Myanmar’s unusually fertile soils and abundant water source are legendary in Southeast Asia. It is even said that Myanmar has the most favorable agricultural conditions in all of Asia. Almost anything can be grown in the country, from fruits to vegetables, from rice to pulses. The agriculture sector dominates the economy, contributing 38% of GDP, and employing more than 60% of the workforce. The importance of agriculture in the economy and as an employer will diminish in coming years as a result of structural transformation. However, the sector will continue to play a remarkable role in reducing poverty in Myanmar for many years to come.
The changes underway in Myanmar can be felt almost everywhere: in Nay Pyi Taw, portraits of Bogyoke Aung San grace the walls of parliament; in Yangon, traffic is choking roads while construction cranes dominate the skyline; and across the country, ports, airports and border crossings are booming with trade. Felt almost everywhere that is, except in rural areas, where the impacts of change have been less visible.
Myanmar’s people are its greatest resource. Its current young population and growing number of productive workers hold the promise of a demographic dividend and inclusive growth. With a steady pace of economic growth, Myanmar has the potential to get rich before it gets old.
For Myanmar to deliver on this potential it can prioritize investing in its people, by strengthening the country's health, education, and social protection systems. Education and health directly improve chances of employment. Individuals who complete more years of schooling earn a higher income. Improving health, education and social protections – closing the gap – is not a mere by-product of economic development, but is essential to shared prosperity.
Myanmar in the early 1960s, poised to be the economic engine of the region, prided itself for having the highest literacy rate in Asia. After decades of underspending and neglect of social services and programs, human development outcomes deteriorated, ranking among the lowest in the region. Rural and poorer households bore a greater burden of ill health, low educational attainment and vulnerability.
In 2009, a major share of the total education and health spending came from households, 63% and 82% respectively. This direct out-of-pocket spending, which was one of the highest in the world, prevented people from seeking care and attending school, because they could not afford it. In the case of health, families were made even poorer, as they had to sell their belongings to pay for the care they needed. And there was no system to protect them.
Even today, social assistance programs only reach 0.1% of the population, compared to 39% among East Asian and the Pacific countries. This is in part due to extremely low level of social assistance spending, which is only 0.02% of GDP, compared to an average of 1.1% of GDP among low-income countries.
Nearly 50 years ago, books such as Asian Drama: An Inquiry Into The Poverty Of Nations, by the Swedish economist and Nobel laureate Gunnar Myrdal, offered a dire prediction of famine and poverty for the region in coming decades.
Globally, around 2 billion people do not use formal financial services. In Southeast Asia, there are 264 million adults who are still “unbanked”; many of them save their money under the mattress and borrow from so-called “loan sharks”, paying exorbitant interest rates on a daily or weekly basis. Recognizing the importance of financial inclusion for economic development, the leaders of the Association of South East Asian Nations (ASEAN) have made this one of their top priorities for the next five years.
Last week, the World Bank Group presented the latest data on financial inclusion in ASEAN to senior representatives of the ministries of finance and central banks of all 10 ASEAN member countries (Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam). The session, held in Kuala Lumpur, is one of the joint activities the new World Bank Research and Knowledge Hub and Malaysia is undertaking to support financial inclusion around the world.
In the last three decades, East Asia has reaped the demographic dividend. An abundant and growing labor force powered almost one-third of the region’s per capita income growth from the 1960s to the 1990s, making it the world’s growth engine.
Now, East Asia is facing the challenges posed by another demographic trend: rapid aging. A new World Bank report finds that East Asia and Pacific is aging faster – and on a larger scale – than any other region in history.
More than 211 million people ages 65 and over live in East Asia and Pacific, accounting for 36 percent of the global population in that age group. By 2040, East Asia’s older population will more than double, to 479 million, and the working-age population will shrink by 10 percent to 15 percent in countries such as Korea, China, and Thailand.
Across the region, as the working-age population declines and the pace of aging accelerates, policy makers are concerned with the potential impact of aging on economic growth and rising demand for public spending on health, pension and long-term care systems.
As the region ages rapidly, how do governments, employers and households ensure that hard-working people live healthy and productive lives in old age? How do societies in East Asia and Pacific promote productive aging and become more inclusive?
The Greater Mekong Sub-region (GMS) is a major global rice producer and exporter but its population suffers from serious levels of poverty and malnutrition.
Spanning six countries – China, Myanmar, Lao PDR, Thailand, Cambodia and Vietnam – the region is home to 334 million people. Nearly 60 million of them are involved in rice production, growing collectively over 44% of the world’s rice. All of the countries, except China, are net exporters of rice. This means they have more rice available than required for domestic consumption. Yet, nearly 15% of the population is seriously malnourished and about 40% of children under five are stunted, in other words, too short for their age as a result of under nutrition.
The latest cyclical warming of Pacific Ocean waters, first observed centuries ago and formally tracked since 1950, began earlier this year and already has been felt across Asia, Africa and Latin America.
Weather experts predict this El Niño will continue into the spring of 2016 and could wreak havoc, because climate change is likely to exacerbate the intensity of storms and flooding in some places and of severe drought and water shortages in others.
El Niño’s impacts are global, with heavy rain and severe flooding expected in South America and scorching weather and drought conditions likely in the Horn of Africa region.
So I just returned from a terrific mission to Myanmar and Laos, two countries experiencing strong annual growth rates, and both facing challenges of making rapid growth inclusive and just for all its citizens.