Overview

Last Updated: April 2016

The November 8, 2015 elections in Myanmar marked a historic milestone in the country’s political and economic transition that began in 2011. The opposition National League for Democracy (NLD) swept into power, leading to the parliament’s election of Myanmar’s first civilian state leader in decades.

Myanmar launched fundamental political and economic reforms in 2011, aimed at increasing openness, empowerment and inclusion. The past years have seen a dramatic increase of political and civil liberties, along with new emerging challenges such as outbreaks of violence in minority ethnic areas. 

There are now opportunities to further deepen reforms, create shared prosperity for all, and for the country to resume its place as one of the most dynamic economies in Asia.

As the largest country in mainland Southeast Asia, Myanmar has one of the lowest population densities in the region, with fertile lands, significant untapped agricultural potential, and a rich endowment of natural resources. Its geographic location at the intersection of China and India, two of the world’s most dynamic economies, makes it well positioned to resume its traditional role as a regional trading hub and a key supplier of minerals, natural gas and agricultural produce.

Economic growth in Myanmar eased to 7 percent in 2015/16 due to floods in July 2015, which affected some of the poorest and most vulnerable people in the country, causing inflationary pressures and a slowdown in new investments. Medium-term growth is projected to average 8.2 percent per year.

Poverty in Myanmar is unequally concentrated in rural areas, where poor people are relying on agricultural and casual employment for their livelihoods. A large number of households also lives near the poverty line and likely to be sensitive to economy-wide shocks. Since the majority of the poor are engaged in subsistence agriculture, they may be shielded from recent inflationary pressures but the urban poor are likely to be highly affected by recent bouts of food price inflation.

Among ASEAN countries, Myanmar has the lowest life expectancy and the second-highest rate of infant and child mortality. Just one-third of the population has access to the electricity grid and road density remains low at 219.8 kilometers per 1,000 square kilometers of land area.  With the liberalization of the telecommunications sector in 2013, mobile and internet penetration has increased significantly from less than 20% and 10% in 2014, to 60% and 25% respectively.  Establishing a credible and consistent policy and regulatory environment in the telecommunications sector can help ensure steady private investments and growth.   

Since the transition, growth has accelerated buoyed by improved macroeconomic management, increased gas production and exports, and stronger performance in non-gas sectors as the economy opened up.

Last Updated: April 2016

In 2015, the World Bank Group (WBG) completed its first full country strategy, Country Partnership Framework (CPF), for Myanmar since 1984. This CPF comes at a time of great opportunity for Myanmar. Reforms that began in 2011 have the potential to bear fruit in bringing Myanmar into a new era of peace and prosperity and stronger participation internally and on the international stage.

The CPF outlines how the global knowledge, financing, and convening services of the WBG can support Myanmar and its people in transforming their country, reducing extreme poverty and boosting shared prosperity. 

The CPF draws on the findings of the Systematic Country Diagnostic carried out by the World Bank Group in 2014, lessons learned from implementation since the WBG re-engagement in 2012, and extensive consultations with a wide range of stakeholders in 2014.

The CPF focuses on three areas:

Reducing rural poverty. At least 70 percent of Myanmar’s poor live in rural areas, reducing poverty and boosting shared prosperity will entail increasing access to essential services, economic opportunities and markets. The WBG expects to provide support to help increase agricultural incomes and productivity, rural electrification, community-driven investments in local infrastructure and services, improve Ayeyarwady River navigation and flood control, and reduce vulnerability to shocks.

Investing in people and effective institutions for people. Successful empowerment and inclusion will depend on citizens who are able to make a better future for themselves and on transparent institutions that allow people to do so. The WBG expects to provide targeted support to help Myanmar approach universal access to and improve the quality of essential social services, especially health and education and, over time, skills development to empower people to participate in a growing economy. The WBG also expects to provide support for state institutions to deliver services effectively, including at the local level. This support is expected to contribute to improved governance in selected sectors as well as more broadly for the citizens of Myanmar.

Supporting a dynamic private sector to create jobs. Reducing poverty and boosting shared prosperity will entail diversification beyond extractive-based industries to inclusive growth that creates jobs. Increased openness and integration will result in higher growth as labor reallocates to more productive sectors and trade drives innovation and productivity. The WBG will seek to foster inclusive growth and a vibrant private sector that will create jobs through investments and support for markets, trade and modern financial institutions.

