Economy of Myanmar

In 1987, according to cheeroutdoor, Myanmar was listed as one of the least developed countries in the world by the UN General Assembly. GDP $15 billion, per capita $300; GDP at purchasing power parity of the currency 63 billion dollars, per capita 1500 dollars (2002). Share in GDP (%, 2002): agriculture 42, industry and construction 17, services 41. Labor force 23.7 million people, of which 65% in agriculture, 10% in industry and construction, 25 in services %. Unemployment 5.1%, inflation 20%. Below the poverty line is 25% of the population. Myanmar is an agricultural country. 15% of the territory is processed, incl. 1.7% of irrigated land. The main food crop is rice; legumes, corn, oilseeds, sugar cane, jute, cotton, tobacco, and rubber plants are also grown. Animal husbandry, poultry farming, sea fishing, and fishing are developed. Cattle are used as draft animals. Precious hardwood blanks, mainly teak, widely used up to the end. 1990s, then were limited due to the threatening depletion of tropical rainforest resources.

Natural gas is produced, incl. for export, oil, iron and polymetallic ores, precious stones. Electricity was produced in 2000 4766 billion kW / h, of which 17% – hydroelectric power plants, 83% – thermal power plants. The manufacturing industry is represented by two oil refineries with a capacity of 32 thousand barrels per day, a lead-zinc plant, small enterprises for processing minerals, producing agricultural products, producing building materials, food and industrial consumer goods. Handicrafts are widespread.

The length of railways is 4 thousand km, automobile roads 28.2 thousand km, river waterways 12.8 thousand km (3.2 thousand km are suitable for large commercial ships). The length of oil pipelines is 1343 km, gas pipelines 410 km, incl. 330 km on the seabed. Merchant fleet – 37 vessels (with a total carrying capacity of 633 thousand tons), incl. registered “under the flag of convenience” 5 German and 4 Japanese ships. Shipping is mainly coastal. The main seaport is Yangon. There are 8 airports in Myanmar, 4 of which are international. Communication does not meet modern requirements. Internet access is strictly controlled by the state – allowed only for government agencies, travel agencies and a few large companies through a single provider, 10 thousand users (2002).

Exports are of an agricultural and raw material nature, in 2001 they amounted to 2.8 billion US dollars. The main exports are natural gas, legumes, teak wood, shrimp and fish products, rice, and ready-made clothing. Main export partners: Thailand (26%), USA (16%), India (10%), China (10%), Singapore (10%), Japan (5%). Rice has ceased to be the main export item, it accounts for only 3% of all exports. Imports in 2001 amounted to 2.7 billion US dollars; machinery and equipment, industrial raw materials and semi-finished products, petroleum products, consumer goods, electrical equipment, vegetable oil, and paper are imported. Main import partners: China (20%), Singapore (17%), Thailand (17%), Japan (11%), South Korea (10%), Taiwan (10%), Malaysia (8%). The deficit of the foreign trade balance before 2001 was more than 24% of GDP. The situation improved after the start of commercial supply of natural gas to Thailand through a new gas pipeline from an offshore field in the Andaman Sea. Official statistics do not take into account the smuggling of drugs, teak wood, precious stones, as well as border trade with Thailand, China, India and Bangladesh. The volume of these transactions exceeds the volume of official trade of the country. Myanmar ranks second in the world in the production and illegal export of opium.

From Ser. 1990s tourism began to develop. The country is visited annually by approx. 300,000 tourists, tourism revenues have long exceeded those from rice exports. The development of tourism is constrained by the negative attitude in the world towards the ruling military regime and insufficient infrastructure.

The official rate of the kyat has not changed for several decades, approx. 6 kyats per 1 US dollar, the real rate increased from 120 (1994) to 1000 kyats per 1 US dollar (2002).

External debt is more than 6 billion US dollars, gold and foreign exchange reserves are 241 million US dollars. There is a constant large deficit of the state budget due to subsidizing unprofitable state-owned enterprises and rising spending on the army. Government revenues in 2000 amounted to $7.9 billion, 5.3% of GDP (according to the purchasing power parity of the currency), of which 2.5% came from tax revenues, 2% from transfers from state enterprises, and 0.8% from others. Government spending $ 12.2 billion, 6.6% of GDP, of which 1.8% – military spending, 0.3% – education, 0.1% – health care, capital investment – 2.8%. To finance the chronic deficit of the state budget, the issue of money is used, which leads to inflation.

Since 1988, Myanmar has been pursuing a policy of transition to a free market economy,

measures to liberalize the economy, a gradual reduction in the level of state control over economic activity and the volume of the public sector itself is envisaged. The private sector dominates in agriculture, light industry, and transport. The positions of the public sector are strong in energy, heavy industry, and rice trade. For the successful implementation of economic reforms, the country needs foreign economic assistance, foreign direct investment. However, after the SFAR came to power in 1988, US efforts blocked official development assistance (ODA) to Myanmar on a multilateral basis (the World Bank and the Asian Development Bank), and bilateral assistance from Myanmar’s traditional donors—Japan and the FRG—was also terminated, with the condition that it be resumed. after political democratic reforms. But during the 1990s Myanmar continued to receive loans and grants from neighboring China and India, humanitarian aid and grants from Japan to cancel the country’s debts. After the passage of the Foreign Investment Law in 1988, the total amount of foreign direct investment approved by 2000 was $7.247 billion. The main investment flows came from the ASEAN member countries, 78% of investments were in oil and gas and manufacturing projects, hotel construction and the development of tourism infrastructure. The tough stance of the United States towards the military regime of Myanmar was expressed in the imposition of sanctions in April 1997. New investments from the United States were prohibited, 20 states at the local level decided to ban the activities of American companies in Myanmar. The sanctions were supported by the EU countries. The military regime was accused of violating human rights, in the use of forced labor, drug trafficking. Repeated economic sanctions were adopted by the US Congress in July 2003 to secure the release of opposition leader Aung San Suu Kyi. The sanctions include freezing all US bank accounts of Myanmar’s military junta and banning US imports of goods from Myanmar for a period of 3 years.

In response to the sanctions, in August 2003 Myanmar’s military authorities banned dollar settlements in foreign trade transactions. Trading operations will be carried out in euro, Japanese yen and Singapore dollars.

Against the backdrop of growing international isolation, Myanmar continued to move closer to China. Relations with the Russian Federation have always been and are friendly.

Economy of Myanmar