Myanmar: Economic Profile

Background:

Ruled by a military junta that has held a tight and often violent grip on power since 1962, Myanmar is one of the poorest countries in Asia. Its economy is built primarily on commodities, especially natural gas, timber, gems, and agricultural products. The EIU estimates that Myanmar grew 1.8% in 2009 and is projecting 3.1% growth for 2010. Myanmar remains isolated from much of the Western world due to a series of sanctions imposed by the U.S., EU, Australia, and Canada. Foreign direct investment, trade, and tourism have all suffered as a result. However, ASEAN and other neighboring countries reject sanctions and have economic relations with Myanmar, notably Thailand, India, China, and Singapore. Economic data is hard to come by and the current leadership is opaque, a fact illustrated by the recent transfer of the capital from Yangon to the jungle retreat of Naypyidaw. A census has not been carried out since 1983 and government policies can be erratic and unpredictable, highlighted by the 1988 decision to abolish all currency notes not divisible by the number 9 on the advice of an astrologer, who considered it to be a lucky number. Myanmar is in arrears to foreign creditors and is suspicious of international organizations. The ADB has not made any loans to Myanmar since 1986 and the World Bank has not since 1987. The IMF holds its annual consultative meetings but it currently gives no assistance. The Cyclone Nargis in 2008 resulted in widespread suffering and did considerable damage to the country's agricultural base. The risk of political instability is high. Yangon was rocked by protests in 2007 in the wake of fuel price hikes and rising food prices. The country is preparing to hold elections in late 2010, though few observers believe they will be free and fair.