Written by Stephanie Li
Myanmar’s economy looks set to grow by 6.4 percent in fiscal 2019-20, up from 6.3 percent last fiscal year, bolstered by growing investment in the transport and telecom sectors and planned infrastructure spending by the government before the 2020 elections, according to a World Bank report released January 15.
However, sluggish global and regional growth combined with the ongoing crisis in Rakhine and slow pace of reform will continue to cast gloom on the country’s outlook.
As an economic downturn continues to loom, the Myanmar government has implemented a series of reforms in a bid to create a friendlier and more stable business environment.
Pointing to efforts such as opening up Rakhine State to the world and strengthening trade ties with countries like Japan, South Korea and Singapore, the World Bank in September ranked Myanmar as one of its top 20 most-improved countries on business environment.
Among the reforms implemented to improve the business environment, Myanmar introduced a company registry platform, Myco, in 2018, with an expedited registration process at a cheaper fee of K250,000. The country also overhauled the property registration process by streamlining deed registration and appraisal, while local courts are set to publish performance measurement reports, according to the report released in September.
Last November, five foreign insurance firms received government approval to operate in Myanmar, following a two-year delay. Along with the insurance sector liberalization, 45 foreign banks have been licensed to set up offices in the country.
A new, $52.6 million plant funded by a Japanese auto giant started construction in November, with operation set to commence in 2021.
“Myanmar continues to experience robust growth, but as the global economic environment deteriorates, the importance of domestic factors such as prevalent conflict, low private-sector productivity and institutional constraints challenge investor sentiment and hamper the country’s long-term prospects,” said Gevorg Sargsyan, World Bank country director for Myanmar.
The report says reforms have lifted Myanmar on the World Bank Group’s Ease of Doing Business Index, placing it 165th among 190 countries, compared to 171st the previous year.
However, the report urges that policies be geared towards private-sector-led growth by fostering market expansion, improving the allocation of resources and developing the capacity of market participants.
“Urgent actions are needed to address sources of conflict, improve social inclusion and foster a diversified and responsible private sector to sustain economic performance and set the foundation for Myanmar’s future prosperity,” added Sargsyan.