Rural Poverty Alleviation in Burma’s Economic Strategy: A Comparative Evaluation of Alternative Interventions to Increase Rural Access to Capital
Abstract
Context Overview
With Parliament’s election of former Prime Minister Thein Sein as president in January
2011, Burma has reached a critical crossroads: the country’s tumultuous political
and economic history is facing new opportunities through the introduction of new economic
and social reforms. President Thein Sein’s government has instituted a series of reforms
targeting governance and political economy, public finance and structural transformation.
Problem Summary
Currently available information ranks Burma as the poorest country in South East Asia.
Nearly 85% of poverty incidence is concentrated in rural areas. Two key factors contribute
to rural poverty: 1- labor is unskilled and subject to casual wages and 2- lack of
assets and particularly land (54% of the agricultural population is landless). High
human concentration, low financial returns and low access to resources/capital in
the rural sector help explain continued and deepening rural poverty concentration.
The low asset ownership among rural and poor households restricts their ability to
access credit and financial capital. Current credit services in Burma do not effectively
target products or access for the rural poor.
Policy Question
What strategies should the Myanmar Development Resource Institute (MDRI)/ International
Growth Centre (IGC) partnership recommend to reduce rural poverty and increase access
to financial capital in rural Myanmar?
Data and Methodology
My focus is to evaluate some alternative rural poverty programs that have been implemented
in other countries and analyze their relevance to Burma’s rural poverty needs. Of
particular interest to analysts is a comparison of programs designed to increase access
to capital. My analysis evaluates and compares three alternative interventions designed
to increase access to capital: rural microfinance, joint partnership rural credit
schemes, and rural credit cooperatives. The specific programs selected for this study
are: A) microfinance programs- government provisioned and NGO- driven; B) the Vietnam
and World Bank joint partnership and C) German rural credit cooperatives. The analysis
of these programs is comprised of three sections: i) a comparative table of the structural
design and impact of each intervention, ii) logic models that systematically dissect
program components, and iii) an assessment of risks, benefits and challenges as they
relate to impact.
Findings
Different tradeoffs occur in each program and its design, such that no one program
can exclusively and successfully impact every objective. As such, a combination of
different features of the programs or different specialized programs may be more effective
in targeting multiple levels of intervention, time periods, credit access problems
or impact. Government collaboration is particularly important, as engaging governments
and balancing their involvement may facilitate partnerships and support (particularly
in resources and expertise) from other organizations (e.g. international organizations)
and open venues for systematic, national change.
In the logic model analysis, four key requirements were observed in the delivery of
services across all the programs: socialization and process for developing and capturing
participation, continued operations and execution of the program, monitoring and evaluation,
and complementary services around human development objectives. The greatest differences
across the programs were observed in the intermediate and long-term outcomes, particularly
in the areas of: human capital development, structural and ecosystem changes to the
rural credit sector, and national development. Furthermore, the key issues that posed
challenges across the programs were: incomplete information, implementation risks,
misaligned incentive systems and limited adaptability of programs. The four key implementation
risks identified in the programs were: challenges scaling localized targets to national
schemes; unintended exclusion of target population individuals; inconsistency of results,
efficacy or enforcement; and cultural barriers.
Recommendations
At this time, Burma’s rural poor have a greater urgency for direct capital and providing
this, in conjunction with training and other human development trainings, is the first
priority. Burma’s program intervention needs to prioritize major facets of household
impact and be designed to work around the four key credit access problems: asymmetric
information, low assets, weak culture of repayment and high fixed costs to accessing
loans. The program should:
• Simultaneously seek a joint partnership with financing from an international NGO
and implement traditional microfinance services to rural areas
• Engage the government as the engine coordinating the programs/partnerships and the
leader facilitating regulatory and policy changes
• Be phased into short/mid-term (credit access and training) and long-term strategies
(systemic change)
• Extract the strengths of each of the programs into a blended and customized Burmese
rural credit program, particularly including the community empowerment objectives
of rural credit cooperatives
• Utilize logic model and program evaluation methodologies to design and refine its
own program and implementation.
Type
Master's projectDepartment
The Sanford School of Public PolicyPermalink
https://hdl.handle.net/10161/6666Citation
Kim, Mariana (2013). Rural Poverty Alleviation in Burma’s Economic Strategy: A Comparative Evaluation of
Alternative Interventions to Increase Rural Access to Capital. Master's project, Duke University. Retrieved from https://hdl.handle.net/10161/6666.More Info
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