A pariah state for decades, Myanmar’s recent emergence from economic isolation has attracted foreign companies and investors intrigued by the Southeast Asian nation’s untapped potential, abundant natural resources and low-wage workforce.
The first US fast-food restaurant, KFC, opened in 2015 and other assorted Western and Asian brands have popped up across the nation’s biggest city, Yangon. With the World Bank forecasting growth of about 7 percent per year through 2019, there is reason for guarded optimism in the next several years.
Yet some of the initial euphoria over the long-term outlook for one of the world’s last frontier markets is waning. Foreign investment and exports have cooled and the currency has slumped, straining the government’s finances. A growing chorus of investors, policymakers and executives worry that the coalition government led by Burmese State Counsellor Aung San Suu Kyi — a former political prisoner and Nobel laureate — lacks the kind of coherent economic strategy and regulatory framework to move the country up the development ladder.
While the government has won praise for passing a revamped companies law that takes effect next month, more work needs to be done, according to an appraisal in October last year by the IMF. To really safeguard growth in the coming decades, the country needs to modernize its tax and public school systems, liberalize the financial sector and streamline business regulation.
Thiri Thant Mon, 40, returned to her native country in mid-2013 after 17 years living and working overseas, including a stint at Morgan Stanley. She sees a glacial pace of economic change in Myanmar.
“The government is slightly lost as to how they can tackle the bigger picture,” said Thiri, managing director and co-founder of Yangon-based investment firm Sandanila Partners. “There is no articulation of policy.”
The World Bank in January also called for greater clarity and communication of the government’s economic policies.
“One of the things that people do say, which I think is a fair criticism of the government, is that it has not set out its economic policies clearly enough,” British Ambassador to Myanmar Andrew Patrick said at an investment conference in Yangon hosted by Bloomberg. “If people understood exactly what the playing field looked like it would be much easier for business to operate here.”
Ethnic tensions and violence persist across the multicultural nation, where minorities make up one-third of the population. External observers accuse the military of waging a campaign of violence in western Rakhine state, targeted at the Rohingya minority. A prominent government legal adviser who called for religious harmony in Myanmar was shot and killed outside Yangon International Airport in January.
Ethnic strife aside, Myanmar remains one of the world’s poorest countries. Its 54 million citizens have a per-capita GDP of US$1,161.50 compared with US$43,876 of its former colonial master, Britain.
Overhauling the civil service and government’s traditional way of doing things is going to require deep cultural change, said Sean Turnell, Naypyitaw-based economic adviser to the Burmese government and an academic at Macquarie University, Sydney.
“I find sometimes people hanker for quick authoritarian solutions to things,” Turnell said. “In the old corrupt authoritarian order it was easy to get quick decisions — but they weren’t necessarily good ones.”