The World Bank In Myanmar

Decades of isolationist military rule have left Myanmar poor, economically underperforming, and riven by the suppression of ethnic groups. In 2008, a new Constitution paved the way for managed political and economic reform and from 2011, gradual liberalization began under a transitional military government, setting in motion a “triple transition”: from military to civilian rule, from a planned to a more market-based economy, and from widespread internal conflict to durable peace.

The first democratic elections in 2015 marked a turning point for Myanmar, generating a wave of optimism. Unification of exchange rates, liberalization of product and factor markets, integration into regional markets, and modernization of economic and financial institutions and systems resulted in rapid economic growth (above 7 percent per year) and measurable improvements in social welfare. Poverty almost halved, falling from 48 percent to 25 percent between 2005 and 2017.

On February 1, 2021, the military again took power by declaring a state of emergency. The combined effects of the military takeover, COVID-19, internal conflict and global disruptions have deepened Myanmar’s economic and humanitarian crisis. Since March 2020 poverty is estimated to have doubled, with about 40 percent of the population living below the national poverty line in 2022: nearly a decade of progress on poverty reduction has been undone. The military extended the state emergency for another six months starting from February 1, 2023, and there has been an increase in fighting in the central and southeast regions. The number of internally displaced persons is expected to reach 2.7 million by the end of 2023.

The World Bank’s January 2023 Myanmar Economic Monitor forecasts 3 percent growth in the year ending September 2023. This means that per capita GDP will be around 13 percent lower than in 2019, indicative of the persistent impacts of recent shocks on both supply and demand. In the absence of further shocks, the economy is likely to continue to expand slowly beyond 2023, though at rates well below those observed before the pandemic.

The failure to return to pre-pandemic levels of activity contrasts with the situation in most of the East Asia and Pacific region. Myanmar’s economy remains subject to significant volatility and uncertainty, with business operations disrupted by conflict, electricity outages, trade and foreign exchange restrictions, shortages of inputs, plus frequently changing rules and regulations.

The depreciating kyat, combined with increases in global prices and ongoing logistics constraints has fueled inflation, which reached almost 20 percent in mid-2022. Household incomes continue to be stretched by the cumulative impact of recent shocks. In July and August 2022, almost half of all households reported income losses compared to the previous year, reducing food and non-food consumption in response.

While moderate growth is expected in services and agriculture over the next year, domestic consumption and industrial sector growth are expected to slow as exports and domestic demand weaken. Although downside risks remain elevated, with increased conflict possible ahead of planned elections, a stronger than expected recovery in China, following the roll-back of pandemic-related restrictions, may provide an added boost to bilateral trade and investment flows.

In the medium and longer terms, Myanmar’s potential for inclusive growth has been sharply curtailed. Funding to critical health and education services is being curtailed and a lack of trust in public services is reducing their use. Lost months of education, rapid increases in unemployment and displacement, and growing out-migration are all likely to reduce already low levels of human capital over the longer term.

Last Updated: Apr 10, 2023

In response to the military takeover of February 2021, the World Bank Group placed a hold on disbursements on operations in Myanmar. The Group’s internal policies and procedures lay out processes to assess the situation. Enhanced monitoring is in place for projects that were already underway, to ensure compliance with World Bank Group policies.

The World Bank in Myanmar is currently focused on analytical activities, including up-to-date monitoring of the impacts of the situation to help better inform development partners and other stakeholders, and to inform the Myanmar public of key economic and sectoral developments. The World Bank is also looking at the possibility of providing humanitarian and basic development assistance to vulnerable groups in Myanmar through international aid agencies.

The World Bank Myanmar Monitoring Platform provides up-to-date analysis, survey results and reports on the economy, service provision and poverty.

Last Updated: Apr 10, 2023

Results of World Bank support to Myanmar between January 2013 and January 2021 include:

The National Community-Driven Development Project: Endorsed immediately after reengaging with Myanmar in November 2012, this highly successful project was designed to support a more people-centered and bottom-up approach to development. The project was financed with an $80 million International Development Association (IDA) grant and additional financing of $400 million through an IDA credit. Since 2013, the project has benefitted more than seven million people in 63 townships (20% of the country) and more than 12,000 villages, through the financing of approximately 37,000 sub-projects that improve basic infrastructure and services for transport (roads, bridges, jetties), water, schools, electrification, etc. The project invested heavily in capacity building and facilitation support for community members who would take direct responsibility for identifying priority development needs and implementing solutions. In the first two years, the project did not operate in conflict areas, but since then more than one-third of project areas have been conflict-affected.

