Myanmar: After the elections – where to next? Some suggestions

After peaceful and fair parliamentary by-elections, the people of Myanmar can look forward to even greater optimism.

Myanmar is a country of immense potential and there is plenty of scope for development and enhancement of the quality of life there. A few interesting facts about Myanmar:

  • It is the 40th largest country in the world, the second largest country in Southeast Asia:
  • and 24th most populous country with over 58.8 million people;
  • Under British administration it was the second wealthiest country in South East Asia;
  • The current capital of Myanmar is now Naypyidaw (“City of Kings” in Burmese) which was chosen as the new capital in 2006. The previous capital used to be Yangon, which is still the commercial hub of the country;
  • It is a hugely vibrant country with a significant level of multi-culturalism and tolerance. Indeed it is not uncommon to see mosques, churches and Hindu temples dotted around the main cities in a largely Buddhist nation.

I have proposed below a number of suggestions as to what Myanmar should consider as the country grows. These thoughts should by no means be viewed as expert opinion but rather as those made by a layman with a deep interest and affection for Myanmar and its people.

Infrastructure improvements

There is an urgent need for Myanmar to improve the following:

Telecommunications & IT infrastructure – Internet access remains expensive and patchy. This is a result of very few operators in the telco space and there should be an active process of inviting regional/international telco partners into the fold and help drive down costs of Internet access. There should also be tie-ups with international partners to allow for an upgrading of the current telecommunication infrastructure. The Myanmar Ministry of Communications, Posts and Telegraphs needs to start working with foreign partners to help support the upgrading efforts.

Roads/railway – With greater economic growth, we will see greater rural-urban migration, which will increase the burden on roads/highways and railways in the cities especially Yangon. Yangon’s traffic network as it stands is just sufficient – but with any further increase in the city’s population, there is a real risk that we will find gridlocked roads that’s commonplace in Jakarta and Bangkok. There must be a realization that there is a severe business and economic cost to poorly managed roads – a point not lost on Jakarta/Bangkok’s city planners. Yangon however – if it chooses to be proactive – can mitigate future problems and issues in a more efficient manner.

Natural disaster early warning systems – The government should also seek aid support (both financially and technically) to help develop and establish early warning systems for cyclones and other natural disasters that afflict Myanmar. This will help minimize casualties and mitigate damages. An early warning system, cyclone shelters, coordinated response systems, integrated medical and emergency protocols, etc will all help with recovery efforts subsequently.

Healthcare – There should be an effort to upgrade medical and healthcare facilities. The current facilities are outdated and with the medical teams normally being overworked and underpaid. The health of the people has to be paramount and there has to be good state hospitals. The easy alternative is to simply let private hospitals operate in the country but this normally tends to create a 2-tier healthcare system – one for those who can afford it (normally a minority) and those who cannot (the majority) and this only exacerbates the problems of social inequality.

Banking sector reforms (including currency exchange)

Banking system

Myanmarese banking systems need to be plugged in with regional partner banks. There should be greater facilitation of international banking norms like Automated Teller Machines (ATMs), international banking transfers, trade financing (such as the use of LCs, DPs, DAs, etc), credit cards, etc.

Credit card acceptance in Myanmar is extremely low – and this hurts locals as well as tourists and businessmen. It also affects the hospitality industry. Plenty of tourists go into Myanmar without realizing that the 99% of the economy is a cash economy which prevents tourists from spending what they would have planned in advance.

Lack of international banking transfers also means that profit repatriation is affected for international investors. This has to be managed as well.

Currency exchange regulations

It is good to note that the Myanmar government has allowed for managed floating of the kyat. However it is important to note that there is still significant dollarization within the economy. Myanmar should avoid the path taken by Vietnam which allowed for the US Dollar to be used as a currency of choice within the country – which effectively meant that the Vietnamese lost all control of their monetary policies as they had no control over the USD. The Myanmar government should restrict the use of the USD extensively within the economy and there should be a push to use kyats by all key sectors of the economy. This will help support the use of the kyat as well as ensure greater monetary policy control subsequently. If the Myanmarese do not control this problem early, it will become too big to solve – see Vietnam experiences.

