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Economy of Burma
Currency kyat (MMK)
Fiscal year 1 April - 31 March
Trade organisations WTO, ASEAN, BIMSTEC
Statistics
GDP $55.04 billion (2008 est.)
GDP growth 0.9% (2008 est.)
GDP per capita $1,200 (2008 est.)
GDP by sector agriculture: 40.9%, industry: 19.7%, services: 39.3% (2008 est.)
Inflation (CPI) 27.3% (2008 est.)
Population
below poverty line
32.7% (2008 est.)
Labour force 30.04 million (2008 est.)
Labour force
by occupation
agriculture: 70%, industry: 7%, services: 23% (2001)
Unemployment 9.4% (2008 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 $6.148 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 (2008)
Export goods natural gas, wood products, pulses, beans, fish, rice, clothing, jade and gems
Main export partners Thailand 44.3%, India 14.5%, the China 7.1%, Japan 5.7% (2007)
Imports $3.589 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 (2008)
Import goods fabric, petroleum products, plastics, fertilizer, machinery, transport equipment, cement, construction materials, crude oil; food products, edible oil
Main import partners China 33.7%, Thailand 19.1%, Singapore 15.5%, South Korea 5.8%, Indonesia 5.2%, Malaysia 4.2% (2007)
Public finances
Public debt $7.17 billion (January 2009)
Revenues $983.6 million (2008 est.)
Expenses $1.775 billion (2008 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 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

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. 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. 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]

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,[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.

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]

Trade

Burmese exports in 2006
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 2003-2004 to Financial year 2006-2007
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

Oil

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].

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. 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.

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." [33]

