A New Dawn for Equitable Growth in Myanmar? Making the private sector work for small-scale agriculture | Aids | Poverty

Please download to get full document.

View again

of 18
All materials on our website are shared by users. If you have any questions about copyright issues, please report us to resolve them. We are always happy to assist you.
Information Report



Views: 8 | Pages: 18

Extension: PDF | Download: 0

Related documents
A new wave of political reforms have set Myanmar on a road to unprecedented economic expansion, but without targeted policy efforts and regulation to level the playing field, the benefits of new investment will filter down to only a few, leaving small-scale farmers
  OXFAM ISSUE BRIEFING 5 JUNE 2013 www.oxfam.org A NEW DAWN FOR EQUITABLE GROWTH IN MYANMAR? Making the private sector work for small-scale agriculture The new wave of political reforms have set Myanmar on a road to unprecedented economic expansion, but, without targeted policy efforts and regulation to even the playing field, the benefits of new investment will filter down to only a few, leaving small-scale farmers  –  the backbone of the Myanmar economy  –  unable to benefit from this growth. If Myanmar is to meet its ambitions on equitable growth, political leaders must put new policies and regulation to generate equitable growth at the heart of their democratic reform agenda. These must address power inequalities in the markets, put small-scale farmers at the centre of new agricultural investments, and close loopholes in law and practice that leave the poorest open to land-rights abuses.  A NEW DAWN FOR EQUITABLE GROWTH IN MYANMAR Myanmar is hurtling towards unprecedented economic expansion. Real GDP growth is predicted to accelerate to 6.5 per cent in 2013, 1  higher than successful neighbouring economies Vietnam and Thailand, 2  with high hopes that this acceleration will continue to soar. The benefits of this  journey could be spectacular: Myanmar currently ranks as the poorest country in South East Asia, and its performance on the Human Development Index sits firmly in the low human development category, 3  but, along with democratic reforms, and action to end human rights abuses, inclusive, equitable and sustainable growth could turn this around by paving the way for the majority of Myanmar people  –  over a quarter of whom are living below the poverty line 4  –  to gain their own place on the economic stage. Markets left unregulated often fail to invest in the skills of the poorest and the economies that matter for them. Without levelling the playing field, small-scale farmers  –  the backbone of the Myanmar economy  –  will be kept poor, powerless and risk being even further marginalized. The pace  2 of reform and the speed at which Myanmar is re-engaging with the global economy is breathtaking, but how the government chooses to direct this is yet to be seen. Targeted regulation, investment support and policy initiatives that are actively designed to level the playing field and protect the rights of the most marginalized can support small-scale farmers and businesses to grow and prosper. By investing in the right infrastructure and extension services, improving the functioning of markets and supporting institutions that are especially important for the poor, the government can increase the access of smaller players to markets and leverage their capacity to make real economic gains  –  as well as mobilizing their unique potential for reducing poverty and inequality.  After such a long investment drought, the temptation may be to seize every opportunity as if it were the last. But the pace of change magnifies the risks as well as the opportunities, especially for the poorest. That is why it is crucial to ensure that investment supports sustainable development and delivers broad-based and long term gains in prosperity. This means governments, donors and businesses must act in ways that empower poor people to influence policies and gain access to markets; that respect, uphold and promote basic rights, including land and water rights and gender equality; and that support the establishment of diverse markets that respond to varied rural contexts and needs. Crucially, political leaders must ensure an end to all human-rights abuses and address the underlying causes of ethnic conflicts, which threaten to undermine political and economic progress and stand in the way of long-term social, political and economic gains.  As business leaders gather for the East Asia World Economic Forum in Nay Pyi Taw, decision makers in Myanmar face a choice: the path to growth for all, or the path to growth for the few. In a country with dizzying levels of poverty, where decades of under-investment have left human resources and infrastructure weak and economic opportunities hard to grasp, the stakes are high. But forging a path to equitable sustainable growth through responsible private sector investment could mean the rewards will be even higher. THE PRIVATE SECTOR AS AN ENGINE OF GROWTH FOR ALL Just over two decades ago, Myanmar’s neighbour Viet Nam was one of the poorest countries in the world. Yet, over the last few years, Viet Nam has grown at a rate of between 5-7 per cent, 5  and has graduated from extreme poverty to lower middle-income country status.  According to new World Bank figures, the poverty headcount in Viet Nam fell from nearly 60 per cent in the early 1990s to 20.7 per cent in 2010 . 6    This fall in poverty was driven by the quality of growth and the kinds of policies put in place by the Vietnamese government; policies which focused on creating good quality jobs, increasing public expenditure and sequencing reforms so that economic growth was kick started in the poorest rural areas, as well as a drive to protect key industries from volatile foreign investment. 