The Continuous Rise During Economic Growth The Covid 19 Pandemic And Conflict In The Adoption Of Labor Saving Agricultural Technologies In Myanmar Evidence And Implications

After decades of isolationism and economic stagnation, Myanmar opened its economy in the beginning of the 2010s, leading to rapid economic growth (Myanmar’s Gross Domestic Product (GDP) was almost 50 percent larger in 2020 than in 2011). But the COVID-19 health crisis that started in 2020 and a military coup in the beginning of 2021 – and the subsequent increase in conflicts, forced displacements, and migration – dramatically reversed that outlook, with Myanmar’s GDP in 2022 estimated to be 13 percent smaller than three years earlier. The agricultural sector also changed accordingly during this period.

Evidence is scarce on how conflict affects technology adoption and consequent agricultural productivity in fragile states, an important topic given the high share of the extreme poor living in fragile environments globally. Our study contributes to filling this knowledge gap by using unique large-scale data on rice producers in Myanmar before and after a military coup in 2021, leading to a surge of conflicts in the country. We find that the increase in violent events significantly changed rice productivity. Specifically, increases in fatal violent events between 2020 and 2021 reduced rice Total Factor Productivity (TFP) – a measure of how efficiently agricultural inputs are used to produce rice – by about 4 percent on average in the short-run. Moreover, poorer farmers are more affected by conflict, as seen through an increased output elasticity to agricultural equipment owned, indicating reduced output resilience for less-capital owning, and therefore poorer, farmers. This seems partly due to reduced access to agricultural extension services, which would otherwise help farmers maintain productivity, even with limited capital ownership, through substitution with human capital and skills. Lower mechanization service fees partly mitigate these effects. Our results consistently hold for both short- and long-run production functions, across various specifications, and in Upper and Lower Myanmar. These findings suggest that containing and reducing violent events is critical in restoring rice productivity. Improved access to extension services, as well as to cheap mechanization service provision to mitigate lack of equipment ownership, could compensate for these losses and boost the productivity of farmers, especially for those with less production capital, in such fragile settings.

