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Myanmar: Future outlook

Dawn of a new era

 

AMIR HOSSAIN | Issue Dated: November 30, -0001, New Delhi
Tags : Myanmar | Myanmar economy | Human Development Index |
 

In the 1950s, Myanmar (formerly Burma) was considered as one of the strongest economies in South-east Asia. But it started to lose its glory when military rule took over the nation since a coup d'état in 1962. By 1987, things had come to such a sorry pass that the United Nations declared Myanmar as a least developed country with a Human Development Index that could not be any worse. Fortunately, since 2011, things have started improving. The military junta, which has ruled the country for decades but has also been responsible for its impoverishment, has vowed to undertake political reforms and is committed to transferring power to a duly elected civilian government. All this has generated optimism about the political and economic fortunes of this Southeast Asia’s once prosperous country. 

A McKinsey Global Institute report has highlighted that the size of Myanmar's economy will be around $200 billion by 2030 from a mere $45 billion in 2010 and that "It now has the potential to be one of the fastest-growing economies in emerging Asia." Currently, the nation’s GDP constitutes about only 1% of Asia's GDP.

Factors like long years of international sanctions against Myanmar’s military regime and a stringent EXIM policy imposed by its former ruling junta have weakened the country’s economy over time. However, blessed with abundant natural resources, a strategic location and favourable demographic factors could help the country gain a competitive advantage and push it to grow at fast clip. Already, global oil giant BP has projected that the nation holds the 46th largest reserves in the world with proven natural gas reserves totalling 7.8 trillion cubic feet. In terms of strategic location, Myanmar can play a pivotal role in connecting two economic power houses like India and China the way Austria does in Europe. In the matter of demographics, its 46 million strong working population could help the nation to become a new manufacturing hub in Southeast Asia. In fact several companies have expressed their desire to relocate their manufacturing plants to the nation from China and other countries in the vicinity where average wages are rising. Firms like Ford Motor have already announced their decision to enter Myanmar and companies like Pepsico, Coca-Cola and GE have reportedly signed a distribution contract to start with.

Clearly, the country once again has a fair chance at regaining its past glory. But the government needs to capitalise the current opportunity efficiently. Most of all, it should restore the confidence among investors by sustaining the political reform, developing the infrastructure sector and resolving the ongoing ethnic conflict. 

 

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Issue Dated: Feb 5, 2017