Energy infrastructure development to power Myanmar’s growth

Myanmar has made enormous strides in integrating into the global community and promoting economic development. The government is focused on sustaining that momentum, but significant challenges remain. Most pressingly, the country must develop its infrastructure and increase its power-generation capacity to continue its growth.

Infrastructure investment – especially in the energy sector – is key to the development of a stable and prosperous economy, with improved standards of living for all. The World Bank estimates that spending an additional 1% of world GDP on infrastructure would increase global GDP by 2% and GDP in developing countries by almost 7%.

Without electricity, developing countries like Myanmar have no chance of providing basic requirements for health, job creation and sustainable development. Per capita electricity consumption in Myanmar is among the lowest in Asia, with an electrification rate of only 27%. The rate is much lower in most rural areas. As Myanmar’s leaders have acknowledged, shortages of electricity are a major hindrance to economic development. The costs are profound – in terms of investments never made, businesses never established and jobs never created.

Myanmar has an opportunity to invest in its energy infrastructure and build a framework for growth. It is looking to develop a comprehensive energy framework that will make the best use of its resources. Interestingly, Myanmar’s own energy development potential reflects at least three significant global trends: the significant growth of power generation based on natural gas, a fuel with which Myanmar is richly endowed; the modernization of transmission and distribution (and eventually, the so-called Smart Grid); and the growth of distributed power or the creation of off-grid solutions that are particularly important for rural areas.

Yet technology alone will not solve Myanmar’s energy needs. Good government policy – policy that enables and attracts effective cooperation with the private sector – is also critical. Based on General Electric’s experience, at least four critical elements are needed to create a strong enabling environment for infrastructure development: (1) a clear and durable political commitment; (2) regulation that is transparent, reasonable and speedy; (3) good, transparent procurement processes; and (4) worker education and training.

A focus on these areas will lead to more investment and long-term commitments from companies, allowing Myanmar to develop infrastructure that will promote growth and improve the quality of life for its citizens.

Author: John G. Rice is Vice-Chairman of General Electric (GE) and President and Chief Executive Officer of GE Global Growth and Operations

Image: Workers repair power cables in Kawhmu, Myanmar REUTERS/Aung Hia Tun