The Asian Development Bank (ADB) has launched its new report – Myanmar in Transition: Opportunities and Challenges – today at The Foreign Correspondents’ Club of Thailand in Bangkok. Stephen Groff, ADB’s Vice President for East Asia, Southeast Asia and the Pacific and Cyn-Young Park, ADB’s Assistant Chief Economist of Economics and Research Department, appeared at the press panel so as to clarify the report publicly at the FCCT.
Myanmar (Burma) could go for Asia’s fast increasing economies and expand at 7% to 8% a year, become a middle income nation, and triple per capita income by 2030 if it can triumph substantial development challenges by further implementing comprehensive reforms, a new Asian Development Bank (ADB) study says.
According to its Monday press release, this report is ADB’s first major assessment of the country since it began political and economic reforms in 2011. The report clearly states that there is much work to be fulfilled. It points out that only a quarter of people in Myanmar (Burma) have access to electricity and only one in five of the country’s roads are paved to all-weather standard. The report says concerted efforts are needed to increase transparency and enhance public services.
“Myanmar’s strategic location, rich natural resources and abundant labor force leave it perfectly positioned to prosper from Asia’s dynamic economic growth,” said Stephen Groff, ADB’s Vice President for East Asia, Southeast Asia and the Pacific. “Myanmar could be Asia’s next rising star, but for this to happen there needs to be a firm and lasting commitment to reform.”
As discloses by the ADB’s new report, there is limited access to finance. Commercial bank density per 1,000 sq km was 0.85 in 2010, compared to 7.0 in Viet Nam, 11.6 in Thailand and 27.2 in Philippines.
The report also says that one in every four people in Myanmar (Burma) is poor. 84% of the poor reside in rural areas. The agriculture is a key sector of the economy, accounting for 36% of GDP and more than half of all employment. Less than 20% of Myanmar’s crop land is currently irrigated. The introduction of quality irrigation systems and other inputs could dramatically boost crop yields and household incomes.
The country needs to broaden its economic base beyond agriculture, the report says, so as to expand the manufacturing and service sectors which will help creating sufficient jobs for the country’s young and increasingly urbanized population.
It also analyzes the huge disparities across Myanmar in terms of income, and access to basic services such as water, housing, education and health. Roughly half of all secondary school age children are out of school or critically lagging. One in four primary school children in Myanmar (Burma) never move on to middle school. Public expenditure on health was 0.2% of GDP in 2009. In Cambodia it was nearly 1% and Viet Nam more than 2.5% in the same period.
And it says that average life expectancy is 62 and one of the lowest in the region. Even though the country sells a great deal of electricity to neighboring countries, only one citizen out of four has electricity access. Poor maintenance of power transmission and distribution systems leads to high power losses as much as 27%, the report says.
The prevalent deforestation is at risk in the direction of climate change, ADB’s analysis says. According to Germanwatch, it says, the country category is second worst affected by extreme weather 1990-2008.
Hence, the report suggests that the nation’s development will rely on the preserving of macroeconomic strength including measures for low inflation rate of fewer than 6% and sustainable budgets. It also needs promoting of domestic savings, along with investing in human capital and infrastructure network.
It also advises to make stronger social consistency and slash poverty rates. It suggests spending greater investments in education, health and social services. The report criticizes about the ratio of irrigation system whereas more than half of Myanmar’s people depend on agriculture for a living, less than 20% of the country’s crop land is irrigated. The report comments that investment in irrigation and other inputs could significantly expand crop yields and boost incomes.
ADB says that it completely realizes Myanmar’s economic potential. However, the report suggests the country ought to concentrate on intensification of infrastructure in transport, power and telecommunications services, as well as modernizing its financial sector.
According to Central Banking Newsdesk, the ADB has not had operations in the country since 1998, although Myanmar has participated in ADB-assisted regional activities since then via its membership of the Greater Mekong Subregion programme.
“Establishing an office in Myanmar allows us to deepen our understanding of the challenges facing the country, and how best to offer assistance to achieve inclusive and sustainable economic growth,” said Stephen Groff, ADB’s vice-president for east Asia, South-east Asia and the Pacific.
ADB has recently established an office in Yangon, and is now studying the option of continue operations in Myanmar, which were cut short in 1988.