ADB on How to Get

The Asian Development Bank (ADB) released a 217-page report in September assessing the trajectory of Myanmar’s economy. The report, titled “Myanmar: Unlocking the potential,” predicts that annual gross domestic product growth of 9.5 percent is possible, but identifies the massive scale of investment needed to get there.

More than US$80 billion would be required by 2030, the report concluded, including investing in much needed physical infrastructure, poverty reduction and, crucially, in human capital to create an educated workforce befitting of a modern economy.

ADB’s assistant chief economist Cyn-Young Park and Myanmar country director Winfried Wicklein spoke with The Irrawaddy’s Simon Lewis as the report was launched, discussing what the Myanmar government’s priorities for the economy should be.

What is the general approach you think the government needs to take, to get to your higher GDP growth forecast?

Cyn-Young Park : Doing this study, three things come out very clearly for us. The main thing is stability. Economic, social, political—those things are really fundamental.

In terms of policy priorities, what comes out is that the country needs to make a lot of investment—now— for the future. That includes the infrastructure, that includes the human capital and it includes putting business in an investment-friendly [environment].

Those are the second steps. You do need that foundation of stability. Then you need to make a really core investment. And then, be more strategic in choosing what are the sectoral strengths the country has, and then target them, together with very well defined sectoral and industrial policies. So investment is the key.

So the country has to be more strategic, rather than reactively accepting the projects donors suggest?

Cyn-Young Park : There has to be a little bit of central coordination. One way we try to help the government is by helping to coordinate among all these different things that are going on, in every corner of the economy, every corner of the country.

Finally, what’s really important is to stay open and connected. The country just opened up. And there is a risk, always. If there’s any sort of turbulence, anything that happens, in times of crisis, many countries in the region have also experienced that there’s a backtracking and a retreating from the openness and being connected to other countries. Especially for Myanmar, being strategically positioned, within Southeast Asia, linking to China and India.

You mentioned the country has to invest early. The report shows that government spending is very low compared with other countries in the region. So you’re saying that government spending needs to go up?

Cyn-Young Park: To be able to make that investment, the government does need to accelerate its fiscal reform. They have to start mobilizing more actively the domestic resources. There are places they can work very hard, like in terms of tax collection, tax administration. They can introduce new taxes. They need to make sure that they get very stable and adequate streams of domestic revenues for that kind of investment. You cannot spend if you don’t have stable sources of income. So the government does need to do that.

What kind of approaches to poverty reduction should the government take?