Education

There should be an extensive review of current tertiary education institutions. There should be greater quality control and better alignment to international best practices. Myanmar’s key universities should invest in (and seek support for investment) their teaching infrastructure and lecturers. There should also be a regional broad-based support of Myanmar’s universities through partnerships with other leading institutions within ASEAN. Exchange programmes, best-practices sharing and scholarships should be implemented with reputable partners. There should also be a review of curriculum (at all levels), textbooks and teaching material (many of which are obsolete), teachers’ competency frameworks and teachers/lecturers’ remuneration.

There should also be additional focus on the development of competencies of Myanmerese youngsters in these areas:

  • Software programming
  • Accountancy & Finance
  • Medicine
  • Engineering
  • Architecture

The above are all areas which Myanmarese have traditionally excelled in and there is a natural gravitation of the talented youngsters towards these subject areas. The government should support the aspiration of the youngsters by ensuring they develop robust and viable capacities and capabilities in these areas.

Public sector / civil service salary review

As the country grows economically and with increasing incomes and greater investments by multinational firms, there remains a real risk that corruption will rear its ugly head. Rampant corruption has been the bane of many a rapidly emerging economy and it becomes a real business cost for the country subsequently. One way of curbing this is to ensure that the members of the civil service have salaries that are consistent with the private sector. Yes, it will be an extremely costly affair, but rather than as a cost, it should be viewed as investment to protecting the country’s future.

A better benchmarked salary will also mean that the civil service and public sector will attract a better quality of individuals with a real commitment to the country’s cause which will help in the country’s development.

This should be a matter which the government addresses sooner rather than later (when it may be too late – the Indian experience is a sorry tale in this regard).

Reinventing the economy

Free-trade zones / Special Economic Zones / Preferred Trading Nations agreements

Myanmar should establish formal country economic partnerships with India, China, the UK and ASEAN. This could be in the form of preferred trading nations agreements, free trade agreements and also in the form of special economic zones whereby the investing nation will get tax breaks and incentives to set up operations in Myanmar. Therefore, we could have an Indian special economic zone (SEZ), a Chinese SEZ, an ASEAN SEZ (where all interested ASEAN member states can invest freely and enjoy liberal benefits). This means that Myanmar also diversifies its economic dependency across a whole host of countries and not remain entirely under the influence of just one major economic partner. This will result in severe risks further down the road.

Professio-nationalisation of key industries and sectors

The country should also consider professionalizing and nationalizing key industries in areas such as mining, energy, infrastructure and transportation. Currently they are either nationalized (but lack professionalism) or have not yet been nationalized at all. Vital industries should be protected by the government. Perhaps one other model is to allow for joint ventures with foreign companies in areas where the government does not have the skill sets. For instance, in Brunei, Shell has a 50-50 venture with the Brunei government (a JV entity known as Brunei Shell Petroleum or BSP) which ensures that Brunei enjoys the technical and managerial expertise of Shell but also ensuring that the returns are shared with the government and ultimately the people.

Supporting small and medium sized enterprises

The government should also provide incentives and support structures for small and medium sized enterprises (SMEs) as they tend to account for the bulk of employment and GDP of any country. Supporting SMEs will also spur greater entrepreneurship, innovation and growth that is led from the bottom-up and which will ensure better distribution of economic resources amongst people.

Conservation & commitment to sustainable growth

In the midst of all these developments, Myanmar however, should not lose sight of the fact that it is a large country with significant environmental beauty and value which must be preserved. Economic progress must not come at all costs and therefore endangering the environment. There must be an overriding commitment to conversation and sustainability. There is no point if the country grows but finds itself polluted and dying from the inside. To this day, I find it absurd that nations spend significant percentages of their GDP of defence spending and yet neglect to look after their environment and allow it to be robbed, pillaged, polluted and destroyed. Effectively, guns are being bought to secure the country from external forces while the country dies from the inside. Myanmar has a real opportunity to ensure this is not the case from a very early stage.


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2 thoughts on “Myanmar: After the elections – where to next? Some suggestions

  1. I have only been to Yangon, Myanmar once which was last August. My first impression is not dissimilar to yours. I have since mentioned to almost everyone I met to ‘look at Myanmar’. It is attractive for any investor in almost any sector or industry.

    • Absolutely. The growth potential is enormous and there is a strong possibility that with good governance this is a country that may rival Indonesia and Vietnam as emerging regional powerhouses.

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