Myanmar's economic, social and political liberalisation has created enormous growth opportunities for the country. But it will take some time yet before the country can be considered competitive relative to its neighbours in the rapidly-growing Asean region.
Thierry Geiger, associate director and an economist with the Global Competitiveness Network for the World Economic Forum, discusses the development and competitiveness issues facing the country.
Q: In what area is Myanmar competitive in, particularly?
This we will find out later this year, when we include Myanmar for the first time in the Global Competitiveness Report series to be released next September. Everybody agrees that Myanmar holds huge potential, but that the challenges are gigantic. We hope that the inclusion of the country in our research will shed new light on those constraints and serve as an additional tool to guide the actors of Myanmar's development.
Q: How long will it take for Myanmar to become on par with its neighbors in terms of business environment?
It depends on what we mean by business environment. If we limit the definition to the quality of the institutional and regulatory frameworks, then improving on it is not necessarily time-consuming or expensive, although it's by no means easy and require a lot of political will. It implies putting in place sound, stable, predictable, transparent regulations for competition, anti-corruption, property rights, banking, taxation, business activity, etc..And these regulations must be enforced. Since 2011, Myanmar has been reforming at a fast pace in an effort to create a more conducive environment. So Myanmar could catch up relatively quickly with other countries in the region, many of which offer less-than-perfect environments.
If we expand the definition to also include other critical factors that shape the business environment, like infrastructure, macroeconomic environment, financing, or access to technology and talent, all of which are covered by the Competitiveness Report, then the task becomes much more daunting. Going after the lower-hanging fruits, such as designing and enforcing sound regulation, will help a great deal in tackling those other issues, by stimulating business activity and attracting investment, and setting a virtuous cycle in motion.
Q: How would you measure competitiveness, and why is it mainly focused on productivity? What about sustainability?
We define competitiveness as the set of factors, policies, and institutions that determine the level of productivity of a country, taking into account its level of development. It's a supply-side conception of competitiveness. The more productive a country is, the more efficient it is, the bigger the return on investment, and the more wealth created. Our definition captures the necessity of countries to become better at what they are producing - goods and services - in order to move up the value chain, and ultimately to become more innovative to continue to create wealth. It is not incompatible with another common definition of competitiveness which defines it as the ability of companies to compete in international markets. If a company, or a country for that matter, is more productive - that is, more efficient - it is better equipped to compete internationally.
Since 2010, the Forum has embarked on a multi-year project to develop a "sustainable competitiveness index". How can a nation remain productive over the longer term while ensuring social and environmental sustainability? Given the complexity of the relationships between the concepts of productivity, economic growth, social progress and environmental protection, and because evidence and data remain very scant, the development of such framework is a massive undertaking. A preliminary framework was introduced last year and we're in the process refining it, while looking for more and better data.
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