Executive Summary
The contraction of household incomes since the onset of the pandemic and the political crisis shows no sign of recovery. Respondents of the People’s Pulse Survey 2023 (PPS), conducted between June and October 2023 by the United Nations Development Programme (UNDP), were asked how their household income had changed since January 2023; 57 percent reported that their income had remained the same, while 30 percent reported a decline. Rather than signalling a potential recovery, however, the more plausible explanation is that incomes have nearly hit the bottom. In addition, despite stable incomes, the prevailing economic conditions suggest that maintaining the status quo is becoming more difficult. Increasing money supply, depreciation of the kyat, and global commodity price rises are all contributing to the rapidly rising inflation, eroding real incomes.
The middle class in Myanmar is disappearing. Throughout the nation, median income was extremely low, close to the Survival Minimum Expenditure Basket (SMEB)1 . Only the median of the highest asset quintile (Q5) reported a higher income per capita (116,667 MMK2 per month), albeit well below what would be required for a middle-class standard of living.3 Median income varies significantly across the states and regions.
The data suggests an exceptionally weak labour market with persistent wage stagnation, reduced income from job losses compounded with approximately half of all households lacking a secondary income source. Households without second incomes are vulnerable to income instability if any shocks hit their only source of income. The states/regions with highest rates of households lacking a secondary income were Kayah (67 percent), Chin (63 percent) and Sagaing (57 percent), which also have the lowest income per capita and experienced persistently high conflict throughout 2023. Monthly income per capita was not surprisingly found to be notably lower in conflict-prone areas.
The decline in incomes and limited income-generating capacity are pushing households to adopt negative coping mechanisms. For every state and region4 and for every asset quintile, cutting nonfood expenditure was the primary coping strategy. The resulting crowding out of human capital investment in health and education threatens to undermine the future re-emergence of a middle class.
The PPS paints a particularly worrying economic picture of Kayah State, which has the lowest income per capita, steepest income reduction (50 percent since January 2023), and largest reported job losses (58 percent). Kayah also had the highest concentration of households without secondary income (67 percent) and the widest array of coping mechanisms (on average 3), including dire strategies such as cutting food expenditure (52 percent). Despite also grappling with significant household pressures, the more peaceful states and regions exhibit relatively better performance, as evidenced by data from Ayeyarwady, Naypyidaw, and Yangon.
Nearly half of Myanmar’s population (49.7 percent) was living below the national poverty line of 1590 Kyats a day by the end of 2023. This compares to 46.3 percent in 2022 and 24.8 percent in 2017. Thus, over the last six years, the share of Myanmar’s population living in poverty has doubled.
Moreover, not only are there more poor people today, but they are also more deeply poor. The poverty gap – a measure of the average income shortfall of all those who are poor – stands at 24.4 percent. This compares to 18.5 percent in 2022 and 5.2 percent in 2017, an increase of over 6 percentage points since 2022. Poverty is deepening faster.
The situation is likely to have deteriorated further by the time of this report’s release. An additional 25 percent of the population were hanging by a thread as of October 2023, just above the poverty line. Since that time, the intensified conflict has led to more displaced people losing their livelihoods, businesses shutting down, and supply chains disrupted in several parts of the country.
The crisis disproportionately affects women-headed households, whose members are 1.2 times more likely than those in male-headed ones to be poor. Over 50 percent of children in Myanmar are poor, and in high-conflict zones households are being pushed deeper into poverty, reflecting both hardship and inequality.
Though they have all but disappeared from global headlines, the people of Myanmar continue to face deep and persistent suffering. It is crucial for multilateral and bilateral development partners to refocus attention on the plight of the vulnerable in Myanmar. This calls for close collaboration with local organizations, civil society actors, the local private sector, and non-governmental organizations to respond effectively to the complex challenges faced by people across all parts of Myanmar. Rebuilding in the hardest hit locations will not be easy in a period of ongoing conflict, so negotiating with all parties to allow for access and support to the most vulnerable communities, irrespective of location, ethnicity or ideology, will be critical to halt the backslide and reinstate a return to human development progress, however limited at this time. In the absence of this, the humanitarian caseload will increase exponentially and the impact on human development will be inter-generational.