The CPF covers a period of three years, 2015-2017. It will include a performance and learning review (PLR) to allow for mid-course adjustments based on changes in country context including engagement with the new government, a review of lessons learned, and the availability of new data such as the national census and household survey.

IFC, the private sector development arm of the WBG, works closely with the Directorate of Investment and Company Administration to improve Myanmar's investment policy and business environment for private sector. In addition, IFC is helping the Central Bank of Myanmar improve its financial infrastructure, namely establishing a credit reporting system and secured transactions to help banks serve their clients better, with diversified products and services. IFC’s engagement with local banks and microfinance institutions will help expand access to critical finance for individuals and micro, small, and medium enterprises. IFC also works with the Ministry of Resources and Environmental Conservation and Ministry of Energy and Electric Power to improve environmental and social standards of the hydropower sector in Myanmar. 

Last Updated: April 2016

National Community-Driven Development Project (NCDDP). The project is empowering villagers to choose, plan, build, and monitor small infrastructure projects that communities need most, such as bridges, roads, health clinics, and schools. Since becoming effective in January 2013, the project has grown from an initial IDA grant of $80 million to approximately $554 million, including a $400 million additional financing from IDA, and concessional loans and grants from the Governments of Italy and Japan. Scheduled to run until 2021, the project is expected to reach about 7 million people in rural communities across Myanmar. 

Currently operating in 27 rural townships across the country, about 3 million people in over 5,000 rural communities will gain better access to improved community infrastructure.  Communities have also built or rehabilitated more than 500 schools, constructed over 500 km of footpaths and roads, and jointly designed and implemented more than 2,100 sub-projects.

Education. The Ministry of Education’s school grants program transfers funding to schools ranging from 400,000 kyat ($325) to more than 10,000,000 kyat ($8,100) per year, depending on the school size. The school grants program has  improved in several ways: (i) more resources are now flowing to schools; (ii) the flow of resources have become more regular; (iii) schools have been granted more autonomy on how they spend resources; and (iv) community participation and oversight have increased with regard to how the funds are spent.

The stipends program, which benefits children in grades 5-11, provides 5,000 and 10,000 kyat ($4 and $8) per month to students depending on the grade level. Over 37,000 students in eight townships received stipends during school year 2014-15.  The program expanded to a total of 27 townships in school year 2015-16, and over 100,000 stipends have already been awarded.  The program is expected to expand to about 60 townships in school year 2016-17. 

In 2014, an assessment of early grade reading results was completed for the Yangon region (and for selected townships across the country in 2015). The results are used to quantify and pinpoint struggling students, as well as identify interventions that could help improve learning outcomes.

Energy. Under the Sustainable Energy for All Initiative, the National Electrification Plan (NEP) aims to provide 7.2 million households with electricity and achieve universal access to electricity by 2030. The NEP calls for investments of $5.8 billion over the next 15 years to expand national and off-grid areas. To support NEP implementation, the World Bank approved $400 million IDA loan in late 2015 to Myanmar. With IDA funds, 6.2 million people, 23,000 public facilities (health clinics, schools, and religious and other community buildings) and 151,000 public street lights will be connected.

The WBG is contributing to informed debate and decision-making on development policy within a rapidly changing Myanmar by periodically bringing most recent economic data and analysis on development issues to government policy makers, think tanks, civil society and citizens. The WBG is also undertaking analytical and diagnostic works on agricultural and energy sector, poverty assessment and trade.

Since 2013, the WBG has released a number of reports, including two Myanmar Economic Monitors which look at economic developments and reforms, Myanmar’s first ever Public Expenditure Review which provides options to  align Union Budget policies to development priorities, Qualitative Social and Economic Monitoring on changes in rural life and livelihoods, and the Investment Climate Assessment which reviews the main bottlenecks to private investment and job creation in Myanmar.

The WBG recently prepared six policy notes presenting policy options to increase shared prosperity in Myanmar and help inform the design of economic and social programs of the new administration. The policy notes discuss expanding access to social services, reducing rural poverty, enhancing competiveness of the private sector, promoting an inclusive financial sector, and ensuring sustainable energy and enhanced public sector accountability.


LENDING

Myanmar: Commitments by Fiscal Year (in millions of dollars)*

*Amounts include IBRD and IDA commitments