The levels of industrial growth expected in Myanmar could potentially benefit every layer of society promoting employment opportunities and economic development, but this would require the country to adopt holistic development policies in order to compete with the numerous other middle income Asian nations.
Myanmar has commenced taking steps towards economic development as the new government ends decades of military rule. Myanmar benefits hugely from its location next to the fest growing economies of India and China. In these countries raw materials are in huge demand providing a ready market for Myanmar’s mined minerals. Sanctions imposed on Myanmar by Australia and the US have also been recently lifted and are freeing the way for further economic development. The introduction of new taxes to Australia and Indonesia has also given Myanmar a boost with foreign direct investment (FDI) in the mineral industry now looking more appealing.
Myanmar’s new democratic government is taking national steps to develop the country’s mineral sector and is seeking to join the Extractive Industries Transparency Initiative (EITI). The mining sector’s contribution to Myanmar’s GDP was US$ 2.3 billion in 2000 and hit US$ 56.2 billion in 2010 with a Compound Annual Growth Rate of 37.6%.
Oil and gas
Myanmar has several major oil and gas fields but there is severe lack of technology and investment from foreign oil companies. Many of the country’s fields are undeveloped however, May 2010 saw the Ministry of Energy announce clearance for overseas oil companies to invest in 23 offshore blocks.
Proven oil and gas reserves in the country are 2.1 billion bbls and 25 trillion ft3 respectively. The country also has reported shale oil reserves of 3.3 million bbls. FDI for 2011 – 2012 stands at US$ 13.8 billion or 31% of the country’s GDP. The country must seek to become a more investor friendly nation to attract bigger foreign investments and develop fossil fuel production.
Myanmar still suffers from weak governance and corruption. The country is lacking in sustainable transport, power and communications infrastructure also. If industries and international trade are to bloom then better facilities are required and the national government must prioritise the development of ports, roads and railways to fully exploit the country’s production and export potential.
Myanmar’s environmental policies also need an overhaul as there is currently excessive tree felling in the country. The correct treatment of mining waste and water systems as well as legal mining also needs to be addressed.
Adapted from press release by Claira Lloyd.