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Myanmar's new administration will grow even more rapidly - KBZ Bank
Only a few years ago Myanmar was isolated from the world economic system. But today the land is regarded as the last border of Asia. KBZ Bank Deputy Managing Director Zaw Lin Aung talks about the advances Myanmar's bank industry has made since 2010 and commends four major investments as the new Myanmar administration comes to rule.
Only a few years ago Myanmar was isolated from the world economic system. But today the land is regarded as the last border of Asia. Discussing with me is U Zaw Lin Aung, Deputy Managing Director of KBZ Bank. Well, U Zaw Lin Aung, if I may begin with Myanmar: This has opened drastically in the last few years, so what kind of changes have you experienced?
Myanmar's story began in November 2010. Much has happened since then in the area of policy control and in the area of economical reforms, with the aim of improving transparency, empiricism and inclusiveness after centuries of the dictatorial regimes. What do you think have been the most important landmarks in Myanmar's financial system in recent years?
It has overhauled the regulatory environment and the various demands on the finance industry in order to modernize the infrastructures, the institutions, liberalize them for the Asiatic markets and allow some degree of bureaucratic scrutiny. Myanmar's central bank - the most important trend was the granting of authorized merchant licences, exchange of funds licences to retail bank.
Myanmar Central Bank deployed the bank ecosystem, the automated settlement system company, and created Myanmar payments union for the first MYP. What does the rate of increase in the bank industry depend on? In particular, the pace of expansion in the bank industry depends on the solid pursuit of regulation reform, the evolution of HR and, above all, the building of confidence among the population.
GDP expansion in the bank industry is linked to the country's GDP expansion. How fast Myanmar's economies grow will depend primarily on how attractively Myanmar is seen by international investments. Investments in Myanmar have increased from $200 million in 1989, when the state first opened, to about $8.5 billion in 2014-15.
Myanmar's financial industry faces a number of major issues, in particular the speed and type of governance reforms, the development of people and confidence. More importantly, nine international financial institutions have already arrived in Myanmar, and Myanmar will join the internal energy markets of ASEAN's economy by the end of 2015.
With Myanmar booming in scale and complexities, the need for banks' manpower is also growing. Every year around 15,000 new employees join the bank branch, but only around 300 alumni can be educated in the branch. How did Myanmar's overall economic development develop in the past fiscal year?
Myanmar's true economic output rose by 8.5 per cent in 2014-15. However, the increase is expected to modernize to 6. 5 proportion in 2015-16, due to the flood and decelerating outlays. This, together with the general appreciation of the US US dollars, has put Myanmar's exchange rate under strain. The fast pace of lending to the consumer goods industry has boosted the pace of financial recovery.
While our budgetary and loan expansion contribute to economic expansion, both budgetary and monetary tightening are needed over the forecasting horizon to curb pressure on inflation and stabilize the exchange rate system. And, lastly, a look into the future: Do you see that this continued expansion and why?
It is expected to grow further in the years to come. Myanmar has always experienced a rate of increase of around eight per cent in the last five years since the 2010 policy and business reform. As Myanmar concludes our parliamentary elections in November 2015 with the Daw Aung San Suu Kyi faction, the largest of our opponents, which has won a landmark triumph and a super majority, it will form the new state.
This is why the rate of expansion will continue to rise. That is why I am expecting multinationals from the West, which have so far adopted a wait-and-see stance, to come to Myanmar at last, like many businesses from our area in recent years.