Myanmar has the potential to quadruple the value of its economy to $200 billion by 2030 if it presses on with reforms, embraces technology and shifts away from agriculture, a study said Thursday.
The nation, whose economy was stifled by decades of corruption and mismanagement under the former junta, could add 10 million jobs and lift 18 million people out of poverty, according to consultants at the McKinsey Global Institute.
"There is everything to play for—but also a major risk of disappointment," the report said, warning the government's task is to continue economic and political reforms in the face of major social challenges.
It estimated that Myanmar's gross domestic product (GDP) grew at an average of 4.7 percent a year from 1990 to 2010, lagging regional neighbours, but could potentially expand at an average annual rate of roughly eight percent until 2030.
Myanmar, one of Asia's poorest nations, is battling bouts of deadly religious violence which threatens to undermine reforms under a nominally civilian government which replaced military rule two years ago.
Buddhist-Muslim clashes this week in the eastern state of Shan have left one dead and several wounded so far.
Investors "want reassurance that the government can resolve ethnic and communal violence, maintain its momentum towards political and economic reform, and ease constraints on doing business" the study said.
But "Myanmar does have intrinsic strengths" in terms of its location between China, India and Southeast Asia, and is fortunate to have started reforms "during the digital era."
The nation can leap ahead of usual development patterns by grasping new technology to educate its people—the population has an average of just four years' schooling—and to provide healthcare and modern banking and business services.
Manufacturing will be integral to the pace of economic growth and may create 10 million jobs, McKinsey said, urging a shift away from farming to higher-paid work such as in the textile industry.
The manufacturing sector can add $70 billion to GDP by 2030—a sevenfold increase on today—and overtake agriculture, which currently adds $21.2 billion, as the economy's main driver, the study added.
Managed carefully, infrastructure, mining and energy, tourism and telecoms sectors will all also boost the economy, but only if Myanmar invests around $320 billion to build modern transport networks and power plants, it said.
But progress is contingent on the government widening reforms and ensuring stability to attract long-term inward investment.
"If it fails to build a compelling growth plan and implement it effectively, today's goodwill and cautious optimism could evaporate all too rapidly," it warned.
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