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Kyaw Soe TheinDirector

ASEAN Division

Foreign Economic Relations Department

Ministry of National Planning and Economic Development

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Introduction: Southeast Asia, Myanmar and

ASEAN

Myanmar in ASEAN Establishment of ASEAN Economic Community

Issues and Challenges Relating Myanmars to Join

AEC

Conclusion

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1.1 What is Southeast Asia The term Southeast Asia was occasionally used by

European, especially German writers, in the late 19thcentury.

Myanmar, Thailand, Laos, Cambodia, Vietnam,Malaysia, Brunei, Singapore, and Indonesia, wereconsidered as some kind of geographical unit.

Ten Nations

Each country has its individual style.

Unity and diversity

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1.2 Socio-economic characteristics of SoutheastAsian Nations: A Brief Overview

ASEAN member countries vary widely in size,population, and income.

Total population of nearly 600 million and landarea of 4,495 thousand sq.km.

Indonesia is the largest, Brunei is the smallest.

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In 2011, Singapore had the highest per capita GDP of US$

(50129.9) followed by Brunei with US$ (38702.5).

Malaysia with US$ (9940.6), Thailand and the Philippines

had US$ (5115.8) and US$ (2340.9) respectively.

Cambodia had US$ (879.7) and Laos had US$ (1278.5).

Myanmars per capita GDP was US$ (875.1), and Vietnam

had US$ (1403.3).

The average per capita income of ASEAN countries would

be about US$ (11422.9).

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GDP growths also differ between countries. In 2011, the fastest growing economies were

Myanmar and Lao PDR with rates of 10.4% and8.0% respectively, closely followed by Cambodia

with 7.1%. Thailand economic growth in 2011 was

disappointing, with a rate of 0.1%.

In term of social indicators, ASEAN 6 (Brunei,Singapore, Malaysia, Indonesia, Thailand, and thePhilippines) generally perform better than the CLMVcountries

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Countries Land Area

(000)

(sq km)

Pop (million) Pop

Growth (%)

Labor Force

(Million)

GDP

At current prices

(US$ million)

Real GDP

Growth (%)

GDP Per capita

At current prices

(US$)

Export

Growth Rate

(%)

Import Growth

Rate (%)

Inflation

Brunei 5,765 0.4 2.0 0.21 16,359.6 2.2 38702.5 33.1 19.6 2.0

Cambodia 181,036 14.5 1.5 7.2 12,775.0 7.1 879.7 35.8 25.9 6.3

Indonesia 1,919,317 241.6 1.7 117.3 846,821.3 6.5 3563 29.0 30.8 5.4

Laos 236,800 6.38 2.0 n.a 8,163.3 8.0 1278.5 6.1 17.6 7.6

Malaysia 329,758 28.96 1.3 12.5 287,922.3 5.1 9940.6 8.7 8.6 3.2

Myanmar 676,577 60.4 1.0 30.1 52841.5 10.4 875.1 0.4 37.3 5.0

The Philippines 300,000 94.2 1.7 40.0 224,337.4 3.9 2340.9 -6.7 9.5 4.6

Singapore 648 5.18 2.1 3.2 259,858.4 4.9 50129.9 7.5 8.6 5.2

Thailand 514,000 67.6 0.4 38.8 345,810.8 0.1 5115.8 11.7 19.1 3.8

Vietnam 330,955 87.8 1.0 51.4 123,266.9 5.9 1403.3 34.2 25.8 18.6

Table (1.1) Selected Economic Indicators (2011): ASEAN

Source: Asian Development Bank, Key Indicators for Asia and Pacific 2012, ASEAN Statistics

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Countries HDI Life expectancy

(yrs)

Adult literacy

(%)

Education

expenditure % of

GDP

Health expenditure

% of GDP

Infant mortality rate

(per 1000)

Access to

improved water

(% of pop)

Brunei 0.84 77 97 n.a n.a 6 n.a

Cambodia 0.52 61 85 n.a 5.6 75 61

Indonesia 0.61 68 95 26 2.6 33 80

Laos

0.52

63

82

13.2

4.5

52

57

Malaysia 0.76 73 95 18.9 4.4 6 100

Myanmar 0.48 64 95 n.a 2.0 61 71

The Philippines 0.64 70 95 16.9 3.6 29 91

Singapore 0.87 82 97 10.3 4.0 3 100

Thailand

0.68

70

96

22.3

3.9

13

98

Vietnam 0.59 72 95 19.8 6.8 19 94

Table (1.2) Selected Social Indicators (2011): ASEAN

Source: World Development Indicators, 2012, Asia Pacific Human Development Report, UNDP.

