Friday, October 01, 2010

Ports in Myanmar

Its amazing how macro-economic models assume a life of their own...

A number of research papers being produced by an Asian think-tank is based on a time-series analysis prepared by Centennial Group - a well known US consulting firm. This model covers 32 developing countries in the Asian region and makes projections for infrastructure requirements for the next eleven years (2010-2020).

Much is this data from this model is being quoted in a number of research papers promoting the need for integrating transport and energy related infrastructure in Asia. Recently, while preparing a paper for East Asia - South Asia connectivity, I happened to notice that for Myanmar, the econometric model projects that there would be no investments in its port sector. Zero for eleven years.

Puzzled by the strange gap, I wondered why there was such a disconnect from reality. I got two answers - (1) the model is built on historic data, so maybe no data was available for Myanmar, and (2) all port investments in Myanmar are funded exclusively by foreigners.

Was this true? A brief search on Google revealed a completely different picture.

View Myanmar Ports in a larger map

Myanmar has been improving its port infrastructure for more than 60 years now. From 1956 to 1981, it was funded by World Bank loans; HPH - a private company is a prominent player, so is ADB;  China and India have also been providing partial funding for port construction for a long time now..

So does this point to a major goof-up in the much touted econometric model? Or is it another case of economic models taking precedence over ground realities?

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