Economy of Burma
From Wikipedia, the free encyclopedia
| Economy of Burma | |
| Currency | kyat (MMK) |
|---|---|
| Fiscal year | 1 April - 31 March |
| Trade organisations | WTO, ASEAN |
| Statistics | |
| GDP (PPP) | $85.2 billion (2006 est.) (66th) |
| GDP growth | 3% (2006 est.) |
| GDP per capita | $1,800 (2006 est.) |
| GDP by sector | agriculture: 50%, industry: 15%, services: 35% (2006 est.) |
| Inflation (CPI) | 21.4% (2006 est.) |
| Population below poverty line |
25% (2006 est.) |
| Labour force | 28.49 million (2006 est.) |
| Labour force by occupation |
agriculture: 70%, industry: 7%, services: 23% (2001) |
| Unemployment | 10.2% (2006 est.) |
| Main industries | Agricultural Processing, Textiles and Footwear, Wood and Wood Products, Metallurgical industry(Copper, Tin, Tungsten, Iron), Construction Materials, Pharmaceuticals, Fertilizer industry |
| External | |
| Exports | $3.56 billion f.o.b. note: official export figures are grossly underestimated due to the value of timber, gems, narcotics, rice, and other products smuggled to Thailand, China, and Bangladesh (2006) |
| Export goods | clothing, gas, wood products, pulses, beans, fish, rice |
| Main export partners | Thailand 48.4%, India 12.6%, the China 5.2%, Japan 5.1% (2006) |
| Imports | $1.98 billion f.o.b. note: import figures are grossly underestimated due to the value of consumer goods, diesel fuel, and other products smuggled in from Thailand, China, Malaysia, and India (2004) |
| Import goods | fabric, petroleum products, plastics, machinery, transport equipment, construction materials, crude oil; food products |
| Main import partners | China 33.6%, Thailand 21.2%, Singapore 15.7%, Malaysia 4.6%, South Korea 4.1% (2006) |
| Public finances | |
| Public debt | $7.162 billion (2006 est.) |
| Revenues | $473.3 million (FY04/05 est.) |
| Expenses | $716.6 million; including capital expenditures of $5.7 billion (FY04/05 est.) |
| Economic aid | recipient: $127 million (2001 est.) |
| Main data source: CIA World Factbook All values, unless otherwise stated, are in US dollars |
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Burma is one of the poorest nations in the world, suffering from decades of stagnation, mismanagement, and isolation. Burma’s GDP grows only 2.9% annually -- the lowest rate of economic growth in the Greater Mekong Subregion.[1]
Burma is also the poorest country in Asia, with a nominal GDP per capita of only $230 (2003), and ranks 174th out of 180 in terms of nominal GDP per capita in the world, thus being classified by the UN as one of the "least developed countries".
Under British administration, Burma was one of the wealthiest countries in Southeast Asia. It was once the world's largest exporter of rice. During British administration, Burma supplied oil through the Burmah Oil Company. Burma also had a wealth of natural and labor resources. It produced 75% of the world's teak, and had a highly literate population.[2] The country was believed to be on the fast track to development.[2]
After a parliamentary government was formed in 1948, Prime Minister U Nu attempted to make Burma a welfare state. His administration adopted the Two-Year Economic Development Plan, which was a failure.[3]
When Burma gained independence in 1948, it was believed to be on its way to become the first Asian Tiger in the region. However, after the military dictatorship seized power in 1962, Burma became an isolated and impoverished nation.
After the 1962 military coup d'état, the military government introduced an economic plan called the Burmese Way to Socialism, under which the military regime nationalized all industries with the exception of agriculture. In 1989, the Burmese government began decentralizing economic control. It has since liberalized certain sectors of the economy.[4] The government heavily regulates lucrative industries, such as gems, oil, and forestry. Foreign corporations have partnered with the government to gain access to these natural resources.[citation needed]
The economy of Burma is currently mixed. The private sector dominates in agriculture, light industry, and transport activities, while the military government controls mainly energy, heavy industry, and rice trade.
