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Myanmar's two decades of partial transition to a market economy : a negative legacy for the new government

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  • Kubo, Koji

Abstract

Despite more than two decades of transition from a centrally planned to a market-oriented economy, Myanmar’s economic transition is still only partly complete. The government’s initial strategy for dealing with the swelling deficits of the state economic enterprises (SEEs) was to put them under direct control in order to scrutinize their expenditures. This policy change postponed restructuring and exacerbated the soft budget constraint problem of the SEEs. While the installation of a new government in March 2011 has increased prospects for economic development, sustainable growth still requires full-scale structural reform of the SEEs and institutional infrastructure building. Myanmar can learn from the gradual approaches to economic transition in China and Vietnam, where partial reforms weakened further impetus for reforms.

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File URL: http://ir.ide.go.jp/dspace/bitstream/2344/1200/1/ARRIDE_Discussion_No.376_kubo.pdf
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Paper provided by Institute of Developing Economies, Japan External Trade Organization(JETRO) in its series IDE Discussion Papers with number 376.

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Date of creation: Dec 2012
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Publication status: Published in IDE Discussion Paper. No. 376. 2012.12
Handle: RePEc:jet:dpaper:dpaper376

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Keywords: Myanmar; Transition to market economy; Economic policy; Government economic enterprises; Transition; State economic enterprises;

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  1. Stanley Fischer & Ratna Sahay & Carlos A. Végh Gramont, 2002. "Modern Hyper- and High Inflations," IMF Working Papers 02/197, International Monetary Fund.
  2. Gérard Roland, 2000. "Transition and Economics: Politics, Markets, and Firms," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262182033.
  3. Masahiro Hori & Yu Ching Wong, 2008. "Efficiency Costs of Myanmar’s Multiple Exchange Rate Regime," IMF Working Papers 08/199, International Monetary Fund.
  4. Kubo, Koji, 2010. "Natural Gas Export Revenue, Fiscal Balance and Inflation in Myanmar," IDE Discussion Papers 225, Institute of Developing Economies, Japan External Trade Organization(JETRO).
  5. McMillan, John & Naughton, Barry, 1992. "How to Reform a Planned Economy: Lessons from China," Oxford Review of Economic Policy, Oxford University Press, vol. 8(1), pages 130-43, Spring.
  6. Oleh Havrylyshyn, 2001. "Recovery and Growth in Transition: A Decade of Evidence," IMF Staff Papers, Palgrave Macmillan, vol. 48(4), pages 4.
  7. World Bank, 2002. "Transition, The First Ten Years : Analysis and Lessons for Eastern Europe and the Former Soviet Union," World Bank Publications, The World Bank, number 14042, October.
  8. Sachs, J.D. & Woo, W.T., 1994. "Structural Factors in the Economic Reforms of China, Eastern Europe and the Former Soviet Union," Papers 94-01, California Davis - Institute of Governmental Affairs.
  9. Sean TURNELL, 2011. "Fundamentals of Myanmar's Macroeconomy: A Political Economy Perspective," Asian Economic Policy Review, Japan Center for Economic Research, vol. 6(1), pages 136-153, 06.
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