Apr 19, 2011

Great expectations for Myanmar economy

International organizations that estimate Myanmar’s economy say that its annual growth rate is around 5 percent. The inflation rate is estimated to be about the same figure.

With more liberal and consistent export and import laws, the Myanmar economy could increase rapidly, say economists.

With the formation of the new Parliament, investors and international organizations are hoping that the very first bold economic measure in the financial area will be to realign the country’s foreign currency exchange rate. Most local commetators see financial reform also including a unified exchange rate and lower income taxes for individuals and businesses.

One weekly journal hoped that new government would focus on trying to raise the living standard of ordinary citizens.

If the Myanmar economy can be managed to realize its potential growth with business friendly initiatives and a new mind set, there is little doubt that Burma’s economy could rapidly expand. With more liberal and consistent business laws, the country will attract foreign capital looking for cheap labour and production costs.

The former military government has issued regular calls for the West to abandon economic sanctions, but no dramatic changes can be expected on that front because the West is waiting for the newly established government to show greater commitment to democracy and human rights.

Areas where great social committment is badly needed include more spending on health and education in the new budget.

Among the most pressing issues are some form of true ownership of land for farmers, allowing them access to agricultural loans, to create crop insurance systems, liberalization of the agricultural market and diversification of crops.

Some Myanmar academics are optimistic in areas of greater governmental transparency, consistency, the rule of law, participatory rule-making, business friendly environments and macro economic management. One can cautiously hope that their optimism is justified.

In order to deal effectively with the future, we can hope that Burmese officials will avoid those two extremes and get down to the business of improving the country’s economy and the life of the people.

Source: Mizzima News