Myanmar’s military government can’t afford economic isolation but that’s exactly what is happening.

Myanmar began its path to democracy in 2011, ending more than half a century of military rule. In 2021, the military overthrew the government through a coup and regained power.

Myanmar has been under military rule for almost a year. Examples of human rights violations have been cataloged by democracy activists. Because of the coup and outflow of foreign capital and businesses, the economy has slowed down. Total, the French energy giant, and Chevron have announced that they are ceasing doing business in Myanmar.

Myanmar’s economy can be adversely affected by the self-closure of foreign companies. Although Myanmar was isolated from the world for decades, Myanmar’s tentative embrace of democracy a decade ago, including the release of the now-disgraced Aung San Suu Kyi, opened the door for the country to connect with the world. But the path was not easy.

There is some good news amidst these developments. According to media reports, the Biden administration has warned businesses of the risks of doing business in Myanmar. When the rule of law is undermined, the environment of doing business in a country is unfavorable. Although Tatmadaw has its own businesses, Myanmar needs to do business with international companies.

Total and Chevron cited human rights abuses by the country’s military government as reasons for withdrawing from the Yadana gas project in the southwest of the country. “Since the military coup in February 2021, the situation in Myanmar, including human rights and the rule of law, has been deteriorating, forcing us to re-evaluate the situation,” Total said in a statement.

A Chevron spokesman said, “Considering the situation in Myanmar, we have decided to leave the country by transferring our operations from the Yadana natural gas project.” Meanwhile, Royal Dutch Shell also confirmed the closure of its operations in 2021.

The country’s economy is likely to suffer because of Shell, Total, and Chevron leaving the country. According to Human Rights Watch, Total, and Chevron alone paid the government more than $1 billion a year in revenue and fees from the Yadana gas project, the single largest source of foreign exchange earnings in the country.

Norway’s Telenor 6 owns the largest telecom service provider in Myanmar. They also announced last year that they would sell their business interests in the country. They will transfer the shares to a Burmese digital service provider this week. Tobacco manufacturer British American Tobacco closed its business interests last October.

Japan’s Toyota was supposed to open a factory in Myanmar last year. They have postponed it, and Suzuki, an Arab-Japanese carmaker, shut down two factories shortly after the military government took power.

Kirin, a Japanese beverage manufacturer, has been trying to sever business ties with Myanmar’s military for months. The Danish company Carlsberg has about 450 employees in the country. The company has announced it will limit its activities there. When Myanmar embarked on the path to democracy in 2011, the Japanese government extended a helping hand. Myanmar has more Japanese businesses than European or American.

All in all, the closure of these multinational companies is raising fears that foreign investment, employment, and the overall economy of Myanmar will be in a more precarious situation. Although the government claims that even if foreign companies wind down their operations, it will not have a big impact on the country’s economy. This theory is likely to be tested in the months and years ahead.