Burma was designated a least developed country in 1987.[5] Private enterprises are often co-owned or indirectly owned by the Tatmadaw. In recent years, both China and India have attempted to strengthen ties with the government for economic benefit. Many nations, including the United States, Canada, and the European Union, have imposed investment and trade sanctions on Burma. Foreign investment comes primarily from China, Singapore, South Korea, India, and Thailand.[6]
In the eleven years from 1989-1999, the military government tried to revitalize the economy after three decades of tight central planning. However the regime has recently canceled its reforms. Despite this, the private sector continues to grow albeit slowly.[citation needed]
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[edit] Macro-economic trend
This is a chart of trend of gross domestic product of Burma at market prices estimated by the International Monetary Fund and EconStats with figures in millions of Myanma kyats.
| Year | Gross Domestic Product | US dollar exchange[7] | Inflation index (2000=100) |
|---|---|---|---|
| 1965 | 7,627 | ||
| 1970 | 10,437 | ||
| 1975 | 23,477 | ||
| 1980 | 38,608 | ||
| 1985 | 55,988 | ||
| 1990 | 151,941 | ||
| 1995 | 604,728 |
Though foreign investment has been encouraged, it has so far met with only moderate success. This is because foreign investors have been adversely affected by the junta government policies and because of international pressure to boycott the junta government.[citation needed] The United States has placed trade sanctions on Burma. The European Union has placed embargoes on arms, non-humanitarian aid, visa bans on military regime leaders, and limited investment bans. Both the European Union and the U.S. have placed sanctions on grounds of human rights violations in the country. However, many nations in Asia, particularly India, Thailand and China have actively traded with Burma.
The public sector enterprises remain highly inefficient and also privatization efforts have stalled.[citation needed] The estimates of Burmese foreign trade are highly ambiguous because of the great volume of black market trading. A major ongoing problem is the failure to achieve monetary and fiscal stability. Due to this, Burma remains a poor country with no improvement of living standards for the majority of the population over the past decade. The main causes for continued sluggish growth are poor government planning, internal unrest, minimal foreign investment and the large trade deficit. One of the recent government initiatives is to utilize Burma's large natural gas deposits. Currently, Burma has attracted investment from Thai, Malaysian, Russian, Australian, Indian, and Singaporean companies. [2]
Burma is the poorest country in the world in terms of GDP per capita. (nominally $97 as in 2005)
According to the CIA World Factbook [3],
| “ | Burma, a resource-rich country, suffers from pervasive government controls, inefficient economic policies, and rural poverty. The junta took steps in the early 1990s to liberalize the economy after decades of failure under the "Burmese Way to Socialism," but those efforts stalled, and some of the liberalization measures were rescinded. Burma does not have monetary or fiscal stability, so the economy suffers from serious macroeconomic imbalances - including inflation, multiple official exchange rates that overvalue the Burmese kyat, and a distorted interest rate regime. Most overseas development assistance ceased after the junta began to suppress the democracy movement in 1988 and subsequently refused to honor the results of the 1990 legislative elections. In response to the government of Burma's attack in May 2003 on Aung San Suu Kyi and her convoy, the US imposed new economic sanctions against Burma - including a ban on imports of Burmese products and a ban on provision of financial services by US persons. A poor investment climate further slowed the inflow of foreign exchange. The most productive sectors will continue to be in extractive industries, especially oil and gas, mining, and timber. Other areas, such as manufacturing and services, are struggling with inadequate infrastructure, unpredictable import/export policies, deteriorating health and education systems, and corruption. A major banking crisis in 2003 shuttered the country's 20 private banks and disrupted the economy. As of December 2005, the largest private banks operate under tight restrictions limiting the private sector's access to formal credit. Official statistics are inaccurate. Published statistics on foreign trade are greatly understated because of the size of the black market and unofficial border trade - often estimated to be as large as the official economy. Burma's trade with Thailand, China, and India is rising. Though the Burmese government has good economic relations with its neighbors, better investment and business climates and an improved political situation are needed to promote foreign investment, exports, and tourism. | ” |
[edit] Economy Today
Today, Burma lacks adequate infrastructure. Goods travel primarily across the Burmese-Thai border, whence most illegal drugs are exported, and along the Ayeyarwady River. Railroads are old and rudimentary, with few repairs since their construction in the 1800s.[8] Highways are normally unpaved, except in the major cities.[8] Energy shortages are common throughout the country including in Yangon. Burma is also the world's second largest producer of opium, accounting for 8% of entire world production and is a major source of narcotics, including amphetamines.[9] Other industries include agricultural goods, textiles, wood products, construction materials, gems, metals, oil and natural gas.
The major agricultural product is rice which covers about 60% of the country’s total cultivated land area. Rice accounts for 97% of total food grain production by weight. Through collaboration with the International Rice Research Institute (IRRI), 52 modern rice varieties were released in Burma between 1966 and 1997, helping increase national rice production to 14 million tons in 1987 and to 19 million tons in 1996. By 1988, modern varieties were planted on half of the country’s ricelands, including 98 percent of the irrigated areas [4]PDF (21.2 KiB).
