The topic of economic transformation in Myanmar was thoroughly discussed at the Forum on Myanmar Democratic Transition held from 11 to 13 August 2017 in Nay Pyi Taw. The talks could generally be summed up that despite the slow economic take-off in Myanmar, the good potential of the Myanmar economy will be seen in the future.
The present economic situation was reviewed and analyzed in comparison with that of the previous government. It was quite evident that the Foreign Direct Investment (FDI) in 2015-16 was USD 9.4 billion and it came down to USD 6.6 billion in 2016-17. However, it is usual practice to size up the general situation of the country in the beginning of a new government while it had been busy with changes in policy and government and change of accountability.
Nevertheless, if compared with the first year of the previous government, it could be seen 2011-12 financial year had FDI $4.6 billion and that of the incumbent government in 2016-17 was $ 6.6 billion. According to the latest information, as of August of the 2016-17 financial year, within one and half year of the incumbent government, FDI had increased to $ 15.207 billion.
In respect of FDI, China is at the top with over $19 billion, but most of the China’s FDI was invested in the early part and decreased later. The FDI of China was mostly in the energy sector, hence there was not much creation of jobs. Singapore was found to have rapidly increased its FDI in Myanmar with its total FDI $16 billion as of 1st quarter of 2017-18. Vietnam came third in FDI having invested US$ 2 billion up to now, which came up from US$ 23 million only before 2010.
The present FDIs were mostly invested in industries, telecommunications and other services. It was found that the successful implementation of the Thilawa Industrial Zone helped boost the Myanmar Economy. The domestic economy was seen to be relying too much on the extraction and selling of the natural resources of the country. Besides, almost all of the nation’s economic transactions had not been transparent and was monopolized by a handful of cronies. Therefore, taxes were evaded and national income had dwindled. Such an economic slow-down which is the anathema of all the people usually occur in the democratic transition of a country.
In a discussion session held at the Novotel Hotel on 24 August Professor of Economics, Sean Turnell pointed out the fact that in the last three-year term of the previous government the budget deficit had gone up successively, with 13.5% in 2014-15 rising to 31.5% in 2015-16. Inflation rate was also rising from 5.9% in 2014-15 to 11.4% in 2015-16. The NLD government had to inherit such unfavorable circumstances from the previous government and if the NLD could not control the situation from getting worse, the incumbent government could have encountered bankruptcy.
The inflation rate had fallen to 6.97% in early 2017 and it was found to go down to 4.92 at the end of July. According to the current official report of the World Bank, the poverty rate in Myanmar had improved from 31% to currently 19%. The good economic potential can be perceived in future of Myammar due to the correct economic policy laid down by the government, change from resource-relying economy to regular economy and axing the government expenses. It was learnt that Myanmar economic growth rate declined to 6.5% in 2016-17 FY and will come up to 7.5 in 2017-18 according to the forecast of the IMF. (Translated by Khin Maung Win)