Access to agricultural extension and crop advisory services can play a crucial role in ensuring widespread and appropriate use of new and improved agricultural technologies, but the delivery and use of such services is not well understood in Myanmar. We assess their use based on repeated large-scale and nationally representative farm surveys from 2020 onwards, as well as on insights from key informant interviews and secondary data. The major findings are the following: Agricultural extension use is low and declining. Before the crisis years – due to COVID-19 and a military coup – agricultural extension provision and use in Myanmar was at much lower levels than in neighboring countries. There has been a further decline in use since. Forty-one percent of farmers reported to have received crop advice during the monsoon of 2020, but this share declined by 9 percentage points to 32 percent of farmers in the monsoon of 2022. In-person agricultural extension is more widely used than digital extension. In the last dry season, 26 and 20 percent of the farmers relied on in-person and digital extension respectively. The private sector is the main provider of in-person agricultural extension. During the last dry season, the main provider of in-person agricultural extension was the private sector (used by 18 percent of the farmers), followed by the public sector (13 percent of the farmers), and NGOs (6 percent). Previous seasons show similar shares. In-person agricultural extension has been declining since 2020. In the last three years, there has been a significant decline in the provision of in-person extension services by all providers. In the case of the public sector in particular, the number of agricultural extension events in 2021/22 dropped by more than 50 percent compared to before the crisis years. Digital agricultural extension service provision increased rapidly before 2020. Before the COVID-19 pandemic and the political crisis, the provision of digital extension services grew rapidly, linked to the rapid expansion of mobile cellphone networks and the spread of cheap smart phones. The total number of posts on Facebook by agricultural companies and organizations from July 2015 until November 2019 more than tripled. The biggest growth in posts was seen in 2018 and 2019, before the COVID-19 pandemic. Digital agricultural extension provision decreased immediately after the coup, but then expanded again in the years after. It was used by 20 percent of the farmers during the last dry season. Most users started using digital agricultural extension since the COVID-19 pandemic and the political crisis. After the initial drop in 2021 - as the use of Facebook was banned and as there were severe communication blockages - there has been an increase in activity since, and this has occurred despite the persistent communication and internet problems and reduced mobile network access in the country. Digital agricultural extension is mostly provided through Facebook by agricultural input companies and social enterprises. The most widely used services are provided through Facebook pages, that for a number of organizations and companies have millions of followers. An analysis of the posts on these Facebook pages shows they contain more technical information than product advertisements, even so for (almost) all commercial input retail companies. We also recently note the establishment of farmer extension groups – a more interactive model – and specific commodity focused groups on Facebook. There are also groups on other online platforms, including specialized agricultural apps and call centers. However, these platforms are less used. Digital extension services are almost exclusively provided by the private sector, including social businesses. Use of agricultural extension is non-inclusive, with less educated, more remote, female, and smaller farmers accessing them less, for digital as well as for in-person extension. We also note an important difference by age, with older farmers relying more on in-person services and younger ones more on digital extension. Conflict-affected areas access agricultural extension services significantly less frequently. Farmers residing in townships under martial law – 13 percent of the townships – use any extension (in-person or digital) service less (8 percent compared to townships not under martial law, often because they lack access to the internet in these townships). While farmers residing in the most insecure areas use in-person extension less (11 percent less), they are however able to rely on digital services to a similar extent as farmers in the more secure townships. The findings of the study have a number of important implications. Scaling of digital extension. Given the widespread insecurity and mobility constraints in the country, limiting in-person travel, alternative digital opportunities have recently emerged that can provide crop advisory services at scale, and especially in some – but not all – of the conflict-affected areas. The scaling-up of such services would be very much welcomed, given that currently only one out of five farmers in Myanmar are relying on such services. Leverage the experience of the private sector. The private sector is most active in agricultural extension, in-person and digital. It has been leading the pivot from in-person to the provision of digital services – not only focusing on sales of their products, but very much being involved in crop advice overall – providing important opportunities to work with these initiatives to finetune and extend the reach of agronomic and other advice for farmers, especially as a large share of farmers is not yet reached by current agricultural extension models. Embrace innovations. Innovations in digital agriculture are quickly emerging - such as chatbots and A.I. - but are not yet being used to their fullest extent in Myanmar. Further piloting, testing, and evaluating the impact of such innovations should be encouraged. Ensure internet access. Access to the internet is problematic in Myanmar – more than 40 percent of all households in Myanmar reported in a recent national survey that they never or only occasionally use the internet - and further efforts to ensure access, especially in conflict affected areas, as well as improve digital literacy should be encouraged. Assess impact of agricultural extension. Despite the interest in the country, few rigorous assessments have been done on the impact of different modalities of extension on adoption of improved technologies and agricultural performance. This would be useful evidence to stimulate the scale-up of the most promising models.

The recent history of rural economic transformation in Myanmar and the effects of COVID-19 and the military coup in February 2021 provide important lessons for the design and implementation of plans to help the country recover from these scourges. The impoverishment of farming communities in Myanmar during decades of socialist military rule, beginning in the 1960s until the turn of the century, led to an outflux of migrants to neighboring countries. As the country opened up to foreign investment through economic reforms initiated in 2011, rural wages surged and farm mechanization services expanded rapidly. Together with increased remittance flows from migrants, higher rural household incomes drove growth in a wide range of non-farm service enterprises. Nevertheless, agricultural growth was low and most crop subsectors stagnated due to underlying and unresolved structural constraints such as poor infrastructure and inequality in land access. As in many other countries in Asia, border closures and lockdowns instituted to prevent the spread of COVID-19 in early 2020 resulted in widespread employment and income losses. The Myanmar government pro-actively sought to mitigate the impacts through expanded credit to farmers and businesses. By the end of 2020, Myanmar was beginning to recover from the economic stresses of COVID-19. However, the February 2021 military coup resulted in a far more severe economic downturn than COVID-19 due to the collapse of the financial system, the massive resignations by public sector employees, and the prolonged movement restrictions. Coup-induced state failure greatly magnified the health and economic consequences of COVID-19 in terms of poverty, food insecurity, and stalled economic transformation. This paper uses a combination of macro, meso, and micro-level analyses to measure the impacts of COVID-19 and state failure on rural economic transformation through the lens of the agri-food system, and to draw lessons for policies to support broad-based and resilient economic recovery.

