The government’s recently released economic plan is long on aspiration, but short on detail.
The government released its much-anticipated economic plan on 29 July, four months after the new government won office. While a step in the right direction, the success will depend on details yet to come.
Consisting of a ‘vision’, four ‘mission’ statements and twelve vague ‘policies’, the plan offers little more than the National League for Democracy's election manifesto of late 2015. The sentiment is sound—stressing the importance of developing a market-oriented system, reducing red tape, diluting monopolies, liberalising the financial sector, expanding access to credit and developing infrastructure. But a lack of detailed timelines and concrete proposals has caused investor disappointment.
Effective economic planning and implementation face enormous challenges. The new government has limited experience and a constrained institutional capacity to address the challenging business environment—Myanmar ranks 167 out of 189 countries in the World Bank’s ease of doing business gauge. A restructured Myanmar Investment Commission faces a US$2.3b backlog of over 100 domestic and FDI licence applications.
But the payoff from improving policy and governance is enormous. Myanmar’s location is prime—bordering countries comprising 40% of the world’s population. And its abundant supply of natural resources and cheap labour could fuel rapid economic growth. Early economic reforms and international integration mean Myanmar is already catching up from a low base (Chart 2). New opportunities are likely to lie in agriculture, infrastructure, utilities and green technology.