BERF’s work in Burma

BERF has yet to complete any projects in Burma.

Context

In a region with some of the fastest growing and most dynamic economies in the world, Burma stands out as one of the poorest countries in Asia. This is despite positive political and economic reforms which began in 2011 and were designed to foster greater political openness and compliance with international democratic norms. Years of under-investment, persistent conflict and economic mismanagement have created a low base from which to grow economically. Burma’s economy is expected to grow to 6.5 per cent in 2016 to 2017. This is in contrast to the 7.3 per cent growth recorded in 2015-2016 by the World Bank which predicts an average of 7.1 percent   growth per annum in the medium term.

Poverty affects around 26 percent of Burma’s 52 million population, according to the United Nations Development Programme. As 70 percent of the population live in rural areas, the threat of extreme poverty and reduced living standards is disproportionately higher for the rural poor. This is made worse by their reliance on subsistence agriculture, which is prone to natural disasters since Burma has a history of climate extremes. Cyclones in particular impact the livelihoods of the poorest, especially women.

Burma is making progress in addressing these challenges with the assistance of development partners such as DFID, and multilateral agencies, including the World Bank and the International Finance Corporation.

DFID’s Strategy for Burma

DFID has five major priorities for its work in Burma. These are to:

  • promote good governance, including improved transparency and the rule of law
  • promote inclusive growth and responsible investment
  • strengthen parliament’s elected bodies
  • help the process of peace building and ethnic reconciliation and
  • support productive and sustainable livelihoods and improved access to better health and education services

A major business environment reform programme recently launched by DFID is seeking to address many of the challenges to promote inclusive growth and make it easier to do businesses in Burma. This includes improving investment regulation, policy and implementation to address the constraints to financial sector development, boosting quality public and private investment in priority infrastructure, assisting Burma to realise its trade potential, and facilitating greater inclusion of women and other excluded groups in Burma’s economic development.

DFID is implementing with a number of partners including the International Finance Corporation which will help to improve Burma’s investment climate and promote competitiveness.

Doing Business Rankings

Although it had a marginal increase in its World Bank Doing Business scores in 2017 versus 2016, Burma is still one of the hardest places to do business in Asia. In 2016, the country ranked 170 of 190 economies in the ease of doing business, one point up from 171 in 2017 but was still the second worst performing economy in the East Asia and Pacific Region ahead of Timor Leste. Burma’s score on the Distance to Frontier index is also consistent with its poor ease of doing business rating. It scored 44.56, as against the regional average of 61.97.

The recent introduction of investment climate and business enabling reform programmes to make it easier to start a business, deal with construction permits and get electricity have shown the greatest improvements. The Distance to Frontier Score for Starting a Business jumped 10.53 points to 77.10 (from 66.57) while approval for construction permits increased to 72.23 (up 1.20 points) and getting electricity scored 52.17 as against 50.92 in 2016. At the same time however, other policies were introduced which made it harder to export and move goods across borders. The Distance to Frontier Score for trading across borders was 47.40 in 2017, declining 7.65 points from the 2016 score of 55.05. This decline in a key indicator associated with a good investment climate and business environment has dampened Burma’s overall progress in 2016.