A Dawbon Township resident receives K20,000 from a local administrator under the government's cash transfer programme on July 25. (Nyein Su Wai Kyaw Soe | Frontier)
A Dawbon Township resident receives K20,000 from a local administrator under the government's cash transfer programme on July 25. (Nyein Su Wai Kyaw Soe | Frontier)

Millions of families receive first cash handouts under COVID-19 relief scheme

Millions of the nation’s most vulnerable families are receiving cash handouts totalling K40,000 to alleviate the impact of COVID-19, but some appear to be falling through the cracks.

By HTIN LYNN AUNG | FRONTIER

Daw Ni Ni Win, a 48-year-old mother of two, lives a precarious existence.

She and her husband sell boiled beans (pe pyote) to make a living, but every month it’s a struggle to find the K450,000 (US$330) they need to cover living expenses.

Her costs include K90,000 a month to rent a home in Dawbon Township in Yangon, about K300,000 for food and K40,000 a month on tuition for their eldest daughter.

Life got much tougher for the family after COVID-19 emerged, Ni Ni Win said, but in late July they got a small helping hand from the government: a K20,000 cash payment to relieve the economic hardship inflicted by the pandemic.

A second payment of K20,000 is expected in August, although after that it’s not clear whether any more will be forthcoming.

The government’s cash transfer programme will reach about four million families that it says meet the criteria for handouts, including not owning land and not having a steady income.

Ni Ni Win said she is grateful for the support, but still worried about the future.

“You can’t do very much with K20,000, but at least I can buy some rice, cooking oil, chili, and onions,” Ni Ni Win told Frontier in her tiny wooden house beside Pazundaung Creek on July 25.

Daw Than Than Aye, 48, also received the K20,000 payment on July 25 from her ward office in Dawbon.

Than Than Aye, who makes a living selling spit-roasted pork, supports a family of five that includes her unemployed husband, and two daughters and a son at school. Another son is a casual labourer. “My elder son does whatever work he can find,” she said.

Making ends meet is difficult at the best of times, she said, but COVID-19 restrictions have made life harder for poor families, particularly vendors like herself. 

“We are doing a little better in July, but it is not as good as before COVID-19,” she told Frontier.

The Dawbon Township General Administration Department prepares to hand over cash to ward administrators on July 24 for distribution to needy families. (Nyein Su Wai Kyaw Soe | Frontier)
The Dawbon Township General Administration Department prepares to hand over cash to ward administrators on July 24 for distribution to needy families. (Nyein Su Wai Kyaw Soe | Frontier)

Falling through the cracks?

Although Myanmar’s economy has been hard-hit by COVID-19 ­– the World Bank has cut its economic growth forecast to just 0.5 percent in 2019-20 – government support for low-income families, particularly in the informal sector, has been modest to date.

In April, a month after the first case of coronavirus was reported in Myanmar, the government provided low-income families with five basic commodities – rice, cooking oil, salt, onions and beans – at an estimated cost of K50 billion.

The COVID-19 Economic Relief Plan released in late April also proposed cash transfers of “an appropriate amount” to the “most vulnerable and affected households including IDPs in the most vulnerable areas”.

Government spokesman U Zaw Htay told a press briefing on May 16 that the transfers would begin within weeks, but working out the logistics – how much to pay, how to distribute it, who would receive it and when to distribute it – took much longer.

Frontier understands that international donors were eager to support universal cash transfers rather than targeted transfers for maximum efficiency and impact on the economy, and as a means to mitigate possible corruption.

However, the government has sought to keep cash transfers as targeted as possible, largely due to concern over the cost and the possibility it might not leave money for other important COVID-19 relief programmes.

U Win Htike, deputy permanent secretary of the Ministry of Planning, Finance and Industry, said the government had eventually decided to pay each household K40,000 in two instalments in July and August.

Back in May, Zaw Htay suggested the transfers would be made through mobile money platforms, but most of the K160 billion is being distributed in cash through the General Administration Department.

Win Htike said recipients in three locations – Kalaw in Shan State, and Meiktila and Kyaukpadaung in Mandalay Region – will receive their payments through mobile transfers under a pilot project.

