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September 24, 2017

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Myanmar poverty levels risk stoking unrest: ADB

BANGKOK -- High rates of poverty among Myanmar's ethnic groups could foment unrest and undercut the reform process in the formerly army-ruled nation, the Asian Development Bank (ADB) said Sunday.

Unemployment and low agricultural productivity have left much of the country in penury with the ADB classing nearly three-quarters of people in Chin, roughly half in Rakhine, both states in the west of the country, and a third in eastern Shan state as poor.

Rakhine was this month rocked by deadly communal clashes between local ethnic minority Buddhists and Rohingya Muslims, while a fragile ceasefire is holding in Shan state after years of war between rebels and Myanmar's army.

"You have to address the regional differences in poverty and economic growth," Stephen Groff, vice-president of the poverty alleviation bank told AFP in Bangkok after a visit to Myanmar.

"These disparities within Myanmar, as in other countries, can lead to ethnic and social unrest that undercuts the country's potential."

The Rakhine violence, which saw dozens on both sides killed, prompted reform minded President Thein Sein to warn unrest could derail hard won democratic progress, as the country emerges from nearly half a century of direct military rule.

Speaking after leading an ADB survey of Myanmar's economy, Groff admitted the task facing the desperately poor nation and would-be donors is "daunting" but said there were reasons for optimism.

Investment in boosting agricultural production and farmers' access to new markets inside Myanmar and overseas could lift many millions out of poverty in the medium-term, he said.

With rich natural resources and a strategic position between China and India, Myanmar was seen as one of Southeast Asia's star prospects in the years after independence from Britain in 1948.

But decades of economic mismanagement by the country's military dictators resulted in the once-thriving farming sector tumbling into ruin.

"The needs are immense but there are rays of light ... rural areas need to be connected to the rest of the country and the rest of the world," said Groff, adding that Myanmar is already the world's second largest exporter of pulses.

He said Thein Sein told him at a meeting last week that the agriculture-dependent country lacks basics such as a regular supply of seeds, leaving future harvests vulnerable to natural disasters.

The ADB study said with the right investment Myanmar has the natural resources to boost the percentage of people who receive reliable electricity — from the current 25 percent — while transport and infrastructure improvements will also lift millions from poverty.

The ADB — which lends money for poverty alleviation — wants Myanmar to settle its US$500 million debts to the bank before it can be offered new financing.

Groff said it would take time for economic reforms to take effect.

"Even if the economy grows at 5-6 percent a year, it'll take 30 years to reach Thailand's current level," said Groff, explaining that Myanmar's per capita income is half of that in its neighbor.

"It's a generation that we are talking about... we're not going to see change in 10-15 years," he added.

Groff urged would-be foreign investors to support political reforms including a strengthened, accountable legal system.

"I left with the real feeling that the government is committed to these reforms," he added.

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