Myanmar’s economy: Reality check; Optimism about business prospects on the final frontier may be overblown
January 4, 2014 Leave a comment
Myanmar’s economy: Reality check; Optimism about business prospects on the final frontier may be overblown
Jan 4th 2014 | YANGON | From the print edition
THE most recent edition of the World Bank’s annual “Doing Business” report is a sobering read for Myanmar. It has been almost three years since President Thein Sein came to power and launched his much-trumpeted reform programme. As part of the effort to reconnect Myanmar to the global economy, the country was included in the report for the first time in 2013. Yet the results show that it is still among the very worst countries in the world to do business.It came 182nd out of the 189 countries surveyed, above such places as Eritrea, Congo, Libya and South Sudan. On some indicators, such as the ease of starting a business and enforcing contracts, Myanmar even ranked below these African countries. Long and costly approval procedures hamper much-needed construction work to rebuild dilapidated infrastructure. Burmese electricity is the priciest in the region.
Unlike the military junta it succeeded, Mr Thein Sein’s government is ready to admit its shortcomings and has vowed to improve. Its ministries are crawling with foreign consultants, lawyers and accountants, dispensing advice on how Myanmar might move up the rankings.
A long road lies ahead. The reformers at the top are few in number: slow progress to date may show how weakly the bureaucrats below them have committed to real change. Although the government has signed up to various reform-minded international agreements, such as the New York arbitration convention and the Extractive Industries Transparency Initiative, implementing them is another matter, given a chronic shortage of trained lawyers and other professionals.
Scepticism about Myanmar’s economy also extends to official statistics. Officially, it grew by 6.5% in the fiscal year beginning in April 2012, and is expected to do even better this year. Yet that does not chime with what many see on the ground. David Dapice, an economist at Harvard University, argues that the “statistical net” is so poor that it is almost impossible to know what the real growth rate is, and that it is probably below the official figure. “There is no systemic falsification,” he says, as in the bad old days of the junta, “but a lot of underreporting.” Large pinches of salt are needed to season the diet of good news that still tends to emanate from Naypyidaw, the gaudy capital built by the generals.
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