Myanmar, which for years has been hit by political conflict, has been emerging from the economic shadows, encouraging banks to enter the market in recent months. But as the population starts to age, the country needs to adopt pro-growth policies, a new report says.

“Myanmar faces a crucial few years to come to ignite economic growth and embark on a higher, more sustainable and more equitable development trajectory. The challenge is even more important as the country’s population will start ageing in 2017,” according to a review launched by UNESCAP and the Organisation for Economic Co-operation and Development. The report, called the Multi-dimensional Review of Myanmar: Initial Assessment, was launched at an event in Yangon that was supported the Hanns Seidel Foundation.

“Myanmar is at a crossroad: it has to capitalise on its numerous assets and seize the momentum for development. The demographic dividend needs to be reaped now and the potential of the economy lifted by productivity-enhancing reforms ", said OECD Development Centre director Mario Pezzini. “Otherwise, Myanmar risks getting old before the incomes and living standards of its people can significantly improve,” he said.

The report comes at a time when the country, formerly known as Burma, has been emerging from a long period as an economic backwater (although at one stage, during the days of the British Empire before the Second World War, it was a relatively prosperous colony). Its improved economic prospects have lured a number of banks to do deals or set up: Bank of Tokyo-Mitsubishi UFJ, the Japanese bank, earlier this year signed a memorandum of understanding with Myanmar-based CB Bank to establish a business alliance. Also in January, Standard Chartered Bank was granted a licence to re-open its representative office in Yangon. In June, the Australian and New Zealand Banking Group formalised the opening of its representative branch in the Republic of the Union of Myanmar. A survey published late last year by Control Risks, the business consultancy, said direct investors are increasingly drawn to markets such as Myanmar in the search for untapped potential.

The OECD/ UNESCAP report said, in a cautionary note, that “recent economic growth in Myanmar has been relatively low for its level of income. The OECD’s medium-term growth forecasts indicate that without structural change the economy can grow at an average of 6.3 per cent over 2013-17, somewhat below the government’s 7.7 per cent target for 2013-2015”.