By Pramod Sedhain.
Almost five decades of military rule and isolated from the rest of the world, the Myanmar path to reforms is under way. Reform has been initiated since November 2010. As part of this effort, the Myanmar government granted amnesty to thousands of political prisoners, human rights defenders, land rights activists, journalists, foreigners, factional-struggle military officials, among others. The Myanmar government has expressed commitment to release the remaining political prisoners. Likewise, the Western nations have been encouraging the Myanmar government to expedite the wave of democratic reforms and open up economy.
The current progress on reforms has created a widespread opportunity and hope for the country’s economy or politics. After the easing of the Western sanctions imposed on the former military rule, the Myanmar government has made multiple progress and opportunity in all fronts, including political, economy or social. The foreign nations have focused their attention on Myanmar’s vast natural resources, economic potentiality and strategic geo-strategic location. (Myanmar shares the land border of 5,876 kilometers with five countries China – 2185 km, Thailand – 1800 km, India- 1463 km, Laos- 235 km, Bangladesh- 193km, which is longest borders in Southeast Asia.)
Progress seen on the horizon in Myanmar and upcoming 2015 election would draw a future course. 2015 multi-party election will prove to be a very significant step in the reform transition from military to a civilian rule. The Myanmar Constitution has reserved 25 per cent of parliamentary seats for the military as well as important ministerial posts. More than half of the rest are held by retired army officers involving pro-military party Union Solidarity and Development Party. Myanmar’s most popular opposition leader Aung San Suu Kyi and her party National League for Democracy (NLD) stepped up the election champion. Nobel Peace Prize winner and international democratic icon, Suu Kyi will not be able to fight for the next president under the constitutional clause. She will not be eligible for the presidency. Suu Kyi, who was under house arrest for at least two decades, has demanded that this constitutional provision be scrapped.
During my visit to the country, we could easily shape perceptions that the country is heading towards reforms in all aspects. The multi-cultural and ethnical potential country has now a very easy access to foreign tourists and they can easily move across the country without any fear. There has been an impressive and extensive booming of construction in the capital Yangon with several other economic activities around the country indicating reform progress. The significant number of foreign tourists flow will be sufficient to evaluate the ground situation of the country with visible signs of reforms underway. The privatization process as well as strengthening of the important financial sectors like telecommunications, electricity, energy, forestry, education, and health indicates that Myanmar has accelerated efforts towards progress and reforms.
Transforming the country’s economic development will help strengthen democracy and improve the people’s living standards. Political reform along with economic and social reforms is the foremost necessary element for the overall development of a country. Market-oriented liberalization economy and trade, transporting line and other development infrastructure, skilled and quality labor training, modernization of industry and agricultural sector, modern health and education system is also vital for development process. Socio-economic new development creates new opportunities to achieve peace and stability.
Poverty reduction and economic progress is Myanmar government’s principle priority. Myanmar government wants to see a triple growth in its gross domestic product (GDP) per capita by fiscal 2015/16 and the government is trying to focus its legal framework target to achieve the goal. But there are multiple challenges to achieve the goals because of financial problem. Government needs to have more direct foreign aid, grants, loans and investment. The government is trying to establish business-friendly environment in the country to attract more investments. The government is still drafting the foreign investment law, drafting laws on industrial zones, to strength privatization, laws on the minimum wages, raising the threshold for income tax, among others.
Following the visit of US President Barack Obama on 19th of November last year (making it the first-ever visit by a US President), Myanmar has been center of attraction. Obama’s visit not only drew the world’s attention, but also helped in pushing the country’s democratic reforms. After the new US engagement in Myanmar, it has become easy to promote foreign trade and to normalize its relations with the wealthy western world. International condemnation and sanctions have been drastically minimized following the reforms in Myanmar. The lifting of all sanctions in Myanmar has opened the door of business opportunities and gaining different sources of engagement and even ending decades of sole reliance on China. According to Reuters news agency report, since July 2012, U.S. companies have cumulatively invested $612 million in Myanmar.
