Myanmar’s Economic Outlook
By Sarah Logan and Talia Smith
On Wednesday 24th April 2013, the Asia Society hosted a lunch and discussion entitled Myanmar’s Economic Outlook: Prospects and Challenges. CGSD kindly sponsored our tickets for the function, as we will be spending the summer working in Myanmar as part of our summer field placements for our MDP program, and are keen to learn all we can about the country’s ongoing transformation and recent initiatives for sustainable development.
The panel included Suzanne DiMaggio (the Vice President of Global Policy Programs at Asia Society); Zaw Oo (Senior Research Fellow and Director of Research Programs at the Centre for Economic and Social Development of the Myanmar Development Resource Institute) and Anoop Singh (the Director of the Asia and Pacific Department at the IMF), and was moderated by Sara Eisen (a correspondent for Bloomberg Television specializing in global macroeconomics).
One of the recurring themes of the discussion was the difficulties that arise when different spheres of government or the economy experience unequal rates of transformation. Specifically, political reforms in Myanmar are taking place faster than economic changes, a phenomena largely explained by the inability of key economic institutions to adapt overnight to the evolving political circumstances in the country. In particular, as foreign direct investment streams into Myanmar in response to more favorable political developments, the sluggish development of the country’s legal system and monetary and fiscal frameworks is failing to provide an optimal environment for such investment. As a result, investors are not adequately assured of the safety of their investments, resulting in more cautious behavior and subsequently less investment entering the country. Strengthening these legal and economic mechanisms will be crucial for catalyzing Myanmar’s economic development.
The panelists discussed how the government in Myanmar is highly cognizant of the fact that, with the country’s institutions in their current state, a challenge to Myanmar’s future development will not necessarily be to attract foreign investment, but rather to effectively and transparently deal with large inflows entering the country too quickly. To combat this challenge, Myanmar is preparing to become part of the Extractive Industries Transparency Initiative (EITI) and adopt best practices from ASEAN partners. The government wants foreign investment in Myanmar to be managed in a sustainable and inclusive manner, benefiting all sectors of the country’s economy. For this, the development of solid systems and institutions is vital.
Another notable challenge is to ensure that Burmese citizens witness the benefit of foreign investment in their country. With accumulating investment in Myanmar will come additional pressures for the government to commit more funding to health care, education, infrastructure development and other key socioeconomic sectors – all of which have been severely neglected over the past decades.
It is clear that Myanmar has a long road to economic development in front of it. However, the importance of the government’s commitment to the opening of the country’s economy and the creation of an environment conducive to foreign investment cannot be underestimated. Much progress has already been made, and continues at a rapid pace. As we embark on our summer work in Myanmar, it will be particularly exciting for us, along with the rest of the world, to witness the ongoing transformation of Myanmar.
Sarah Logan and Talia Smith are first year students in the Masters of Development Practice Program at Columbia University
For more information about the Asia Society event please click here
For more information about CGSD’s work in Myanmar please visit our Myanmar page