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Trade, Foreign Investment and Myanmar's Economic Development during the Transition to an Open Economy

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  • Kudo, Toshihiro
  • Mieno, Fumiharu

Abstract

Throughout the 1990s and up to 2005, the adoption of an open-door policy substantially increased the volume of Myanmar's external trade. Imports grew more rapidly than exports in the 1990s owing to the release of pent-up consumer demand during the transition to a market economy. Accordingly, trade deficits expanded. Confronted by a shortage of foreign currency, the government after the late 1990s resorted to rigid controls over the private sector's trade activities. Despite this tightening of policy, Myanmar's external sector has improved since 2000 largely because of the emergence of new export commodities, namely garments and natural gas. Foreign direct investments in Myanmar significantly contributed to the exploration and development of new gas fields. As trade volume grew, Myanmar strengthened its trade relations with neighboring countries such as China, Thailand and India. Although the development of external trade and foreign investment inflows exerted a considerable impact on the Myanmar economy, the external sector has not yet begun to function as a vigorous engine for broad-based and sustainable development.

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File URL: http://ir.ide.go.jp/dspace/bitstream/2344/624/3/ARRIDE_Discussion_No.116_kudo.pdf
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Bibliographic Info

Paper provided by Institute of Developing Economies, Japan External Trade Organization(JETRO) in its series IDE Discussion Papers with number 116.

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Date of creation: Aug 2007
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Publication status: Published in IDE Discussion Paper. No. 116. 2007.8
Handle: RePEc:jet:dpaper:dpaper116

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Related research

Keywords: Myanmar (Burma); International trade; Cross-border trade; Foreign direct investment; Economic development; Development cooperation; Foreign investments;

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Cited by:
  1. Kubo, Koji, 2012. "Trade policies and trade mis-reporting in Myanmar," IDE Discussion Papers 326, Institute of Developing Economies, Japan External Trade Organization(JETRO).

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