Tiger Cub on the Irrawaddy: Managing Myanmar's Economic Growing Pains
NEW YORK, April 24, 2013 — Myanmar’s sudden reversal of years of diplomatic isolation in 2011 has left leaders and investors around the world scrambling to adjust to the new status quo. Zaw Oo, a Senior Research Fellow at the Myanmar Development Resource Institute joined Anoop Singh, Director of the Asia Pacific Department at the International Monetary Fund and Asia Society's Vice President of Global Policy Programs, Suzanne DiMaggio, to discuss the economic outlook of this rapidly evolving nation. Sara Eisen of Bloomberg Television moderated the panel.
As Southeast Asia's second largest country, with vast resources and a history as an agricultural exporter, Myanmar has the clear potential to join the ranks of the boom economies of the 21st century. According to Singh, however, avoiding the pitfalls of inequality will require Myanmar to learn from its neighbors' past mistakes and encourage institution-building and transparency from the outset of its integration into global affairs.
Oo, a guiding voice in the development of a framework for economic and social reforms guiding the economic transition, concurred: while acknowledging the "miracle" of Myanmar's sudden opening-up, he emphasized that challenges that "stem from…structural and underlying conditions [that] will not change for some time." Investors would be wise to weigh these obstacles moving forward, but there are also opportunities.
Myanmar's neighbors are well-positioned to continue benefiting as the economy develops, especially China, even as resentment towards the Chinese government remains high. The U.S., Japan and other countries have a role to play, as well with the panelists calling for "leadership" from these developed nations in helping Myanmar develop. "Lifting sanctions," DiMaggio said, would have "an instant impact of paramount importance" in helping bring the benefits of a growing GDP to all levels of society.
Additionally, historical underinvestment in infrastructure and education, along with building a stable financial system remain as strong challenges holding back growth. Organizations like the IMF can play a role in helping to establish systems that guide social reforms and also build investor confidence in institutions there.
An important bellwether will be the country's chairmanship of ASEAN in 2014 and the 2015 national elections, which represent a test of the government's commitment to democracy. Myanmar's political transition was swift and may yet prove to be lasting, but those seeking to take advantage of concurrent GDP growth will need to be patient as the country's economic and social systems play catch-up.
Reported by James Kochien
Video: Highlights from the discussion (3 min., 48 sec.)
Watch the complete program