Myanmar Country Paper Jean-Pierre A. Verbiest and Tin Htoo Naing REVISED Draft 30 March 2013 (ADBI) I. Introduction In terms of land area, Myanmar is the second largest country in ASEAN after Indonesia. It is twice the size of Viet Nam and more than a quarter larger than Thailand. Its location in Asia is central to the most dynamic economic region in the world, having borders with five nations, and connecting East and Southeast Asia with South Asia. Part of monsoon Asia, Myanmar’s particular geography and topography have given it abundant and diversified resources in agriculture, forestry and fisheries. It is further endowed with large natural resources, including minerals, and oil and gas. With a population of about 60 million, pressure on land use is moderate. In fact, up to the early 1940s, Myanmar was a leading regional economy and a major exporter of paddy, tropical wood and other agricultural products. Yet today Myanmar is the one of the poorest country in Asia. Per capita GDP in 2012 is estimated at about $849 (IMF 2012). Data from the 2011 Integrated Household Living Conditions Assessment show poverty at 25.6 percent of the population nationwide, but rural poverty is significantly higher. In a complex country with some 130 ethnic groups, income inequality remains a very serious issue. Finally, in the UNDP Human Development Index, Myanmar ranks 149 out of 187 countries for which the index is computed (UNDP 2011). In Asia, only Afghanistan, Nepal and Papua New Guinea have a lower HDI. In 2008, a political reform process was initiated with the adoption of a new Constitution in 2008, followed on November 7, 2010 by the election of a national assembly –the first one in 20 years- and the formation of a new civilian government in April 2011. The new Constitution defines Myanmar as a market based economy, where all economic sectors can play a role, and where monopolies, pricing collusion, nationalizations and, interestingly, demonetization will not be allowed. The improvement of the people’s living conditions is also given a prominent place in the Constitution (Government of Myanmar, 2008). Given its history over the past 50 years, Myanmar is faced with multiple economic and political of challenges. The most immediate policy priorities are the strengthening of core economic policy institutions and reforms in key economic policy areas, such as fiscal policy including tax reforms, monetary policy and exchange rate management, investment liberalization including the implementation of the foreign investment law, and liberalization of the foreign trade. These “core” economic policy reforms are perquisites to successfully implement the numerous structural reforms needed to revive the real sectors of the economy. In particular, policies must first be put in place revive the agricultural sector which has huge potential and will play a key role in poverty reduction. They would also ensure political support for the reform process. Given its vast natural resources including gas, minerals, forestry and hydropower, the economy is prone to “Dutch Disease” symptoms. Hence there is an urgent need to diversify the industrial base of the economy. The success of reforms in all areas will require massive efforts at accelerating human resources development. This may be one of the most formidable challenges the economy faces. Finally, the rehabilitation and upgrading of infrastructure including power generation, all modes of transportation, telecommunications, and water and sanitation must be accelerated to support developments in the real sectors of the economy. Myanmar’s policy agenda is formidable over the next 2 decades. However given what has already been achieved over the past two years since political and economic reforms started, there is a sense of optimism in 2013 that Myanmar can reassume its rightful place in Asia over the next two decades.
Posted on: Tue, 29 Jul 2014 06:41:49 +0000
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