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

Footnotes

  1. ^ "Burma". The World Factbook. Central Intelligence Agency. https://www.cia.gov/library/publications/the-world-factbook/geos/bm.html. Retrieved 2007-01-13.  ,
  2. ^ a b Steinberg, David L. (February 2002). Burma: The State of Myanmar. Georgetown University Press. ISBN.  
  3. ^ Watkins, Thayer. "Political and Economic History of Myanmar (Burma) Economics". San José State University. http://www2.sjsu.edu/faculty/watkins/burma.htm. Retrieved 2006-07-08.  
  4. ^ "The Burma road to ruin". The Guardian. http://www.guardian.co.uk/world/2007/sep/28/burma.uk.  
  5. ^ Kate Woodsome. "'Burmese Way to Socialism' Drives Country into Poverty". http://www.voanews.com/english/archive/2007-10/2007-10-04-voa10.cfm?CFID=117290760&CFTOKEN=64840153&jsessionid=6630167e8fd1b43b9eef18506362225e1f2d.  
  6. ^ "List of Least Developed Countries". UN-OHRLLS. 2005. http://www.un.org/special-rep/ohrlls/ldc/list.htm.  
  7. ^ Stephen Codrington (2005). Planet geography. Solid Star Press. pp. 559. ISBN 0-9579-8193-7.  
  8. ^ a b c "Index of Economic Freedom: Burma". 2009. http://www.heritage.org/index/country/Burma.  
  9. ^ a b c Sean Turnell (29 March 2006). "Burma’s Economic Prospects - Testimony before the Senate Foreign Relations Subcommittee on East Asian and Pacific Affairs". http://foreign.senate.gov/testimony/2006/TurnellTestimony060329.pdf.  
  10. ^ 2007 CPI http://www.transparency.org/policy_research/surveys_indices/cpi/2007
  11. ^ Sean Turnell (May 2, 2008). "The rape of Burma: where did the wealth go?". The Japan Times. http://search.japantimes.co.jp/cgi-bin/eo20080502a1.html.  
  12. ^ "High Inflation Impeding Burma's Economy, Says NLD". The Irrawaddy. 2007-04-30. http://www.irrawaddy.org/article.php?art_id=7064. Retrieved 2007-04-30.  
  13. ^ Fullbrook, David (2004-11-04). "So long US, hello China, India". Asia Times. http://www.atimes.com/atimes/Southeast_Asia/FK04Ae03.html. Retrieved 2006-07-14.  
  14. ^ Myanmar and IRRIPDF (21.2 KiB), Facts About Cooperation, International Rice Research Institute. Retrieved on 2007-09-25.
  15. ^ a b Brown, Ian (2005). A Colonial Economy In Crisis. Routledge. ISBN 0-4153-0580-2.  
  16. ^ a b c d "Challenges to Democratization in Burma" (PDF). International IDEA. November 2001. http://www.idea.int/asia_pacific/burma/upload/chap3.pdf. Retrieved 2006-07-12.  
  17. ^ a b "Myanmar Country Profile" (PDF). Office on Drugs and Crime. United Nations. December 2005. pp. 5–6. http://www.unodc.org/pdf/myanmar/myanmar_country_profile_2005.pdf. Retrieved 2006-07-09.  
  18. ^ a b Gems of Burma and their Environmental Impact
  19. ^ Henderson, Joan C.. "The Politics of Tourism in Myanmar" (PDF). Nanyang Technological University. http://www.channelviewpublications.net/cit/006/0097/cit0060097.pdf. Retrieved 2006-07-08.  
  20. ^ http://www.tayzathuria.org.uk/bd/2006/12/24/re.htm
  21. ^ http://www.burmacampaign.org.uk/action_holiday.html
  22. ^ [1] - MIRT. Team, "Exchange rate between the United States dollar and Myats, 1913 -1999", 2002.
  23. ^ http://www.financialexpress-bd.com/index3.asp?cnd=12/15/2006&section_id=24&newsid=46742&spcl=no
  24. ^ https://www.cia.gov/library/publications/the-world-factbook/geos/bm.html#Econ
  25. ^ [2]PDF (21.2 KB)
  26. ^ "High Inflation Impeding Burma's Economy, Says NLD". The Irrawaddy. 2007-04-30.  
  27. ^ "Oil and Gas in Myanmar". Total S.A.. http://burma.total.com/en/contexte/p_1_2.htm. Retrieved 2009-01-20.  
  28. ^ Ye Lwin (2008-07-21). "Oil and gas ranks second largest FDI at $3.24 billion". The Myanmar Times. http://www.mmtimes.com/feature/energy08/eng002.htm. Retrieved 2009-01-20.  
  29. ^ CBC - Gem dealers push to ban Burmese rubies after bloody crackdown
  30. ^ Reuters, Move over, blood diamonds
  31. ^ http://www.ruby-sapphire.com/burma-embargo2.htm
  32. ^ Henderson, Joan C.. "The Politics of Tourism in Myanmar" (PDF). Nanyang Technological University. http://www.multilingual-matters.net/cit/006/0097/cit0060097.pdf. Retrieved 2008-10-17.  
  33. ^ "Myanmar's rulers implement increasingly restrictive regulations for aid-giving agencies". International Herald Tribune. 2007-04-19.  

See also

External links


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]

The current state of the Burmese economy has also had a significant impact on Burmese demographics, as economic hardship results in extreme delays of marriage and family building. The average age of marriage in Burma is 27.5 for men, 26.4 for women, almost unparalleled in the region, with the exception of developed countries like Singapore.[2][3] Burma also has a low fertility rate, of 2.07 children per woman (2010), especially as compared to other Southeast Asian countries of similar economic standing, like Cambodia (3.18) and Laos (4.41), representing a significant decline from 4.7 in 1983, despite the absence of a national population policy.[4] This is at least partly attributed to the economic strain that additional children place on the family income, and has resulted in the prevalence of illegal abortions in the country, as well as use of other forms of birth control.[5]

Contents

History

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.[6] The country was believed to be on the fast track to development.[6]

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.[7] 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.[8][9] Burma's admittance to Least Developed Country status by the UN in 1987 highlighted its economic bankruptcy.[10]

