An article by Kim N. B. Ninh and Matthew Arnold, The Asia Foundation.
In a meeting with the business community over the weekend, Myanmar President U Thein Sein declared that “economic development for the country is possible only when the private enterprises that constitute 90 percent of the country’s economy develop,” and that “the government and the private sector must work hand in hand.” He also urged the business community to work with the government in showcasing Myanmar’s “private sector prowess” during its ASEAN Chairmanship.
Indeed, economic growth in Myanmar has been strong over the past several years, with the International Monetary Fund predicting a 7.5 percent growth rate for 2014. Creating a business environment that is conducive for increased foreign direct investment as well as a vibrant domestic private sector is a key element in generating strong and sustainable economic growth.
At the local level, the important role of small- and medium-sized businesses (SMEs) to provide employment and services to communities, to generate much-needed revenues for local governments to finance social services and development initiatives, and to participate effectively in the emerging production chains as part of Myanmar’s regional and global integration must be encouraged.
Though they account for a much smaller share of GDP than larger firms, their success will be inseparable from the growth and development of Myanmar’s overall economy, especially in terms of job creation.However, despite comprising 99.4 percent of businesses in the country, not enough attention has been paid to the business environment encountered by Myanmar’s SMEs. Though they account for a much smaller share of GDP than larger firms, their success will be inseparable from the growth and development of Myanmar’s overall economy, especially in terms of job creation. Strengthening these local agents of growth is dependent not only on furthering national reforms but also on strengthening the support of local governments at the state and regional levels.
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