In a recent New York Times op-ed Roy Prosterman and Darryl Vhugen of the U.S. NGO Landesa highlight some of what Myanmar’s government will need to do to promote sustainable growth in the country. It certainly needs to attract investment and at first blush things look very encouraging: a variety of investors are interested in a number of projects – particularly building out infrastructure. But the article points out that other infrastructure – the intangible, institutional infrastructure that supports a rule of law and protects rights, including property rights and rights to trade – also needs attending to.
Specifically, they point to the need to secure land rights for Myanmar’s people to protect against uncompensated takings and to encourage investment. As we’ve learned around the world, secure land rights create positive incentives to invest capital and labor in land and so help improve productivity while also encouraging the kind of “alertness” to profitable opportunities that motivates entrepreneurs. Unfortunately, as Prosterman and Vhugen point out, the current legal and policy environment is already falling short and proposed new laws threaten to make the situation even worse.
Weak rights may create short-term gains for some, but recognizing and formalizing the land rights of Myanmar’s women and men will help build the kind of institutional infrastructure that sustains growth over the long-term.