SING`ORE – Myanmar's civil war is plunging the population into an acute economic crisis, with the middle class shrinking dramatically and poverty spreading, according to a report released on Thursday by the United Nations Development Program.
UN researchers have found that the middle class is now half the size of three years ago and that rising inflation is forcing households to cut spending on food. Almost half of the population lives below the national poverty line of 76 cents per day.
The report, which included more than 12,600 interviews, is one of the largest surveys in Myanmar since the military seized power to spark civil war in 2021, and represents a rare account of the economic upheaval in one of Asia's most promising emerging economies. After decades of Isolation, Myanmar began liberalizing and opening up to foreign investment in 2011. Myanmar's economy grew faster than any other in the world in 2016, according to the International Monetary Fund.
“This was a country that was on a very positive path,” UNDP Administrator Achim Steiner said in an interview from New York. Now Myanmar's economy is “imploding” and there is no sign this will stop without intervention, he added.
Pro-democracy insurgents have been fighting military rule for three years, joining ethnic rebel groups that have waged war for decades. The junta has committed what human rights researchers call crimes against humanity in a brutal campaign to crush the opposition. Even for those not involved in the fighting, daily life has become unbearable, the UNDP said in its report.
The value of the Myanmar currency has plummeted. Hundreds of thousands of workers have left the country and wages have stagnated even as raw materials have become more expensive. Millions in Myanmar were in “free fall,” unable to make a living because their jobs were closed or destroyed or because these people were forced to flee the violence, Steiner said.
Myanmar's GDP shrank by about 18 percent in 2021 due to the dual impact of the coup and the coronavirus pandemic. Military leaders claimed last year that the economy was recovering and GDP would grow 4 percent annually. But in December, the World Bank released a forecast that economic growth would be closer to 1 percent.
According to the UNDP, the greatest suffering is found in areas with intense conflict. In the small southeastern state of Kayah, where a rebel movement has faced indiscriminate military airstrikes, household income has halved since 2021 – more than in any other state. Median per capita income has fallen to about $14 a month, less than what the UN considers the minimum necessary for survival.
When the UNDP completed its survey in October, about 25 percent of Myanmar's population was “hanging by a thread,” the agency said. Since then, major rebel offensives have worsened conflict across the country and likely pushed much of the population into marginalization and poverty, U.N. officials say.
The military, meanwhile, shows no signs of slowing its campaign, said Richard Horsey, a senior adviser on Myanmar for the International Crisis Group. In February, amid reports of poor troop morale, the military announced it would begin drafting new soldiers.
Security analysts say the military derives much of its funding from exploiting natural resources and operating illegal or unregulated businesses. Myanmar became the world's largest opium producer last year, surpassing Afghanistan, according to the U.N. Office on Drugs and Crime. The country has also become one of the world's largest centers for online fraud operations.
Even as the formal economy collapses, the military has found ways to continue funding its war effort, Horsey said. “It is the common people,” he added, “for whom life will become even more miserable.”
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