Building on this success, the project’s Contingency Emergency Response Component was activated in July 2020 in response to the COVID-19 crisis. Activation allowed the transfer of $110 million, divided in a $60 million cash-for-work program and a $50 million Emergency Village Revolving Fund. Cash-for-Work results as of January 1, 2021: Operating in 259 townships and 2,505 villages with an estimated 2.1 million population; 400,781 beneficiary households; 42 percent of female participants; 17 billion kyats in wages paid; 4,402 sub-projects under implementation (mostly roads and water supply). Emergency Village Revolving Fund results as of January 1, 2021: Operating in 247 townships and 1,710 villages; 134,816 revolving loans approved; 41 billion kyats disbursed to borrowers; 4 percent to female borrowers

The National Electrification Project The government adopted the National Electrification Plan in 2014 — drawing from World Bank analytical support and expertise through geospatial least-cost electrification planning – to achieve universal access to affordable, reliable and sustainable electricity services for all by 2030. Two-thirds of the population without electricity access belong to over 130 distinct groups, have distinct languages/dialects, are often among the poorest, and reside in the most isolated regions, which compounds the challenges of service delivery. Since its implementation, the project has successfully provided electricity access to 3.8 million people, half of whom were female beneficiaries, in 12,000 villages in remote rural areas through both grid extension and off-grid solution with 405,000 solar home systems. In addition, the project has provided electricity access to 20,000 schools, rural health clinics and community centers in all these villages. 125,000 streetlights have been installed and been providing safety to the residents. A mobile phone-based Citizen Engagement Platform was successfully established in the pilot phase and was subsequently scaled up in parallel with the increase of solar home system installations.

The Decentralizing Funding to Schools Project

in 2019 and 2020 disbursed funds to township education offices, schools, and at-risk children and their families, in which 244,331 students in 57 townships received stipends, all government schools (47,008) and monastic schools (1,500) in 330 townships received school improvement funding, more than 20,000 mentee-teachers in 150 townships benefitted from in-school visit and support from a teacher mentor, six rounds of early learning assessment data were collected, analyzed, and used to inform to design an early reading pilot. The project upholds two underlying principles, which are non-discrimination and inclusive consultation.

The Inclusive Access and Quality Education project extended the geographic scope of the DFSP taking a national and a focused approach, covering all states and regions and supporting programs to reach out to schools across the country, while placing greater emphasis on social inclusion and support to conflict-affected areas. More than 70 percent of the financing has been dedicated to Myanmar’s most disadvantaged townships, with a particular focus on the most under-performing schools and teachers within these townships. The project design also includes support to strengthening the efficiency of the education system, including through improved public financial and human resource management and technical support to the Ministry of Education, and stringent monitoring mechanisms.

The Myanmar Essential Health Services Access Project since 2015 has supported over 12,000 primary health care facilities across the country, ranging from township hospitals to the sub rural health centers, with monthly health facility funds to improve service delivery readiness of these critical frontline health facilities, thus expanding access to basic essential health services for mothers, newborns and children both at the facility level and within the community. The project strengthened the quality of care by skills building of frontline health workers – about 9,000 midwives were trained on how to provide emergency care during pregnancy and immediately after birth for mothers and babies, and 4,500 midwives learnt also how to identify and manage common childhood illnesses. At the systems level, supervision was enhanced practice by improving the regularity and systematic approach of supervision visits, improves efficiency and responsiveness of public finance through financial trainings and supported introduction of tablet-based health management information systems to the midwives.

Project funds were also mobilized in May 2020 to assist Myanmar’s response to the COVID-19 pandemic by financing (i) capacity building and operational costs to intensify surveillance activities in all states and regions; (ii) establishment of functioning information and reporting system for all suspected cases; (iii) engagement with basic health staff including ethnic health organizations for community surveillance; (iv) dissemination of guidelines to health staff and community volunteers on COVID-19; (v) development and dissemination of Information, Education and Communication materials for risk communication on COVID-19; and (vi) operating expenses at the point of entries.

In April 2020, the World Bank approved a $50 million IDA credit plus $7.7 million grant from the Pandemic Emergency Financing Facility for the Myanmar COVID-19 Emergency Response Project to help Myanmar fill a critical gap in its contingency plan to urgently increase hospital preparedness and surge capacity in order to reduce the spread of COVID-19, protect health workers, and treat patients. Eleven central level hospitals and 54 hospitals across regions and states were prioritized for project support.

The Maternal and Child Cash Transfer Project has provided much needed financial support for people in Myanmar hit by the COVID-19 pandemic. Over 126,600 women (pregnant women and women with children under two years old) in Ayeyarwady Region and Shan State were enrolled in the program by late August 2020. Beneficiaries received 6 months of cash payment, totaling MMK 90,000 (15,000MMK/$11.50 per month). Cash distribution began on September 9, 2020 through private payment agents, (AYA and KBZ banks). By late 2020, 50 percent of beneficiaries in Shan State and 70 percent in Ayeyarwady Region had received payments.

In June 2020 the National Food and Agriculture System Project was approved, to support income retention for farmers by improving the quality and utilization of agricultural inputs, generate labor-intensive cash-for work-activities to create jobs for poor households and returning migrants, increase agricultural productivity and diversification, and enhance market access for Myanmar farmers, with a strong focus on inclusion for smallholder farmers, women and other vulnerable groups. The $200 million project was in its preparatory stage in January 2021.

Last Updated: Apr 10, 2023