Khin Maung Nyo (Economics) - Privatization discussions and other economic issues

2014 World Economy

The good news about global economic growth comes with two risks: one is the risk of rising interest rates, and the other is the risk of slowing down the pace of reform efforts.

Since the end of the global financial crisis, American analysts have started each year on a positive note. This year is no different. Stock market conditions are strengthening. Consumer confidence is improving, and higher economic growth rates are expected in 2014. The Standard & Poor’s (S&P) 500 index of the top companies in the US rose 30% in 2013, its highest annual growth rate in two decades, setting a new record. The US economic recovery is expected to lead to a global economy growing by about 4% in purchasing power parity (PPP) terms. That growth rate is 1% higher than in 2013 and the best in several years.

While we celebrate the New Year, it's important to remember that every year since the financial crisis, our hopes have been dashed. The biggest threat this year is that optimism itself.

Things are starting to improve in the rich countries. The UK is seeing a recovery. Japan's consumption tax hike does not seem to have affected the economy. The outlook for Europe is not as bleak as it once was. But the main driver of the recovery is the US.

The United States is fundamentally strong and growing economically. First, the balance sheets of households and businesses are in good shape. While private debt in Europe has not yet been reduced, the United States has put the financial crisis in the past. An example is the recovery in housing prices.

Second, the United States is competitive because of cheap fuel, years of wage control, and a relatively weak dollar. These factors have led to faster job growth and rising stock prices, which are likely to boost consumer spending and investment in the future. Finally, the fiscal deficit is beginning to ease. In 2013, the federal government spent 1.75% of GDP. It cut spending more than it raised taxes. The recent agreement would reduce spending by 0.5% of GDP this year. All of these factors should push U.S. economic growth in 2014 to around 3%, higher than previously expected.

As U.S. households and businesses spend more, demand for goods and services from around the world, from China to Germany, will rise. Americans will no longer be as eager to buy foreign goods as they once were. The current account deficit has fallen to 2.2 percent of GDP, the lowest in 15 years. But the U.S. economy is so large that higher spending will boost exports around the world. That should boost domestic confidence from Europe to Japan.

One problem is that the US economic structure is not the only, nor is it the main channel for trade flows to the rest of the world. Looking at the current rally in stock prices, financial markets are playing a big role. As the US economy strengthens, investors are likely to expect the Federal Reserve to raise interest rates earlier than originally planned in mid-2015. That could boost bond yields significantly.

Central bank officials have made it clear that they will not raise interest rates any time soon, even as bond purchases slow. However, as economic growth accelerates, investors are increasingly confident that they will. The growth in the UK has led to expectations that the central bank will raise interest rates. Indeed, the central bank has said it will not raise rates. If bond yields rise due to the rapid growth in the US, this could weigh on economic growth. The central bank’s ability to influence global financial conditions could slow economic growth worldwide.

A more subtle and dangerous issue is the risk of complacency. Politicians are more eager to score points for economic growth than to make tough reforms. Recently, there was good news about the economic situation in Europe, and plans for a banking union have been postponed. In rich countries, there is so much to do that some work is postponed. In the United States, there are also problems with long-term unemployment and rising disability benefits.

Britain will have to rely on rising house prices unless it eases housing regulations and invests more in airports, roads and other infrastructure. The eurozone will not achieve real prosperity unless it can reduce private debt and get young people into work.

If you are feeling extremely happy, you should consider the above points.

(Economics)

1. The following are suggestions and considerations for improving privatization in Myanmar.

2. First, as in other countries, privatization plays a key role in Myanmar's reform agenda.

3. Secondly, privatization is a very complex and controversial issue. It also raises social and political concerns. A good understanding of these issues will help to develop a generally acceptable solution that will address all of these concerns.

4. Thirdly, implementing a privatization project is never easy. There is a saying that the devil is in the implementation. So, be prepared for mistakes. It has happened in various other countries. The important thing is to do more right than wrong.

5. Fourth, I see that the Burmese press has shown particular interest in this issue. The news has been well-written. I believe that the press can play an important role in ensuring that the privatization process is fair and just. However, it is important that the press report fairly and sensitively, as it is often controversial. It is important that the press report impartially. It should be investigative and report on both the good and the bad. Only then can the news be colorful and the usual taste of journalism be enjoyed.

6. Fifth, around the world, privatization is unpopular. The same is true in Myanmar. Many people in Myanmar are concerned that privatization will result in businessmen close to the government leaving the country with their family treasures. In some countries, there are also concerns about the potential disadvantages that privatization can bring.

7. Sixth, I believe that there is no need to worry about the potential disadvantages of privatization in Myanmar at this time. Because

(a) In Myanmar, there are now three branches of government: the executive, the legislative, and the judicial. There is also appropriate mutual supervision and control between the three branches. Therefore, we can avoid extreme events that arise due to policies that could harm the country's economy.

(b) If the Burmese government were to have extraordinary assets and wealth, it would face extraordinary difficulties and problems. In Russia, the particular problem is that $1.5 trillion has been stolen. Compared to Russia, Myanmar’s GDP is currently only $21 billion. Furthermore, like other countries, the Burmese government does not have a precise and accurate estimate of its above-ground and underground assets. Therefore, it is not clear how much has been stolen, and therefore it is unlikely that it will suffer significant losses.