An United Nations study estimates that in a worst-case scenario, almost half the population of Myanmar could slide below the poverty line by 2022. This is the twin impact of COVID-19 and the coup by the country’s military junta.
The impact of COVID-19 on the people of Myanmar has been compounded by the February 1 coup d’état of 2021, says a recently released survey report by the United Nations. The report holds ominous warnings of poverty knocking on the doors of half of the country.
Existing vulnerabilities have intensified, “impacting Myanmar’s people at the family level and even individual level,” according to the report. Nearly three fourths of households surveyed reported a drop in income. Galloping poverty has hit urban homes particularly hard.
“The last ten months showed a rising trend of households eating less food,” says the report. While the reduced consumption of food was more prevalent in urban areas, over a tenth of rural households surveyed reported that they had consumed the food they had kept aside for the lean season.
Coming on the heels of the COVID-19 pandemic, the report says, “households living in proximity to conflict have experienced the largest reduction in income.” It adds that “over three-quarters of them have reduced non-food consumption as a coping strategy.”
Distress Selling of Assets Amid Poverty
“People are also increasingly selling assets to cover living expenses, mainly gold or jewelry, livestock and motorbikes,” the study says. It adds that “There is anecdotal evidence that since the military takeover a number of informal credit businesses had arisen.”
Two-fifths (38.7 per cent) of respondents who had relied on savings since 1 February said that they have no more savings left. “People are increasingly selling assets to cover living expenses,” the report reads.
The shortage of cash has served to enhance credit businesses. This business revolved around pawning of assets or a borrower signing a bank transfer instrument. Indeed, 3.4 per cent households even reported earning interest lending money.
Other households receive informal support from family, friends and religious institutions while two in 100 receive cash or in-kind support from humanitarian organisations.
Myanmar’s Situation Not Entirely Unpredictable
This report by the United Nations agency builds on previous World Bank High Frequency Surveys and joint Household Vulnerability Survey conducted by the country’s Central Statistical Organisation together with the United Nations Development Programme. The findings are not entirely unpredictable.
Previously, the World Bank’s Myanmar Economic Monitor released earlier in July had estimated the economy to contract around 18 per cent in Myanmar’s Fiscal Year (October 2020 to September 2021).
An earlier report released in June 2021 had estimated that total investment in Myanmar could fall over 40 per cent during the year. “The once-positive outlook for Myanmar in 2021 and the medium term has soured,” it had said.
Impending Poverty Can Impact Half Of Myanmar’s People
The United Nations study estimates that in a worst-case scenario, almost half the population of Myanmar’s 55 million population – some 25 million people – could slide below the national poverty line by 2022. The numbers of urban poor itself could triple, it says. This will effectively erase 15 years of pre-pandemic economic growth.
“The rising levels of poverty is not just about the lack of incomes to survive but we are also seeing a significant risk to nutrition, health and education, which will negatively impact on the human capital of the next generation,” said the survey report.
The report highlights the twin impact of the military coup d’état and the COVID-19 pandemic.
The overthrow of the democratically elected government of Aung San Suu Kyi saw retaliatory mass protests and yet further action by the military junta to clamp down on the protesters. This, together with the COVID-19 pandemic, worsened the condition of people living around the sites of the protests.