Currently in the midst of a major transition to a democratic government system with more market-oriented economy, Myanmar is emerging as a center of opportunity and prosperity for its citizens and investors. The ongoing policy reforms have stimulated economic growth and are key to future development. Improved economic prospects have ignited a surge of interest from foreign investors and Myanmar is on the path to resurface as a major competitor in the Asian market.
With the largest land mass in Southeast Asia, Myanmar is endowed with fertile soil and abundantnatural resources ranging from offshore oil and gas deposits to interior forests and gem mines. The country’s central location—literally at the crossroads between India and China—position Myanmar to return to it’s former position as a regional trading hub and vital provider of natural gas, minerals, and agriculture.
The challenges facing Myanmar are significant. The GDP per capital remains low at $868 in 2012/13, along with a poverty headcount of 26 percent. The country’s GDP is estimated at $55 billion in 2012/13. Once the largest exporter of rice in the world, today Myanmar accounts for only a small share of the international market.
The union government has undertakenanaspiring economic and politicalreform process. It has begun a series of reforms to remove economic distortions, fiscal regulations to rationalize personal income tax and reduce consumption tax, liberalizing the telecommunications sector, reviews of the financial sector, promotion of access to finance, and creating an environment conducive to job creation.
Since the 2010 reforms were introduced, Myanmar's economy has progressed significantly (7.3 percent in 2012/13). The main drivers of growth were increased gas production, construction, FDI, and commodity exports. There is much movement in the financial and banking sectors, with continued progress towards unifying multiple exchange rates and a managed float of the currency, along with licensing private banks to engage in international banking and to offer foreign exchange services. Continued changes along these lines should shift more foreign exchange from informal to formal markets, increase liquidity, and facilitate the central bank’s management of the exchange rate. Inflation is projected to remain moderate and the country’s economy is projected to continue to grow with increases in gas production, trade,agricultural output, and tourism spending.
International support is also increasing rapidly. Arrears to the Asian Development Bank and the World Bank were cleared in January 2013, allowing both banks to renew lending to the country. The Paris Club of creditors also reached an agreement to cancel or reschedule arrears.After a nearly 25 year absence, the World Bank Group endorsed an Interim Strategy for the country, reaffirming support for the government’s reforms to improve the lives of the citizens of Myanmar. Economic growth is also assisted with the EU’s reinstatement of preferential access for Myanmar’s exports under the Generalized System of Preferences, and the US suspension of almost all sanctions on imports from Myanmar.