Myanmar: Asia's next growth story?

Just last month, I made my first visit to Myanmar, a place Rudyard Kipling referred to as "quite unlike any land you know about". While decades of isolation have helped this century-old observation hold true, on arrival I was struck by the vibrancy and a palpable sense of change in the air.

The country's immense potential is reflected in the Asian Development Bank's most recent analysis, which shows Myanmar has the potential to follow Asia's fast-growing economies and expand at 7-8per cent if it continues on the path of across-the-board reforms initiated this year. The country should become a middle-income nation, and could triple per capita income by 2030.

Half a century ago, Myanmar was the pearl of Asia, one of the region's leading economies with a per capita income more than twice that of its neighbour, Thailand. While most other regional economies have skyrocketed since that time, Myanmar has languished, and today it has Southeast Asia's lowest per capita gross domestic product.

After decades of stagnation, Myanmar has an enormous amount of catching up to do. The recent experiences of Asia's fast-growing economies are instructive. For Myanmar to effectively capitalise on its potential, the country will need to maintain low inflation - under 6per cent - and better ensure sustainable budgets. It will also need to encourage greater savings, dramatically bolster the skills of its people, invest heavily in infrastructure, modernise its financial sector, foster job creation and continue with its reform of the foreign exchange regime.

No small order, to be sure, but Myanmar's neighbours have shown dramatic economic transformations are possible in relatively short amounts of time if reforms remain on track.

Nearly everyone I spoke to in July emphasised that maintaining social stability will be crucial. While economic growth has been the most effective tool for reducing poverty in Asia, it has become less equitable in many fast-growing regional economies.