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.[11] The economy is still rated as the least free in Asia (tied with North Korea).[12] All fundamental market institutions are suppressed.[12][13] 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.[14]

The national currency is Kyat. Burma has a dual exchange rate system similar to Cuba.[15] The market rate was around two hundred times below the government-set rate in 2006.[13] Inflation averaged 30.1% between 2005 and 2007.[12] 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."[16]

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.[13] Foreign investment comes primarily from People's Republic of China, Singapore, South Korea, India, and Thailand.[17]

Industries

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.[18]

The lack of an educated workforce skilled in modern technology contributes to the growing problems of the economy.[19]

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.[20] Highways are normally unpaved, except in the major cities.[20] 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.[21] Other industries include agricultural goods, textiles, wood products, construction materials, gems, metals, oil and natural gas.

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

Oil and gas

Gemstones

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.[24]

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.[24] 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.[25] 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."[26]

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.[27]

Tourism

Since 1992, the government has encouraged tourism. However, fewer than 750,000 tourists enter the country annually.[28]

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.[29] 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.

Since 1992, the government has encouraged tourism in the country. However, fewer than 750,000 tourists enter the country annually.[30] 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 Major-General 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.[31] 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.[32]

External trade

File:2006Burmese
Burmese exports in 2006
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

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[33] 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.[34]

According to the CIA World Factbook,[35]

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.

Economic issues

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.[20] Highways are normally unpaved, except in the major cities.[20] 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.[21] 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.[36]

The lack of an educated workforce skilled in modern technology contributes to the growing problems of the Burmese economy.[19]

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.” [37]

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." [38]

