Policy Advice in Trade, Macroeconomics and Statistics in Myanmar

The Project at A Glance

After a long history of being a socialist planned economy, Myanmar underwent a transition towards a market economy following a military coup in 1988. Private sector firms could then engage in international trade and foreign investment was equally permitted for the first time since the 1960s. Over the past five years, between 2007 to 2010, Myanmar’s GDP has more than doubled, increasing from USD 20 billion in 2007 to over USD 50 billion in 2011.
International Economics Consulting Ltd. (IEC) assisted in the design of support missions and delivery of policy advice to key Ministries in Myanmar, in the areas of Trade, Macroeconomics and Statistics. The objective of the project was to increase the income of producers and exporters in selected sectors through the creation of more competitive sectors, ultimately contributing to sustainable economic development.
Moreover, the study was also written in a bid to assist the European Commission, in their definition of trade-related interventions to assist the Government and private sector in Myanmar and increase the latter’s participation in regional and international trade, and especially to make use of the reinstatement of the General Scheme of Preferences (GSP).

What We Found

Myanmar’s economy is heavily reliant on the primary sector, which also predominantly makes up its basket of exports. As per UNCTAD, close to 90% of Myanmar’s merchandise exports constituted commodities from the primary sectors, with approximately 10% being manufactured goods. Of this, around 0.5% could be classified as “high-skill and technology-intensive.” Thus, there is a need for Myanmar to diversify away from the primary sector, although the country needs to continue improving productivity and efficiency within the sector. The oil and gas industry has known significant interest among foreign investors and natural gas constituted one of the country’s largest exports. The majority of exports were destined to Thailand, although it is expected that the sector will grow larger as the sector is endowed with further investment. Following natural gas, agricultural products featured as Myanmar’s second largest exports, also denoting high potential for further growth. Exports in the sector comprised predominantly beans and pulses. At present, trade between the European Union and Myanmar is small and concentrated in a limited range of products. In 2011, Myanmar exported EUR 169 million worth of goods to the EU, representing 3% of Myanmar’s total exports. The majority of exports to the EU were textiles and clothing, amounting to nearly 79% of Myanmar’s total exports to the bloc. In 1997, Myanmar was removed from the EU’s list of countries eligible for GSP, causing a drop in Myanmar’s total exports to Europe. However, the reinstatement of Myanmar to the GSP is expected to lead to a positive shift in trade flows between Myanmar and the EU.

Our Strategy and Impact

It is important to note that reform programmes by Myanmar’s Government are improving and contributing to a more competitive business environment within the country. Improvements can be noted at the legal, regulatory and institutional levels. As Myanmar is still at an early stage of its reform process, guidance and capacity building from the EU can facilitate the country’s integration into the regional and global economy. There is thus an opportunity for the EU to assist the Government of Myanmar. Assistance can target areas such as improving the country’s trade capacity. While short-term activities should focus on the needs of the Government and supporting the necessary reforms required, over the long term, assistance can be extended to supporting a more comprehensive business environment which would enable Myanmar to gain long-term sustainable competitiveness.

Our Core Solutions

With the rapid proliferation of trade agreements worldwide, there are new markets and investment opportunities for countries to explore. At International Economics Consulting, based on our extensive experience in international trade, we assist our clients by providing a detailed analysis of the key impacts of new trade agreements on their operations and competitiveness through an assessment of tariff, and non-tariff barriers, provisions on rules of origin, customs efficiency, the effectiveness of transport networks, and sustainability provisions, among others. We can help assess the opportunities in different markets, determine the feasibility and viability of projects, and benchmark the wider ecosystem to support business growth. We also support clients in navigating the policy landscape regarding international trade by establishing robust monitoring and evaluation framework through sophisticated real-time dashboards and reporting systems to ensure the best outcomes.