is Myanmar truely the next economic frontier?
The Chinese and Indian State-run companies are competing to pour cash into Mnyanmar's promising economy. This comes as the result of the 2011 IMF Myanmar Staff report for the year 2011 where the IMF labeled Myanmar's economy as "the next economic frontier" expecting a yearly growth of 7% a year in the next 5 years.
In three very juicy lines, the IMF said in its report, quoting here.
Myanmar’s new government faces a historic opportunity to jump-start development and lift living standards. Myanmar could become the next economic frontier in Asia if, with appropriate reforms, it can turn its rich natural resources, young labor force, and proximity to some of the most dynamic economies, to its advantage.
Before going through further analysis, let me first present the numbers:
GDP per Capita (PPP) of Myanmar
1,400 $
GDP growth rate of Myanmar in 2012
6.30 % (2012)
Myanmar Imports the following commodities
fabric, petroleum products, fertilizer, plastics, machinery, transport equipment; cement, construction materials, crude oil; food products, edible oil
Import partners
China 38.8%, Thailand 22.6%, Singapore 9.7%, South Korea 5.4%, Malaysia 4.5%, Japan 4.1% (2011)
Myanmar Exports the following commodities
natural gas, wood products, pulses, beans, fish, rice, clothing, jade and gems
Export partners
Thailand 36.7%, China 18.8%, India 14.1%, Japan 6.6% (2011)
The GDP per capita of Myanmar is 1400 USD, making it one of the poorest nations in the world. This presents an attractive opportunity for business to open factories and production lines in Myanmar to take advantage of the cheap labor. China, the world biggest factory, requires high amounts of natural resources which Myanmar is very rich in such as natural gas, wood products, pulses...
It all seems way too bright for Myanmar, doesn't it? but is it really so?
Myanmar has a lot of challenges on its way up from the poorest countries in the world:
1- Investments that are being placed in Myanmar only serve the countries placing the investments, as it facilitates their ability to extract all the natural resources they need for their heavy manufacturing rate. A more healthy economical investment would be one that creates more jobs by improving industrial exports rather exports of raw material.
2- If the western based companies do find Myanmar an attractive cheap labor environment to invest in, this could present a huge economical growth, but on the expense of the modern day slavery of the poor rural farmers of Myanmar. Strong Labor laws should be put in place to protect the Myanmar civilians.
3- The high rate of export of natural resources such as timber/wood does present an environmental disaster to the country. Are there any laws to prevent the deterioration and deforestation of the whole country and enforcing sustainable utilization of the natural resources?
4- Finally, here listing the main government related challenges to ensure a fast growth as stated in the IMF report:
a- Exchange Rate Unification
b- Establishing a Monetary Policy Framework
c- Fiscal Management: Supporting Development and Ensuring Sustainability
d- Financial Sector Policies: Facilitating Development
e- Structural Policies: Lifting Impediments to Broad-based Growth
If the government of Myanmar addresses the above issues properly, then Myanmar will indeed have a very bright future.
In three very juicy lines, the IMF said in its report, quoting here.
Myanmar’s new government faces a historic opportunity to jump-start development and lift living standards. Myanmar could become the next economic frontier in Asia if, with appropriate reforms, it can turn its rich natural resources, young labor force, and proximity to some of the most dynamic economies, to its advantage.
Before going through further analysis, let me first present the numbers:
GDP per Capita (PPP) of Myanmar
1,400 $
GDP growth rate of Myanmar in 2012
6.30 % (2012)
Myanmar Imports the following commodities
fabric, petroleum products, fertilizer, plastics, machinery, transport equipment; cement, construction materials, crude oil; food products, edible oil
Import partners
China 38.8%, Thailand 22.6%, Singapore 9.7%, South Korea 5.4%, Malaysia 4.5%, Japan 4.1% (2011)
Myanmar Exports the following commodities
natural gas, wood products, pulses, beans, fish, rice, clothing, jade and gems
Export partners
Thailand 36.7%, China 18.8%, India 14.1%, Japan 6.6% (2011)
The GDP per capita of Myanmar is 1400 USD, making it one of the poorest nations in the world. This presents an attractive opportunity for business to open factories and production lines in Myanmar to take advantage of the cheap labor. China, the world biggest factory, requires high amounts of natural resources which Myanmar is very rich in such as natural gas, wood products, pulses...
It all seems way too bright for Myanmar, doesn't it? but is it really so?
Myanmar has a lot of challenges on its way up from the poorest countries in the world:
1- Investments that are being placed in Myanmar only serve the countries placing the investments, as it facilitates their ability to extract all the natural resources they need for their heavy manufacturing rate. A more healthy economical investment would be one that creates more jobs by improving industrial exports rather exports of raw material.
2- If the western based companies do find Myanmar an attractive cheap labor environment to invest in, this could present a huge economical growth, but on the expense of the modern day slavery of the poor rural farmers of Myanmar. Strong Labor laws should be put in place to protect the Myanmar civilians.
3- The high rate of export of natural resources such as timber/wood does present an environmental disaster to the country. Are there any laws to prevent the deterioration and deforestation of the whole country and enforcing sustainable utilization of the natural resources?
4- Finally, here listing the main government related challenges to ensure a fast growth as stated in the IMF report:
a- Exchange Rate Unification
b- Establishing a Monetary Policy Framework
c- Fiscal Management: Supporting Development and Ensuring Sustainability
d- Financial Sector Policies: Facilitating Development
e- Structural Policies: Lifting Impediments to Broad-based Growth
If the government of Myanmar addresses the above issues properly, then Myanmar will indeed have a very bright future.