Chiang Mai International Students’ Forum Chiang Mai International Students’ Forum

‘ The Status of Economic Integration of Myanmar in ‘ The Status of Economic Integration of Myanmar in ASEANASEAN ’ ’

Presented byPresented by

Nan Aye Aye ThweNan Aye Aye ThweInternational College, Rangsit UniversityInternational College, Rangsit University

Economic Integration of Myanmar into the ASEANEconomic Integration of Myanmar into the ASEAN

1. Introduction1. Introduction(a) about Myanmar(a) about Myanmar(b) history of Burmese Economy(b) history of Burmese Economy

- market economy- market economy- Socialist economy- Socialist economy- open door economy- open door economy

2. Economic Integration2. Economic Integration(a) What is economic integration?(a) What is economic integration?(b) Forces that drive economic integration in ASEAN(b) Forces that drive economic integration in ASEAN(c ) Economic integration in ASEAN(c ) Economic integration in ASEAN

3. Progress of economic integration of Myanmar3. Progress of economic integration of Myanmar(a) trade (a) trade (b) investment(b) investment

4. Problems of Economic integration4. Problems of Economic integration(a) Political instability(a) Political instability(b) Corruption(b) Corruption(c ) Migrant workers(c ) Migrant workers

5. Conclusion5. Conclusion

The Union of MyanmarThe Union of Myanmar the largest country on mainland SE Asiathe largest country on mainland SE Asia

Total land area (676,577) sq km.Total land area (676,577) sq km.

Total population – 54,745 thousands (2004)Total population – 54,745 thousands (2004)

Neighboring countries – Bangladesh, India, Neighboring countries – Bangladesh, India, China, Lao PDR, ThailandChina, Lao PDR, Thailand

8 major ethnicity and over 100 spoken 8 major ethnicity and over 100 spoken dialectsdialects

- Burman (- Burman (60%)60%) three main religions – Buddhism (80%), three main religions – Buddhism (80%),

Christianity and IslamChristianity and Islam

independenceindependence from British in 1948 from British in 1948

History of Burmese History of Burmese EconomyEconomy

market economy before 1962market 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.

socialist economy before 1988socialist economy before 1988- - most industries were nationalized most industries were nationalized

under General Ne Win-led socialist regime under General Ne Win-led socialist regime backed by the militarybacked by the military

- - an economic crisis – devaluation of an economic crisis – devaluation of national national currency (1987)currency (1987)

- - One of the richest countries became One of the richest countries became one of the least developed nations.(1987)one of the least developed nations.(1987)

U Nu,

the first PM of Myanmar (Burma)

General Ne WinGeneral Ne Win

““the open door” economy after 1988 the open door” economy after 1988 (but, military-planned economy)(but, military-planned economy)(under SLORC & SPDC) (under SLORC & SPDC)

inviting foreign investmentinviting foreign investment

reform program – “so-called” linearization and privatization reform program – “so-called” linearization and privatization but still crony capitalism in reality.but still crony capitalism in reality.

Economic declination – mainly due to the govt mismanagement and Economic declination – mainly due to the govt mismanagement and corruption – e.g., Banking crisiscorruption – e.g., Banking crisis

Black market and inflation beyond government’s controlBlack market and inflation beyond government’s control

US’s economic sanction (after 1997) – but marginal effects US’s economic sanction (after 1997) – but marginal effects for economic cooperation from neighboring countries.for economic cooperation from neighboring countries.

Agriculture remains the main sectorAgriculture remains the main sector

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

Low industry - Tourist industry is the main source of foreign exchange.Low industry - Tourist industry is the main source of foreign exchange.

Economic IntegrationEconomic Integration

a. What is economic integration?a. What is economic integration?

the ultimate form of regional integrationthe ultimate form of regional integration

involves removing all barriers that block the factors of involves removing all barriers that block the factors of production and unifying economic policies of member production and unifying economic policies of member nationsnations

members are subject to the binding decisions of members are subject to the binding decisions of

supranational authoritysupranational authority

b. Factors and forces that drive economic integration in b. Factors and forces that drive economic integration in ASEANASEAN

Market-led processMarket-led process through international production , through international production , sharing of sharing of

multinational companiesmultinational companies

Institutional-led processInstitutional-led process through free trade and through free trade and investment investment agreementagreement

Private- led processPrivate- led process

c. Economic integration in ASEANc. Economic integration in ASEAN

established in August 1967 in Bangkok established in August 1967 in Bangkok Ten member countriesTen member countries

- Indonesia, Malaysia, Philippines, Singapore, Thailand - Indonesia, Malaysia, Philippines, Singapore, Thailand (1967)(1967)

- Brunei Darussalam (1984)- Brunei Darussalam (1984)

- Vietnam (1995)- Vietnam (1995)

- - Laos and Myanmar (1997)Laos and Myanmar (1997)

- Cambodia (1999)- Cambodia (1999)

Main purpose – the development of a free trade area Main purpose – the development of a free trade area between between its membersits members

ASEAN Free Trade Area or AFTA ( 1992) ASEAN Free Trade Area or AFTA ( 1992)

- to integrate the ASEAN economies into a single production - to integrate the ASEAN economies into a single production unit. unit.

