MYANMAR has achieved a high economic growth rate of 6.5 per cent this year and the momentum is expected to continue building in the next few years, according to the Word Bank. “In our view the Myanmar economy is doing very well. Myanmar has strong economic growth prospects. It has grown by 6.5 per cent in the last year, which is from April 2012 to March 2013,” Ulrich Zachau, director of the Thai office, told The Nation yesterday.
“We expect that Myanmar will continue growing around 6.8 per cent for this current year, which starts this April.”
He was very optimistic, saying that in the medium term that level may be a little higher, like 6.9 per cent, referring to a projection made in the “Myanmar Economic Monitor” released yesterday by the World Bank.
Foreign direct investment has increased and keeps increasing. Myanmar has passed a foreign investment law, which helps improves the foreign investment environment. This partly caused a current account deficit of 4.4 per cent for the fiscal year that ended this March.
Regarding economic reforms, Zachau said that there are things that Myanmar has done.
It has “undertaken fundamental reforms and the biggest thing is that the whole economy is opening up. Trade is opening up, foreign investment is opening up, Thai investors are going to Myanmar to invest. Japanese investors are going. Asian investors are going. Investors from all over the world are looking at Myanmar and are looking to invest,” he said.
This is good for Myanmar. It helps bring in foreign capital, it helps Myanmar develop and it is also good for foreign investors so it is a win-win all around, he said.
The country is making some progress on investment protection.
“Reforms of the business environment, ease of doing business, protection of investments, they take time,” he said.
“There are many factors playing a role. Myanmar has taken the first very important step and passed this foreign investment law. It does make foreign investment in Myanmar better than it was before.
“Of course many things are still needed to be done. It is a huge agenda of economic reform and there remain some concerns as there remain in other countries. The World Bank just issued a big report which we do annually. It is called ‘Doing Business’ and it is about the quality of the business environment in different countries.
“It ranks 189-190 countries in this year’s edition. Just to give you an example, Thailand is at No 18, ranked out of 189 countries. It is the same rank as last year. Myanmar is at the very bottom of that ranking, so around 182,” he said.
The business environment there is still not good as here. Thai firms, businesses and investors, have an excellent business environment. In Myanmar it is not as good. Myanmar has just begun improving. The trend is in the right direction. It is a growing economy, a growing country, a growing market so these are good things for investors.
Thailand and other Asean countries could contribute to Myanmar’s development by offering the experience of private businesses and other technical support.
Inflation in Myanmar is quite high this fiscal year, estimated at 5.6 per cent, up from last year’s 2.8 per cent. However, this is common for a new emerging economy.
Reform in Myanmar is moving faster than what Eastern European countries did in the past when they opened up their economies.
Source: THE NATION Thailand