Poverty Reversals: Myanmar’s Journey from Progress to Peril

A World Bank report reveals that Myanmar's poverty levels have surged due to the COVID-19 pandemic and the 2021 military coup, reversing years of economic progress. The poverty headcount has risen to 32.1 percent, with 7 million more people living in poverty compared to pre-pandemic levels. The report highlights the need for continued monitoring and interventions to address these challenges.

The Rise of Poverty in Myanmar

Myanmar, a nation once celebrated for its rapid economic growth, now faces a dramatic reversal in its fortunes. According to a recent report by the World Bank titled "Development Reversed: Poverty and Labor Markets in Myanmar," poverty levels have soared to alarming heights. The national poverty headcount for 2023-24 is estimated at 32.1 percent, a stark increase from previous years. This surge means approximately 7 million more people are living in poverty compared to the beginning of the COVID-19 pandemic.

Impact of Multiple Shocks

The report highlights the dual impacts of the COVID-19 pandemic and the February 2021 military coup as key drivers behind this rise. These events have significantly disrupted the economy, pushing poverty back to levels last seen in 2015. Rural areas, internally displaced persons (IDPs), and people with disabilities are among the hardest hit, with poverty rates around 50 percent in 2023.

Unofficial household survey data from the World Bank's Myanmar Subnational Phone Surveys (MSPS) indicates that poverty has increased by around 7 percentage points since 2017. If Myanmar had sustained its pre-pandemic growth, there would be 8 million fewer poor people today, and the poverty rate would be 11 percent instead of the current 32.1 percent.

Economic Setbacks and Rising Inequality

Myanmar's economic setbacks are evident in the reversal of significant progress made until 2020. Previously, the nation experienced robust economic growth, driven by expansions in manufacturing and services. Headcount poverty decreased from 42 percent in 2005 to 25 percent in 2017, making Myanmar one of the fastest-growing economies in East Asia and the Pacific region. However, by 2023, these gains had evaporated, with urban poverty rising sharply by 12 percentage points and rural poverty by 7.3 percentage points.

The deterioration in job quality has also contributed to these troubling trends. The Gini coefficient, a measure of inequality, has dropped from 30.0 in 2017 to an estimated 27.0 in 2023, indicating that while poverty has spread, inequality has slightly reduced due to the economic decline affecting even higher-income groups.

Regional Disparities and Labor Market Woes

The report sheds light on significant regional disparities in poverty levels. Chin remains the poorest state, with conflict-affected areas like Sagaing, Kayah, and Kayin experiencing dramatic increases in poverty. Conversely, regions such as Rakhine, Magway, and Nay Pyi Taw have seen minor reductions in poverty, while Ayeyarwady has experienced substantial improvements.

Labor market indicators reveal a grim picture. Employment rates have declined, and informal employment has risen. Rural employment has fallen, exacerbated by agricultural input price inflation, while urban areas have seen a decline in job quality. The availability of formal jobs with contracts and pension provisions has decreased, further destabilizing the urban workforce.

A Call for Continued Monitoring and Interventions

Recent studies by UNDP and IFPRI support the World Bank's findings, highlighting the deepening entrenchment of poverty and growing economic instability in Myanmar. There is an increasing risk of non-poor households sliding into poverty due to the deteriorating economic conditions.

The MSPS data has been crucial in filling gaps left by the absence of official survey statistics, offering valuable insights into the trends in household well-being and poverty. Despite the challenges, the report underscores the necessity for continued monitoring and targeted interventions to mitigate the rise in poverty and address economic instability in Myanmar.