Burma’s Foreign Minister Wunna Maung Lwin has asked Asean-based countries to look for new ways to enhance micro financing for rural agricultural projects, which is cited as a prime need to energize Burma's agricultural sector.
Speaking at the 10th East Asian Forum hosted by Burma in Naypyitaw on Thursday, he said there was also a need to enhance networking between regional government authorities in agricultural and food-related research institutions.
Wunna Maung Lwin outlined Burma's national development strategy on rural development and poverty eradication, and he urged the participants to find new practical ways and ideas for narrowing the development gap in rural and urban communities.
Micro financing is viewed as an important new strategy in Burma’s agricultural sector, which is seen as a key to national growth in the short term.
The economy, which has been ravaged by 50 years of military dictatorship, has caused the financial system to deteriorate to the point where it is “a deeply unsophisticated, underdeveloped” financial system, according to Sean Turnell, an economist at Macquarie University in Sydney, who studies the country’s economic system. A prime factor has been the banking sector's inability to offer widespread loan programs to finance farming innovations.
“If you’re paying a [high] interest rate, it’s going to be very hard to make a profitable return,” Turnell said.
Private loans in Burma account for only 5 per cent of Gross Development Product (GDP), compared to 30 per cent in Cambodia and over 120 per cent in Vietnam, he said.
The situation is worse in rural areas where there is “no finance available...truly nothing” even though micro finance has a “big role to play” in a nation that is predominantly agricultural, Turnell said.
Representatives from Asean-member countries, plus dialogue partners of China, Japan and South Korea, the Deputy Secretary General of the Asean Political and Security Community and Asean Secretariat as well as business and academic representatives attended the EAF meeting.
The year 2012 marks the 15th anniversary of the Asean Plus Three Cooperation and the 10th anniversary of the East Asia Forum.