7  Although in recent years growth has slowed as a result of   3 global economic instability and external shocks, 8  inflation is once again under control and the growth story continues. It is clear that a core component of Viet N am’s  earlier economic trajectory has been the recognition that not all growth was good growth. For countries emerging out of decades of poverty and under-investment, generating growth alone is not enough. The type of private sector investment that a country encourages can have a direct impact on that quality of growth, and governments have a role to play in choosing investment that leads towards high quality, equitable growth. Governments should give clear signals to investors about the type of growth they want through clearly and consistently articulating their priorities in domestic policy, regulation and incentives to attract Foreign Direct Investment (FDI). The Government of Myanmar must be bold and clear about the kind of growth it wants, and the standards it expects investors to uphold in their business activities and engagement with the local economy, environment and society. Not repeating the experiences of others: Inequitable growth and land grabs in Cambodia  Economic liberalization in Cambodia led to extremely rapid growth rates, hitting 9.8 per cent between 1999 and 2007. 9  But much of this growth has failed to deliver results for the poor. While Cambodia’s Human Development Index rating has improved, income inequality has risen, 10  and environmental and social rights have been ignored and abused, particularly over the issue of land, where poorly managed land concessions have led to widespread land-grabs and conflicts between local communities and foreign firms. Vast flows of FDI without accompanying domestic investment have also left Cambodia heavily dependent on foreign investment and, because of this, vulnerable to shocks that would cause investors to withdraw. 11  Like Myanmar, in Cambodia agriculture is a major source of income and provides employment for the majority of the workforce. 12  A key asset for small holders is their access to and control over land; however, legal requirements on land investment have often been sidestepped by investors with little or no accountability at the national or international level. Social and environmental impact studies have often been inaccurate or simply not carried out, consultations have been tokenistic, and, in some cases, the promised benefits of investment have never materialized. 13  Poor farmers are often unaware of their legal rights and have weak bargaining capacity to protect their land and livelihoods. The result is that land already being cultivated by small-scale farmers has repeatedly been expropriated for commercial use with devastating consequences for the affected communities. One of the most controversial cases involved $33m of World Bank support to the Government of Cambodia to improve land tenure security and promote the development of efficient land markets. Critical safeguards and consultation policies were not upheld with the result that hundreds of communities submitted a complaint to the World Bank claiming to have been evicted from their land as a direct result of the project. This eventually led the World Bank to suspend its entire lending portfolio in Cambodia, following a critical report by its own Inspection Panel. 14  In Cambodia, FDI in the agricultural sector has often been at the expense  4 of the rural livelihoods which are so vital to small-scale farmers. 15  Although the expansion of the private sector has been a key factor in Cambodia’s growth, it has also been a key factor in the unsustainable fashion in which assets have been used, rights abused, rural livelihoods damaged and inequality increased. It is vital Myanmar does not repeat this. The right kind of private sector investment has the potential to deliver huge economic benefits for women and men living in poverty. Where there is a healthy, vibrant and responsible private sector, there are great possibilities for equitable economic growth. Growth that enables poor people to access markets, decent work, goods, services and credit can lead to real poverty reduction. 16  But too often the benefits of private sector growth go to a select few, excluding the vast majority from any benefits, and shifting the risks and costs to the poorest, who are least able to bear them. Private sector investment that fails to integrate social and environmental responsibilities into its core business model can deprive people of access to vital natural resources, displace them, and result in devastating abuse of rights for poor communities. Wealth that is generated in local value chains but not captured by poor communities can deepen poverty, exacerbate inequalities and lock in market dependency. If the government fails to collect tax revenue from those companies benefitting from the growth in Myanmar’s economy, essential services, such as health care and education, will remain underfunded. This will leave vast gaps in provision for vital hospitals and schools, creating distrust and dissatisfaction with the government. Ultimately this will deprive Myanmar of the building blocks of economic prosperity that provide a healthy, skilled and empowered workforce. The private sector in Myanmar has the potential to be the engine of growth for all, but not if markets are left unregulated. In Myanmar, where decades of under-investment in core infrastructure means many live on the precipice of absolute poverty, people cannot wait for the benefits of private sector investment to be realized. The question of how to set a pathway to equitable growth and responsible investment must be urgently answered. If instead, we see a rush to embrace all investment in order to create short-term growth, there is a real risk that the poorest will be excluded and permanent environmental and social damage done in the name of short-term profit for international investors and privileged local elites. WHAT WILL BE IMPORTANT FOR THE PRIVATE SECTOR IN MYANMAR Investing in small-scale farmers and markets they can access There is growing evidence to show that, in poorer countries, small-scale agricultural development is commercially viable and   has the potential to maximize poverty reduction. 17  This is particularly important for Myanmar
View more...
We Need Your Support
Thank you for visiting our website and your interest in our free products and services. We are nonprofit website to share and download documents. To the running of this website, we need your help to support us.

Thanks to everyone for your continued support.

No, Thanks