Poverty in Myanmar: upward mobility has been likely for many – but not for all

Over the past decade, Myanmar has experienced sustained economic growth and steady reductions in poverty. Between 2010 and 2015, the poverty rate fell from 42% to 32% of the population; just two years later, in 2017, it had dropped below 25%. This same period was one of gradual liberalisation in Myanmar: in 2015, after five decades of military rule, the country held its first openly contested elections and appointed a new government. With the notable exception of Myanmar’s minoritised Rohingya population, , the national picture during this period (2015–17) was one of moderate growth and relative stability.

Since then, Myanmar’s social, political and economic situation has become increasingly precarious. International outcry has intensified over the country’s treatment of the Rohingya people, who experience continuing violence. (In 2017, more than 700,000 Rohingya fled Myanmar, most to neighbouring Bangladesh; the remaining 600,000 people were not reached by that year’s household survey due to the ongoing unrest, which may affect poverty estimates.) The ruling democratic party were overthrown by the military in early 2021, just months after being re-elected for a second term. And of course, the emergence of COVID-19 in 2020 and efforts to limit its spread (such as lockdowns and border closures) have caused widespread disruption and global economic slowdown.

To know how to respond in exceptional times, we first need to understand how people’s situations might change (or not) in times of relative normality. But poverty trends based on snapshots of who is ‘poor’ or ‘not poor’ at single point in time tell us little about these household-level dynamics. By applying advanced statistical methods to Myanmar’s most recent national household survey data (2015 and 2017), we can generate new insights into poverty mobility and vulnerability, and the factors that may be associated with different transitions. Overall, we find reasonably high levels of poverty mobility in Myanmar between 2015 and 2017. For households living below the poverty line in the first of these two years, the likelihood of them moving out of poverty in the second year is 43%. Although comparatively less than the 57% chance of remaining poor, this figure is a overall – and many more times the 6% chance of a ‘non-poor’ household falling into poverty over the same period.

Our analysis reveals similar findings when we introduce ‘vulnerable’ as a distinct category for households that are above the poverty line but face increased risk of dropping below it in the event of a shock or stress. Of the households that we identify as being vulnerable in 2015, more than half are likely to have experienced an improvement in their situation by 2017, moving to a position of relative security; a much smaller proportion (15%) were likely to have fallen into poverty. Downward transitions are even less likely for households that were secure in 2015, particularly for ‘secure’ to ‘poor’ (2%) and we estimate that only a very small proportion of households were ‘vulnerable’ in both 2015 and 2017 (6%).

At the same time, and even in this relatively stable period, almost a third of households that were vulnerable in 2015 are likely to have remained vulnerable in 2017 and more than half of households experiencing poverty are likely to have stayed poor (‘persistent poverty’). Our synthetic panel analysis also reveals significant differences between households that share certain characteristics – like the age of the household head or whether they have a valid ID card. This means that some people may be considerably less likely than others to escape poverty.

For example, households headed by someone with no education are more likely than average to be poor in 2017 if they were poor in 2015 (70% vs 57%) and significantly less likely than households with some education to escape poverty (by as much as 30 percentage points). Other factors associated with persistent poverty are being of Christian religion (70%), engaged in the primary sectors of agriculture, mining, forestry or fishing (63%–65%) and not having a valid identity card (64%).

Generally, the characteristics associated with upward transitions – that is, movement out of poverty and/or into a position of relative security – are the inverse of those associated with persistent poverty, vulnerability and downward transitions (e.g. having a higher level of education, a valid ID card). Greater poverty mobility is also much more likely in urban areas (60% vs 40% in rural areas) and among households that own more goods.

Worryingly, these findings suggest some overlap with the pandemic’s early impacts. Urban households are only slightly less likely than average to experience persistent vulnerability and have been especially hard-hit by COVID-19 as they have been subject to greater restrictions. The same is true for households in which the household head is engaged in transportation and manufacturing, sectors that have suffered as borders have closed and supply chains broken down. The situation of these groups is likely to have worsened and therefore should be a priority – certainly in the shorter term. Education and getting children back to schools after the COVID-19 closures is also important, given its strong positive association with greater levels of mobility and improved security.

Read the full paper here.