ADVISORY COMMISSION ON RAKHINE STATE 3. MAIN FINDINGS AND RECOMMENDATIONS THE ECONOMIC AND SOCIAL DEVELOPMENT OF RAKHINE STATE Rakhine is fertile, relatively well-endowed with natural resources, and strategically located. Yet, its economy is marked by stagnation, underinvestment and under-development. The state’s poverty rate is 78 percent, almost double the national rate of 37.54 percent,4 which makes it one of the poorest parts of the country. All communities in Rakhine suffer from poverty, poor social services and a scarcity of livelihood opportunities. The bulk of the Rakhine economy is made up of farmers, fishermen, and family-run business, and wages in the agricultural sector are low. Landlessness is more common in Rakhine than other parts of the country – especially in the northern part of the state, where 60 percent of households are landless.5 While other parts of Myanmar have seen rapid economic growth over the past years, Rakhine has fallen further behind. Current international perceptions of Rakhine as a place marked by unrest and frequent human rights violations, including enforced segregation, continue to discourage foreign investment. Various factors serve to undermine the prospects for economic growth in the state, including frequent natural disasters, such as cyclones, and the impact of climate change. Yet, many obstacles to growth and development are man-made. The waves of inter-communal violence in 2012 significantly reduced trust between the communities, disrupting trade and commerce across the state, as well as cross-border trade with Bangladesh. As communities were disentangled, businesses relying on both Rakhine and Muslim labour have struggled to maintain their level of productivity. Some Rakhine employers have come under intense pressure from Rakhine nationalists to avoid hiring Muslims, thus disrupting the labour market and depriving the community of employment opportunities. While communal markets do continue in some areas, they are often under threat of disruption from hard-line elements within both communities seeking to undermine interaction between the communities. 4 Myanmar Poverty and Living Conditions Survey, World Bank, January 2015. * Unlike the source stated, the correct source is, “World Bank. Myanmar: Ending poverty and boosting shared prosperity in a time of transition. A Systematic Country Diagnostic, Report No. 93050-MM. July 2014.” The Commission notes that the Government’s figure for the poverty rate in Rakhine is 43.5 percent, as compared with 25.6 percent nationally (Integrated Household Living Condition Assessment Survey, 2010). 5 Food Security Assessment in Northern Rakhine State Myanmar, World Food Program (WFP), February 2011. 20 Towards a Peaceful, Fair and Prosperous Future for the People of Rakhine