Economic growth is just one facet of development. Policy makers are focused on ensuring that their country’s development path is sustainable and that the lives of citizens improve, which calls for the need to reconcile economic, social and environmental objectives.

Transitions are complex phenomena which require astute policy making backed up by unwavering political will. The progress made in Myanmar since the start of its transition process in 2011 has been remarkable, particularly given the country’s unique challenge of a “triple transition”. In the political sphere, the country has moved from military rule to multi-party democracy; economic reforms aim to transform a largely centrally planned economy to a market-based one; and finally, negotiated ceasefires in the on-going peace process have halted several of the prolonged conflicts in the country’s border areas.

Myanmar boasts numerous assets including fertile land that is rich in minerals and hydrocarbons, forests and hydro-resources, and a relatively young population. By coupling these assets with its favourable geo-strategic location in a dynamic region, Myanmar can establish a multi-pronged strategy for sustained, rapid growth and development based on agriculture, resource extraction, manufacturing and services. Yet time is of the essence: Myanmar’s now comparatively young population will start ageing in the next two decades. If the momentum for development created by the country’s opening and internal peace process is not seized, Myanmar could get old before it gets rich.

The following chapter provides an overview of the development opportunities and challenges facing Myanmar, framed in terms of the four capital stocks – physical, human, institutional and social – which underpin development. The discussion begins with an assessment of Myanmar’s assets, notably its fertile land, natural resources, rich cultural heritage, abundant labour and strategic geographical location. It then examines the key challenges the country faces to ignite growth that is both sustainable and equitable and looks at factors determining the longterm potential of the economy, such as demographics. The chapter closes with an analysis of well-being in Myanmar, drawing on the OECD How’s Life? framework, and compares indicators of well-being for Myanmar over time and in relation to other countries in the region or at similar levels of economic development.

This chapter discusses the policies being undertaken by Myanmar which aim to achieve stable and sustainable development and identifies issues for further attention, particularly in relation to building up institutional capital. It focuses on four priority areas: establishing sound frameworks for macroeconomic and financial stability; strengthening the rule of law; achieving environmentally sustainable development; and creating a level playing field for the private sector. The section on macroeconomic stability examines the country’s financial sector and frameworks for monetary, exchange rate and fiscal policies. The discussion on the rule of law assesses the reforms and legislative changes underway as well as the progress made in strengthening voice, accountability and transparency. Next, the degradation of Myanmar’s natural resources, the sources of pressure on these resources and the country’s legal framework and institutions for environmental policy are discussed. The section on private sector initiatives describes the characteristics of Myanmar’s business sector before turning to examine the legal and regulatory frameworks governing private initiatives. The chapter ends with an examination of Myanmar’s human and physical capital stocks.

The following chapter examines the policy challenges facing Myanmar in achieving growth that is more inclusive and which provides more equitable opportunities than it has in the past. The first section examines Myanmar’s recent growth performance in order to highlight which groups in society have benefited and which have been excluded, looking at levels of poverty and inequality and sources of growth. The discussion then turns to people’s access to public services and goods, looking at differences in access between poor and non-poor households, between rural and urban areas, across different states and regions, and along gender lines. Equality between ethnic groups is also discussed in the context of building a multi-ethnic state. The chapter ends by assessing the state of trust in Myanmar’s institutions, looking primarily at trust in public institutions, and suggesting ways to build this component of social capital.