidays, had work contracts violated, and refused overtime pay. Meanwhile, workers seeking solutions to disputes are often denied meetings with government labor officials, leaving them no choice but to continue working despite the rights violations.
The junta’s governing body, which calls itself the State Administration Council (SAC), has ignored the plight of its workforce and even jailed labor rights activists. In other words, the regime wants all the benefits from workers without any of the protections. In the latest example of exploitation, the junta imposed a tax of up to 10 percent on the salaries of Myanmar citizens working abroad, effective from Oct. 1. Observers noted that the cash-strapped regime is now double-taxing Burmese expatriates to extract foreign currency from them.
Three core labor reforms needed
The irrationality, self-interest, and economic mismanagement of successive junta leaders have earned Myanmar the status of “least developed country”, with its resources and citizens exploited to the hilt.
Regarding labor rights, there are three obvious tasks to ensure legal protections for workers.
First, Myanmar has no core law covering labor rights, which are instead covered by 12 separate laws that are sectoral in nature. As a result, employers, both foreign and local, often exploit their workers due to a lack of comprehensive legal protections.
Second, currently only civil servants or government employees are covered by the pension scheme. The rest of the population must rely on themselves or their children in their old age. There is no law that requires private-sector employers to provide pensions. The starting point here should be to amend Myanmar’s Social Security Law (2012) that exempts “international organizations, embassies or consulates of foreign governments; non-profit companies, associations or organizations” from having to provide social security to their employees.”
Third, enforce compliance with existing labor laws, and change authorities’ attitude toward labor rights activists who demand a fair share in return for workers’ contribution to the economy.
Zung Ring is a social worker and independent political analyst based in Myanmar.