According to the Myanmar government, foreign direct investment was five times higher in the fiscal 2012-13 than in 2011-12. According to Reuters News agency report, Myanmar has revised its forecast for foreign direct investment more than the estimated $4 billion figure to more than $5 billion for the fiscal year that began in April. The major foreign investment sectors are energy (oil and gas), manufacturing, mining, hotels and tourism, transport and logistics, real estate, livestock and fisheries, agriculture, construction and services.
According to the Myanmar Investment Commission data, economic reforms helped triple Foreign Direct Investment into Myanmar to more than US$4.107 billion in the fiscal year, compared with $1.419 billion a year before and $91.17 million 10 years ago in fiscal 2003/04. Top foreign investors are China, Thailand, Hong Kong, Japan, Malaysia, South Korea, United Kingdom, Sweden, Brunei, Samoa, India and other western states. This investment attraction indicates business-friendly law in Myanmar.
Despite the vast natural, cultural and biological resources and lot of potentiality, Myanmar remains one of poorest countries in the region. According to the Asian Development Bank data, Myanmar’s GDP growth was estimated at 6.5 percent for 2013 and is forecasted to rise to 6.7 percent in 2014. If the international community rewards Myanmar, it will be one of the potential stronger economies in the region. The 60 million population nation’s economic transformation is not a big deal because of its diversifies potential options including low-cost youth labor force, huge regional market opportunities, foreign aid and investment commitment, growing interest of foreign investors, among others.
In other hand, it have lot of stock of untapped natural resources including the valuable petroleum, timber, tin, zinc, coal, lead, marble, natural gas and similar to hydropower. Myanmar’s long coastline has easy access to major Indian Ocean shipping lanes which has the most potential of developing new deep-sea ports to enhance trade corridors in the region. Another rare chance to Myanmar is its location, which is a key factor to huge potentiality to build up trade channels link with around 2 billion consumers market. Credible financial institution suggests that the country’s economy is likely to grow by an average of 7.7 percent per year across 2016-2020. According to McKinsey Global Institute survey, Myanmar could grow the size of its economy from $45 billion in 2010 to more than $200 billion in 2030.
Myanmar’s tourism industry has a huge potential and is already the highest record ever in history. Myanmar’s growing tourism industry is a major contributor to GDP. Tourism can be a major source of revenue and potentiality to enhance their economy through this sector. According to Myanmar Minister of Hotels and Tourism figure, they received 2.04 million tourists in 2013, with a growth of over 90 percent as compared to the previous years. In 2010, just 300,000 tourists visited the country. Tourism development plan, policy and investment are growing rapidly. It lists 794 hotels licensed to accept foreigners but still needs to improve easy air connectivity with foreign countries. Myanmar government has a projection of some 3.01 million tourist arrivals by 2015 and 7.48 million by 2020.
The natural aspect is the most potential tourist destination because of their extensive destination of Himalayan range, tropical forests, pristine beaches, off-shore islands to inland waterways. Myanmar is a fascinating destination for hundreds of pagodas, temples, archaeological sites, and other rich cultures and natural attractions. The nation has a beautiful flora and fauna along with different beauty spots snow-peaked mountains to rivers, natural lakes, beaches and archipelagos. The nation has around 135 national races with different customs, tradition and art. Myanmar is rich in bio-diversity and resources. According to Myanmar’s Ministry of Foreign Affairs data, the country is home to nearly 300 known mammal species, 300 reptiles and about 100 species of birds, and 7,000 species of plants.
Challenges ahead
Despite lot of opportunities and hope, Myanmar’s reform transition faces great challenges and extensive obstacles. Challenges remain in critical phases and there is still a risk of stability and peace. Country needs to solve the long-standing inter-communal violation and it ethnic conflicts. Myanmar is still in fault-line of multi religious and ethnic tensions. Internal power struggle might affect the fragile ethnic diversity and the economic progress. National unity is the most significant factor to avoid the risk of different internal as well as ethnic conflicts risk.
Failing to form a common solution and a political unity the tensions and mistrust in Myanmar will spread and take a new height resulting new waves of deadly violence and communal unrest. Peace and stability should be the government priority. The government has made ceasefire with 10 major ethnic armed groups, which were fighting against the government. The country’s early stage economic development, unemployment, management capacity, urbanization, technology, full fledge connection with world are other challenges. Myanmar has already stepped forward. However, there are several seen and unseen political, economic and social challenges.
