Chiang Mai International Students’ Forum

‘ The Status of Economic Integration of Myanmar in ASEAN ’

Presented by

International College, Rangsit University

Nan Aye Aye Thwe

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 (Burma)

socialist economy before 1988 - 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 one of the least developed nations.(1987)

General Ne Win

“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 nonASEAN.

(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 SPDC, the ruling govt grips power firmly at any political costs never ending conflict between ethnic minority groups and the ruling junta

Aung San Suu Kyi

( b) Corruption
  

Rampant and high Inflation even former PM was ousted for corruption lack of economic opportunities

(c) Migrant Workers
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

Former PM Khin Nyunt was ousted in Oct 2004

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!!!