Myanmar in Transition
A reflection on Myanmar's economic outlook
In 2013 the Asia Society Policy Institute released its “Sustaining Myanmar’s Transition” report, outlining ten critical challenges for Myanmar as it approached the 2015 election. Three years on, Myanmar has elected the National League for Democracy (NLD), continued its political reformation and outlined its economic plan for the future. Listen here about Myanmar's road to democracy.
In anticipation of Asia Society Australia’s upcoming event with Nicholas Coppel, Australian Ambassador to Myanmar, we reflect on Myanmar’s economic outlook and question what emerging challenges Myanmar will face.
Don't miss the below video of Aung San Suu Kyi's address at Asia Society New York earlier this week.
Political & Economic update
On April 1st of this year Myanmar’s first non-military government in 54 years took office led by Aung San Suu Kyi. The NLD won just under 80% of the contested seats, a landslide victory that marked the commencement of a long process of political and economic reform for a nation that is recovering from the economic stagnation wrought by past international sanctions.
Myanmar’s economic outlook has been closely scrutinized following the NLD’s victory, as experts assess the resources for future growth yet to be fully harnessed by the new government.
Much of this potential is derived from its location between the two most populous countries in the world, as well as its population of 51 million and its natural endowment of gold, jade, rubies, oil and natural gas. All of these resources could be utilized through effective economic management to drive sustainable growth into the future.
The NLP’s economic outline, released on the 29th of July, is the Government’s first formal plan for reforming Myanmar's economy. It has been both criticized for a lack of specificity and applauded for its ambition and vision. Dr. Sean Turnell of Macquarie University is one such expert applauding the government for its 12-point plan, “The July 29 announcement is just a glimpse, in my view, from afar of a hive of activity that at the moment is perhaps hidden from view.”
If this hive of activity does achieve the structural shifts and productivity boost that Myanmar needs, then forecasts for future growth are very positive. McKinsey has indicated that Myanmar could sustain growth of 8% per year if it manages to diversify its economy and increase productivity.
Asian and Australian Engagement
Historically Australia has had limited engagement with Myanmar. The Australian Government imposed sanctions on Myanmar in 1991, when the military Government failed to recognize the National League for Democracy's electoral victory. Australia only lifted its financial sanctions and travel bans in 2012, a decision mirrored by the US and much of the international community.
The lifting of international embargos has drastically increased international engagement with Myanmar, as Foreign Direct Investment increased from $900 million in 2010 to more than $8 billion in 2015.
However, in spite of the surge in investment, Australia has remained relatively disengaged from the Myanmar economy. Resource-based companies such as Woodside have been at the forefront of Australian investment, but experts predict that until the effects of the LNP’s economic plan begin to be felt, Australian investment will remain modest, especially with the better-understood Chinese and Indian markets attracting much of the regional investment.
NEW YORK, September 21, 2016 — The Myanmar leader Aung San Suu Kyi delivers an address at Asia Society in New York on her country's political and economic development. Following her remarks, she engages in a wide-ranging discussion with Kevin Rudd, the president of Asia Society Policy Institute and the former prime minister of Australia. (52 min., 58 sec.)
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Photos: Aung San Suu Kyi and Hillary Clinton Address Asia Society in D.C.
Aung San Suu Kyi's 'Powerful Position' After Myanmar's Elections
Prepared by James Levy