Myanmar Government reveals economic policy goals

The government has presented its long-awaited economic policy in which it aims to develop a market-oriented system “in all sectors” and establish an economic framework in support of national reconciliation.

A 12-point document released today, seen by The Myanmar Times, puts national reconciliation as the top priority, based on a “just balancing of sustainable resource mobilisation and allocation across states and regions”.

The government will work to ensure that natural resource extraction is transparent and sustainable and will extend the Extractive Industries Transparency Initiative remit to include the mining industry, it said, and will also weigh up the costs and benefits of economic policies for their impact across the entire country.

Earlier this week the government demonstrated its intention to shake up the troubled mining industry, by announcing that jade and gems mining permits will not be renewed until new laws are in place.

In the policy’s second point, the government said it would support competition and a vibrant private sector. It aims to practice a market-oriented system in every sector, cut unnecessary red tape, dilute the power of monopolies and expand access to credit.

The third point develops the National League for Democracy’s promise in its economic manifesto to strengthen public financial management and work on fiscal prudence and macroeconomic stability.

This includes making public spending more efficient, improving budget transparency and privatising “appropriate” state-owned enterprises, which are an enormous burden on the budget, though an open and transparent process.

The government also plans to tackle smuggling, or “fully account for Myanmar’s foreign exchange earnings”, especially from the sale of natural resources, streamline the tax system to boost public revenues and develop capital and money markets to help finance the growing budget deficit, which is expected to reach K3.76 trillion by the end of this financial year.

The fourth point in the ambitious document refers to infrastructure development, noting that the government is preparing an infrastructure policy, which will focus on producing and distributing power; building and maintaining rural roads and developing better port facilities.

Fifth, the government will support the agriculture and livestock sectors to promote inclusive growth, enhance food security, increase exports, and boost living standards. Farmers will be given full production freedoms, while the state will support high value-added crops and livestock breeding.

Farmers will have more access to credit, land tenure will be strengthened and production chain sectors improved, it said.

Sixth, the government says it will focus on job creation to reduce domestic poverty and inequality and encourage migrant workers and the displaced to return from overseas. It sees most jobs being created in special economic zones, and by infrastructure development projects, particularly in rural areas.

In its seventh point the government said it welcomes foreign direct investment. It is preparing a more detailed policy note this but in brief, it will promote responsible business by creating a stable environment where companies feel secure to invest, and improving property rights and the rule of law.

The eighth point address human capital and commits to developing a skilled workforce to fill jobs created in the manufacturing and services sectors. To support this goal, the state will improve healthcare and academic and vocational education, while enforcing international standards on labour rights.

The ninth point covers monetary and fiscal stability and the creation of a financial system that can sustainably provide capital to businesses, farmers and households.

The underdeveloped financial sector currently excludes large sectors of the economy, but will soon be liberalized to encourage growth, the government said. It will review limitations on bank lending, enable mobile banking, allow foreign insurance companies into Myanmar and aim to get a sovereign credit rating.

Tenth, the government will reform state-owned enterprises, making them more accountable and responsive to the public, and privatising them where necessary. They will be audited as a prerequisite for their reform or transformation.

In the eleventh point the government says it will help small and medium enterprises by improving the ease of doing business in Myanmar, increasing access to financial services and developing a more skilled workforce. Myanmar was ranked 167 out of 189 countries in the World Bank’s ease of doing business ranking last year.

Finally, the government pledged to promote inclusive economic growth and development, “to enable our country to escape poverty and achieve the prosperity our people deserve.”

“Democracy, the rule of law, the promotion of human rights, are ends in themselves, and need no economic or other justification,” the policy proposal concludes.

Source: Myanmar Times

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