Chiang Mai International Students’ Forum

‘ The Status of Economic Integration of Myanmar in

ASEAN ’

Presented by

Nan Aye Aye Thwe

International College, Rangsit University
Economic Integration of Myanmar into the ASEAN
1. Introduction
(a) about Myanmar
(b) history of Burmese Economy
- market economy
- Socialist economy
- open door economy
2. Economic Integration
(a) What is economic integration?
(b) Forces that drive economic integration in ASEAN
(c ) Economic integration in ASEAN
3. Progress of economic integration of Myanmar
(a) trade
(b) investment
4. Problems of Economic integration
(a) Political instability
(b) Corruption
(c ) Migrant workers
5. Conclusion
The Union of Myanmar
 the largest country on mainland SE Asia

 Total land area (676,577) sq km.

 Total population – 54,745 thousands (2004)

 Neighboring countries – Bangladesh, India,

China, Lao PDR, Thailand

 8 major ethnicity and over 100 spoken

dialects
- Burman (60%)
 three main religions – Buddhism (80%),
Christianity and Islam

 independence from British in 1948

 History of Burmese
Economy
 market economy before 1962
- the world largest rice exporter
- economic growth under U Nu- led democratic
govt
- civil war – some ethnic group took up arms
for greater autonomy.

U Nu,
the first PM of Myanmar
 socialist economy before 1988
(Burma)
- most industries were nationalized
under General Ne Win-led socialist regime
backed by the military

- an economic crisis – devaluation of national

currency (1987)

- One of the richest countries became

General Ne Win one of the least developed nations.(1987)
  “the open door” economy after 1988
(but, military-planned economy)
(under SLORC & SPDC)
 inviting foreign investment

 reform program – “so-called” linearization and privatization

but still crony capitalism in reality.

 Economic declination – mainly due to the govt mismanagement and

corruption – e.g., Banking crisis

 Black market and inflation beyond government’s control

 US’s economic sanction (after 1997) – but marginal effects

for economic cooperation from neighboring countries.

 Agriculture remains the main sector

 Low trade - Govt control rice trade- major population farmers suffer

 Low industry - Tourist industry is the main source of foreign

exchange.
 Economic Integration
a. What is economic integration?

 the ultimate form of regional integration

 involves removing all barriers that block the factors of

production and unifying economic policies of member
nations

 members are subject to the binding decisions of

supranational authority
b. Factors and forces that drive economic integration in
ASEAN

 Market-led process through international production ,

sharing of multinational
companies

 Institutional-led process through free trade and

investment agreement

 Private- led process

c. Economic integration in ASEAN

 established in August 1967 in Bangkok

 Ten member countries
- Indonesia, Malaysia, Philippines, Singapore, Thailand
(1967)
- Brunei Darussalam (1984)
- Vietnam (1995)
- Laos and Myanmar (1997)
- Cambodia (1999)

 Main purpose – the development of a free trade area

between its members

 ASEAN Free Trade Area or AFTA ( 1992)

- to integrate the ASEAN economies into a single
production unit.
- to promote greater economic efficiency, productivity,
and competitiveness
Progress of Economic Integration
(a) Trade

 ASEAN is one of the main export markets for Myanmar

 24 % of its total world exports (1997) went to ASEAN

 trade with ASEAN (1997-2004)

- Singapore (top exporter)
- Thailand (top importer )

 Trade with Non-ASEAN (1997-2004)

- India, China (top non-ASEAN export & import
countries)

 Comparison bet: ASEAN and Non-ASEAN

- More export to Non-ASEAN than ASEAN
- Import from ASEAN is two times larger than non-
ASEAN.
(b) Foreign Investment

 Foreign investment law promulgated in 1988 to induce FDI.

 Potential domestic markets, natural resources and low-cost labor

attract FDI

 Impacts that decrease Foreign investment

 Asian Financial Crisis,

 US sanction for human rights abuses

 Political deadlock and instability

 Three major ASEAN investor (1997-2004)

 Singapore

 Thailand

 Malaysia

 TOTAL (France) is the largest international investor Myanmar

 US$ 1,543 million over the last 7 yrs

 Problems of Economic
integration
(a) Political Instability
 a series of political events and cosmetic reforms
- a military coup (1962)
- antigovernment students’
demonstration (1988)
- a landslide victory of Aung San Suu Kyi
(1990)
ignored by SLORC
- Aung San Suu Kyi, the Nobel Peace
Laureate(1991) remains under house arrest
 US and EU have put pressure on the government and
call for political reform and release of ASSK from
house arrest
Aung San Suu
Kyi
 SPDC, the ruling govt grips power firmly at any
political costs
 never ending conflict between ethnic minority groups
and the ruling junta
( b) Corruption

 Rampant and high Inflation

 even former PM was ousted for corruption
 lack of economic opportunities

(c) Migrant Workers Former PM Khin

Nyunt was ousted in
Oct 2004
 Many illegal migrant workers to neighboring
countries
 Of total figure of 1,269,074 migrant workers
registered in Thailand in 2004
80 % are from Myanmar
 Conclusion
 The govt is responsible for
 Political instability
 Economic decline
 Human Right Abuse
(detrimental to Foreign Investment)

 The govt should create

 Political and economic stability – domestic and
regional – that secure environment for investment

 Stabilize national currency

 Reduce unemployment by creating job opportunities

- Jobs creation, ways to attract labor-intensive
investments
- improve economic integration in ASEAN in way that
leads to country’s economic growth)
Thank You!!!