Myanmar undoubtedly faces challenges when it comes to opening up its economy in order to flourish in the future.
According to a leading British diplomat, Myanmar has the potential to grow its economy by as much as 10 per cent, effectively following in the footsteps of Vietnam’s economic growth. In comments made at Bloomberg’s conference in Yangon recently, he went on to say that Myanmar needs to be speedy when it comes to opening up markets and making new policy in order to enjoy this growth.
Challenges facing Myanmar
The high cost of carrying out business, the lack of clarity surrounding policy making and an uncertain power supply all combine to create extensive challenges for Myanmar’s fledgling economy.
Experts say that the speed with which policies can be made will be key. But, if the government goes at the fastest pace possible, then there’s no doubt that at least six per cent, and possibly as much as ten per cent growth is more than possible.
Reforms have been underway since 2011, and the task of transforming a formerly state run economy into an open market is complicated for many reasons. However, something is definitely going right for Myanmar, as the International Money Fund estimated that its economy was one of the fastest growing in the world in 2016, with a growth rate of 8.1 per cent.
A clean slate for the economy
As not many people even own bank accounts, the economic market is wide open and presents unprecedented opportunity for overseas investors. It’s there for the taking in an open market, much as was the case in Vietnam 20 years ago.
And this is where FinTech startups come in. For example, Telenor Myanmar joined with Yoma Bank to start up Wave Money, an online banking platform that is targeting the population that don’t already have bank accounts. In many rural districts, there is no physical access to banks, so technology will allow access in remote areas. However, although the signs are positive and economic growth is undoubtedly increasing, Myanmar has a long way to go before it can be on a par with its neighbours.
A view from the experts
Various company executives at Bloomberg’s conference also talked about the challenges Myanmar faces.
Myanma Awba, Group CEO Thadoe Hein pointed to the need to overhaul investment in agriculture. As poverty is still endemic throughout the country, the economy faces many risks including a weakening currency and decreased investment.
Farming is undoubtedly key to the growth of Myanmar’s economy and must be appropriately prioritised. Many farmers have little to no access to financing and this has to be taken on board. It is vital that investment is made in farming infrastructure to increase productivity and lessen the costs of productivity.
Global integration necessary
Myanmar also needs to become more integrated within the global economy. Its physical location between China and India gives tremendous scope for economic growth, in terms of supplying food and goods to both countries. However, unless Myanmar boosts integration in the worldwide economy, improves its infrastructure and modernises its legal environment, then it runs the risk of losing out, according to Myan Shwe Pyi Tractors chairman Khin Maung Win.
As well as increased investment into processing food, and increased clarity from the government in terms of its plans for agriculture, policy making in general needs to speed up. Recently, decision making appears to have slowed down considerably, and it’s absolutely necessary that Myanmar quickens the pace.
The President of the Thai Stock Exchange, Kesara Manchusree said that above all else, Myanmar has to open its markets to overseas investors in order to achieve growth. In addition, he said in a TV interview that Myanmar’s laws have to change in order to make the market more open.