The lack of an educated workforce skilled in modern technology contributes to the growing problems of the Burmese economy.[10] 1.1
Inflation is a serious problem for the Burmese economy. In April 2007, the National League for Democracy organized a two-day workshop on the economy. The workshop concluded that skyrocketing inflation was impeding economic growth. “Basic commodity prices have increased from 30 to 60 percent since the military regime promoted a salary increase for government workers in April 2006,” said Soe Win, the moderator of the workshop. “Inflation is also correlated with corruption.” Myint Thein, an NLD spokesperson, added: “Inflation is the critical source of the current economic crisis.” [11]
[edit] Tourism
Since 1992, the government has encouraged tourism. However, fewer than 750,000 tourists enter the country annually.[12]
Tourism remains nevertheless a growing sector of the economy of Burma. Burma has diverse and varied tourist attractions and is served internationally by numerous airlines via direct flights. Domestic and foreign airlines also operate flights within the country. Cruise ships also dock at Yangon. Overland entry with a border pass is permitted at several border checkpoints. The government requires a valid passport with an entry visa for all tourists and business people. Both the tourist visa and business visa are valid for 28 days, renewable for an additional 14 days for tourism and 3 months for business. Seeing Burma through a personal tour guide is popular. Travelers can hire guides through travel agencies.
[edit] Trade volume of Burma
| Sr. No. | Description | 2006-2007 Budget Trade Volume | 2006-2007 Real Trade Volume | |||||
| Export | Import | Trade Volume | Export | Import | Trade Volume | |||
|---|---|---|---|---|---|---|---|---|
| 1 | Normal Trade | 4233.60 | 2468.40 | 6702.00 | 4585.47 | 2491.33 | 7076.80 | |
| 2 | Border Trade | 814.00 | 466.00 | 1280.00 | 647.21 | 445.40 | 1092.61 | |
| Total | 5047.60 | 2934.40 | 7982.00 | 5232.68 | 2936.73 | 8169.41 | ||
| No | Financial Year | Export Value | Import Value | Trade Value (US$, 000,000) |
|---|---|---|---|---|
| 1 | 2003-2004 | 2356.82 | 2239.97 | 4596.79 |
| 2 | 2004-2005 | 2927.83 | 1973.58 | 4901.41 |
| 3 | 2005-2006 | 3558.03 | 1984.41 | 5542.44 |
| 4 | 2006-2007 | 5232.68 | 2936.73 | 8169.41 |
[edit] Humanitarian Aid
In April 2007, the U.S. Government Accountability Office (GAO) identified the financial and other restrictions that the military government places on international humanitarian assistance in the Southeast Asian country.
The GAO report, entitled "Assistance Programs Constrained in Burma," outlines the specific efforts of the Burmese government to hinder the humanitarian work of international organizations, including by restricting the free movement of international staff within the country. The report notes that the regime has tightened its control over assistance work since former Prime Minister Khin Nyunt was purged in October 2004. Furthermore, the reports states that the military government passed guidelines in February 2006, which formalized Burma's restrictive policies. According to the report, the guidelines require that programs run by humanitarian groups "enhance and safeguard the national interest" and that international organizations coordinate with state agents and select their Burmese staff from government-prepared lists of individuals. United Nations officials have declared these restrictions unacceptable.
"The shameful behavior of Burma's military regime in tying the hand of humanitarian organizations is laid out in these pages for all to see, and it must come to an end," said U.S. Representative Tom Lantos (D-CA). "In eastern Burma, where the military regime has burned or otherwise destroyed over 3,000 villages, humanitarian relief has been decimated. At least one million people have fled their homes and many are simply being left to die in the jungle."
U.S. Representative Ileana Ros-Lehtinen (R-FL) said that the report "underscores the need for democratic change in Burma, whose military regime arbitrarily arrests, tortures, rapes and executes its own people, ruthlessly persecutes ethnic minorities, and bizarrely builds itself a new capital city while failing to address the increasingly urgent challenges of refugee flows, illicit narcotics and human trafficking, and the spread of HIV/AIDS and other communicable diseases." [13]
[edit] Recent Economic Protests
The Burmese military junta detained eight people on Sunday, April 22, 2007 who took part in a rare demonstration in a Yangon suburb amid a growing military crackdown on protesters. A group of about ten protesters carrying placards and chanting slogans staged the protest Sunday morning in Yangon's Thingangyun township, calling for lower prices and improved health, education and better utility services. The protest ended peacefully after about 70 minutes, but plainclothes police took away eight demonstrators as some 100 onlookers watched. It could not immediately be determined if they were arrested on criminal charges. The protesters carried placards with slogans such as "Down with consumer prices."
