Middle class wiped out: Half of Myanmar’s people forced into poverty by civil war, UN report finds

Once considered among the most promising economies in Southeast Asia with a growing middle class, Myanmar is now suffering from soaring levels of poverty as a devastating civil war drives tens of millions further into destitution, according to a new United Nations report.

Almost half of Myanmar’s population of 54 million is below the poverty line, with 49.7% of people living on less than 76 US cents a day — a figure that has doubled since 2017, researchers with the UN Development Program (UNDP) found.

Three years after the military seized power in a coup, the economic situation in the country has rapidly deteriorated to a point where the middle class is at risk of being wiped out and families are forced to cut back on food, health and education due to soaring inflation, the report found.

The researchers paint an alarming picture where an additional 25% of people in Myanmar were “hanging by a thread” just above the poverty line in October 2023.

“The situation is likely to have deteriorated further by the time of this report’s release,” the authors said. “Since that time, the intensified conflict has led to more displaced people losing their livelihoods, businesses shutting down.”

Myanmar had made solid progress in reducing poverty, particularly since the start of a democratic transition from military rule in 2011 that prompted economic and political reforms.

In 2016, the country had the region’s fastest-growing economy, according to the Asian Development Bank, and between 2011 and 2019 Myanmar’s economy grew by an average 6% a year, World Bank figures showed.

The country effectively halved its poverty rate from 48.2% in 2005 to 24.8% in 2017.

But the 2021 military coup, which overthrew the democratically elected government of Aung San Suu Kyi, plunged the country into instability and violence, and — coupled with the Covid pandemic — reversed that progress.

Poverty has not only doubled but people are also more deeply poor, the report found.

“Overall, about three quarters of the population are in poverty, but the very scary thing are those surviving now at just a bare subsistence level. So, the depth of poverty is huge,” said Kanni Wignaraja, assistant secretary-general and UNDP regional director for Asia.

Wignaraja said Myanmar’s middle class is “literally disappearing.”

“A 50% collapse of the middle class over two and a half years is quite astounding for this country, but for any country,” she said.

The report is based on more than 12,000 interviews conducted over three months between June and October 2023 and is one of the largest nationwide surveys conducted in recent years.

While poverty was widespread across the country, those living in conflict zones are being pushed deeper into destitution, with women and children disproportionately affected, the report found.

Since the coup, anti-junta resistance forces and ethnic armies have been fighting against military troops to oust it from power. The military junta has launched increasingly brutal attacks against the people of Myanmar, and ground battles, airstrikes and junta raids on villages have displaced nearly three million people.

In tiny southeastern Kayah state, where fighting has been particularly intense, half of all households reported a decline in income — the most of any area surveyed.

Even those not impacted by the fighting are suffering, the report found. The value of Myanmar’s local currency, the kyat, has plummeted, along with rising costs for food and other basic necessities.

Foreign investment in the country has sharply declined and the number of unemployed people who have migrated abroad has significantly increased.

The report found that Myanmar’s GDP has not been able to recover from the 18% drop it suffered in 2021 due to the double shock of the political crisis and pandemic.

“We had never seen the big urban areas move so fast into distress. So areas around Yangon and Mandalay are hurting really hard,” said Wignaraja.

Without immediate intervention, the humanitarian crisis will worsen “exponentially” and the impact on development will be inter-generational.

“Without immediate interventions to provide cash transfers, food security and access to basic services, vulnerability will keep growing, and impacts will be felt across generations,” said UNDP Administrator Achim Steiner in a statement.

“We call on all stakeholders — inside and outside Myanmar — to take action and preserve vulnerable households from slipping into irreversible poverty and despair.”