Poverty and the President’s pledge

The middle and upper classes are faring well under the Thein Sein government, but has the President lived up to his promise to alleviate rural poverty?

By OLIVER SLOW | FRONTIER

Ma Thida’s humble bamboo hut sits on the edge of a rice field on the southern bank of the Yangon River, offering an uninterrupted view of Yangon’s skyline. As a devout Buddhist, the golden orb of the Shwedagon Pagoda is by far the most important structure to her.

“I am happy to be able to see it from my home, and pray to it every day, but I cannot go there, it is too expensive,” said the 36 year-old mother of three who farms rice on the field on behalf of the landowner.

The Dalah-Yangon ferry, less than a kilometre from her house, costs just 100 K each way, but Ma Thida said she is focussed on ensuring that her young family can afford to eat every day.

That has become even more challenging in the last three years, she said, given that her income of about 100,000 K per month has remained stagnant despite the price for every day products increasing.

“I have heard about the new government, but have seen no change. A few roads have been improved [in the township], but there has been nothing else. Nobody comes here,” she said.

Her 14-year-old son, Kyaw Lin Oo, suffered serious mental trauma after Cyclone Nargis hit in 2008, destroying the village they lived in at the time, but Ma Thida cannot afford the psychological treatment that she thinks her son needs.

When President Thein Sein delivered his inaugural speech on March 30, 2011, he surprised many by singling out alleviating poverty as one of his main objectives. His message was significant, also because the former Government had stubbornly denied that Myanmar was actually one of the poorest countries in the World.

According to a World Bank report published in November 2014, Myanmar’s poverty rate is 37.5 percent, one of the highest in Southeast Asia.

“An important thing to say with regards to poverty is that it is very difficult to measure,” said Sergiy Zorya, a Southeast Asia rice expert for the World Bank. “It is very difficult to say whether or not poverty has increased or decreased, but what we are able to say is that poverty in Myanmar is very high.”

During Thein Sein’s tenure, a number of economic reforms have been enacted, including lessening restrictions on import and export restrictions, giving greater autonomy to the Central Bank and endorsing new foreign investment laws that are more welcoming to international companies.

Almost all economic indicators, including growth, foreign direct investment (FDI) and GDP, indicate that these reforms have had a positive impact on the country’s economy, but with Myanmar having a rural population of 70 percent, and much of the growth centred in Yangon and resource-rich, but inaccessible rural areas, it begs questioning how much of the country’s “new” wealth has filtered down to the rural poor.

“I think the President has had 75 percent success [in eradicating poverty],” said U Hla Swe, Amyotha Hluttaw MP for Union Solidarity and Development Party (USDP). “People now have touchscreen phones and cars are more affordable, so for the middle class, this is very good. But for the very poor people, maybe their standard has raised a little, but they still have nothing.”

Rice bowl

Like elsewhere in Southeast Asia, rice is Myanmar’s most important staple.

According to a World Bank report on the rice industry, the crop accounts for “25 percent of the consumption of richer households and 50 percent of the consumption of poorer households.” It also accounts for 30 percent of total planted area, 40 percent of gross agricultural output and 13 percent of the country’s GDP, the report said.

“Although it is not the only crop, rice is a dominant part of the agriculture sector in Myanmar,” said Mr Zorya. “It is an important indicator of the country’s well-being.”

During colonial rule, then-Burma was referred to Asia’s Rice Bowl, exporting seven million tonnes of the product worldwide, according to Oxford Business Group’s 2014 report on the country. However, the grubby legacy of decades of mismanagement took its toll and by 1997 exports had dwindled to as low as 15,000 tonnes.

Foreign companies are not allowed to import or export rice, a product the government considers to be one of the cornerstones of the Myanmar diet. Yet the industry is on the rise again. Exports reached 1.8 million tonnes in the 2014-2015 fiscal year, according to the Myanmar Rice Federation, and it has targeted 2 million tonnes for this year, focussing heavily on China and new markets in Europe.

“There is a lot of potential. Currently, yields are very low and they really should double,” said Mr Zorya.

Mr Zorya believes that there are three areas where Myanmar should focus on in order to improve its exports – road infrastructure, electricity and the re-development of Yangon port to become a key hub for export.

Even if the industry does grow substantially, Mr Zorya warns that the riches will not necessarily be shared equally.

“We could see an increase in production and exports, but that does automatically mean an increase in income for farmers? I don’t know, because there are so many people in the supply chain.”

Sean Turnell, an associate professor at Macquarie University in Australia and an expert on Myanmar’s economy, believes that eradicating poverty needs to come through reforms in the agricultural sector.

“The main thing that can be done is to reform agriculture by the extension of genuine production freedoms to farmers, the revitalisation of the rural credit system, the improvement of rural infrastructure, especially roads, along with genuine and large spending boosts to health and education.”

Much has been made of Myanmar’s potential return to the title of “Asia’s Rice Bowl” but Mr Zorya believes that the nature of today’s global rice industry means that is not possible.

“Back when then-Burma was the rice bowl, it exported almost mostly to India. Now, India can feed itself, and places like Vietnam and Thailand are some of the world’s biggest exporters. Now, with two million tonnes of export, it is part of that ‘club’, and I think a realistic target for Myanmar is to reach three to four million tonnes of export,” he said.

A squatter community near the East Dagon industrial zone. (Jeroen de Bakker / Frontier)

Thein Sein’s legacy

In a different part of Dalah from Ma Thida’s home, but still in view of downtown Yangon, Daw Tin Yee, 76, lives on 15 acres of rice fields with her daughter and grandchildren.

Although Daw Tin Yee has two employees to work the fields, she said she barely earns enough each month to feed her family.

Pointing across the river, she said the changes “over there” don’t concern her or her family.

“I have heard about this new government from friends, but we have seen no changes. In fact, prices of everyday products have increased,” she said, echoing Ma Thida’s thoughts.

Halfway through the interview, a cheeky looking teenage boy pokes his head around the door.

“He is so lazy,” shouts Daw Tin Yee. “He does not work at school, he will not have a good job.”

The boy, Aung Kyaw Moe, smiles and slips away again. His mother and Daw Tin Yee’s daughter, Ma Hla Aye, laughs.

“Education is so important for my children, I want them to have more opportunities than we had. I hope the new government will bring more opportunities for my children. We are poor and I do not want them to work as rice farmers, I want them to do something different and earn a better, more stable income,” she said.

Dr Turnell thinks that even though Thein Sein has overseen economic growth in the country, the proceeds of it have been unevenly spread.

“Good poverty data is hard to get, but the indications would suggest that the small urban middle class in the cities are better off – as are the cronies and the like – but that the lives of people in rural Burma [are] a little improved, if at all. Indeed, factor in higher costs in a range of areas, the great expansion of ‘land grabbing’ and the like, and rural Burma remains a place of poverty and exploitation.”