IMF says Myan­mar should en­sure level play­ing field for pri­vate banks

The Pak Banker - - Front Page -

WASHINGTON

An IMF mis­sion vis­ited Myan­mar dur­ing Novem­ber 5–22, 2012, to hold dis­cus­sions on macroe­co­nomic poli­cies that could sup­port the au­thor­i­ties’ am­bi­tious re­form pro­gram over the next year. The IMF mis­sion met with U Win Shein, Union Min­is­ter of Fi­nance and Rev­enue; Cen­tral Bank of Myan­mar Gov­er­nor U Than Nyein; and other se­nior of­fi­cials. The mis­sion also briefed par­lia­men­tar­i­ans and had dis­cus­sions with rep­re­sen­ta­tives of the pri­vate sec­tor and donors.

IMF Mis­sion Chief Meral Kara­sulu at the con­clu­sion of the mis­sion said Myan­mar has em­barked on a his­toric set of re­forms to mod­ern­ize and open up its econ­omy. Man­aged well, th­ese re­forms will fa­cil­i­tate strong and in­clu­sive growth that re­duces poverty.

The government has made rapid strides over the last two years. The ex­change rate regime has been changed from a peg to a man­aged float. The fi­nan­cial sec­tor is be­ing grad­u­ally mod­ern­ized, start­ing with par­tial de­posit rate lib­er­al­iza­tion and the re­lax­ing of some re­stric­tions on pri­vate banks. Th­ese re­forms are al­ready bear­ing fruit. Growth is ex­pected to ac­cel­er­ate to around 6¼ per­cent in FY2012/13, bol­stered by for­eign in­vest­ment in nat­u­ral re­sources and ex­ports of com­modi­ties. In­fla­tion has de­clined rapidly and should re­main mod­er­ate at around 6 per­cent next year. Mean­while, the ex­change rate has been sta­ble in re­cent months, with in­ter­na­tional re­serves in­creas­ing to $4 bil­lion.

Nev­er­the­less, the government rec­og­nizes there is still a long way to go. Myan­mar re­mains one of the poor­est coun­tries in Asia, with eco­nomic devel­op­ment stymied by many dis­tor­tions. On the macroe­co­nomic front, the government’s over­ar­ch­ing pri­or­i­ties are twofold: to main­tain sta­bil­ity dur­ing the tran­si­tion process, and to build the mod­ern tools and in­sti­tu­tions nec­es­sary to man­age a rapidly chang­ing econ­omy. Meet­ing th­ese chal­lenges will hinge on im­ple­ment­ing a core set of poli­cies, as em­pha­sized by the government’s own eco­nomic plans. Com­mit­ment to such re­forms and sound eco­nomic man­age­ment would also fa­cil­i­tate a suc­cess­ful res­o­lu­tion of ar­rears, which is cru­cial for Myan­mar to re-en­gage with the global com­mu­nity.

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