The junta tolerates little dissent and strictly curbs press freedoms. Some of those detained were the same protesters who took part in a downtown Yangon protest on February 22, 2007, said the witnesses who did not want to be identified for fear of reprisals by the government. That protest was one of the first demonstrations in recent years to challenge the junta's economic mismanagement rather than its legal right to rule. The protesters detained in the February rally had said they were released after signing an acknowledgment of police orders that they should not hold any future public demonstrations without first obtaining official permission.[14]
The Burmese military government stated its intention to crack down on these human rights activists, according to an April 23, 2007, report in the country’s official press. The announcement, that comprised a full page of the official newspaper, followed calls by human rights advocacy groups, including London-based Amnesty International, for Burmese authorities to investigate recent violent attacks on rights activists in the country.
Two members of Human Rights Defenders and Promoters, Maung Maung Lay, 37, and Myint Naing, 40, were hospitalized with head injuries following attacks by more than 50 people while the two were working in Hinthada township, Irrawaddy Division in mid-April. On Sunday, April 22, 2007, eight people were arrested by plainclothes police, members of the pro-junta Union Solidarity and Development Association, and the Pyithu Swan Arr Shin (a paramilitary group) while demonstrating peacefully in a Rangoon suburb. The eight protesters were calling for lower commodity prices, better health-care and improved utility services. Htin Kyaw, 44, one of the eight who also took part in an earlier demonstration in late February in downtown Rangoon, was beaten by a mob, according to sources at the scene of the protest.
Reports from Burmese opposition activists have emerged in recent weeks saying that Burmese authorities have directed the police and other government proxy groups to deal harshly with any sign of unrest in Rangoon. “This proves that there is no rule of law [in Burma],” the 88 Generation Students group said in a statement issued on April 23, 2007. “We seriously urge the authorities to prevent violence in the future and to guarantee the safety of every citizen.” [15]
[edit] Other statistics
Electricity - production: 7.393 billion kWh (1998)
Electricity - production by source:
fossil fuel: 61.72%
hydro: 38.28%
nuclear: 0%
other: 0% (1998)
Electricity - consumption: 6.875 billion kWh (1998)
Electricity - exports: 0 kWh (1998)
Electricity - imports: 0 kWh (1998)
Agriculture - products: paddy rice, maize, oilseed, sugarcane, pulses; hardwood
Currency: 1 kyat (K) = 100 pyas
Exchange rates: kyats per US dollar - 5.82 (2005), 5.7459 (2004), 6.0764 (2003), 6.5734 (2002), 6.6841 (2001) note: these are official exchange rates; unofficial exchange rates ranged in 2004 from 815 kyat/US dollar to nearly 970 kyat/US dollar, and by year-end 2005, the unofficial exchange rate was 1,075 kyat/US dollar.
[edit] Footnotes
- ^ "Burma". The World Factbook. Central Intelligence Agency. Retrieved on 2007-01-13.,
- ^ a b Steinberg, David L. (February 2002). Burma: The State of Myanmar. Georgetown University Press. ISBN.
- ^ Watkins, Thayer. "Political and Economic History of Myanmar (Burma) Economics". San José State University. Retrieved on 2006-07-08.
- ^ Stephen Codrington (2005). Planet geography. Solid Star Press, 559.
- ^ "List of Least Developed Countries". UN-OHRLLS (2005).
- ^ Fullbrook, David (2004-11-04). "So long US, hello China, India", Asia Times. Retrieved on 2006-07-14.
- ^ [1] - MIRT. Team, "Exchange rate between the United States dollar and Myats, 1913 -1999", 2002.
- ^ a b "Challenges to Democratization in Burma" (PDF). International IDEA (November 2001). Retrieved on 2006-07-12.
- ^ "Myanmar Country Profile" (PDF). Office on Drugs and Crime 5-6. United Nations (December 2005). Retrieved on 2006-07-09.
- ^ Brown, Ian (2005). A Colonial Economy In Crisis. Routledge. ISBN 0-4153-0580-2.
- ^ "High Inflation Impeding Burma's Economy, Says NLD", The Irrawaddy (2007-04-30). Retrieved on 2007-04-30.
- ^ Henderson, Joan C.. "The Politics of Tourism in Myanmar". Nanyang Technological University. Retrieved on 2006-07-08.
- ^ "Myanmar's rulers implement increasingly restrictive regulations for aid-giving agencies", International Herald Tribune (2007-04-19). Retrieved on 2007-04-23.
- ^ "Eight demonstrators detained for rare protest in military-ruled Myanmar", International Herald Tribune (2007-04-22). Retrieved on 2007-04-23.
- ^ "Burma’s Junta Vows to Crack Down on Human Rights Activists", The Irrawaddy (2007-04-23). Retrieved on 2007-04-23.
[edit] See also
[edit] External links
- News, information, journals, magazines related to Burmese business and commerce
- Myanmar Commerce Online Licence Services, Information Services website
- Myanmar Commerce Information Services website
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