ADB’s Work in Myanmar
Hope and Possibilities
Until 2011, Myanmar was one of the world’s most isolated economies. Today, it is one of Asia’s fastest-growing economies and ADB is an active partner in this renaissance.
Myanmar has experienced historic and fundamental transitions since 2011, and is now flourishing and experiencing rapid economic growth. Decades of direct military rule have been replaced by a democratically elected government. A shift from central planning toward an open market economy is under way, active conflict in a number of ethnic states is being managed through a peace process, and many parts of the country are now relatively stable. Development partners have resumed country operations, and international sanctions have been lifted. The government has initiated wide-ranging economic, social, and governance reforms. These stimulated economic growth at an average rate of 7.9% during 2012–2015, and improved human development outcomes.
From isolation to reengagement
Myanmar joined ADB in 1973, but operations were put on hold in 1988, when the country entered a period of economic and political isolation. Even so, some activity continued during those years through Myanmar’s participation in the Greater Mekong Subregion Economic Cooperation Program, for which ADB acts as secretariat, as well as through economic monitoring.
ADB reengaged with Myanmar in 2012, and set about supporting Myanmar’s economic and social transition.
“This is a historic tipping point for Myanmar,” Stephen Groff, vice-president of operations for East Asia, Southeast Asia, and the Pacific, said at a ceremony marking the resumption of ADB lending to Myanmar in 2013. “We are focusing first on the building blocks for stability and sustainability, which will ultimately lead to major investments in road, energy, irrigation and education projects, as well as investments in other sectors.”
In a short period of time, ADB has laid strong foundations, rebuilding relationships and dialogue with government, civil society, and the private sector and providing knowledge and capacity-building support. It has built a significant country program focused on infrastructure (particularly transport and energy), rural development, and education and training.
ADB was also quick to establish a strong country presence. ADB is the only development partner to have its main office in the capital, Nay Pyi Taw, with a second office in Yangon where other development partners, embassies, and major private sector and civil society organizations are located. This has helped ADB improve its understanding of the challenges facing Myanmar and the intricacies of operating in the country’s formative period of its development.
“We have been on a steep learning curve,” said Winfried Wicklein, ADB’s former country director in Myanmar. “Close consultation and participation with all the main development stakeholders helps ADB to be more relevant and responsive to the country’s needs and priorities.”
"We thank ADB for its increasing and active support to Myanmar since its reengagement with the country in 2012."
Accelerating Myanmar’s transition
Since resuming operations in 2012, ADB has built up a $1.2 billion sovereign portfolio that includes energy transmission and distribution in and around the country’s main commercial centers, road transport improvement along its main trade corridors, urban infrastructure in Mandalay city, and irrigation infrastructure. It has also supported education reforms and efforts to equip youth with the skills needed in a modern economy.
Rebuilding the country’s road system was a key priority and ADB was not new to the task. In the 1980s, ADB had helped upgrade about 250 kilometers of the road from Yangon to Pyay. Travel times decreased and economic activity improved after the completion of the Yangon–Pyay Road Improvement Project.
In 2015, after conducting a nationwide transport sector assessment, ADB launched the East–West Economic Corridor Eindu to Kawkareik Road Improvement Project. This project is upgrading 66 kilometers of Myanmar’s road network to improve connectivity within the isolated Kayin State and link Myanmar’s “rice bowl” with neighboring Thailand and beyond.
State Counsellor and Union Minister for Foreign Affairs Daw Aung San Suu Kyi, at a meeting in 2016 with ADB President Takehiko Nakao, underscored the critical importance of infrastructure for sustainable and inclusive development and job creation in Myanmar. The State Counsellor stressed the importance of connecting villages with power and roads to improve lives in rural areas—where the majority of Myanmar’s people reside—and stressed that improved access would support education, health, women’s social participation, as well as peace and stability.
Human capital for inclusive growth
Following decades of neglect, weaknesses both in general education and technical and vocational education and training (TVET) are a critical development challenge for the country. Businesses consistently cite human capital as a leading constraint to growth in Myanmar. Meanwhile, low educational attainment leaves most young people with bleak prospects for participation in a modern economy.
The government has recognized the need to bolster human capital and decrease dependence on natural resource extraction and cheap labor, as part of a strategy to ensure that all parts of society can contribute to and benefit from growth. ADB has supported government-led efforts to advance evidence-based reforms in close cooperation with other development partners.
“In 2012, Myanmar launched the Comprehensive Education Sector Review to pinpoint key reform priorities, and ADB immediately responded in supporting this process,” says Myo Thein Gyi, minister of education for Myanmar. “Based on that evidence, in 2016, ADB once again responded to the government’s request for investment in critical reforms in secondary education and TVET, with the approval of the Equipping Youth for Employment Project.”
The project will support government reforms to realign secondary education and TVET to meet skill demands in a modern economy.
The private sector steps up
ADB is also helping to foster private sector development in Myanmar. It supported the government’s formulation of a Private Sector Development Framework and Action Plan, which prioritizes strengthening legislation, access to finance, trade and investment, and human capital, as well as promoting public–private partnerships. Myanmar’s government is focused on efforts to carry these and other reforms forward, with the goal of enhancing competitiveness, expanding investment, and creating quality jobs. ADB is also supporting the government in promoting public–private partnerships, especially in infrastructure.
By 2016, ADB’s $1 billion portfolio of private sector investments was supporting projects to expand telecommunication networks, promote power generation, and support logistics. ADB has also expanded its Trade Finance Program to Myanmar to support trade growth, including among small and medium-sized businesses—the main generators of jobs.
The road ahead
ADB is proud of its contributions, albeit modest, to Myanmar’s ongoing transformation process. With its first full country partnership strategy for Myanmar, 2017–2021, ADB will have a historic opportunity to support Myanmar as it accelerates its transition and builds the foundations for inclusive and sustainable growth.
This article was originally published in a special edition of Together We Deliver, which tells 50 stories highlighting the importance of good partnerships in Asia and the Pacific in meeting the complex development challenges of this dynamic region.