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1.3 Myanmar: Geography, Demography, and NaturalResources

Myanmar has a land area of more than 676,000 sq.km.occupied by more than (57) million people in 2011.

135 nationalities, multi-ethnic, multi-cultural and multi-religious society.

Myanmar, the largest ethnic group, comprises about 70%of the countrys total population followed by the Shan,with 8.5% of the countrysinhabitants.

Other major ethnic group include the Kayin, 6.2% ,Rakhine, 4.5%, and other indigenous races, 6.5%. rich in natural resources: forests, minerals and fish. an abundance of human resources- literate labors

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At least two reasons which led to Myanmars decision to joinASEAN.

(1) internal and external conditions had changed in the country(2) age of globalization and regionalism

Politically

peace and stability in the region better confidence among members of ASEAN Strengthening of eternal security

Economically increase trade and investment links within the region achieve greater development increased efficiency

Culturally contribute to ASEAN through promoting the own rich

traditions

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2.2 Myanmar Participation in ASEAN the summits to ministerial meetings to officials meetings.

Several committees and sub-committees were formed to assist

the ASEAN Economic Minister

small-and medium-enterprise activities, transport, and

services.

several committees at the national level such as the National

Committee on Information and Culture, the National

Committee on Science and Technology, and the National

Committee on Social Development were formed to coordinate

with relevant ASEAN committees and subcommittees.

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The National Commission for Environmental Affairs, theCentral Committee for Drug Abuse Control (CCDAC), and the

Public Services Selection and Training Board (PSSTB) were

established to be in line with existing ASEAN committees.

Became a part of AFTA

participating in ASEAN activities fully since its first day of

entry into the regional association.

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1990-91 1995-96 2000-01 2005-06 2009-10

Value %

(Total)

Value %

(Total)

Value %

(Total)

Value %

(Total)

Value %

(Total)

Singapore

845.8

28.6

986.8

19.6

737.3

5.8

1532.7

7.4

3690.9

8.9

Malaysia

40.87

1.4

147.5

2.9

471.1

3.7

540.4

2.6

832.2

2.0

Indonesia

-

-

299.6

5.9

221.6

1.7

380.5

1.8

205.3

0.5

Philippines

0.22

0.07

133.1

2.6

37.8

0.2

73.2

0.4

147.6

0.4

Thailand

387.9

13.1

534.9

10.6

1831.3

14.4

7868.6

38.1

17431

42.2

Vietnam - - 0.97 0.02 29.5 0.2 223.8 1.08 299.8 0.7

Lao PDR - - - - 2.8 0.02 0.09 0.0004 - -

Cambodia - - 1.1 0.02 - - - - -

Brunei - - 1.59 0.03 1.4 0.01 4.99 0.02 4.09 0.01

2.3 Myanmar - ASEAN Cooperation for Economic Development

Table (2.1) Myanmar Exports to ASEAN (Kyat million)

Source: Statistical Yearbook 2010.

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1990-91 1995-96 2000-01 2005-06 2009-10

Value

%

(Total)

Value

%

(Total)

Value

%

(Total)

Value

%

(Total)

Value

%

(Total)

Singapore 532.4 9.6 1819.7 17.7 3646.4 24.2 3240.2 28.1 6593 28.9

Malaysia 383.5 6.9 615.9 5.9 794.0 5.3 810.8 7.01 871.3 3.8

Indonesia 17.17 0.3 350.3 3.4 534.3 3.5 336.1 2.9 760.4 3.3

Philippines

1.06

0.02

4.85

0.04

75.1

0.5

32.4

0.3

77

0.3

Thailand 554.8 10.1 1318.8 12.8 1970.7 13.1 1376.2 11.9 2069.6 9.1

Vietnam

10.6

0.1

42.7

0.3

57.1

0.5

148.4

0.6

Lao PDR

-

-

-

1.1

0.01

-

-

-

-

Cambodia - - - - - - - - -

Brunei 0.04 0.0007 0.02 - - - - - -

Table (2.2) Myanmar Imports from ASEAN (Kyat million)

Source: Statistical Yearbook 2010.

