Development Centre

Building on rural sector is key for economic modernisation in Myanmar, says OECD


14/01/2015 - Improving Myanmar's agricultural sector by building up food processing activities and related services could help the transformation of the country's economy, to a more modern one able to produce higher-value goods for export, according to a new OECD report. 


Poor rural infrastructure, inadequate farmer skills, insufficient government services to promote exports and lack of access to finance in the agricultural sector would also need to be addressed, the report says. For example, only 2.5% of loans in Myanmar go to the rural sector despite the fact the sector accounts for 30% of gross domestic product (GDP) and two-thirds of jobs. 


"Myanmar's transformation to a modern economy could be kick-started through a strong focus on the agricultural sector where most people currently work. Increasing access to finance in rural areas and improving farmer skills will be vital to boosting farm productivity, freeing up workers for manufacturing and services", said OECD Deputy Secretary General Rintaro Tamaki, launching Volume 2 of the OECD's Multi-dimensional Review of Myanmar in Yangon. 


In the manufacturing sector, the main factors hampering business development are corruption, a lack of technology and poor access to land and office space, according to the report.


Resolving ambiguity over land rights, improving infrastructure and reforming the financial system would help create the right conditions for the wider economy to flourish. More government support to promote Myanmar’s exports abroad and in strengthening health and safety regulatory systems so that products meet export standards would also have a positive impact.


This structural transformation will need considerable investment. Achieving the government’s growth targets could require investment of between 21% and 28% of GDP annually over the next two decades and as much as 30-40% of GDP by 2035. To meet its funding needs, Myanmar should consider all available sources of finance. External sources - including Official Development Aid, Foreign Direct Investment and remittances from the country’s large diaspora - could meet as much as one third of financing needs for the rest of the decade. However, the bulk of financial resources, especially for the medium to long term, will need to come from domestic sources, including government revenues and household savings, which are currently very low.


The OECD's Multi-dimensional Review of Myanmar notes the reforms initiated by the government in many areas - including the management of external development finance, the tax structure and the financial system - and stresses the need for continued progress. "Sustaining the momentum of the reform process is essential to ensure that people's incomes and living standards rise", stated OECD Deputy Secretary General Tamaki. 


The OECD has been working with the government of Myanmar on the Multi-dimensional Review of Myanmar, in partnership with UNESCAP. OECD Multi-Dimensional Country Reviews are a new tool for tailoring OECD expertise to the realities of developing economies. To support policymakers, the Reviews aim to design policies and strategies which reconcile economic, social and environmental objectives to ensure that countries’ development paths are sustainable and that the lives of citizens improve.


Further information on the Multi-dimensional Country Review is available at

Requests for interviews or an electronic copy of the report should be directed to the OECD Development Centre (; Tel: +33 145 24 82 96).


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