2017 Article IV Consultation - Press Release; Staff Report; and Statement by the Executive Director for Myanmar


2017 Article IV Consultation - Press Release; Staff Report; and Statement by the Executive Director for Myanmar

Fund Relations

(As of December 31, 2017)

Membership Status: Joined on January 3, 1952; Article XIV.

General Resources Account:

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SDR Department:

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Outstanding Purchases and Loans: None

Latest Financial Arrangements:

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Overdue Obligation and Projected Payments to the Fund1 (SDR Million; based on existing use of resources and present holdings of SDRs):

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Implementation of HIPC Initiative: Not Applicable

Implementation of Multilateral Debt Relief Initiative (MDRI): Not Applicable

Implementation of Catastrophe Containment and Relief (CCR): Not Applicable

Exchange Rate Arrangement

The kyat had been pegged to the SDR at K 8.5057 per SDR since May 2, 1977. On April 1, 2012, the authorities replaced the official peg to the SDR with a managed float. The Central Bank of Myanmar (CBM) started daily two-way multiple-price foreign currency auctions with technical assistance (TA) provided by the Monetary and Capital Markets Department (MCM). The auctions provided a mechanism for the market to determine an exchange rate that the CBM could use to set its new reference rate. However, in 2016 problems in operating the auction led to a sharp decline in traded auction volumes. Over 2017 the CBM has informally set the official reference exchange rate near the informal market rate. Despite not being used for price discovery, the auction remains in place, and may be used for future intervention purposes. The CBM reserves the right to intervene to moderate excessive exchange rate volatility in the foreign exchange market. The de jure exchange rate arrangement is classified as managed float, and the de facto exchange rate regime is classified as stabilized arrangement, effective January 12, 2017.

Myanmar continues to avail itself of transitional arrangements under Article XIV, although it has eliminated all Article XIV restrictions. Myanmar has made significant progress toward satisfying Article VIII obligations. Almost all current account restrictions have been removed through the implementation of the 2012 Foreign Exchange Management Law. However, Myanmar still maintains an exchange restriction and a multiple currency practice (MCP) subject to Fund approval under Article VIII. The exchange restriction subject to Fund jurisdiction arises from the requirement of tax certification for authorizing transfers of net investment income abroad. The MCP arises from the two-way, multi-price foreign currency auction in the absence of a mechanism for maintaining winning bids within 2 percent of each other.

Article IV Consultation

Myanmar is on the standard 12-month Article IV consultation cycle. The last Article IV consultation discussions were conducted on October 14–28, 2016 in Yangon and Nay Pyi Taw. The Executive Board concluded the 2016 Article IV consultation on January 25, 2017.

Technical Assistance

Myanmar is now one of the largest recipients of IMF technical assistance (TA). Delivery is through a mix of resident advisors; experts in the Bangkok-based Technical Assistance Office for Lao P.D.R. and Myanmar (TAOLAM) and short-term HQ and expert missions. The key areas of focus are:

  • Central Banking: a resident foreign exchange advisor and a monetary operations advisor based in TAOLAM provided frequent responsive advice, supported by HQ missions. In addition, regular expert missions were conducted in order to assist the CBM strengthen its accounting framework and systems. Both advisors have completed their assignments, and their replacements are scheduled to take duty over the coming months.

  • Financial Sector Supervision: work in this area is led by a resident advisor in Yangon supported by HQ and expert missions. AML/CFT TA is delivered by HQ staff and short-term expert.

  • Revenue Reform: a resident tax administration advisor is supported by HQ and expert missions aimed at modernizing the Internal Revenue Department (IRD). Work on tax policy is delivered through HQ missions.

  • Public Financial Management: the focus is on capacity development of the Treasury Department, following its establishment in September 2014, which was led by PFM advisors based in TAOLAM and supported by HQ and expert missions.

  • Statistics: the work plan in this area has been developed following a multi-sector diagnostic mission in 2013. As a result, external sector and government finance statistics advisors have taken up duties in TAOLAM and expert visits continue to assist in the development of price statistics. A rebased CPI was released in August 2016.

  • Macroeconomic Management: an advisor based in TAOLAM leads the work on developing a macroeconomic framework and other analytical tools, which is closely integrated with the broader IMF training program.

