Jakarta should not lower the bar for Myanmar

Indonesia, a member of the Financial Action Task Force, should not lower its standards when assessing Myanmar, despite the Southeast Asian nation's recent title change to a civilian government. In March 2025, over 500 Indonesians returned home from scam compounds in Myanmar's border region, with 54 more brought back in December, according to Antara. This week provides Indonesia with an opportunity to tackle the system that made these operations profitable.

The Financial Action Task Force, set to meet in Paris from October 26-30, will decide whether to intensify measures against Myanmar. The country has been on the FATF blacklist since 2022, alongside Iran and North Korea, with a warning that countermeasures would be considered if no further progress is made by October, according to South Africa's Financial Intelligence Centre. As the FATF's 40th member and a country with a strong financial intelligence unit, Indonesia's voice matters at that table.

Min Aung Hlaing, who became Myanmar's president in April following a coup, is reportedly expected to visit Jakarta during the ASEAN summit in Manila in May. Leaders expressed appreciation for recent positive gestures, including prisoner releases and a change in Aung San Suu Kyi's detention status. However, more than 15,000 political prisoners remain in detention, and these gestures do not address the critical question before the FATF: Is dirty money being stopped?

Myanmar's issues are not a capacity gap; they originate from an economic model protected by military rule for decades. Private banks functioned more as corporate cash boxes for connected conglomerates, as noted by economist Sean Turnell. The civilian-era central bank introduced standard loan accounting in 2017; however, the International Monetary Fund warned that bank capital remained weak.

The 2021 coup removed the government committed to enforcing these rules, leading to a financing deficit primarily supported by the central bank and, more recently, commercial banks holding the public's deposits.

With inflation near or above 20 percent for years, the real value of old crony debts has diminished while savers and wage earners absorbed the loss. Indonesia should ensure that Myanmar's actions meet the FATF's stringent requirements.