U Myint advocates quick-wins for Myanmar’s economy

Writer: 
KHINE KYAW
U Myint, former chief presidential economic adviser, delivers a speech at an event at UMFCCI office in Yangon. (Photo--Khine-Kyaw,Myanmar Eleven)

 

By KHINE KYAW

MYANMAR ELEVEN

YANGON

EVEN as international agencies pronounce a favourable outlook for Myanmar, former chief presidential economic adviser U Myint has identified policy areas that can help ensure that an improving economy benefits ordinary people.

The economist endorses a move that will see fresh studies conducted into patterns of expenditure in household consumption starting from 2010. He hailed the Central Statistical Organisation’s efforts to undertake such an update with the support of World Bank, which, with the International Monetary Fund, has maintained its positive outlook for the national economy.

“I believe the study will provide useful information on the state of life and labour for the common folk in our country,” U Myint said.

He said that average incomes of families in many parts of Myanmar were inadequate to meet household consumption expenditure. Estimated monthly incomes of average households were insufficient to cover consumption costs in all the states and regions except Yangon and Ayeyarwady.

He referred to a previous study that showed spending on food was very high in Yangon, the nation’s commercial hub, accounting for 68 per cent of total household consumption. He said it seemed to be among the highest in Asia, taking into account a very low level of income for the nation.

“With rising incomes, the share of food declines while there is a corresponding increase in the share of other items such as housing, consumer durables, transport, education, health, recreation, and family welfare services,” he said.

He also pointed out that there had been a rise in the share of charity and ceremonials (C&C), which has become a major item of expenditure since 2001. Spending on C&C was higher than what the typical household spent on renting a home, home improvements, education, clothes, and health.

He sees families doing meritorious deeds and playing an active role in ceremonies - including celebrations, conventions, festivals, musical events and rituals - as major reasons for the rise in C&C expenditures.

In its latest Myanmar Economic Monitor launched last week, World Bank projected Myanmar’s economic growth would increase to 6.7 per cent next year. Yet, the economist warned that the authorities should not become “too happy” with a narrow focus on gross domestic product (GDP) growth alone. “Too much pre-occupation with GDP is not good,” he said.

“Too much pre-occupation with GDP is not good,” he said.

“In Myanmar, like in most countries, a lot of attention is devoted to GDP and its components in reporting about economic conditions in the country and plans for the future. There is a tendency to think the higher the growth rate, the better [the economy]. Whether this is really true has been debated for a long time.”

He urged that the government should focus on the distribution of income that accompanies growth in GDP.

 “In addition to looking at GDP, which deals with production and output aspects of an economy, it will be instructive to pay some attention to the consumption and expenditure aspects to get a better idea of our people’s economic situation,” he said.

He also warned of the impact of a brain drain, and urged the authorities to encourage Myanmar people living abroad to return to their homeland. In 2016, the International Organisation for Migration estimated that 4.25 million Myanmar nationals are living abroad. A large number of them work in Thailand and Malaysia, driven by the need to earn more for their families.

According to the economist, the major reasons for migration are higher wages in neighbouring countries, conflicts, and environmental migration caused by natural disasters.

“Children of the cream of Myanmar society in government, business, defence, academics and the professions are mostly all residing abroad either studying to acquire skills or settling down and working abroad,” he said.

Yet, he believes Myanmar now has a better political landscape.

“Now our situation is different. I believe we have made some progress with regard to freedom of legitimate thought, word, action and expression. Such progress should be maintained and strengthened,” he said.