The proportion of Myanmar’s working-age population may soon begin to decline, according to the Organization for Economic Co-operation and Development (OECD), just when the country, after transitioning to a more democratic government, is on the precipice of rapid economic development with recent inflow of foreign investment and concentrated effort to improve its infrastructure.
Myanmar has an estimated population of 59 million currently, with a population structure like China had in the 2000s, meaning that it is approaching a point where the share of workers available to support retirees starts to decline, the OECD report showed. By contrast, neighboring Cambodia and Laos will continue to see their working-age population increase, Bloomberg reported.
According to United Nations data used to compile the report, the share of people between age 10 to 64 in Myanmar will begin to dip in 2017. More developed nations in Southeast Asia, such as Vietnam and Indonesia, will experience similar trends in 2020 and 2021, respectively, according to the Wall Street Journal.
It is now imperative for Myanmar’s leaders to implement policies that optimize economic growth, the report said.
“Myanmar’s now comparatively young population will start aging in the next two decades,” the OECD said in a report released today. “If the momentum for development created by the country’s opening and internal peace process is not seized, Myanmar could get old before it gets rich.”
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Following decades of military rule, the new government under the leadership of President Thein Sein is seeking to create more jobs for Myanmar, one of Asia’s poorest countries, by allowing greater political and economic freedom.
Recently, Myanmar welcomed a number of major western companies – including the Coca-Cola Company (NYSE:KO) and Visa Inc. (NYSE:V), as the country boasts of one of the last untapped frontiers and one of the cheapest labor costs in the region, Bloomberg reported.
In 2011, a factory worker in Myanmar cost an average of $1,100 a year, one sixth of the wage of a comparable worker in China or Thailand. Many other western companies, including General Electric Company (NYSE:GE), have similar plans in the country, according to the Wall Street Journal.
The OECD predicted that without structural change, Myanmar’s economy can grow at an average of 6.3 percent from now to 2017, below the government’s target of 7.7 percent growth from now to 2015. For the country to reach that level of growth, it will need to invest in its manufacturing and services sectors to create jobs and raise income, the organization said.
Myanmar must also focus on attracting foreign investment, developing special economic zones, optimizing the contribution of public enterprises to growth, and helping small businesses to develop, the report said.
The country’s gross national income per capita is 13 percent lower than Cambodia’s and 24 percent below Laos, according to the OECD.
Investors’ interest in Myanmar is particularly high now, as the world learns about a country that was for decades closed off both economically and culturally.
"Time is of the essence," said the report, according to the Wall Street Journal. "If the momentum for development is not seized now, Myanmar risks getting old before the incomes and living standards of its people can significantly improve."