By Sinsiri Tiwutanond
BANGKOK, Aug 20 (Reuters) - Myanmar's economy is capable of growing between 7 and 8 percent a year, the Asian Development Bank (ADB) said on Monday, but the government had to ensure it pushed through inclusive and sustainable reforms that would benefit all of its people.
A quasi-civilian government has opened up the country since taking over in March 2011 from the military, which had ruled for nearly 50 years. It has pushed through a series of political and economic reforms, leading Western countries to relax sanctions.
"These are not exceptional figures," Cyn-Young Park, the ADB's assistant chief economist, said of the growth projections.
Vietnam had achieved nearly double-digit growth over a decade and reduced poverty by 50 percent, she told a briefing.
"Strong growth is going to be crucial to poverty alleviation, but in order to do so, growth needs to be inclusive and environmentally sustainable," she said.
Myanmar has a young population, with those between the age of 15 and 28 accounting for nearly 40 percent of working age people.
Echoing comments from long-time campaigner for democracy Aung San Suu Kyi, now a member of parliament, Park warned that youth unemployment could fuel social instability. The country could benefit from its youthful population, Park said, but the government had to ensure its health and education.
Myanmar, among Asia's poorest countries, has doubled the education budget for fiscal year 2012/13 to 6.3 percent of total spending, but that remains far behind international standards.
Despite notable progress in primary education, Myanmar still lags in post-primary and higher education, and "one in four primary school completers never enter middle school", the ADB said in a report.
For Stephen Groff, ADB's vice-president for East Asia, Southeast Asia and the Pacific, inclusivity had to extend to the country's ethnic minorities, many of which fought against the former junta regime.
The civilian government has reached ceasefires with most of them as a prelude to political talks, although fighting continues in Kachin state, while at least 77 people died in sectarian riots in Rakhine state in June.
Groff welcomed what he called efforts by President Thein Sein to look into the problems there. "I think there is an understanding that the future of the country is going to depend very much on their ability to generate inclusive growth ... in all areas of the country," he said.
The ADB believes Myanmar can become a middle-income country and triple its GDP per capita by 2030 but says constraints in its underdeveloped financial sector could weigh on progress.
In addition, it had the lowest tax revenue to GDP ratio in the region, with taxes accounting for only one-third of total revenue.
"This is even lower than Afghanistan in Asia. It is very important to strengthen public finances through strengthening the efficiency of the tax system, growing the tax base, and removing tax concessions," Park said.
As the authorities relax the state's grip on the economy and society, some citizens have started to complain about their lot, with town dwellers taking to the street over incessant power cuts, for example, and farmers protesting about land grabs.
Some 70 percent of Myanmar's 60 million people live on farms and Park said rural development had to be a priority.
"Myanmar has already experienced some social unrest. As the economy grows fast, the country needs to make sure the growth benefits reach the wider public," she said. (Editing by Alan Raybould and Sanjeev Miglani)
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