U Wunna Htun, the GAD administrator in Yangon’s downtown Lanmadaw Township, said he attended an education session on the cash transfer programme on July 23 and withdrew money from the bank the next day for immediate distribution to families.

“Because the number of families entitled to receive the transfer [in Lanmadaw] was not so many, I was able to finish in one day,” Wunna Htun told Frontier. “Other townships might take two or three days.”

On July 24, Frontier attended a ceremony in Dawbon at which township administrator U Kyaw Thet Htoo handed over piles of cash to ward administrators for distribution to needy families.

But while many recipients are appreciative, others were upset that they missed out on the cash handouts despite apparently meeting the criteria.

Administrators said the cash transfers are going to the same families that received the package of five basic commodities in April.

Kyaw Thet Htoo said some needy families that did not receive the food handout had expected to receive a cash transfer but administrators were unable to add names to the list.

“We received instructions that those in real need had been on the list to receive the food and the same list is to be used for the cash support,” he said.

One Dawbon resident, a widow, said the selection criteria was unfair. Although she is a widow and struggled to get by selling pe pyote, she was excluded because she owns land.

“I missed out on the basic commodities in April and now I’ve missed out again,” she said. “I’m a widow, but some women who are much better off than me still received government support. It should be fair.”

The K40,000 cash transfer to four million low-income households is expected to cost around K160 billion. (Nyein Su Wai Kyaw Soe | Frontier)
The K40,000 cash transfer to four million low-income households is expected to cost around K160 billion. (Nyein Su Wai Kyaw Soe | Frontier)

Worried about waste

Cash transfers are a relatively new policy response in Myanmar and not everyone is comfortable with the idea of handouts to the poor.

“We are worried about whether they will make the best use of the money provided by the government; it is impossible to go and see how each family is spending the money,” said one senior civil servant, who asked not to be identified. “If they don’t make good use of it, it will be a waste of government money.”

Others express concern over the cost, which is likely to be above K200 billion for both the in-kind transfers in April and cash transfers in July and August.

COVID-19 has had a dramatic impact on Myanmar’s budget position, hitting revenues hard and forcing the government to spend on response measures to cushion businesses and households from the full impact of the slowing economy.

The government has borrowed more than $1 billion from international financial institutions and bilateral donors to help fund the deficit and new spending, as well as K1.3 trillion from the Central Bank of Myanmar.

The 2020-21 budget bill recently submitted to the Pyidaungsu Hluttaw anticipates total spending of K34.6 billion, total revenue of K27.8 billion, for a deficit of more than K6.8 billion, or 5.4 percent of GDP. In previous years the government has kept the deficit-to-GDP ratio below 5pc, in line with the International Monetary Fund’s recommendations.   

Economist Dr Aung Ko Ko said the cash transfer programme could be beneficial in a number of ways, such as by increasing consumer spending.

“Only if the people have money in their hands will they be able to buy goods,” he said.

But he also expressed concern over how households would spend the money. “Whether or not the government’s financial support is beneficial depends on the intelligence of each recipient family,” he said.

“If they make the best use of it, it will be beneficial… When you give money, it is good to watch and make sure they use it beneficially; you should not give it for the sake of giving.”

But previous experience suggests the fears over how money will be spent are likely to be unfounded. A review of a government programme that provides K15,000 in cash a month to pregnant women and new mothers for up to 30 months – during the final six months of pregnancy and the 24 months after birth – in an effort to combat stunting, found that the main use of the cash was for food-related purposes and to cover health costs.

In most cases, women controlled how the payment was spent, and there was a strong preference for cash over in-kind support. Known as the Maternal and Child Cash Transfer programme, it began in Chin State in 2017 and has since been expanded to Rakhine, Kayah and Kayin states and the Naga Self-Administered Zone.

The World Bank has also argued that cash transfers could help many households just above the poverty line to avoid falling back into poverty. 

It has warned that the economic impact of COVID-19 “threatens to reverse Myanmar’s progress in lifting millions out of poverty and to heighten deprivation among those already poor”.

Modelling in the June edition of the World Bank’s Myanmar Economic Monitor showed that even a modest cash transfer of K7,500 per person per month to the poorest 25 percent of the population could ensure any rise in poverty would be temporary.

By Frontier

By Frontier

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