Economic Reforms in Myanmar:
Pathways and Prospects
Hank LIM and Yasuhiro YAMADA
This chapter should be cited as:
Lim, H. and Yamada, Y., 2012. “Economic Reforms in Myanmar: Pathways and Prospects.” In Economic Reforms in Myanmar: Pathways and Prospects, edited by Hank Lim and Yasuhiro Yamada, BRC Research Report No.10, Bangkok Research Center, IDE-JETRO, Bangkok, Thailand.
Economic Reforms in Myanmar: Pathways and Prospects
Hank LIM and Yasuhiro YAMADA
The introductory chapter is intended to provide an overview of the eight chapters written under the auspices of the Bangkok Research Center (BRC). These chapters cover a wide range of issues important to the success of economic reforms and what Myanmar can learn from development experiences of Thailand and Vietnam and other neighboring ASEAN economies. The critical issues at stake are on how to accord policy priorities and policy sequencing to the ongoing economic reforms in Myanmar? First and foremost in a transition process, Myanmar must have macroeconomic stabilization, price and market liberalization and privatization of state enterprises. Policy target must be set to control inflation and to set prices, interest rate and exchange rate in a correct alignment with the supply and demand conditions of the economy. Following successful macroeconomic management, policy makers must be able to mobilize domestic resources and to attract foreign direct investment not only required to build industries but also to transfer skill and technology to Myanmar. In this respect, Myanmar can profit from the success and pitfall from the neighboring countries’ experience in managing FDI. It is also equally important to design industrialization strategy that would not exacerbate development disparity among states and regions, and relative inequality among different income groups. Due to the importance of agriculture in providing employment, social safety nets and sources of growth, Myanmar must continue to accord a paramount policy importance in improving agriculture productivity and enhanced allocation of resources to the local government. The existence of Myanmar migrant workers in Thailand provides an attractive policy option to bring back these workers who would be potentially contributing readily to the much needed experienced workers in the manufacturing, service and agriculture sectors in Myanmar. Financial reforms in terms of payment and settlement system should be given policy priority immediately after macroeconomic stabilization. On the contrary, initiating liberalization of financial and banking sectors and capital flows must be carefully scrutinized at much later stages as premature financial sector opening may create instability to the aggregate economy. The chapter on the ASEAN Economic Community provides a comprehensive assessment of the opportunities and challenges facing Myanmar. Ultimately, the implementation of policy 1
priorities and sequencing of economic reforms is critically dependent on a strong political leadership supported by efficient administration of public bureaucracy
This research project entitled “Economic Reforms in Myanmar: Pathways and Prospects” is undertaken under the auspices of JETRO Bangkok Research Center (BRC). The objective is to provide a comprehensive analysis of the pathways and prospects of the Myanmar economy following political and economic liberalization initiated by President Thein Sein since March 2011. After decades of economic isolation, Myanmar has initiated a series of gradual and radical changes of economic reforms aimed at accelerating structural change and economic development. On 19 June, 2012, President U Thein Sein declared that the government started this year the Second Phase of reform strategy seeking a 7.7 percent annual...
References: Kudo, T. and Kumagai, K., 2012, Two-Polar Growth Strategy in Myanmar: Seeking
“High” and “Balanced” Development, IDE Discussion Paper No. 371, Chiba:
Institute of Developing Economies.
Rhee, C.Y., 2012, Confronting Income Inequality in Asia, [presentation material of
Asian Development Outlook report, July 2012.]
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