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Country 31-1-2002 31-1-2013

Number of

Projects

Amount

(US$ million)

% of Total

Investment

Number of

Projects

Amount

(US$ million)

% of Total

Investment

Brunei - - - 2 3.04 0.007

Singapore 70 1541.6 20.8 83 2167.0 5.2

Malaysia 31 151.1 2.0 43 1031.3 2.5

Indonesia 11 240.0 3.2 12 241.5 0.6

Thailand 49 1290.2 17.4 61 9568.1 22.9

The Philippines 2 146.7 1.9 2 146.7 0.4

Cambodia - - - - - -

Lao PDR

-

-

-

-

-

-

Vietnam - - - 5 361.8 0.9

Table (2.3) Foreign Direct Investment Flow into Myanmar from ASEAN

Source: Directorate of Company Administration and Investment, Ministry of National Planning and

Economic Development.

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3.1 Why ASEAN decided to establish AEC 9th ASEAN Summit agreed to establish the ASEAN

Economic Community (AEC) as the end goal ofeconomic integration as outlined in the ASEAN

Vision 2020. As a single market and production base

To make the ASEAN region a more dynamic andstronger segment of the global supply chain

the integration of its Member Countries andenhancing the regionseconomic competitiveness.

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To strengthen the implementation of its existingeconomic initiatives.

ASEAN Free Trade Area (AFTA), ASEAN FrameworkAgreement on Services (AFAS) and ASEAN Investment

Area (AIA) accelerate regional integration in the priority sectors

facilitate movement of business persons, skilled labor andtalents

strengthen the institutional mechanisms of ASEAN, Dispute Settlement Mechanism to ensure expeditious and

legally binding resolution of any economic dispute.

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goals are being pursued through the Initiative forASEAN Integration (IAI) and the Roadmap for the

Integration of ASEAN (RIA).

deepening and broadening of integration of ASEANshall be accompanied by technical and development

cooperation in order to address the development

divide and accelerate the economic integration of

Cambodia, Laos, Myanmar and Vietnam so that thebenefits of economic integration are shared

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3.2 Economic Implications of Myanmar to Join AEC

expects general regional trade area (RTA) advantages fromjoining ASEAN and AEC greater trade, service, and investment links within the region

increased attractiveness to foreign direct investment (FDI)from outside the region, more secure access to the greaterASEAN market,

improved resource allocation from specialization according tocomparative advantage,

economies of scale in an enlarged regional market, enhanced industrialization prospects of small and medium

enterprises, spill-over effects, and infant industry learning effects with

improved quality control, design, and marketing and thusimproved competitiveness in the world market .

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3.3 How Ready was Myanmar to Join AEC Myanmar has made a commitment to establish an ASEAN

Economic Community (AEC) and actively participating andcoordinating with other member countries.

Chair of ASEAN in 2014 To develop a viable stock exchange by 2015

To develop the capital market, and the Capital MarketDevelopment Committee and its sub-committee are nowendeavoring to implement the road map for the development

of capital market in Myanmar, which is drawn up inaccordance with time frame of ASEAN Capital Market Forum(ACMF).

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Custom modernization preparedness, measures for

rationalization, simplification, and harmonization are trying tobe consistent with ASEAN Singe Window (ASW)

Custom clearance time which usually takes two days for

containerized cargo of import and one day for containerized

cargo of export is targeted to reduce to 30 minutes. the aim of facilitating investment procedures and getting

opportunities in doing business, government issues two

notifications relating to land used and foreign currency

One Stop Service in company registration is finished one dayif the documents are completed.

the standard and conformance areas

performance and factors of IPR in line with AEC measures

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Development of capital market in Myanmar need to improve legal and regulatory framework need to the development of issuing system private sector participation

SMEs development poor infrastructure with regards to power,

communication, transportation, access to world market, higher cost of materials and inputs,

outdated technology, insufficient R&D, limited knowledge and poor

management skill.

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financial sector Development difficult to develop the correspondent

arrangement account with foreign hard currencyin EU nations and US.

depends on Singapore and China currency tooperate international transaction

barrier to attract investment which is a key factorfor economic development in financial sector

from EU and US

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Implementation of AEC lack of awareness on the program areas and

implementation progress even among the mainbeneficiary groups and responsible department

and agencies the target areas of some projects are mismatch

with the specific requirement of respectivesector

the priority areas of some programs do notsatisfy the needs and development priority ofindividual country

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Myanmars Implementation in AEC

Phase I : 95% Phase II : 80%

Phase III : 77%

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Thank You