Date: 5 May 2011
The event will be held in Yangon, Myanmar, with the participation of distinguished participants from academia, government, civil society, international organizations, and the press. The list of well known participants making opening remarks, presentations and commenting on the publication includes:
Economic Affairs Officer
Countries with Special Needs Section
Macroeconomic Policy and Development Division
Country briefing note <download pdf file>
Economic growth benefits from higher foreign investment and some early reforms
Myanmar saw its economy slow down sharply in 2009, but with new foreign investments in oil and gas, electric power and mining, growth picked up again and reached an estimated 5.5% in fiscal year 2010 (ending 31 March 2011).
It was reported that foreign direct investment, mostly from Asia , reached a record US$16 billion in the first 11 months of 2010. A special economic zone law was enacted in January 2011 in a bid to attract more foreign capital.
Plans are also under way to promote tourism and to expand banking, telecommunications, shipping and agriculture.
Nevertheless, the overall domestic economy still suffers from restrictive measures, such as licensing, which pose barriers to the agricultural and manufacturing sectors in gaining access to inputs and equipment.
The projection for Myanmar in 2011 is 5.8%, but this could improve if substantial reforms are introduced in the wake of the general elections in November 2010 and the new Government in March 2011.
Inflation is lower than the traditional average, but rising food prices is a concern
While inflation has clearly moderated in recent years, consumer price inflation was at 7.9% in 2010, owing mostly to higher food prices. Rice prices rose sharply in recent months and the Government decided to suspend rice exports in February 2011.
Upward price pressure also comes from the expectation of higher inflation based on rumours of a planned sharp pay increase for civil servants.
In general, however, prices have become more stable in recent years, partly because the Government began to finance part of its deficit through Treasury bond issues, rather than relying completely on the central bank to print money.
Fiscal balance remains in deficit
There are no timely fiscal data on Myanmar , but it is likely that the country is continuing to run a large fiscal deficit. The central bank continues to print money to finance fiscal deficit, and monetary policy is rarely used. The last time the official interest rates were changed was in 2006.
Large foreign investment projects are increasing capital imports
The current account was likely to be in deficit in 2010, as major foreign investment projects rapidly increased capital imports.
Broader trends affecting South-East Asian exports are weakening demand in the developed countries, offset by rising demand from China and India .
Official development assistance to Myanmar doubled after Cyclone Nargis in 2008 to around 2% of GDP, but it is still relatively low compared to the amount received by other least developed countries.
The multiple exchange rate system continues to create economic distortions and an inefficient allocation of resources.
Addressing vulnerable employment and poverty could also boost growth
While unemployment has fallen to pre-crisis levels in many countries in South-East Asia , the formal sector has seen less improvement, as many of the workers who had been laid off were absorbed by the informal sector during the crisis.
The informal sector, however, suffers from lower productivity, lower wages, poorer working conditions, lower employment protection and minimum levels of social protection.
This has serious implications not only for poverty but also for the future growth potential of the subregion.
Therefore, human resources and skills development—including strengthened education, technical and vocational training—are vital for sustained dynamism in South-East Asia .
Such efforts will also help to tackle high youth unemployment in the subregion.
Moreover, considering that labour is one of the few assets of the poor, creating more and better jobs will help the poor to earn their way out of poverty.
In this regard, economic policies should be tailored towards expanding opportunities for poor workers to move into better jobs in the formal and nonagricultural sectors.