After a series of bold social and economic reforms since its return to civilian rule in 2011, Myanmar has made a strong start on its journey toward peace, democracy, and prosperity, one that could put its troubled postwar history behind it. To secure its course, however, it will have to navigate a complex set of long- and short-term measures that are potentially fraught with difculty.
Much has been achieved in the three years since the government, led by President U Thein Sein, came to office in the frst general election in 20 years. While initial reforms focused on the political system and national unity, major macroeconomic reforms are well under way. The exchange rate has been unified under a managed float and the country now has an independent central bank. Details have also been released on increasing transparency in the national budget. Authorities have begun establishing basic regulatory structures and removing unnecessary hurdles to business and trade, providing legal foundation for foreign investment,improving essential public services, and addressing governance and corruption issues.
In response, the economy has sustained gross domestic product (GDP) growth of more than 7% for two years running, a remarkable performance helped by foreign governments lifting long-standing trade sanctions. Foreign investment is flowing in, foreign exchange earnings rising, and tourists returning to enjoy the country’s outstanding areas of natural beauty and cultural attractions. These achievements, with visible improvements in most economic and some social and political indicators, illustrate the government’s strong commitment to economic development and the scope for further rapid deployment of innovative policies.
Few will be surprised, nonetheless, to hear of the pitfalls ahead. Modernizing an economy is a huge and complex task. And the government needs to prioritize and sequence reform measures and identify and address constraints to sustained rapid economic growth. Observers widely acknowledge the huge opportunity, yet the country is facing difficult challenges in almost all aspects of economic and social policy.
A successfully integrated development policy framework will need to consider comprehensive development and reform planning and phasing. It is in this context that the Asian Development Bank’s (ADB) Economics and Research department presents this report, ‘Myanmar: Unlocking the Potential’, which is based on an indepth country study undertaken in 2013. The report examines the most important and immediate issues that need to be tackled to unlock the potential. These include weak infrastructure, creating modern market and government institutions, human development, stronger regional integration, a clear focus on inclusive growth, and environmental protection.
