Economy of Burma

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Economy of Burma
Rank	86th
Currency	kyat (MMK)
Fiscal year	1 April - 31 March
Trade organisations	WTO, ASEAN, BIMSTEC
Statistics
GDP	$56.92 billion (2009 est.)
GDP growth	1.8% (2009 est.)
GDP per capita	$1,100 (2009 est.)
GDP by sector	agriculture: 42.9%, industry: 19.8%, services: 37.3% (2009 est.)
Inflation (CPI)	7.7% (2009 est.)
Population below poverty line	32.7% (2009 est.)
Labour force	30.85 million (2009 est.)
Labour force by occupation	agriculture: 70%, industry: 7%, services: 23% (2001)
Unemployment	4.9% (2009 est.)
Main industries	agricultural processing; wood and wood products; copper, tin, tungsten, iron; cement, construction materials; pharmaceuticals; fertilizer; oil and natural gas; garments, jade and gems
External
Exports	$6.504 billion (2009 est.) 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 (2009)
Export goods	natural gas, wood products, pulses, beans, fish, rice, clothing, jade and gems
Main export partners	Thailand 52%, India 12.3%, China 8.8%, Japan 4.3% (2008)
Imports	$3.555 billion (2009 est.) 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 (2009)
Import goods	fabric, petroleum products, plastics, fertilizer, machinery, transport equipment, cement, construction materials, crude oil; food products, edible oil
Main import partners	China 31.3%, Thailand 20.8%, Singapore 20.4%, Malaysia 5% (2008)
Public finances
Public debt	$7.373 billion (2009 est.)
Revenues	$1.142 billion
Expenses	$2.354 billion (2009 est.)
Economic aid	recipient: $127 million (2001 est.)
Main data source: CIA World Fact Book All values, unless otherwise stated, are in US dollars

Burma is one of the poorest nations in the world, suffering from decades of stagnation, mismanagement, and isolation. Burma’s GDP grows at an average rate of 2.9% annually – the lowest rate of economic growth in the Greater Mekong Subregion.^[1]

Under British administration, Burma had been the wealthiest country in Southeast Asia. It was also 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 and adopted central planning. Rice exports fell by two thirds and mineral exports by over 96%. Plans were partly financed by printing money, which led to inflation.^[3] The 1962 coup d'état was followed by an economic scheme called the Burmese Way to Socialism, a plan to nationalize all industries, with the exception of agriculture. The catastrophic program turned Burma into one of the world's most impoverished countries.^[4][5] Burma's admittance to Least Developed Country status by the UN in 1987 highlighted its economic bankruptcy.^[6]

After 1988, the regime retreated from totalitarian socialism. It permitted modest expansion of the private sector, allowed some foreign investment, and received much needed foreign exchange.^[7] The economy is still rated as the least free in Asia (tied with North Korea).^[8] All fundamental market institutions are suppressed.^[8][9] Private enterprises are often co-owned or indirectly owned by state. The corruption watchdog organization Transparency International in its 2007 Corruption Perceptions Index released on September 26, 2007 ranked Burma the most corrupt country in the world, tied with Somalia.^[10]

The national currency is Kyat. Burma has a dual exchange rate system similar to Cuba.^[11] The market rate was around two hundred times below the government-set rate in 2006.^[9] Inflation averaged 30.1% between 2005 and 2007.^[8] Inflation is a serious problem for the 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."^[12]

In recent years, both China and India have attempted to strengthen ties with the government for economic benefit. Many nations, including the United States and Canada, and the European Union, have imposed investment and trade sanctions on Burma. The United States has banned all imports from Burma.^[9] Foreign investment comes primarily from People's Republic of China, Singapore, South Korea, India, and Thailand.^[13]

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 the country 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.^[14]

The lack of an educated workforce skilled in modern technology contributes to the growing problems of the economy.^[15]

Today, the country lacks adequate infrastructure. Goods travel primarily across the Thai border, where most illegal drugs are exported and along the Ayeyarwady River. Railroads are old and rudimentary, with few repairs since their construction in the late nineteenth century.^[16] Highways are normally unpaved, except in the major cities.^[16] 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 illegal drugs, including amphetamines.^[17] Other industries include agricultural goods, textiles, wood products, construction materials, gems, metals, oil and natural gas.

The Union of Myanmar's rulers depend on sales of precious stones such as sapphires, pearls and jade to fund their regime. Rubies are the biggest earner; 90% of the world's rubies come from the country, whose red stones are prized for their purity and hue. Thailand buys the majority of the country's gems. Burma's "Valley of Rubies", the mountainous Mogok area, 200 km (125 miles) north of Mandalay, is noted for its rare pigeon's blood rubies and blue sapphires.^[18]

Since 1992, the government has encouraged tourism in the country. However, fewer than 750,000 tourists enter the country annually.^[19] Aung San Suu Kyi has requested that international tourists not visit Burma. The junta's forced labour programmes were focused around tourist destinations which have been heavily criticised for their human rights records. Even disregarding the obviously governmental fees, Burma’s Minister of Hotels and Tourism Maj-Gen Saw Lwin recently admitted that the government receives a significant percentage of the income of private sector tourism services. Not to mention the fact that only a very small minority of impoverished ordinary people in Burma ever see any money with any relation to tourism.^[20] Much of the country is completely off-limits to tourists, and the military very tightly controls interactions between foreigners and the people of Burma. They are not to discuss politics with foreigners, under penalty of imprisonment, and in 2001, the Myanmar Tourism Promotion Board issued an order for local officials to protect tourists and limit "unnecessary contact" between foreigners and ordinary Burmese people.^[21]

The private sector dominates in agriculture, light industry, and transport activities, while the military government controls energy, heavy industry, and rice trade.