In all areas, the IMF coordinates closely with other development partners. In the financial sector, the IMF team has assisted the Central Bank of Myanmar in developing a framework for coordination of international technical assistance.

Resident Representative

Mr.Yasuhisa Ojima has been the Resident Representative of the country and stationed in Yangon, since September 2015.

The Technical Assistance Office for Lao P.D.R. and Myanmar (TAOLAM)

The IMF opened TAOLAM in Bangkok in October 2012. Mr. David Cowen, Director, has headed the office since September 2015. TAOLAM provides technical assistance and training in macroeconomic management and statistics, supported by resources from the Government of Japan and the Bank of Thailand. Currently, six TA advisors are based in the office, covering public financial management (PFM), monetary and foreign exchange operations, macroeconomic management, government financial statistics, and external sector statistics for Myanmar, as well as Cambodia, Lao P.D.R., and Vietnam under most of TAOLAM’s capacity development projects.

Myanmar: Key Technical Assistance by the Fund During 2017

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World Bank-IMF Collaboration

(January 2018)

The Fund and the Bank country teams for Myanmar, led by Mr. Peiris (International Monetary Fund, IMF) and by Ms. Goldstein (World Bank Group, WBG), maintain excellent working relations and dialogue on macroeconomic and structural issues.

The level of cooperation and coordination is strong, and is becoming more regular as both institutions have been scaling up their engagement in Myanmar. Staffs routinely share country documents prepared by both institutions for their respective Executive Boards and collaborate regularly in areas of mutual interest.

Following the clearance of arrears to the International Development Association (IDA) in January 2013, the Bank has resumed normal lending relations with Myanmar and the International Finance Corporation (IFC) commenced its investment and advisory activities. A pre-arrears clearance IDA grant to finance a National Community Driven Development Project preceded an initial Development Policy Operation in support of a program around macroeconomic stability and arrears clearance. To date, 13 IDA financed projects have been approved by the Executive Board of Directors with commitments around US$2 billion in electricity, telecommunications, public financial management, education, health, agriculture, and river basin management. The IFC has made investments in infrastructure, microfinance, hospitality and banking sectors and is developing its pipeline of investments in several sectors. The WBG has also significantly scaled up its analytical and advisory services.

Following the completion of the 2013 Staff Monitored Program, the IMF is continuing to provide intensive policy advice and technical assistance to Myanmar. On the surveillance side, annual Article IV consultations are supplemented with regular staff visits and frequent engagement through the resident representative office which was opened in 2013. Technical Assistance continues to intensify with two (three up to July 2015) resident advisors in Myanmar and five (up to October 2016) in the Bangkok-based TAOLAM alongside regular HQ-missions. Key TA priorities include development of monetary and exchange rate policy tools, enhancing bank supervision, strengthening tax policy and administration, enhancing budget preparation and execution, strengthening macro policy analysis and developing macroeconomic statistics. The Fund also has a wide-ranging training program for Myanmar.

There is strong collaboration between the WBG and IMF.

  • Macroeconomic policy advice to the authorities. WB and IMF regularly exchange views on macroeconomic developments, carry out the joint Debt Sustainability Analysis (DSA), and coordinate TA, including on macroeconomic monitoring and forecasting. The Fund country team shares its economic outlook during surveillance missions and comments on the World Bank’s recently launched bi-annual Myanmar economic monitor. The Bank and the Fund have collaborated on the Staff Issue papers, notably the recent paper on poverty and regional disparities.

  • In the financial sector, the World Bank and IMF have been coordinating technical assistance through regular information sharing based on an earlier joint note on the IMF-WB Financial Sector TA Plan for Myanmar. World Bank TA has focused on strengthening the financial sector legal and regulatory framework (including technical input on the now approved Financial Institutions Law, and microfinance and insurance regulation and supervision); state-owned bank reform, through completion of diagnostics of the four main state-owned banks; regulatory framework for mobile financial services; and development of a Financial Sector Development Strategy. The Fund has focused on bank supervision, monetary and FX operations, central bank financial management and the resolution framework. The Bank and Fund also recently completed a focused update on the joint banking sector action plan.

  • On fiscal management, the World Bank and the Fund have exchanged views on priorities for the recently completed Second Public Expenditure Review; coordinating TA to the Large Taxpayers’ Office in its efforts to introduce a risk-based audit system; coordinating TA to the Treasury Department and the Myanmar Economic Bank on strengthening of the payment and settlement system; and coordinating policy dialogue through participation in the PFM sector working group. Staff from the Bank and the Fund continue the joint preparation for the Debt Sustainability Analysis.

