RANGOON — Burma’s economic growth is forecast to recover to 8.4 percent in fiscal year 2016-17, a new report from the Asian Development Bank (ADB) said Wednesday.
In “Asian Development Outlook 2016,” an annual ADB publication, this growth is in part attributed to positive political developments in Burma and structural reforms over the past several years, though obstacles remain for the National League for Democracy (NLD)-led government that was sworn in on Wednesday, such as helping Burma to rebound from the widespread flooding and landslides last year that dropped economic growth to 7.2 percent.
“Though economic reforms implemented since 2011 have had positive outcomes, Myanmar’s new government will face the challenges of advancing economic reform, addressing infrastructure and labor shortages, and making progress towards peace and social cohesion,” said Winfried Wicklein, ADB’s country director in Burma, in a statement.
“Moreover, intensified efforts are needed to connect and develop rural areas to improve access to markets and services, and to generate opportunities and jobs.”
Still, the ADB views Burma’s economic outlook with judicious optimism.
“We’ve reviewed political documents like the NLD’s economic policy, and we’ve engaged with many people. The new government can accelerate reform,” Wicklein said, adding that, going forward, the ADB would look to enhancing Burma’s transportation infrastructure, which has suffered from decades of under-investment.
“This year we’re looking in particular to support Myanmar’s transport sector. We’re working closely with the government and private sector. This is a very exciting time for Myanmar. With the new government coming, investors are also looking to invest in Myanmar,” Wicklein said during a press conference in Rangoon on Wednesday.
According to the ADB, and estimated US$60 billion will be needed through 2030 to ramp up transport systems to the standards of other countries at similar stages of development.
“This means increasing transport sector investments to the equivalent of 3 percent to 4 percent of gross domestic product from little more than 1 percent in recent years,” said ADB deputy country director Peter Brimble in Wednesday’s statement.
The ADB also expects foreign direct investment to get a boost from Burma’s internationally lauded, historic election in November, with funds flowing into new special economic zones (SEZs) and into the rapidly expanding transport, telecommunications and energy sectors.
Among the main challenges that could hamper economic growth in Burma are high inflation, weak external and fiscal buffers, limited government capacity to retain reform momentum, protracted ethnic and religious tensions and vulnerability to bad weather, the regional lender said.
