The Southeast Asian country of Myanmar has been through a series of struggles and strife in the last 80 years. Now, the world is waiting to see the results of its elections as well as the consequences that it will bring.
From being the second-wealthiest country in all of Southeast Asia under the administration of the British, Myanmar has fallen a lot. So much that was recognized as one of the least developed countries by the UN in 1987 due to its economic bankruptcy.
Many attributed Myanmar’s historical downfall to the 1962 military coup which paved the way for the infamous plan referred to at the time as the “Burmese Way to Socialism.” By planning to nationalize all industries apart from agriculture, this scheme turned the once-wealthy country into one of the world’s most impoverished.
However, all of this has changed for the better. Elections in 2010 removed the 50 year military government rule, leading to what many called “the opening” of the country to foreign investment as well as some of the most sustained economic growth Southeast Asia has ever seen. A major driving force behind the economic uplift was the lifting of sanctions by countries around the world.
To look at the change in more quantifiable details, a few key economic indicators will be examined, mainly GDP growth rate and the amount of foreign investment the country has managed to attract.
Myanmar’s GDP growth rate has experienced a tremendous increase ever since the military government was dissolved, as we can see in the exhibit below. The current upward trend is expected to continue especially since the national favorite political party, the National League for Democracy which is led by Nobel Peace Prize Aung San Suu Kyi, is expected to win by a landslide.
Foreign investment was fueled further by competition among several Asian powerhouses vying for influence in mainland Southeast Asia’s largest country by geographic area. Oil and gas served as the top receiver of foreign investment, making up more than 43% of the total.
In terms of the amount of FDI, a more drastic increase can be observed with investment increasing more than tenfold in just less than 4 years. This is because the “opening” has effectively lifted all sanctions, except on arms sales, greatly boosting trade and investment prospects.
Myanmar’s reforms have opened a lot of different sectors for private investors, including but not limited to, financial services, education, and healthcare. The government has also been playing a more active role in attracting foreign investment by holding bidding rounds for players looking to enter telecoms and oil and gas.
Myanmar’s Future Depends on Election Results
According to Hirokazu Yamaoka, a representative from JETRO (Japanese External Trade Organization Office) in Myanmar, this rapid growth has left investors bracing for the outcome of this Sunday’s vote. Many are hoping that the election results will send the message to the world that Myanmar is a very stable country to invest in.
“There are many Japanese investors with their sights set on Myanmar, and we truly hope that the results will not change their minds,” he added.
With the votes now being counted and the results of the election on the horizon, the rest of the world is definitely holding its breath to find out just what the outcome will be and what impact it would bring on the sustained economic development that has happened so far.