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

Footnotes

  1. ^ "Burma". The World Factbook. Central Intelligence Agency. https://www.cia.gov/library/publications/the-world-factbook/geos/bm.html. Retrieved 2007-01-13. 
  2. ^ Myat Mon (2008). "The Economic Position of Women in Burma". Asian Studies Review (Wiley) 24 (2): 243-255. doi:10.1111/1467-8403.00076. http://onlinelibrary.wiley.com/doi/10.1111/1467-8403.00076/abstract. 
  3. ^ http://www.un.org/esa/population/publications/worldmarriage/worldmarriagepatterns2000.pdf
  4. ^ Jones, Gavin W. (2007). "Delayed Marriage and Very Low Fertility in Pacific Asia". Population and Development Review (The Population Council, Inc.) 33 (33): 453-478. doi:j.1728-4457.2007.00180.x. http://dahuang.dhxy.info/population/Delayed_Marriage_Fertility09.pdf. 
  5. ^ Ba-Thike, Katherine (1997). "Abortion: A Public Health Problem in Myanmar". Reproductive Health Matters (Reproductive Health Matters) 5 (9): 94-100. http://www.jstor.org/stable/3775140. 
  6. ^ a b Steinberg, David L. (February 2002). Burma: The State of Myanmar. Georgetown University Press. ISBN. 
  7. ^ Watkins, Thayer. "Political and Economic History of Myanmar (Burma) Economics". San José State University. http://www2.sjsu.edu/faculty/watkins/burma.htm. Retrieved 2006-07-08. 
  8. ^ Tallentire, Mark (2007-09-28). "The Burma road to ruin". London: The Guardian. http://www.guardian.co.uk/world/2007/sep/28/burma.uk. Retrieved 2010-05-01. 
  9. ^ Kate Woodsome. "'Burmese Way to Socialism' Drives Country into Poverty". http://www.voanews.com/english/archive/2007-10/2007-10-04-voa10.cfm?CFID=117290760&CFTOKEN=64840153&jsessionid=6630167e8fd1b43b9eef18506362225e1f2d. 
  10. ^ "List of Least Developed Countries". UN-OHRLLS. 2005. http://www.un.org/special-rep/ohrlls/ldc/list.htm. 
  11. ^ Stephen Codrington (2005). Planet geography. Solid Star Press. p. 559. ISBN 0-9579-8193-7. 
  12. ^ a b c "Index of Economic Freedom: Burma". 2009. http://www.heritage.org/index/country/Burma. 
  13. ^ a b c Sean Turnell (29 March 2006). "Burma’s Economic Prospects - Testimony before the Senate Foreign Relations Subcommittee on East Asian and Pacific Affairs" (PDF). http://foreign.senate.gov/testimony/2006/TurnellTestimony060329.pdf. Retrieved 2010-01-22. [dead link]
  14. ^ 2007 CPI http://www.transparency.org/policy_research/surveys_indices/cpi/2007
  15. ^ Sean Turnell (May 2, 2008). "The rape of Burma: where did the wealth go?". The Japan Times. http://search.japantimes.co.jp/cgi-bin/eo20080502a1.html. 
  16. ^ "High Inflation Impeding Burma's Economy, Says NLD". The Irrawaddy. 2007-04-30. http://www.irrawaddy.org/article.php?art_id=7064. Retrieved 2007-04-30. 
  17. ^ Fullbrook, David (2004-11-04). "So long US, hello China, India". Asia Times. http://www.atimes.com/atimes/Southeast_Asia/FK04Ae03.html. Retrieved 2006-07-14. 
  18. ^ Myanmar and IRRIPDF (21.2 KB), Facts About Cooperation, International Rice Research Institute. Retrieved on 2007-09-25.
  19. ^ a b Brown, Ian (2005). A Colonial Economy In Crisis. Routledge. ISBN 0-4153-0580-2. 
  20. ^ a b c d "Challenges to Democratization in Burma" (PDF). International IDEA. November 2001. http://www.idea.int/asia_pacific/burma/upload/chap3.pdf. Retrieved 2006-07-12. 
  21. ^ a b "Myanmar Country Profile" (PDF). Office on Drugs and Crime. United Nations. December 2005. pp. 5–6. http://www.unodc.org/pdf/myanmar/myanmar_country_profile_2005.pdf. Retrieved 2006-07-09. 
  22. ^ "Oil and Gas in Myanmar". Total S.A.. http://burma.total.com/en/contexte/p_1_2.htm. Retrieved 2009-01-20. 
  23. ^ Ye Lwin (2008-07-21). "Oil and gas ranks second largest FDI at $3.24 billion". The Myanmar Times. http://www.mmtimes.com/feature/energy08/eng002.htm. Retrieved 2009-01-20. 
  24. ^ a b Gems of Burma and their Environmental Impact
  25. ^ CBC - Gem dealers push to ban Burmese rubies after bloody crackdown
  26. ^ Reuters, Move over, blood diamonds
  27. ^ Burma Embargo & the Gem Trade
  28. ^ Henderson, Joan C.. "The Politics of Tourism in Myanmar" (PDF). Nanyang Technological University. http://www.multilingual-matters.net/cit/006/0097/cit0060097.pdf. Retrieved 2008-10-17. 
  29. ^ {http://www.mmtimes.com/2010/news/522/news01.html}
  30. ^ Henderson, Joan C.. "The Politics of Tourism in Myanmar" (PDF). Nanyang Technological University. http://www.channelviewpublications.net/cit/006/0097/cit0060097.pdf. Retrieved 2006-07-08. 
  31. ^ Burma Digest
  32. ^ The Tourism Campaign - Campaigns - The Burma Campaign UK
  33. ^ [1] - MIRT. Team, "Exchange rate between the United States dollar and Myats, 1913 -1999", 2002.
  34. ^ http://www.financialexpress-bd.com/index3.asp?cnd=12/15/2006&section_id=24&newsid=46742&spcl=no
  35. ^ CIA - The World Factbook - Burma
  36. ^ [2]PDF (21.2 KB)
  37. ^ "High Inflation Impeding Burma's Economy, Says NLD". The Irrawaddy. 2007-04-30. 
  38. ^ "Myanmar's rulers implement increasingly restrictive regulations for aid-giving agencies". International Herald Tribune. 2007-04-19. 

See also

External links








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