Contents 1 Macro-economic trend 2 Economy Today 3 Trade 4 Oil 5 Gemstones 6 Tourism 7 Humanitarian Aid 8 Other statistics 9 Footnotes 10 See also 11 External links

[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[22]	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.^[23]

According to the CIA World Factbook,^[24]

“

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.^[16] Highways are normally unpaved, except in the major cities.^[16] 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.^[17] 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.^[25]

The lack of an educated workforce skilled in modern technology contributes to the growing problems of the Burmese economy.^[15] 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.” ^[26]

[edit] Trade

2006-2007 Financial Year Trade volume (in US$ 000,000)

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

Total Trade Value for Financial year 2006-2007 to Financial year 2009-2010

No	Financial Year	Export Value	Import Value	Trade Value (US$, 000,000)
1	2006–2007	5222.92	2928.39	8151.31
2	2007–2008	6413.29	3346.64	9759.93
3	2008–2009	6792.85	4563.16	11356.01
4	2009–2010	7568.62	4186.28	11754.90

[edit] Oil

• Myanma Oil and Gas Enterprise (MOGE) is a national oil and gas company of Burma. The company is a sole operator of oil and gas exploration and production, as well as domestic gas transmission through a 1,200 miles (1,900 km) onshore pipeline grid.^[27][28]
• The Yadana Project is a project to exploit the Yadana gas field in the Andaman Sea and to carry natural gas to Thailand through Myanmar.
• Sino-Burma pipelines refers to planned oil and natural gas pipelines linking the Burma's deep-water port of Kyaukphyu (Sittwe) in the Bay of Bengal with Kunming in Yunnan province of China.

[edit] Gemstones

Of the world's rubies, the finest are found in Myanmar (Burma). Burmese gems are prized for their hue and high degree of saturation. Thailand buys the majority of Myanmar's gems. Myanmar's "Valley of Rubies", the mountainous Mogok area, 200 km (125 miles) north of Mandalay, is noted for its rare pigeon's blood rubies and blue sapphires.^[18] Working conditions in the Mogok Valley are primitive and as such similar to mining conditions in other parts of the world.

The Union of Myanmar's rulers depend on sales of precious stones such as sapphires, pearls and jade to fund their regime. Rubies are the biggest earner; 90% of the world's rubies come from the country, whose red stones are prized for their purity and hue. Thailand buys the majority of the country's gems.

In 2007, following the crackdown on pro-democracy protests in Myanmar, human rights organizations, gem dealers, and US First Lady Laura Bush called for a boycott of a Myanmar gem auction held twice yearly, arguing that the sale of the stones profits the dictatorial regime in that country.^[29] Debbie Stothard of the Alternative ASEAN Network on Burma stated that mining operators used drugs on employees to improve productivity, with needles shared, raising the risk of HIV infection: "These rubies are red with the blood of young people." Brian Leber (41-year-old jeweler who founded The Jewellers' Burma Relief Project) stated that: "For the time being, Burmese gems should not be something to be proud of. They should be an object of revulsion. It's the only country where one obtains really top quality rubies, but I stopped dealing in them. I don't want to be part of a nation's misery. If someone asks for a ruby now I show them a nice pink sapphire."^[30]

Richard W. Hughes, author of Ruby and Sapphire, a Bangkok based gemologist who has made many trips to Burma makes the point that for every ruby sold through the junta, another gem that supports subsistence mining is smuggled over the Thai border.^[31]

[edit] Tourism

Since 1992, the government has encouraged tourism. However, fewer than 750,000 tourists enter the country annually.^[32]

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. As of May 2010, foreign visitors from any country can apply for a visa on arrival when passing through Yangon and Mandalay international airports without having to make any prior arrangements with travel agencies.^[33] 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] 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." ^[34]

[edit] Other statistics

Electricity - production: 5.961 billion kWh (2006 est.)

Electricity - consumption: 4.298 billion kWh (2006 est.)

Electricity - exports: 0 kWh (2007)

Electricity - imports: 0 kWh (2007)

Agriculture - products: rice, pulses, beans, sesame, groundnuts, sugarcane; hardwood; fish and fish products

Currency: 1 kyat (K) = 100 pyas

Exchange rates: kyats per US dollar - 1,205 (2008 est.), 1,296 (2007), 1,280 (2006), 5.82 (2005), 5.7459 (2004), 6.0764 (2003) note: unofficial exchange rates ranged in 2004 from 815 kyat/US dollar to nearly 970 kyat/US dollar, and by yearend 2005, the unofficial exchange rate was 1,075 kyat/US dollar; data shown for 2003-05 are official exchange rates

[edit] Footnotes

[edit] See also

This section has no content. You can help Wikipedia by introducing information to it. (July 2010)

[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
• Official Myanmar Industrial and Commercial Business Directory

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