Fast-tracking Myanmar's Reform

By Stephen P Groff

Over just three years, Myanmar has introduced ambitious reforms that have put it on track toward becoming a modern economy. Against a backdrop of ongoing political challenges this remains an extraordinary and hopeful moment.

But bigger challenges lie ahead. To avoid backtracking ? and to realize its full potential ? Myanmar needs to accelerate momentum in its push for reform

Further reforms must focus on providing more people with better chances to grasp economic opportunities ? and soon.

Undue delays risk losing the momentum that is central for reforms to be successful. The key challenge on this front is job-creation.

Proper jobs and learning opportunities, especially for youth, are critical not just for sustained growth, development and social stability, but also for the public support needed to drive reform forward.

Growth is imperative for a country with per capita income of about $900 ? making it one of the poorest countries in Asia, along with Afghanistan, Bangladesh and Nepal.

Myanmar's current growth relies on a narrow field of industries, driven by exports of natural resources ? mostly gas and mining products ? construction and tourism

Time is of the essence for Myanmar Its window of opportunity is narrowing rapidly.

Market forces unleashed by reforms are already presenting challenges.

Faster growth and an influx of foreign investment are fueling inflation, jeopardizing macroeconomic stability. With the financial market still underdeveloped, large capital flows and increased private sector investment put strong upward pressure on prices of real estate and services.

This could strengthen the currency, which would reduce export competitiveness. Meanwhile, rising property and service prices could depress foreign investment in other productive sectors such as manufacturing.

Galvanizing reform is essential for building institutional and market capacity to manage these forces. A top priority should be to exploit clear opportunities for targeted investment in agricultural infrastructure, institutions and innovation to spur rapid productivity growth.

This will immediately benefit those who depend on agriculture for income and food security, and also contribute to high and inclusive growth. After all, agriculture accounts for 30 percent of Myanmar's gross domestic product, and more than 50 percent of employment.

With relatively abundant land, water and labor, coupled with proximity to the world's fastest growing markets...