Economic outlook for Myanmar looks 'promising'

 

"The outlook for Myanmar’s economy is promising, supported by continued macroeconomic reforms. We expect GDP growth to accelerate to 6.4 percent in 2013 from 6.2 percent in 2012," said the Standard Chartered chief. 

"The tourism sector is emerging as a new pillar of growth, and ongoing FDI is also providing support. Myanmar has continuously increased its foreign reserves, reflecting improved external balances," said Singhsacha, adding that energy-related sectors continue to receive the most foreign investment. 

The banking chief also expressed her belief that Myanmar’s tenure as the ASEAN chair for 2014 will have a positive impact on the country’s economic and social development.

"It will provide Myanmar with an excellent opportunity to showcase the progress the country has made over the last two years. It will also allow Myanmar to demonstrate its growing stature as a key mover and leader in the ASEAN region to the broader international community."

Singhsacha conceded that Myanmar's banking sector was not as advanced as some its neighbours, but insisted that there was much potential from growth provided reforms continue. 

She lauded the government's decision to make the central bank independent from the Ministry of Finance, and expressed her confidence that in time such reforms will help build confidence in the banking sector. 

"This will not happen overnight as they will need time to implement a range of reforms to help enhance the country’s financial infrastructure," she said. "We believe this is a step in the right direction, which will strengthen confidence in the banking system." 

Standard Chartered is currently working with the central bank to support capacity building efforts by sharing the bank's international experience and expertise.

Matt Davies, who led the International Monetary Fund’s recent mission to Myanmar, shared similar views at a press conference on Tuesday.

"I think the government’s decision last year to establish the autonomous central bank is very important one. Financial sector modernisation will require sustained reform efforts over several years. The banking sector is growing and modernising rapidly and will require updated regulations and improved supervision capacity," said the IMF representative. 

Foreign bank participation can also play a useful role in accelerating financial sector development, he added, insisting that new fiscal policies were needed to minimise risk and maintain healthy balance to encourage local banks. 

"Foreign banks can bring benefits to the economy, but they will also make it difficult for local banks. Supervisors should set a good balance between them," said Davis.

Standard Chartered was the first Western Bank to open a representative office in the country following the easing of international sanctions in 2012. Up to now Myanmar has not allowed foreign banks to open branches in the country. 

Despite concerns that international banks may kill local competition, sources close to the central bank indicate that Myanmar may soon allow foreign banks to open branches in what is widely seen as Asia’s last frontier.

Tina Singhsacha confirmed that Standard Chartered would welcome the opportunity to open a local branch, but insisted that they were focused on building their reputation in the country first. 

"We will explore when such a move might be appropriate in time. For the time being we remain focused on re-establishing our presence in Myanmar through our representative office," said Tina Singhsacha.

Standard Chartered Myanmar is also expanding corporate social responsibility programmes such as their "Goal" sports-for-development programme. Established in October last year the programme aims to use sports to raise awareness of health issues like HIV/AIDS and provide skilled training to teenage girls. 

Standard Chartered is also part of the UK-Myanmar Financial Services Task-force, which aims to support the development of Myanmar’s financial sector by enabling a regulatory environment and effective industry education and training programmes.