A senior British diplomat is of the view that with the economy having the potential of growing as much as 10 percent, Myanmar could be the next Vietnam or Thailand.
However challenges including a shortage of power supply, lack of policy clarity and high cost of doing business, have to be overcome by the Southeast Asian nation, which is opening its economy to investors after decades of military rule.
On Thursday, at a conference in Yangon, Andrew Patrick, the U.K.’s Ambassador to Myanmar, said this.
“Growth takes time,” Patrick said. “The main thing is you’ve got to go at the fastest pace you can.” He added that “6 percent to 8 percent, even 10 percent growth going forward is perfectly realizable.”
In a country long controlled by state-owned firms, Myanmar began democratic and economic reforms in 2011. The economy was among the fastest growing in the world last year at 8.1 percent, estimates the International Monetary Fund.
“On the financial sector, this is a blank sheet,” Patrick said.
He said that the nation is “an untapped market. It’s like Vietnam 20 years ago,” since there are few people who own bank accounts.
Telenor Myanmar CEO Lars Erik Tellmann said in a Television interview with Haslinda Amin in Yangon that with the aim of seeking to reach the country’s unbanked population, the company has formed a joint venture with Yoma Bank to start Wave Money.
He said that where there’s no access to physical banks, Wave Money will tap rural areas.
The country has some way to go before it can catch up with its neighbours even while growth in the economy may be accelerating.
Some issues and challenges for the economy were highlighted by the executives who were present at the conference.
Myanma Awba Group CEO Thadoe Hein said that in order to lower the cost of cultivation and improve productivity, Myanmar needs to invest in farming infrastructure and a major challenge for farmer is the access to financing.
Myan Shwe Pyi Tractors Chairman Khin Maung Win said that Myanmar needs to boost integration with the global economy, infrastructure and the legal environment even while the country has “massive” growth potential as it sits between India and China and can supply food to both markets.
Dagon Group CEO Christopher Thurane Aung said that better clarity on the government’s priorities with regard to agriculture is required and the country needs investment in food processing.
International Finance Corp. Country Manager Vikram Kumar said that the country needs to accelerate the pace of policy making as there has been a slow down in the pace of decision-making by the government. He said that in order to reduce foreign-exchange risk, IFC plans to lend to Myanmar institutions in the local currency.
On the other hand, Stock Exchange of Thailand President Kesara Manchusree said in a TV interview that the nation’s laws need to change to liberalize its market and Myanmar has to open its markets to foreigners for growth.
(Adapted from Bloomberg)