  • On structural reforms, during the process of the preparation of the Myanmar Investment Law, the WBG has consulted frequently with the IMF on many provisions, in particular on issues related to capital and current account transfers and taxation. The IMF provided written comments on the first and second drafts of the Investment Law to the IFC and the government. The Bank and the Fund have also provided views on the new Myanmar Companies Act to the authorities.

  • On statistics, there has been good ongoing collaboration including joint IMF-ADB-WB missions to Myanmar under the auspices of the National Strategy for the Development of Statistics (NSDS) project to coordinate support and advice to the government. The IMF is primarily providing TA to government finance statistics (Ministry of Finance), balance of payments (Central Bank of Myanmar), prices (Central Statistical Organization), monetary statistics/central bank balance sheets, and financial soundness indicators. The ADB is providing TA on the SNA compilation framework. The World Bank is currently focusing support to overall statistical strategy development, institutional reform, and poverty monitoring.

Based on the above partnership, the World Bank and the Fund share a common view about Myanmar’s macroeconomic and structural reform priorities. Important reform priorities include:

  • Promoting long-term growth and diversification. Modernizing Myanmar’s economy will require removing impediments to growth by enhancing the business and investment climate, encouraging financial sector development, and further liberalizing trade and foreign direct investment restrictions. The government’s Framework for Economic and Social Reform would benefit from coordination across government agencies, broader consultation with stakeholders, and lessons from other countries’ experiences through substantial capacity building efforts.

  • Macroeconomic stability. Sustainable and inclusive growth will require macroeconomic stability, which must be underpinned by a consistent macroeconomic policy mix.

  • Foreign exchange policy. Continued exchange rate flexibility is needed to help manage shocks while building reserves. Priorities are to formally adopt the new mechanism for setting the official reference rate, and to further develop the interbank foreign exchange market.

  • Monetary policy. Strengthening the CBM’s capacity to conduct monetary policy is a critical prerequisite for macroeconomic management. Continued attention to building tools and capacity for monetary policy is required. Steps to improve the monetary framework include: (i) Strengthen monetary policy independence and phasing-out CBM financing of the fiscal deficit; (ii) Improve functioning of money markets; (iii) Formally establish the monetary policy committee while clarifying the CBM’s price stability mandate by adopting a medium-term inflation objective.

  • Financial sector. Liberalization of the financial sector needs to be complemented with a stronger regulatory and supervisory framework to maintain financial stability. Changes should be implemented step by step, in line with the development of needed supervisory capability and banks’ capacity. The issuance of key prudential regulations has been a critical step forward. Immediate priorities include: (i) Issue an amendment to the directive, or supervisory guidance, on credit risk management; and (ii) Move ahead with restructuring of state-owned banks (SOBs). The World Bank has discussed the special diagnostic reports of the four SOBs and is working with government to follow up on the findings.

  • Fiscal policies. Fiscal policy should be geared toward achieving the Sustainable Development Goals (SDGs)1, while being anchored on debt sustainability and lowering central bank financing of the deficit. Fiscal space for increased spending towards SDGs can be achieved through further revenue mobilization and improved PFM. A strong focus is also needed on PFM reforms including the public investment management framework and State Economic Enterprises reforms, building on the enactment of the Financial Rules and Regulations and improvements in cash management through the introduction of government securities auctions.

  • Revenue mobilization. Revenue mobilization should build on the good progress achieved in the first phase of the revenue reform. The next phase of revenue reforms approved by the Cabinet Economic Committee should be fully implemented with the prioritization of: (i) complete the modernization of tax laws; (ii) reducing sources of revenue leakages, such as through inefficient tax incentives; (iii) develop staff capacity and operations; and (iv) improve customs administration, with the help of IMF TA.

  • Strengthening statistical capacity. Continue the good progress towards improving macroeconomic statistics needed for informed policy-making. The CBM’s publication of its inaugural Quarterly Bulletin, monetary and financial statistics, and financial soundness indicators were important steps forward. In addition, participation in EGDDS and publication of GFS will further assist in improving the availability of statistics. The government aims to implement SNA 2008 (today they broadly follow SNA 1968). This implies developing complementary data systems to produce the minimum required data sets and constructing a Supply-Use Table (SUT). The ADB is providing TA on the compilation framework/SUT and IMF is providing TA to selected sectors.

