WASHINGTON \u2014 The government of Daw Aung San Suu Kyi is opening the economy and growth is rebounding in Myanmar, though the possibility of broader Western sanctions over the Rohingya refugee crisis is nevertheless giving some foreign investors pause, according to a senior IMF official.<\/p>\n
Shanaka Jay Peiris, the International Monetary Fund\u2019s (IMF) mission chief to Myanmar, said in a recent interview that initial data reviewed by the IMF indicated that some foreign investors were delaying final approval of projects until there was clarity about how the situation may unfold.<\/p>\n
\u201cThe numbers we have for FDI (foreign direct investment) aren\u2019t showing it yet \u2026 but foreign investment approvals are slowing down, so there is some indicator that going forward FDI may be weaker,\u201d Peiris told Reuters following the publication last week of the IMF\u2019s latest review of Myanmar\u2019s economy.<\/p>\n
\u201cSince August, investors are taking a pause. It isn\u2019t a surprise,\u201d he said. He said it was unclear which projects were being delayed and added that more data was necessary to better understand whether the \u201cpause\u201d was temporary or not.<\/p>\n
However, leading indicators such as FDI project amounts approved by Myanmar\u2019s government for the first 10 months of fiscal 2017\/18 from April show \u201ca marked slowdown\u201d since September 2017, according to the IMF.<\/p>\n
For now, FDI inflows for 2017\/18 still look to be a \u201csolid number,\u201d Peiris added.<\/p>\n
While it is too soon to know what it could mean for the overall economy, Peiris said: \u201cWe have to see whether project approvals were temporarily lower or will be a trend, as well as whether actual FDI inflows will fall by much. The magnitude would also matter.\u201d<\/p>\n
\u201cWe are not operating under the assumption that there are going to be broad economic sanctions,\u201d he added, downplaying the risk of a decline.<\/p>\n
Myanmar government spokesman Zaw Htay said that, \u201cEspecially in Myanmar, because of the Rakhine issue, tourism has come down, investments and FDI have come down too,\u201d adding that the authorities were working hard to ensure macroeconomic stability.<\/p>\n
The report by the IMF, which follows annual consultations with the government, followed a November visit to Myanmar, the first since nearly 700,000 Rohingya fled to Bangladesh after a military crackdown condemned by the international community.<\/p>\n
The World Bank announced on\u00a0Oct. 13\u00a0it was delaying the release of $200 million in budget support for Myanmar in response to the \u201cforced displacement of the Rohingya.\u201d<\/p>\n
Both the United States and Canada imposed sanctions against a general in Myanmar\u2019s military for his role in the crackdown against the Muslim Rohingya. The European Union said in February it was preparing sanctions against military leaders to hold them accountable for their role in the crisis.<\/p>\n
The Trump administration\u2019s aid chief, Mark Green, said last month he will visit Myanmar soon for talks with the government and see for himself conditions of the Rohingya refugees.<\/p>\n
Targeted Sanctions<\/strong><\/p>\n Peiris said the IMF believed that any more Western sanctions would likely target individuals in the military and not the economy.<\/p>\n \u201cIf the sanctions are limited to the military personnel, which has been the case to now, we believe it will be less of an impact\u201d on the economy,\u201d Peiris said. \u201cIf it is broader, it would be more worrying.\u201d<\/p>\n Overall, the IMF sees economic growth picking up toward an estimated potential rate of about 7-7.5 percent after lower-than-expected growth of 5.9 percent in 2016\/17.<\/p>\n The United States remains concerned about the plight of the Rohingya, a Treasury official told Reuters, declining to comment on the status of sanctions investigations. Another US official said the Trump administration was reviewing all options on Myanmar.<\/p>\n When asked by Reuters how concerned the government was about more sanctions, the Myanmar spokesman said such actions would affect \u201cthe whole country\u201d because Myanmar was no longer a military dictatorship but instead run by \u201ca democratic government elected by the people.\u201d<\/p>\n \u201cThey shouldn\u2019t do the economic sanctions,\u201d the government spokesman said. \u201cIf the investments are affected, then it affects the people.\u201d<\/p>\n Opening Up<\/strong><\/p>\n The IMF visit came shortly before Myanmar introduced regulations to bring the country\u2019s banks closer to international standards and force them to recover mostly open-ended \u201coverdraft loans\u201d that make up the bulk of their lending.<\/p>\n Myanmar\u2019s central bank deputy governor, Soe Thein, told Reuters in November that private banks had been given more time to clear most of their loan books.<\/p>\n Private banks account for more than half of banking system assets and the largest six private banks hold around 80 percent of private bank assets, according to the IMF.<\/p>\n The new rules compel banks to open their books to the central bank, and Peiris said initial data raised concerns about the need for more bank capital.<\/p>\n \u201cIt is more fragile than what has been published, so banks will have to raise capital and recognize losses,\u201d he said.<\/p>\n \u201cThe question is whether owners are willing to put up the money, and if they can\u2019t, will they try to find partners? How that will evolve is hard to tell but they will need more capital,\u201d he said. The Fund would have a better perspective of the situation during its next visit later this year, he said.<\/p>\n \u201cWe and the central bank do have a sense that it is a significant issue,\u201d he added.<\/p>\n Asked whether the government agreed with the IMF assessment on the banks, the Myanmar government spokesman said reforms were important to build economic stability.<\/p>\n \u201cIt is necessary to be careful,\u201d he said, \u201cWe cannot afford to make any mistakes.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":" WASHINGTON \u2014 The government of Daw Aung San Suu Kyi is opening the economy and growth is rebounding in Myanmar, though the possibility of broader Western sanctions over the Rohingya refugee crisis is nevertheless giving some foreign investors pause, according to a senior IMF official. Shanaka Jay Peiris, the International Monetary Fund\u2019s (IMF) mission chief […]<\/p>\n","protected":false},"author":1,"featured_media":3899,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-3898","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/equalitymyanmar.org\/index.php?rest_route=\/wp\/v2\/posts\/3898","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/equalitymyanmar.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/equalitymyanmar.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/equalitymyanmar.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/equalitymyanmar.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=3898"}],"version-history":[{"count":1,"href":"https:\/\/equalitymyanmar.org\/index.php?rest_route=\/wp\/v2\/posts\/3898\/revisions"}],"predecessor-version":[{"id":3900,"href":"https:\/\/equalitymyanmar.org\/index.php?rest_route=\/wp\/v2\/posts\/3898\/revisions\/3900"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/equalitymyanmar.org\/index.php?rest_route=\/wp\/v2\/media\/3899"}],"wp:attachment":[{"href":"https:\/\/equalitymyanmar.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=3898"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/equalitymyanmar.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=3898"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/equalitymyanmar.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=3898"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}