January 2021

Oxfam's latest report has brought a critical issue to the world’s attention as the World Economic Forum gets underway this month in Davos, Switzerland: how the COVID-19 crisis is worsening already serious levels of inequality and undermining poverty eradication efforts around the world. Inequality has been a worsening global problem for years as we’ve tracked and measured the widening income gaps between the richest and the poorest in countries across the globe. As Oxfam, we see growing inequality as a fundamental challenge to the fight to end poverty – if inequality is high, those at the bottom simply don’t have the basic opportunities and income they need to get by, let alone thrive.

In this latest report, Oxfam looks at how the COVID-19 pandemic is exacerbating existing inequalities of wealth, gender, race.[i] The virus has taken close to two million lives and hundreds of millions of people are being pushed into destitution and poverty. Unemployment is one of the main costs caused by COVID-19 in light of the lockdowns and restrictions needed to keep people safe. These restrictions have had particular impacts on people at the bottom of the economy meaning that for some of the poorest, they are struggling to survive both the health crisis and the economic crisis

UN secretary-general, Antonio Guterres said ‘COVID-19 has been likened to an x-ray, revealing fractures in the fragile skeleton of the societies we have built. It is exposing fallacies and falsehoods everywhere: The lie that free markets can deliver healthcare for all; The fiction that unpaid care work is not work; The delusion that we live in a post-racist world; The myth that we are all in the same boat. While we are all floating on the same sea, it’s clear that some are in superyachts, while others are clinging to the drifting debris.’[ii]

While the whole world is struggling with the impacts of the global pandemic, low-income countries face additional challenges in controlling the spread of the disease with increased risks, including in relation to overcrowded urban areas with inadequate housing, coupled with limited resources.

Myanmar is no exception as it suffers through the impacts of the COVID pandemic while also seeing already high levels of inequality worsen. Market traders, garment factory workers and daily labourers are all suffering disproportionately as incomes have disappeared and people have limited to no savings to fall back on. Based on an assessment survey by Oxfam in Myanmar, farming communities in conflict affected Kachin state identified their coping strategies amidst the economic crisis wrought by COVID-19 as taking on increasing levels of household debt and decreasing the amount of food they consume. Such concerning trends have been flagged in numerous other studies as well[iii] and they demonstrate the very real consequences of such a shock for households which don’t have any assets to fall back on. The lack of access to essential public services and social assistance in Myanmar reflects the related chronic underinvestment in these areas, aggravating the risks and vulnerabilities these lower income groups face in the midst of the health crisis.

As Oxfam in Myanmar and ActionAid Myanmar described in a recent report: 'Myanmar has one of the lowest tax takes in the world. This contributes to chronic underinvestment in health, education and social protection and is a major obstacle for achieving the government’s development vision’[iv]. Low investment in health services with 3.67%[v] in 2019-2020 budget year and 4.19% [vi] in 2020-2021 budget year, the country’s healthcare system is exhausted at the time of COVID-19. A medical doctor at the government services – locally called Assistant Surgeon – earns 3,300,000 Myanmar Kyats per annum; a highly paid CEO in Myanmar earns 780,000,000 Myanmar Kyats per annum[vii]. That means it would take a medical doctor 236 years to earn what a CEO earns in a year; alternatively, a CEO could earn the same a medical doctor does in a year in 1.4 days. This demonstrated the huge income gaps in Myanmar. Combined with the lack of services and supports, so many in Myanmar, particularly those in the informal sector, have been experiencing a deepening of poverty during the COVID-19 crisis.

In positive developments, the Government of Myanmar has been actively supporting the development and implementation of COVID-19 relief and recovery efforts, with a primary focus on economic relief. Covid-19 Economic Relief Plan- CERP (Overcoming as one) was developed in April, and followed by a detailed 'Myanmar Economic Relief and Recovery Plan' (MERRP).

MERRP focuses on macro-economic dynamics through financial and monetary policies. It includes some considerations in support of gender equality, which are welcome and urgently needed, and it also offers support to some of the most vulnerable through the provision of in-kind food and cash transfers. While the amounts of support remain very low, it is nonetheless encouraging to see social assistance levels being scaled up so quickly and reaching a far broader group than ever before in Myanmar. Millions of families who were identified as the most vulnerable received cash transfers totaling 40,000 MMK as part of government’s immediate response to COVID-19.[viii] Such developments also point to the longer term potential for an expanded and more comprehensive social safety net in Myanmar, one where social assistance could support those faced with economic crisis and labour protections can ensure more decent work opportunities.

The possibility for more transformative policies in Myanmar and around the world that target and support the most vulnerable is a small ray of hope and one that must be built on through meaningful reforms to tax policies, budgeting and the delivery of essential services. Oxfam’s report highlights that “It took just nine months for the top 1,000 billionaires’ fortunes to return to their pre-pandemic highs but for the world’s poorest people recovery could take 14 times longer; more than a decade”. Based on such findings, the report urges governments to prioritize the poorest in every part of their recovery plan. Through fair redistribution practices, people at the bottom of the economy will have adequate access to essential quality public services that will help them to get out of the cycle of poverty.. Countries like Myanmar need the government to ensure a relief and recovery plan that works for all.

Alongside urgently needed investment in public services and decent livelihoods, ensuring the experiences and priorities of diverse women, conflict affected communities, informal workers and other marginalized groups are taken into account and that communities have the ability to help shape recovery processes is critical to realizing a just recovery and a longer-term transition to an economy that allows everyone to realize their human rights and human potential.

The Government of Myanmar has the opportunity to tackle inequality and support community resilience over the long term whilst it continues its fight against the coronavirus. Inequality is not inevitable and together, we can create a more equal future for all.

Full report of Oxfam International can be found here

[i]Esmé Berkhout, Nick Galasso, Max Lawson, Pablo Andrés Rivero Morales, Anjela Taneja, and Diego Alejo Vázquez Pimentel. 2021, The inequality Virus; Bringing together a world torn apart by coronavirus through a fair, just and sustainable economy, Oxfam International, Oxfam House, John Smith Drive, Cowley, Oxford, OX4 2JY, UK

[ii] https://www.un.org/sg/en/content/sg/speeches/2020-07-18/remarks-nelson-m...

[iii] https://www.mmtimes.com/news/poverty-spikes-myanmar-following-second-wav...

[iv] Sebastian Sahla & Alison Kent, 2020, Fair Finances: How tax and social spending can support the reduction of poverty and inequality, Oxfam in Myanmar and ActionAid Myanmar https://oi-files-cng-prod.s3.amazonaws.com/myanmar.oxfam.org/s3fs-public...

[v] Myanmar Citizen’s Budget, 2019-2020, https://www.mopfi.gov.mm/sites/default/files/Citizen's%20Budget%20for%202019-2020.pdf

[vi] Myanmar Citizen’s Budget, 2020- 2021, https://www.mopfi.gov.mm/sites/default/files/2020-2021%20Fiscal%20Year%2...'s%20Budget_0.pdf

[vii] Myanmar Salary Survey 2020

[viii] https://www.frontiermyanmar.net/en/millions-of-families-receive-first-ca...