    WB is in discussions with the government on financial and technical support for a new household survey. Besides information on poverty and household living conditions, a new household survey will be an important source of data on the household final consumption for the SUT.

  • Private Sector Development. To enhance investment (especially FDI) reforms are needed to streamline procedures around funds transfers, including the inflow and repatriation of profits and capital. The Investment Law ensures the rights for funds transfer, but there is uncertainty with regard to the procedures and time required for funds transfers to be approved by the CBM.

The teams are committed to continue their close cooperation going forward. The table below details the specific activities planned by the two country teams over the period January–December 2018.

Myanmar: Joint Management Action Plan January–December 2018

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Relations with the World Bank Group1

(January 2018)

Myanmar became a member of the World Bank in 1952, IFC in 1956, IDA in 1962, and MIGA in 2013. By 1987, the Bank’s total portfolio amounted to US$804 million equivalent, of which US$752.8 million equivalent had been disbursed. New lending ceased after 1987. The last formal Consultative Group meeting was held in January 1986 in Tokyo, chaired by the World Bank.

Myanmar went into arrears with the World Bank in January 1998 and subsequently into nonaccrual status in September 1998. All credits that had been approved but which had not fully disbursed were cancelled and Myanmar was not eligible for new loans. The World Bank’s engagement with Myanmar became limited to monitoring economic and social developments in the country.

Relations between Myanmar and the World Bank were recently normalized. The World Bank provided a US$80 million grant in 2012 for a Community Driven Development Project. The Government of Myanmar cleared the full amount of its arrears to the World Bank in January 2013, in the amount of US$420 million through a bridge loan from the Government of Japan. The World Bank resumed lending to support Myanmar’s foreign exchange needs, including those associated with IDA arrears clearance.

The World Bank opened its first ever country office in Myanmar on August 1, 2012. Initial engagement with Myanmar was guided by an Interim Strategy Note (FY 2013–14). This was followed by a Systematic Country Diagnostic (SCD) that identified priorities for accelerating progress towards the twin goals that the WBG has committed to helping attain in its member countries: ending poverty and boosting shared prosperity.

The SCD provided the basis for a Country Partnership Framework (CPF), the first full country strategy for Myanmar since 1984. The CPF program, which runs from FY 2015 to FY 2017, has three areas of focus: reducing rural poverty; investing in people and effective institutions for people; and supporting a dynamic private sector to create jobs.

Myanmar’s IDA 18 allocation is SDR1.11 billion or US$1.58 billion equivalent2. While the Country Partnership Framework (CPF) identifies an indicative program based on this amount, it will be largely backloaded, given potential delays with the Development Policy Operations. In addition, IFC has already invested and mobilized a total of US$1.2 billion over the current CPF period. It plans to continue to support the domestic and international private sector over the next two years, with a key focus on infrastructure and job creation. MIGA will provide insurance against political risks based on demand by private investors.

Since the approval of the pre-arrears grant to finance a National Community Driven Development Project, ten IDA lending projects have been approved by the Executive Board of Directors in agriculture, additional financing for the community driven development project, river basin management, electricity, telecommunications, public financial management, health, education, and agriculture. IFC has made investments in infrastructure, microfinance, hospitality and banking.

There are several WB lending projects in the pipeline for delivery within the next 12 months (e.g., on financial inclusion, health financing). IFC is developing its pipeline of investments in several sectors. Apart from lending programs, the World Bank has significantly scaled up its analytical and advisory services.

Relations with the Asian Development Bank1

(December 2017)

Myanmar joined the Asian Development Bank (ADB) in 1973 and operations started the same year. In 2012, as the international community resumed engagement with Myanmar as a result of significant economic and political reforms, the ADB developed a road map for resumption of normal operations. In a phased approach, ADB undertook (i) intensive dialogue with government, civil society, the private sector and other development partners; (ii) prepared comprehensive economic and sector studies; developed a country partnership strategy for Myanmar; mounted an extensive capacity development and policy advisory technical assistance program; and resumed sovereign and non-sovereign lending operations.

