Let me elaborate on these two themes: why liberalise the financial sector, and why liberalise at a measured pace. In doing so, I will draw partly from Singapore’s experience. Singapore and Myanmar are two very different economies and it would be unwise to apply Singapore’s experience directly to Myanmar. But I think the overall lesson is relevant: It is critical to open up, but open up at a measured pace. Why financial liberalisation is important A well-developed financial sector can be a catalyst to spur and sustain economic growth. It will lead to more effective mobilisation of domestic savings, help to harness foreign savings, and improve the efficiency of investment allocation. And opening up the financial sector to foreign participation can play a critical role in catalysing the sector’s growth and development. A basic purpose of banking is the provision of credit for economic and social development. Large segments of the Myanmese economy and population do not have access to affordable funding. Foreign financial institutions can complement the local banks in effective credit intermediation. It will deepen the financial sector, thereby helping to raise household savings and divert funds away from the shadow financial system. Foreign financial institutions can provide a channel for Myanmar to tap into foreign savings to drive its growth, even as the country ramps up the mobilisation of domestic savings. This is  BIS central bankers’ speeches  1  particularly relevant for financing infrastructure development, which is critical to drive Myanmar’s economic growth.
Ravi Menon: Myanmar must open up at a measured pace Keynote address by Mr Ravi Menon, Managing Director of the Monetary Authority of Singapore, at High-Level Seminar on Financial Sector Liberalisation, Nay Pyi Taw, Myanmar, 10 January 2014. *  *  *  His Excellency U Win Shein, Union Minister, Ministry for Finance and Revenue, His Excellency U Kyaw Kyaw Maung, Governor, Central Bank of Myanmar, distinguished guests, ladies and gentlemen, good morning. A defining moment I am pleased to be here for this high-level seminar on financial liberalisation. This collaborative event is a clear testimony to two things: •  first, the commitment and resolve of the Myanmar government and central bank to modernise and develop the financial sector; and  •  second, the warm relationship and close co-operation between the central banks of Myanmar and Singapore. Myanmar is at a defining moment. There is a distinct sense of optimism, as the country rejoins the global economy. A strategic location at the intersection of China and India, a generous endowment of natural resources, and a large, youthful and literate population – Myanmar is poised to be the next economic frontier in Asia. Finance is a handmaiden to the economy. As Myanmar opens up its economy and seeks to achieve sustained growth, it is important to liberalise and develop its financial sector in concert. But it must do this in a progressive and calibrated manner, step-by-step, making sure the fundamentals and preconditions are in place.