More than half of Myanmar’s most economically productive citizens, high-skilled graduates between 20 and 40 years of age, want to flee the country, the latest World Bank outlook for the once-promising economy says.
Mariam Sherman, World Bank country director for Myanmar, Cambodia and Laos, explains why: “Displacement, job losses, and income losses have wiped out much of the previous progress [since 2015] in poverty reduction. The economic outlook remains very weak.”
The country also faces surging inflation, a weakening currency and a decline in the number and quality of jobs, the report, “Myanmar Economic Monitor – Livelihoods Under Threat,” notes.
The structural transformation to higher-productivity jobs that characterized Myanmar’s development over much of the last decade has been reversed, the report says, noting that highly educated workers are now shifting to low-skilled or informal jobs.
Declining investment in people is undermining the country’s prospects for long-term development and poverty reduction, the report suggests.
World Bank senior economist Kim Edwards sees a scarred future for Myanmar: “Declining household investment in health and education, reductions in employment and job quality, and increased outward migration will hinder human capital accumulation and scar Myanmar’s future growth and development potential.”
Since the pandemic, an additional 7 million people have joined the ranks of the poor and another one-third of the population is at risk of following suit, the report says. The poverty rate exceeded 32 percent early this year, a level last seen in 2015.
The World Bank also halved its growth forecast for Myanmar for this year to 1 percent, from the 2 percent forecast in December.
Inflation and unemployment remain high while poverty has become entrenched across the country, the report says. Manufacturing is being hit by shortages of imported materials, workers and electricity as falling incomes constrain consumption and retail sales, the report says.
Conflict is disrupting border trade and the movement of goods within the country. In the six months to March 2024, exports of goods fell by 13 percent and imports fell by 20 percent year on year, the report says.
Farmers are seeing improved crop yields and prices, but the cost of raw materials has risen and they have limited access to credit, the report says.
The plunging currency is one reason for higher input costs. The kyat has depreciated about 22 percent more against the US dollar since the end of 2023, and slightly less against the Thai baht and Chinese renminbi, the report says.
Junta officials have implemented several measures to maintain a balance between foreign exchange supply and demand but these have backfired, the report suggests.
The measures include import restrictions, promotion of the use of barter arrangements and foreign currencies other than US dollars, and crackdowns on foreign exchange dealers not complying with regulated prices.
These attempts to prevent depreciation have exacerbated downward pressure on the kyat, the report says.
The World Bank’s bleak assessment of Myanmar’s economy notes that the situation is more likely to worsen than improve: “The major risks to outlook are on the downside … Medium to long-term prospects for living standards also remain at considerable risk of worsening further.”
