The recent report by the McKinsey Global Institute says Myanmar has the potential opportunities that could quadruple the economy by 2030. However, there are some challenges and risks in the face of ongoing economic reforms.
According to the 2013 study by the
institute, the size of Myanmar economy was US$ 45 billion in 2010 and
could reach US$200 billion by 2030 due to the speed of digital
leapfrogging which is a faster economic growth.
Despite the positive impact, McKinsey
warns companies entering Myanmar to be cautious about major risks that
could disappoint foreign investors.
Economic, political and governance
issues facing Myanmar are all widely acknowledged but there are other
ways to unlocking growth with attention to key sectors, the report says.
Myanmar needs to focus on seven sectors
that will deliver growth. Those are manufacturing, agriculture,
infrastructure, energy and mining, tourism, financial services and
telecommunication. Of these key sectors, agriculture, energy and mining,
manufacturing and infrastructure are the major ones to account for
almost 85% of the total economic opportunity.
"Growing incomes will also unleash new
consumer demand growth in Myanmar" Heang Chhor, a McKinsey & Company
director for the South East Asia Office told the press. He added "As
the number of consumers with income for discretionary spending
potentially rises from 2.5 million today to 19 million in 2030, consumer
spending could triple from $35 billion to $100 billion."
Myanmar currently has 46 million working
age people and over one million working abroad. If the economic reforms
lead to more dynamic changes in key sectors, the country will be right
on the track in a short time, Doan Nguyen Hansen, a Principal in
McKinsey & Company's Geneva office told the media.
Myanmar needs to reconnect to the global
economy through foreign direct investment, trade and flows of people.
It potentially requires $ 170 billion in foreign capital to meet its
overall investment need of $650 billion, the report says.
source: Eleven Myanmar
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