Using phone survey data from March 2021, we found that the impacts of the recent political unrest in Myanmar further compound the disruptions caused by the COVID-19 pandemic, both on the farm as well as on the non-farm rural economy. Within one month of the start of the political unrest, we observed the following: ▪ 10 percent of farm households experienced disruptions in accessing farm inputs in February, particularly farm machinery and inorganic fertilizers. ▪ Compared to their interactions with input markets, farmers face substantially higher disruptions in their engagements with output markets. Twenty percent of farmers were unable to sell their produce in February, with an additional 27 percent experiencing difficulties in selling or receiving lower prices than expected. ▪ 45 percent of non-farm enterprises experienced additional disruptions in February, further aggravating the economic downturn they had experienced due to COVID-19. ▪ 34 percent of respondents who normally engage in farm or non-farm wage labor experienced additional challenges in finding employment. In combination with the continued impacts of COVID-19, a total of 78 percent of workers now have no or less wage employment income. ▪ Respondents continue to report lower-than-usual consumption of meat and fish due to reduced incomes.

Myanmar experienced four distinct COVID shocks to its economy over 2020 to early 2022 as well as a military takeover in February 2021 that created severe political, civil and economic turmoil. COVID and the coup d’état reversed a decade of growth and poverty reduction, but the full extent of the crisis on household poverty has remained uncertain because of the challenges of conducting large-scale in-person welfare surveys during the pandemic and recent political instability. Here we combine ex ante simulation models with diverse phone survey evidence from mid-2020 to early 2022 to estimate the poverty impacts of these shocks and some of the mechanisms behind them. Both simulations and surveys are consistent in painting a grim picture of rising poverty, capital-depleting coping mechanisms, and the complete collapse of government-provided social protection.

"The ongoing COVID-19 pandemic marks the most significant, singular global disruption since World War II, with health, economic, political, and security implications that will ripple for years to come." -Global Trends 2040 (2021) Global Trends 2040-A More Contested World (2021), released by the US National Intelligence Council, is the latest report in its series of reports starting in 1997 about megatrends and the world's future. This report, strongly influenced by the COVID-19 pandemic, paints a bleak picture of the future and describes a contested, fragmented and turbulent world. It specifically discusses the four main trends that will shape tomorrow's world: - Demographics-by 2040, 1.4 billion people will be added mostly in Africa and South Asia. - Economics-increased government debt and concentrated economic power will escalate problems for the poor and middleclass. - Climate-a hotter world will increase water, food, and health insecurity. - Technology-the emergence of new technologies could both solve and cause problems for human life. Students of trends, policymakers, entrepreneurs, academics, journalists and anyone eager for a glimpse into the next decades, will find this report, with colored graphs, essential reading.

The world economy is experiencing a very strong but uneven recovery, with many emerging market and developing economies facing obstacles to vaccination. The global outlook remains uncertain, with major risks around the path of the pandemic and the possibility of financial stress amid large debt loads. Policy makers face a difficult balancing act as they seek to nurture the recovery while safeguarding price stability and fiscal sustainability. A comprehensive set of policies will be required to promote a strong recovery that mitigates inequality and enhances environmental sustainability, ultimately putting economies on a path of green, resilient, and inclusive development. Prominent among the necessary policies are efforts to lower trade costs so that trade can once again become a robust engine of growth. This year marks the 30th anniversary of the Global Economic Prospects. The Global Economic Prospects is a World Bank Group Flagship Report that examines global economic developments and prospects, with a special focus on emerging market and developing economies, on a semiannual basis (in January and June). Each edition includes analytical pieces on topical policy challenges faced by these economies.

After a disappointing 2019, growth prospects in developing Asia have worsened under the impact of the current health crisis. Signs of incipient recovery near the turn of this year were quickly overthrown as COVID-19 broke out in January 2020 in the region’s largest economy and subsequently expanded into a global pandemic. Disruption to regional and global supply chains, trade, and tourism, and the continued spread of the outbreak, leave the region reeling under massive economic shocks and financial turmoil. Across Asia, the authorities are responding with policies to contain the outbreak, facilitate medical interventions, and support vulnerable businesses and households. Assuming that the outbreak is contained this year, growth is expected to recover in 2021. Especially to face down fundamental threats such as the current medical emergency, innovation is critical to growth and development. As some economies in developing Asia challenge the innovation frontier, many others lag. More and better innovation is needed in the region to sustain growth that is more inclusive and environmentally sustainable. Five key drivers of innovation are sound education, productive entrepreneurship, high-quality institutions, efficient financial systems, and dynamic cities that excite knowledge exchange. The journey to creating an innovative society takes long-term commitment and hard work.