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Building on an initial assessment of constraints to development in Myanmar (Volume 1), this second volume provides analysis and policy recommendations in three key areas: structural transformation, education and skills, and financing development. It finds that Myanmar faces a crucial few years to shape growth towards a higher, more sustainable and equitable trajectory. To succeed, it will require a transformation of the economy from an agrarian base reliant on small-scale agriculture at present towards a broad range of modern activities. Building up the right skills in the workforce will be essential to support this structural transformation. Myanmar’s transformation will also depend upon how effectively the country can mobilise and allocate the financial resources needed to support its development, which could amount to as much as an additional 5-10% of GDP on average over the next two decades.

In 2013 the OECD launched the first Multi-dimensional Country Review (MDCR), a new series that looks at economic development along the lines of inclusive growth, i.e. growth that is also equitable and sustainable and that improves the overall well-being of citizens. The series aims to identify key constraints to broad-based development, and to formulate appropriate policy recommendations to address these constraints, including sectoral as well as cross-cutting issues.

Myanmar faces a crucial few years ahead in shaping its economic growth towards a more rapid, sustainable and equitable trajectory. This will require fundamental changes in the structure of the economy. While the share of value-added of the manufacturing sector has increased over the last decade, Myanmar is still an agrarian country. Fortunately, Myanmar possesses a wealth of assets and opportunities that potentially enable it to pursue a development strategy to modernise the agriculture sector and to transform into a manufacturing- and services-based economy. This report investigates how to achieve structural transformation and pays particular attention to the requirements in terms of workforce skills and financing.

This chapter analyses Myanmar’s education and training system with a focus on the skills in Myanmar’s workforce. It looks at how to develop relevant skills – especially through technical and vocational education and training (TVET) – how to encourage people to actively contribute their skills to the labour market, and how to make sure people’s skills are put to effective use. The chapter also assesses and provides recommendations for strengthening the policy framework for the skills system in Myanmar.

Realisation of Myanmar’s potential will depend upon how effectively the country can mobilise and allocate the financial resources to support its development needs. At present, the key institutions in the government and financial system that govern mobilisation and allocation of development financial resources are underdeveloped and hampered by a range of constraints and distortions. These include limited government capacities and underdeveloped legal and fiscal institutions, as well as limitations in the regulatory frameworks essential to the effective functioning of markets and private sector development.Myanmar’s authorities have made impressive beginnings on addressing these obstacles but the challenge will be to sustain an ongoing process of institutional reforms and capacity building. Areas of reform should cover government mechanisms for reporting, co-ordinating, and managing external funding; public financial management and revenue collection; as well financial market development. Reforms should be targeted to ensure that the provision of financial resources not only keeps up with but helps to catalyse the country’s overall development.

Myanmar possesses multi-faceted development opportunities. The country is endowed with a wealth of resources, including fertile land, minerals, hydrocarbons, forests and water resources as well as a relatively young population. Myanmar’s geographical location suggests potential as a regional trading hub. However, as highlighted in the diagnostic first phase of the Multi-dimensional Country Review (MDCR) of Myanmar (OECD, 2013), in order to achieve stable and sustainable development in the long term, the country must address various key challenges.

Myanmar possesses vast assets and opportunities that enable it to modernise the agricultural sector and to pursue a potentially structural economic transformation towards a modern economy. This chapter focuses on measures to modernise the agricultural sector and promote the transformation towards a manufacturing and services-based economy. Importantly, while services can become important drivers of growth in developing countries, this can only be achieved in tandem with growing the manufacturing sector. Moreover, modernising the agricultural sector by building linkages to complementary non-agricultural activities can initiate a structural transformation towards a more manufacturing and service-based economy.