IMF sees stronger growth in Myanmar, but Rohingya crisis may hurt investment

Myanmar’s leader Aung San Suu Kyi arrived on her first visit to conflict-battered northern Rakhine State on Nov. 2. (AFP)
Updated 17 November 2017
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IMF sees stronger growth in Myanmar, but Rohingya crisis may hurt investment

YANGON: The International Monetary Fund (IMF) on Friday forecast an economic rebound in Myanmar this year, but said the Rohingya refugee crisis may dampen investment as the country faces international pressure over its treatment of the Muslim minority.
More than 600,000 Rohingya have fled to Bangladesh since late August, driven out by a military counter-insurgency clearance operation in Buddhist-majority Myanmar’s Rakhine State.
A top UN official has described the military’s actions as a textbook case of “ethnic cleansing.” Myanmar denies that.
While there is no sign of a major direct economic impact, the crisis has dented hopes of a Western investment boom as European and US companies are wary of the reputational risks of investing.
Last month, the World Bank froze $200 million in budget funding for Myanmar over the crisis.
“The internal conflict and humanitarian crisis in northern Rakhine State could affect development finance and investor sentiment, although direct economic impact appears to have been largely localized,” the IMF’s Myanmar mission chief, Shanaka Peiris, told reporters in the commercial capital of Yangon.
“Myanmar’s economy is rebounding and macroeconomic imbalances are stabilizing. Growth is expected to rebound to 6.7 percent,” he said.
However, the near-term growth trajectory was moderately weaker than previously expected, reflecting a subdued pick-up in domestic investment and uncertainty surround the Rakhine State crisis, particularly for tourism, he said.
The IMF had previously downgraded its gross domestic product growth forecast for Myanmar for 2017-2018 to 6.7 percent from 7 percent, but Shanaka said it still represented a “significant acceleration” compared with 5.9 percent from a year ago, thanks to a recovering agriculture sector and exports.
The government led by Aung San Suu Kyi had seen “a challenging first year,” he said, with lower-than-expected growth, but the medium-term outlook remained “favorable” as higher tax revenues could support growth.
Frustration over the government’s management of the economy has grown in recent months.
Foreign investment approvals have slowed since Suu Kyi’s National League for Democracy won an election in late 2015, and took office early the next year.
Still, Myanmar has enjoyed one of the fastest growth rates in the region after the military, which ruled for nearly 50 years, ceded power in 2011 to a quasi-civilian government that ushered in rapid reforms, including the relaxation of foreign investment rules in 2013-2014.
— REUTERS


UAE, Saudi Arabia optimistic world trading system can be restored, says survey

Updated 22 October 2018
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UAE, Saudi Arabia optimistic world trading system can be restored, says survey

  • Three quarters of respondents hopeful of 'working order'
  • Trade disputes cloud horizon in emerging markets

LONDON: More than three-quarters of respondents in the UAE and Saudi Arabia said that the troubled global trading system can be restored to “working order,” according to a survey.
Only 27 percent thought the system would be restored ‘soon’, while 49 percent said it would be a more ‘long-term’ recovery, the Bloomberg research published on Oct. 22 found.
More than half of those surveyed in the two Gulf countries were optimistic that trade will grow in the next five years, with only 26 percent saying there would be less trade over that time period.
The survey findings come just days after the director-general of the World Trade Organization, Roberto Azevedo, urged action to be taken to avoid “serious harm” to the global trading system, in a speech in London on Oct. 17.
A continuing trade dispute between China and the US has led to the two countries imposing a series of tariffs on various imports.
The survey found that 65 percent of Saudi and UAE respondents said they were learning about new technologies to prepare for the future economy, while a similar proportion were learning new skills and taking professional courses.
Global governance issues were viewed as the most critical issue challenging the future of trade, according to the respondents.
The global survey also found there was a divide in opinion between business leaders in the emerging markets and those in developed countries.
Almost two-thirds (63 percent) of emerging market business professionals said they believe there would be more trade in five years, compared to just 36 percent in developed markets that felt the same way.

“The survey reveals vast differences in perceptions for the future and highlights the need to bring together global leaders in business and government to find private-sector led solutions to some of the world’s biggest challenges,” said Justin B. Smith, chief executive officer, Bloomberg Media Group.