Myanmar’s positive economic trajectory will be challenged by a massive infrastructure need that the government does not have the resources to meet alone, according to a new report, Building Myanmar: Bridging the Infrastructure Gap, produced by the Economist Corporate Network and Baker McKenzie. 

While Myanmar's economic growth is predicted to continue to sit above an average of 7% for several years to come, sustaining this growth will depend on massive investment from the government, development finance institutions (DFIs) and the private sector. If it is not forthcoming, the growing infrastructure gap could put the brakes on Myanmar’s economy.

So why should infrastructure investors still focus on Myanmar? According to the Building Myanmar report, there are still huge opportunities for those investors with the patience and understanding to back infrastructure development in Myanmar, with healthy returns on offer. The nation has a large population, rich natural resources and a youthful labour force, emerging after decades of relative isolation. 

In addition, Myanmar is at the intersection of two of the world's most important emerging markets, China and India. With Myanmar central to China's Belt and Road ambitions*, including the development of a China-Myanmar-Bangladesh-India trade corridor, partnering on Myanmar infrastructure development is also a gateway into the Belt and Road Initiative, particularly for non-Chinese firms.

The Myanmar government is pushing to increase the pace in which their country's infrastructure needs are addressed, particularly around power, water and transport, and officials are increasingly seeking foreign investors to support this push.

One infrastructure bright spot for Myanmar is its telecoms sector. Prior to the reform period, Myanmar had one of the world’s lowest rates of connectivity, with very limited internet access and active SIM cards measured in the thousands. This has changed virtually overnight and Myanmar now has more than 50m active SIM cards, as well as the region’s fastest mobile internet speeds.

Jo Daniels, Managing Partner, Yangon, Baker McKenzie, said: "Myanmar is going through a huge transition, moving rapidly from a closed economy to one that is open to international investment, systems and ideas. It is not without major challenges, but for a huge number of Myanmar people, they are gaining access to life changing infrastructure improvements, and for international investors, some unique opportunities at the nexus of two of the most important economies in this region, and the world."
“This new report highlights both the tremendous potential and the considerable challenges evident in Myanmar today” notes Andrew Staples, Director of The Economist Corporate Network, South-east Asia and co-author of the report. “Improved infrastructure is perhaps the most important requirement for the continuation of Myanmar’s positive economic trajectory. Economic development, as we have seen across Asia, leads to social development and a real improvement in the quality of life for millions of people. This paper provides a starting point for an understanding of several key infrastructure sectors in Myanmar and identifies areas of risk and opportunity for investors seeking to engage more closely with the country”.

The report also acknowledges the challenging conflict in the northern Rakhine State in Myanmar, although it does not see this spreading to Myanmar's political and economic centres.
Explore Our Newsroom
See All News