Thursday, December 4, 2014

Challenges in Myanmar economy

Since its transition from a dictatorship to a democratic system, Myanmar has been expected to carry out the necessary changes in order to become a real, efficient country within the international community. Although the series of reforms launched by the elected President Thein Sein, the country still included among the worst nations to do business. This essay explores the main problems that the government has to face if it wants to create a modern economic system suitable for a global market, especially if it wants to be reconnected to an international economy. Moreover, this text tries to depict the errors that can emerge in the case that the economy policies are the only target that the authorities focus on.

After the World War II, the infrastructures of Myanmar were devastated, given that one of the longest and most destructive battles took place in the country, formerly known as Burma. This fact has been an obstacle, since the military government didn’t carry out real measures to renew all factors that could create a prosperous atmosphere for developing solid institutions to look after society welfare. A captious vision of Communism –it is the military junta– has been proved trough History as a dangerous element of instability, even injustice for all mankind. We can remember the wealth acquired by Ceaucescu while people died of famine in the streets of Romania. His palace was decorated with the most sophisticated paintings and luxurious carpets from Orient as well as with sumptuous furniture and chandeliers. Stalin was another example of this misunderstanding of Communism, or maybe this attempt to gain power by using attractive ideas that covered doubtful interests. In his chef-oeuvre, The Gulag Archipielago, Solzhenitsyn reveals the reality of those who expressed any opposition of a supposed people’s regime.

False concepts create false and turbulent societies and countries. Within an international community, it deters foreign relations because an unstable country cannot allow other nations to trust them, particularly when the balance of powers doesn’t exist and capitalism seems to be the only option for real development. That was the situation in Myanmar for more than 40 years. Repressive actions of an autarchy regime dominated the arena; a closed and obscure nation was the best definition for that period of the “socialist republic” of Myanmar. The unique support that could be available for the country was the aid of other communist regimes that the country was surrounded by. China became a good partner for the country. As you can see in this table, the growth of the trade between China and Myanmar through the years is significant:



Although this commercial aid, Myanmar’s GDP has been an enormous challenge for achieving a real state of welfare. After the transition to a democratic path in 2010, the country is willing to become an effective economy, even though its policies are proved to be insufficient. The current President, Thein Sein, has developed a range of measures to connect Myanmar to the global market by the empowerment of the main economic areas such as agriculture, construction, and tourism. The World Bank, an organisation whose aim consists in working for a world free of poverty, has also monitored the country, giving this overview of the measures implemented by the government: “Since 2011, the government has embarked on an ambitious economic, political and governance reform program. It has begun a series of reforms to remove economic distortions, such as floating the currency, new fiscal regulations to rationalize personal income tax and reduce consumption tax, liberalizing the telecommunications sector, reforms aimed at developing the private sector and stimulating direct foreign investments, a review of the financial sector, promotion of access to finance, and creating an environment conducive to job creation.”

GDP has therefore grown considerably during the last past three years. Nevertheless, experts have doubts about the clearness of the official statistics that the governments provide to the international analysts. As The Economist stated in its article “Reality Check”, published on January 4th 2014, even though officially the GDP grew by 6’5% in 2012, the reliability of these analysis is almost inexistent, for the “statistical net is so poor that it is almost impossible to know what the real growth rate is”. Plus, reality doesn’t support this supposed growth: Myanmar is considered one of the poorest countries in Asia, ranking 149 among 186 nations rated in the 2013 Human Development Report of the United Nations Development Programme. Since the democratisation of the country, many observers have been too optimistic about the future of the country. By the years, all these hopes are crawling up among false mirages. Economy areas such energy, that was expected to be the main economic resource, are now under doubts, given that the consummation is low compared to its Asian neighbours. The same occurs in many other sectors like tourism or construction. Although the boarders are now opened to visitors and foreign investment, the country is not succeeding in becoming an attractive destination for all those who want to pursue an economic activity nor a leisure one.

Economy must be supported by a solid civil society. Liberalism has shown that it is only possible when a major part of society is prepared to. Education, democratic and meritocratic values as well as freedom of speech and other civil rights must be assumed in order to create a context where Myanmar can show all its potential to the world. If the country itself is not capable to assume this inescapable task, economy will be subject to the variations of climate, wars, and internal conflicts. Capitalism without humanistic values is condemned to defeat. The example of China as one of the most powerful countries in economic terms must be erase. China is growing monstrously by damaging all genre of resources that our planet can provide. The US invented the Fordism, and China adopted the idea without any restrictions. The same happened with Communism.  This mixture of a growing economy lacking any idea but GDP is a major threat that Myanmar must avoid. The new government has therefore to restructure not only the democratic and economic institutions but also the social entities in favour of sustainable development in all areas.

Reference List:
1.      Maung Aung Myoe (2007) Sino-Myanmar Relations since 1988, Asia Research Institute Working Paper Series no.86

2.      U Myint (2009) Myanmar Economy, a comparative view, Asia Paper, December 2009

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