By Market Research Myanmar | Posted September 3, 2019
After decades of closed economy policies under the military rule, current Myanmar now faces a new chapter in its history. Since the establishment of semi-democratic government in March 2011, Myanmar's economy starts to open up with global trade through several progressive political and economic reforms made by the new government. Foreign businesses have expressed their interest in the country which hauled as the last economic frontier in the Southeast Asia region. Still, Myanmar faces a number of challenges, one of them being digital development.
In 2010, internet penetration in Myanmar was among the lowest in the world, only 0.3% of the population had access to the Internet. By 2019, Internet penetration has risen to nearly 40%, according to We Are Social. Moreover, 99% of these internet users are mobile. E-commerce transactions are now common in Myanmar. However, of the estimated 220,000 active users only 1% online purchases. The total e-commerce market accounts for just 0.07% of Myanmar GDP.
In the light of the lagging digital ecosystem, the Ministry of Planning and Finance developed a Digital Economy Roadmap. The new plan was drafted with the objective of enabling digital transformation, trade, governance, and innovation to encourage sustainable socio-economic development. This digital plan is supported by four pillars; 6+1 strategic framework, 9 priority sector, 14 goals, 32 short-term plans, and 16 long-term plans.
The roadmap targets digital development in nine different sectors, namely healthcare, education, agriculture, tourism and hospitality, manufacturing and SME, financial services, technology and startup, digital trade, transportation, and logistics.
Under the roadmap, Myanmar’s government has targeted foreign direct investment in the digital economy to hit $8 and $12 billion by 2020 and 2025, respectively. Digital transformation across business sectors is also expected to rise to 10% by 2020 and to 30% by 2025, and the utilization of business technology by 20% and 50%, over the same period. To provide assistance throughout the execution of the roadmap initiatives, a Digital Economy Development Committee was also established.
Continuing on the line of Digital developments, startups are inventing disruptive business models to improve the socio-economic situation of Myanmar, one of which is Wave Money. The digital money transfer service has transformed how people in Myanmar send money, replacing traditional remittances only over the past few years. Transactions via the service were recorded to exceed USD 1.3 billion in 2018 and it is expected that this figure will hit USD four billion by the end of 2019. In the future, Wave Money plans to add other services to become a more comprehensive financial platform.
Since the opening up of its economy, Myanmar has witnessed significant improvements in both the economic and social sectors. The Government, as well as private companies, are starting to address new challenges to help the country reach global standards, and it is expected that Myanmar will keep expanding its economy with an average GDP growth rate of 6.7% for the 2019 to 2024 period.
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