Tue 10 Dec 2013
Filed under: Business / Trade,International,News
International Monetary Fund chief Christine Lagarde urged Myanmar — which is enjoying an economic boom after decades of international isolation under the junta — to urgently prioritise tackling widespread poverty.
“As Myanmar opens up and expands, it needs the structural foundations of a modern economy. This is an urgent priority,” she said in a speech to students at the Yangon Institute of Economics.
Lagarde was in Yangon Saturday on her first official trip to the country formerly known as Burma. She met with a range of government officials and opposition leader Aung San Suu Kyi.
“Three-quarters of the population have no access to electricity… only 1 per cent of the population uses the internet,” she said.
Myanmar suffered from decades of corruption and economic mismanagement under the junta.
Since the dissolution of the junta in 2011, economic reforms have accelerated but experts warn many obstacles remain.
High annual growth rates and a large, untapped domestic market, have triggered a surge of interest from foreign investors, but Lagarde pointed out that 26 per cent of the country’s population still lives below the poverty line.
“The next step is to build on these gains and take the path of sustained, strong, and inclusive growth to lower poverty and lift the prospects of everyone in Myanmar,” she said.
“Clearly, too many people are not yet equipped for the economy of tomorrow,” she added.
She highlighted the importance of agriculture to the country’s economy, pointing out it accounted for over a third of GDP and more than half of all employment.
“More than that, over two-thirds of the population depends on the land for their livelihood. So it is important to raise the productivity of agriculture, to boost the income of farmers and all who depend on them,” she said.
She also urged the government to boost spending on health and education which account for, respectively, just 1.5 per cent and 1.7 per cent of GDP — the lowest in the ASEAN region.
Lagarde said the IMF was going to ramp up assistance to the country, adding more staff to its team in 2014, but warned there was “a lot of groundwork to do”.