Mon, Jul 02, 2012 - Page 5 News List

Poverty risks unravelling Myanmar’s reforms: ADB


Ethnic Kachin children pose on May 29 at the N-Hkawng Pa Internally Displaced People’s camp outside Mai Ja Yang, in a Kachin Independence Army-controlled territory of Myanmar’s northern Kachin state on the border with China. Peace mediators say Myanmar’s far north is writhing in the grip of a “resource war” with no end in sight.

Photo: AFP

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 yesterday.

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

Rakhine was last 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 the Burmese army.

“You have to address the regional differences in poverty and economic growth,” Stephen Groff, vice president of the bank said 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 Burmese President Thein Sein to warn that 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.

However, 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 that 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 debts of US$500 million 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 to 6 percent a year, it will take 30 years to reach Thailand’s current level,” said Groff, explaining that Myanmar’s per capita income is half of that of its neighbor’s.

“It’s a generation that we are talking about ... we’re not going to see change in 10 to 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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