World Bank maintains optimism over Myanmar economy despite risks

Hans Anand Beck, World Bank’s lead economist for Myanmar, said at a press briefing yesterday that the rising consumption and the potential to welcome major foreign and domestic investments would drive Myanmar’s economy in the short and medium term. 
“We are seeing our baseline contribution from consumption but also from picking up investment from the public sector and domestic investment,” he said. 
He sees great potential in the garment industry, as the region demands more from Myanmar. 
He said Myanmar’s growth potential is even higher despite downside risks and investor perceptions of slowing reforms. Public and private investments in priority infrastructure services such as power and transportation are projected to pick up and inflation is expected to ease further this year. 
Beck lauded notable reforms by the government, as it has tried to improve the quality of citizens’ life. He stressed the importance of FDI and national consumption in the nation’s economic activities. 
He considered exchange rate unification as a very good reform, and was also aware of revenue reforms by the democratic government. 
He urges implementation of regulations on credit information reporting and improving public access to electricity. 
According to Beck, it is important for the government to improve generation capacity and power distribution on the supply side, and to review the pricing and electricity tariff on the demand side. 
He urged the government to maintain macroeconomic stability despite seeing some good progress in a wide range of sectors. He also calls for easier access to finance, electricity and land, reform of business regulations and improvement in labour skills, to boost investor confidence. 
“There is no quick win. There is a long and deliberate agenda that the government has set out . We understand the government is pushing for further reforms. So it is important that the state’s reform strategy ensures optimism for investors,” he said. 
Beck said the conflicts in Rakhine state may have indirectly affected the nation’s investment potential. He pointed out concerns of the tourism industry after some bookings were cancelled due to instability in Rakhine state. 
 He warned Myanmar’s high potential may not be fully materialised, if the nation failed to maintain peace and stability. 
The economist said Myanmar must sustain hard-earned macroeconomic stability to ensure long-term growth. 
He suggested maintaining the target for a gradual reduction in intervention by the Central Bank of Myanmar, allowing interest rates to adjust to market conditions to ease monetary pressures. He also called for easing of control over retail interest rates, shifting burden of fiscal adjustment towards revenue mobilisation, and continued reprioritisation of expenditure, particularly for public investment projects.  
Ellen Goldstein, World Bank’s director for Myanmar, Cambodia and Laos, said the development lender had assessed a wide range of factors before it set a bullish growth projection. 
She is committed to support the government to ensure a broader inclusive growth in line with the organisation’s mandate to reduce poverty and improve prosperity. 
Goldstein stressed the organisation’s deep concern of the recent violence in Rakhine state. She urged the government to facilitate the return of refugees. 
She said the organisation would join the international community in strengthening the government , so it could move forward to ensure a return to stability in the conflict-affected area.