ADB’s first full country partnership strategy (CPS) for 2017–2021 was approved in March 2017 and it is fully aligned with Myanmar’s strategic priorities. It emphasizes on supporting the government in laying the foundations for sustainable and inclusive economic development, and job creation for poverty reduction. ADB operations will focus on: (i) improving access and connectivity to connect rural and urban areas and markets, and to link Myanmar with the regional and global marketplace; (ii) strengthening human capital to promote a skilled workforce and increased employment while enabling the poor and disadvantaged to participate in and benefit from economic growth; and (iii) promoting structural and institutional reform to support the modernization of the economy. In implementing these priorities, infrastructure (energy, transport and urban development) will remain the largest component of ADB operations. To enhance inclusiveness, ADB will also provide concerted support for rural development and education and training. To help accelerate Myanmar’s transformation process, ADB will intensify its focus on capacity development and governance; private sector development; environment and climate change, and disaster risk management; regional cooperation; and gender equity. ADB has established a pipeline of projects addressing Myanmar’s key transport, energy, urban development, rural development, and education and training needs. The Country Partnership Strategy as well as the annual Country Operations Business Plan reflect a gradual shift towards increased sector focus, concentrating on infrastructure (transport, energy, and urban development), education and training, and rural development as priority activities. It will apply a long-term approach in the priority areas, and is coordinated and aligned with evolving strategies and sector activities of other development partners.

Myanmar cleared its arrears to ADB in January 2013. The ADB has so far provided 41 loans and grants totaling US$1,671.85 million. Of these, two loans amounting to US$ 6.6 million were from the ADB’s ordinary capital resources (OCR) which have already been pre-paid, and the rest were from concessional Asian Development Fund resources. From 2012–June 2017, ADB approved a total of 45 technical assistance projects (TAs), totaling about US$69 million, focusing on capacity needs in education and training, finance sector, public financial management, external debt management, private sector development, trade and investment policy, energy, power, transport, information and communication technology, statistics, tourism, environmental and social safeguards, disaster risk management and reduction, conflict-sensitivity, community and civil society participation in development, and urban development and infrastructure.

Myanmar is an increasingly active participant in the Greater Mekong Subregion Economic Cooperation Program and the Association of Southeast Asian Nations (ASEAN). ADB coordinates closely with the IMF, the World Bank, the UNDP, and other development partners and is actively engaged in various sector and thematic working groups formed by the government for aid coordination purposes.

The largest share of ADB assistance has been provided to support public sector management (including a US$512 million loan provided alongside with bridge financing for clearing arrears with an objective to support the government budget reform), followed by development of the agricultural sector (largely prior to 1988). The sector composition of ADB accumulated lending to Myanmar is shown below:

Myanmar: Asian Development Bank Lending 1973–December 2017

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Source: Asian Development Bank.

Statistical Issues

As of January 5, 2018

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Myanmar: Table of Common Indicators Required for Surveillance

(As of January 16, 2018)

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Daily (D), Weekly (W), Monthly (M), Quarterly (Q), Annually (A); Irregular (I); Not Available (NA).

Any reserve assets that are pledged or otherwise encumbered should be specified separately. Also, data should comprise short-term liabilities linked to a foreign currency but settled by other means as well as the notional values of financial derivatives to pay and to receive foreign currency, including those linked to a foreign currency but settled by other means.

Officially determined, including discount rates, money market rates, rates on treasury bills, notes, and bonds.

Foreign, domestic bank, and domestic nonbank financing.

The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds), state and local governments, and State economic enterprises (SEEs).

Including currency and maturity composition.

Includes external gross financial asset and liability positions vis-à-vis nonresidents.


When a member has overdue financial obligations outstanding for more than three months, the amount of such arrears will be shown in this section.


The Systematic Country Diagnostic (SCD) of the World Bank was published in 2014. It highlighted Myanmar’s priorities in (1) raising incomes in rural communities; (2) increasing universal access to basic services such as health care, education, water and sanitation, and electricity; (3) and improving investment climate for private sector led growth and good jobs. The Fund has collaborated with the World Bank in addressing these priorities. The IMF team has also collaborated with the UNDP on the macro-fiscal implications of SDG financing in Myanmar.


Prepared by the World Bank Group’s staff.


Converted U.S. dollar amount is based on the SDR/USD exchange rate of 1.42413 SDR as of end of December 2018.


Prepared by the Asian Development Bank’s staff.