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Business News/ Politics / Policy/  Myanmar’s growth not inclusive, says opposition
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Myanmar’s growth not inclusive, says opposition

Myanmar needs $650 bn of investment by 2030 to support growth, according to a McKinsey report

A file photo of Myanmar’s President Thein Sein. Photo: Bloomberg (Bloomberg)Premium
A file photo of Myanmar’s President Thein Sein. Photo: Bloomberg

Nay Pyi Taw/Yangon/New Delhi: Even as Myanmar attempted to re-engage with the rest of the world during the recent World Economic Forum (WEF) meeting, concerns have been voiced about the growing inequality in the multi-ethnic society and the benefits of its growth reaching only a privileged few. Members of the National League for Democracy (NLD), Myanmar’s principal opposition party, said growth in the country was not inclusive and that the rural areas had been neglected.

Concerns have also been raised about investments coming in the extractive industries and the continuing violence in the country keeping investors away.

“The president of this government has conceded that most of the changes have not trickled down. A large number of people don’t have the rights to enjoy these changes," U Hantha Myint, member, central executive of the NLD economic committee, said in an interview. “Some of the sections of the population might have enjoyed some of the development but most of the people have been left out. It’s not inclusive."

This comes in the backdrop of Myanmar opening up its $53 billion economy, which is expected to grow to $90 billion by 2018. The country hosted the just-concluded WEF.

“The benefits of growth have only reached the upper level. By upper level, I mean the government’s side and the cronies. There has only been a slow transition," said Daw Than Ngwe, a member of Pyithu Hluttaw, the lower House of Myanmar’s Parliament known as Pyidaungsu Hluttaw.

More than 70% of Myanmar’s 60 million people live in rural areas in abysmal conditions. A case in point being the average electrification rate of a mere 16%. According to a WEF report, only 26% of the country’s population has access to electricity. Myanmar’s annual budget is $1.06 billion, or around 2% of its $53 billion economy, not sufficient to meet the growing needs of its citizens.

“All the reforms we are undertaking are in response to the desires of the people," Myanmar’s president Thein Sein said on Friday. He said his government’s reforms were “inclusive" in nature.

Speaking at the WEF, Thein Sein stated that special attention must be paid to the rural areas, where the majority of the population lives.

Stressing the need for growth in Myanmar’s rural areas, Helen E. Clark, administrator of the United Nations Development Programme, said, “Putting a big focus on agriculture right now is key."

There are also environmental concerns about Myanmar’s extractive resource industry. There has been considerable interest in the country’s resource sector from neighbouring countries. Myanmar borders China and India, both fast-growing major economies.

“Most of the investment which is coming is for extractive industry to extract our mineral reserves, our forests and also our fisheries. It is quite worrying," said U Hantha Myint of the NLD.

The Myanmar government is set to issue landmark regulations for environment protection shortly and join the Extractive Industries Transparency Initiative, a global standard to measure governance and transparency in resource-rich countries.

India and China’s engagement with Myanmar has led to comparisons.

“Indian business practices here are much fairer, much better and their work relations with the labour force are much better than the Chinese," said U Hantha Myint.

India is Myanmar’s fourth largest trading partner after Thailand, Singapore and China. Of Myanmar’s overall trade of around $19 billion, China accounts for around $5 billion, and India $2 billion. Of this latter, exports account for $542.7 million and imports $1.4 billion.

Myanmar needs $650 billion of investment by 2030 to support growth, according to a McKinsey and Co. report. Of this, $320 billion is required in infrastructure.

“While a lot of investment has been talked about, not much has come in. That’s the problem," said U Hantha Myint. “People are reluctant to take risk and come and invest here. There is uncertainty. The government has to give some sort of certainty in terms of credibility in policies and importance to society."

Myanmar last year took its first steps in transitioning towards democracy after five decades of military rule, but still faces problems such as the escalating violence in the Rakhine province, where attacks against Rohingya Muslims have prompted allegations of ethnic cleansing.

“There is an ongoing conflict in this country so people who are considering about investing in this country, for them these issues are quite a worrying sign," said U Hantha Myint.

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Utpal Bhaskar
"Utpal Bhaskar leads Mint's policy and economy coverage. He is part of Mint’s launch team, which he joined as a staff writer in 2006. Widely cited by authors and think-tanks, he has reported extensively on the intersection of India’s policy, polity and corporate space.
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Updated: 13 Jun 2013, 12:41 AM IST
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