Rural Poverty Alleviation in Burma’s Economic Strategy: A Comparative Evaluation of Alternative Interventions to Increase Rural Access to Capital

Kim, Mariana





The Sanford School of Public Policy


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.





Burma economic development rural poverty credit


Rural Poverty Alleviation in Burma’s Economic Strategy: A Comparative Evaluation of Alternative Interventions to Increase Rural Access to Capital


Master's project


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