95% of people survive on less than $10 a day: survey

About 95 per cent of adults in Myanmar live on less than US$10 a day, with 10 per cent preferring to save money in gold or cash, according to a recent survey. 

The Making Access Possible (MAP) survey was based on a sample of 5,100 people from all over the country, including interviews done last year. 

“Financial services are at a very low level in Myanmar and this is impacting the country’s ability to harness the capital available for national development. Significant effort is required to move the country towards more formal financial services,” said Henri Dommel, Director Inclusive Finance at UNCDF.

Due to a cash-based culture, the cost of starting a business in Myanmar is high. Numerous banking firms, obstacles to get loans, and burdensome rules and regulation, all encourage informal money-lending.

The survey aims at encouraging the government, investors and international donors to focus on spreading micro-finance services to areas around the country.

It says that Myanmar’s current monetary services do not match the country’s needs.

“If there is a well-functioning financial system, citizens can save and this would help the country’s development,” the survey advised.

In consultation with the International Monetary Fund, the Central Bank of Myanmar is now working on liberalising the financial system, which will include welcoming foreign banks and foreign insurance companies. Over 30 banks have set up representative offices in the country, some doing so in 2012, waiting patiently for the licences.

Since it reopened the country in 2011, Myanmar has shown impressive economic growth. In 2013, it posted 7.5 per cent growth. In the latest World Economic Outlook released in April, the IMF has forecast 7.8 per cent growth for the country in 2014, 7.8 per cent in 2015 and 7.7 per cent in 2019. The projections are above the average growth forecasts for the overall emerging and developing economies in Asia: 6.7 per cent, 6.8 per cent and 6.5 per cent, in the corresponding years respectively. 

The high growth rate is attributed to a low base. According to the World Bank, the country’s gross domestic product (GDP) is estimated to be $55 billion in fiscal 2012-13. It is one of the poorest countries in East Asia and the Pacific, with an estimated GDP per capita of $868 in 2012-13 and a poverty headcount of 26 per cent, according to a 2010 national household survey. 

At the World Economic Forum in Manila last week, Vice President Nyan Tun reiterated the country’s goal to reduce the poverty rate to 16 per cent by 2015 from 26 per cent in 2011. Nyan Tun noted that the country’s priority now is economic growth and that will be followed by equality.

The World Bank said on its website that despite this recent positive economic performance, Myanmar faces a number of challenges. Aside from the high poverty rate, most social indicators are very low. For example, 32 per cent of children under five suffer from malnutrition. Limited access to and the poor state of infrastructure are major impediments to providing basic health and education services and for economic development. Almost half the roads are not passable during the monsoon season. 

Telecommunications and Internet access are also limited. About 73 per cent of the population lacks access to electricity, and the consumption of electricity is one of the lowest in the world – 20 times less than the world average. Existing power infrastructure can only meet about half of the current demand, resulting in frequent blackouts and rationing of electricity supply. Access to drinking water is also limited in many areas.