- to promote greater economic efficiency, productivity, and - to promote greater economic efficiency, productivity, and competitivenesscompetitiveness

Progress of Economic Integration Progress of Economic Integration (a) Trade(a) Trade

ASEAN is one of the main export markets for MyanmarASEAN is one of the main export markets for Myanmar 24 % of its total world exports (1997) went to ASEAN24 % of its total world exports (1997) went to ASEAN

trade with ASEAN (1997-2004)trade with ASEAN (1997-2004)- - Singapore (top exporter) Singapore (top exporter) - - Thailand (top importer )Thailand (top importer )

Trade with Non-ASEAN (1997-2004)Trade with Non-ASEAN (1997-2004)- - India, China (top non-ASEAN export & import India, China (top non-ASEAN export & import

countries) countries)

Comparison bet: ASEAN and Non-ASEANComparison bet: ASEAN and Non-ASEAN- - More export to Non-ASEAN than ASEANMore export to Non-ASEAN than ASEAN- - Import from ASEAN is two times larger than Import from ASEAN is two times larger than

non-ASEAN. non-ASEAN.

(b) Foreign Investment(b) Foreign Investment

Foreign investment law promulgated in 1988 to induce FDI.Foreign investment law promulgated in 1988 to induce FDI.

Potential domestic markets, natural resources and low-cost labor Potential domestic markets, natural resources and low-cost labor attract FDIattract FDI

Impacts that decrease Foreign investmentImpacts that decrease Foreign investment Asian Financial Crisis, Asian Financial Crisis, US sanction for human rights abuses US sanction for human rights abuses Political deadlock and instabilityPolitical deadlock and instability

Three major ASEAN investor (1997-2004)Three major ASEAN investor (1997-2004) SingaporeSingapore ThailandThailand MalaysiaMalaysia

TOTAL (France) TOTAL (France) is the largest international investor Myanmar is the largest international investor Myanmar

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

Problems of Economic Problems of Economic integrationintegration

(a) Political Instability(a) Political Instability a series of political events and cosmetic reforms a series of political events and cosmetic reforms

-- a military coup (1962)a military coup (1962)

-- antigovernment students’ antigovernment students’ demonstration (1988)demonstration (1988)

-- a landslide victory of Aung San Suu a landslide victory of Aung San Suu Kyi Kyi (1990) (1990)

ignored by SLORCignored by SLORC

-- Aung San Suu Kyi,Aung San Suu Kyi, the Nobel Peace the Nobel Peace Laureate(1991) Laureate(1991) remains under house arrestremains under house arrest

US and EU have put pressure on the government and call for US and EU have put pressure on the government and call for political reform and release of ASSK from house arrestpolitical reform and release of ASSK from house arrest

SPDC, the ruling govt grips power firmly at any political SPDC, the ruling govt grips power firmly at any political costscosts

never ending conflict between ethnic minority groups never ending conflict between ethnic minority groups

and the ruling juntaand the ruling junta an exodus of refugees and IDPan exodus of refugees and IDP

154,000154,000 refugees and 33 refugee camps refugees and 33 refugee camps 526,000526,000 IDP IDP

Aung San Suu Kyi

( b) Corruption( b) Corruption

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

(c) Migrant Workers(c) Migrant Workers

Many illegal migrant workers to Many illegal migrant workers to neighboring countriesneighboring countries Of total figure of 1,269,074 migrant Of total figure of 1,269,074 migrant workers workers registered in Thailand in 2004registered in Thailand in 2004

80 %80 % are from Myanmar are from Myanmar

Former PM Khin Nyunt was ousted in Oct 2004

ConclusionConclusion The govt is responsible forThe govt is responsible for

Political instabilityPolitical instability Economic declineEconomic decline Human Right AbuseHuman Right Abuse(detrimental to Foreign Investment)(detrimental to Foreign Investment)

The govt should create The govt should create Political and economic stabilityPolitical and economic stability – domestic and – domestic and

regional – that secure environment for investment regional – that secure environment for investment

Stabilize national currencyStabilize national currency

Reduce unemployment by creating Reduce unemployment by creating jobjob opportunitiesopportunities

- Jobs creation, ways to attract labor-- Jobs creation, ways to attract labor-intensive investments intensive investments

- improve economic integration in ASEAN in - improve economic integration in ASEAN in way that leads way that leads to country’s economic to country’s economic growth)growth)

Thank You!!!Thank You!!!