It is widely hoped that the process of political and economic reform currently taking place in Myanmar will be the catalyst for turning the country’s obvious economic potential into sustainable and inclusive economic growth just as they have already precipitated a suspension of economic sanctions and helped improve Myanmar’s standing within the international community.
During their respective 2012 state visits both U.S. President Barack Obama and British Prime Minister David Cameron spoke optimistically about Myanmar’s future prospects. Reforms have also drawn praise from the E.U., the United Nations and the IMF which has earmarked US$245 million in credit and grant funding under an 18-month work plan. The Asian Development Bank (“ADB”), the World Bank, and other international organisations have also re-engaged with the country.
The transition to a fully functioning market based economy cannot be achieved overnight. The process is likely to be lengthy, complex and not without its difficulties. The challenges ahead are numerous and include, but are not limited to, the normalisation of domestic politics, agrarian reform, the development of democratic institutions and legal and regulatory frameworks, the emergence of a reliable and effective banking system, inflation control, and the settling of ethno-religious conflicts. Myanmar currently suffers from poorly developed road, rail and port infrastructure, a skills shortage, inadequate power and water supplies and a deficient telecommunications network. One of the most difficult tasks facing the government will be the management of increased foreign direct investment to ensure broad based economic development.
Despite the magnitude of the challenges ahead there are plenty of reasons to be optimistic about Myanmar’s prospects. The country enjoys well-established trade links with China, Singapore, Japan, Thailand, Malaysia and India. Myanmar also has the advantage of being able to learn from the development experiences of its ASEAN neighbours. Its geographic location between Southeast Asia, China and the Indian sub-continent places it at a gateway to a potential market of 2 billion consumers. It is rich in natural resources, including gold, gas, teak, oil, jade and gems. With 2,823 km of coastline and a myriad of cultural attractions Myanmar boasts tremendous potential as a leading holiday destination in South East Asia. Myanmar also has a strong tradition of entrepreneurship, and although restricted by sanctions its business leaders have remained active and are prepared to offer their knowledge and expertise to the government as it tries to manage the country’s transition. In its updated ‘2012 outlook’ the ADB forecasted that reforms enacted to date (including exchange rate reforms, the introduction of a new foreign investment law, and the lifting of import restrictions) would help Myanmar achieve an increase in GDP of 6.5% in 2013. It has also estimated that growth, depending on the pace and success of reforms, could reach 7% – 8% annually