Myanmar (Burma) - IUJ

COUNTRY PROFILE 2000

Myanmar (Burma)This Country Profile is a reference tool, which providesanalysis of historical political, infrastructural and economictrends. It is revised and updated annually. The EIU’s CountryReports analyse current trends and provide a two-yearforecast

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EIU Country Profile 2000 © The Economist Intelligence Unit Limited 2000

Comparative economic indicators, 1999

1


Contents

3 Basic data

4 Political background4 Historical background7 Political forces

10 Constitution and institutions11 International relations and defence

13 Resources and infrastructure13 Population15 Health16 Education16 Natural resources and the environment17 Transport and communications19 Energy provision

20 The economy20 Economic structure22 Economic policy26 Economic performance28 Regional trends

29 Economic sectors29 Agriculture, forestry and fishing31 Mining and semi-processing32 Manufacturing34 Construction34 Financial services36 Other services

37 The external sector37 Trade in goods41 Invisibles and the current account42 Capital flows and foreign debt43 Foreign reserves and the exchange rate

45 Appendices45 Regional and other organisations45 Sources of information46 Reference tables46 Population estimates47 Employment by sector47 Labour force47 Transport statistics48 National energy statistics48 Government finances49 Money supply, credit and interest rates49 Gross domestic product50 Gross domestic product by expenditure51 Gross domestic product by sector51 Consumer price index

2


51 Output and yields of key crops52 Production of livestock and fish52 Timber production53 Minerals production53 Manufacturing production54 Construction and renovation work54 Banking statistics54 Tourist arrivals and receipts55 Exports55 Imports56 Key exports and imports (volume)56 Main trading partners57 Direction and composition of trade57 Balance of payments, IMF series58 Balance of payments, national series59 External debt59 Net official development assistance60 Foreign reserves60 Exchange rates

Myanmar (Burma) 3

© The Economist Intelligence Unit Limited 2000 EIU Country Profile 2000

Myanmar (Burma)

Basic data

676,577 sq km

45.1m (mid-1999/2000 estimate)

Population in ‘000 (1983 census)

Yangon (capital) 2,513 Pegu 320Mandalay 533 Moulmein 220

Note. In the text, places are referred to by their pre-1989 names, apart fromYangon and Myanmar. Pre-1989 names appear in brackets on the map at thebeginning of this report

Subtropical

Hottest month, April, 24-36°C; coldest month, January, 18-23°C; driest month,January, 3 mm average rainfall; wettest month, July, 582 mm average rainfall

Burmese; numerous other minority languages are also in use, such as Karenand Shan

UK (metric) system. Some other units are in use, for example 0.9842 long orimperial tons=1 metric tonne=1.10231 short tons. Some local measures include:1 lakh=100,000 units; 1 crore=10,000,000 units; 1 viss or peiktha=100ticles=1.6 kg; 1 basket (paddy)=20.9 kg; 1 basket (rice)=34 kg

1 kyat (Kt)=100 pyas. Average official exchange rate in 1999: Kt6.3:US$1; infiscal year 1999/2000: Kt6.3:US$1; in first eight months of 2000: Kt6.4:US$1.Average free-market exchange rate in 1999: around Kt340:US$1; in 1999/2000:around Kt342:US$1; in first eight months of 2000, around Kt350:US$1 (free-market exchange-rate data are approximate, based on exchange rates in thefirst week of each month)

Note. In the text, US dollar conversions are given at the official exchange ratefollowed by the free-market exchange rate

6.5 hours ahead of GMT

April 1st-March 30th

January 4th (Independence Day); February 12th (Union Day); March 2nd(Peasants’ Day); March 10th (Dry Season Celebration); March 27th (ArmedForces’ Day); mid-April (New Year); May 1st (Workers’ Day); July 19th (Martyrs’Day); December 25th (Christmas Day); plus other religious holidays such asDiwali and end of Ramaddan (Eid el Fitr) that depend on lunar sightings

Land area

Population

Main towns

Climate

Weather in Yangon(altitude 5 metres)

Languages

Measures

Currency

Time

Fiscal year

Public holidays, 2001

4 Myanmar (Burma)


Political background

Myanmar’s current ruling military junta came to power in 1988 followingwidespread pro-democracy protests. The main opposition party, the NationalLeague for Democracy (NLD), won the last election, held in May 1990.However, the results were not recognised by the junta, and no parliament wasever convened. The junta has ignored international pressure for dialogue withthe NLD, and has attempted to sideline the NLD as a political force. Yet publicopposition to the junta remains widespread. The junta also faces armedresistance from a number of ethnic minority groups seeking greater autonomyand an end to brutal suppression by the junta.

Historical background

On January 1st 1886 Burma (as Myanmar was known until the current juntachanged the country’s name in 1989) came under British control, after threeAnglo-Burmese wars. A nationalist backlash against British colonial rule led tothe creation of the pro-independence Anti-Fascist People’s Freedom League(AFPFL), under the leadership of Aung San and U Nu. The AFPFL won alandslide election victory in April 1947. In July that year, when independencenegotiations with the British were well advanced, Aung San was assassinated; UNu subsequently became the prime minister of the Union of Burma when itgained independence on January 4th 1948.

The AFPFL won two further elections, and apart from a two-year period under amilitary caretaker government headed by the army chief-of-staff, GeneralNe Win, Myanmar enjoyed 12 years of democratic government. However, thiscame to an end in March 1962, when General Ne Win launched a coup,replacing the government with a military-run revolutionary council. In 1972,in the face of growing discontent, General Ne Win and his senior commandersretired from the army, but remained in control of government.

In 1974 a new constitution declared Myanmar to be a socialist one-party state,ruled by the military’s Burma Socialist Programme Party (BSPP, or LanzinParty). The BSPP embarked on the so-called Burmese Way to Socialism, an oddmix of Buddhism, Marxism and nationalism, of which the central elementswere economic self-sufficiency and political isolation. Myanmar remained shutoff from the outside world, a policy that resulted in economic stagnation.

In October 1987, as the economy deteriorated further, student demonstrationswere held in the capital, Yangon. Widespread protests began in March 1988,increasingly focused around the leadership of Aung San Suu Kyi, the daughterof the independence-era leader, Aung San. In July 1988 General Ne Winresigned as chairman of the BSPP, and was succeeded by General Sein Lwin,who declared martial law in Yangon. But the protests gathered strength until,on August 8th 1988, troops were ordered to fire on unarmed demonstrators.Several thousand civilians are estimated to have been killed and many moreinjured in the ensuing bloodbath.

From colony toindependent country

A long history ofmilitary rule

The pro-democracymovement was crushed

in 1988—

Myanmar (Burma) 5


Despite this crackdown, demonstrations continued, forcing General Sein Lwinto resign within weeks of coming to power. His successor, a civilian, MaungMaung, lasted less than one month, during which time a multiparty electionwas planned. On September 18th 1988 the military again formally took power,nominally under the leadership of General Saw Maung—although withGeneral Ne Win’s involvement behind the scenes. The junta formed a militarycouncil, called the State Law and Order Restoration Council (SLORC), to rulethe country. The junta also dismantled the socialist one-party order, andbowed to the demonstrators’ demands for an election to be held.

More than 200 parties registered for the 1990 election. The main contenderswere the National Unity Party (NUP, a renamed BSPP), the NLD (of whichAung San Suu Kyi was secretary-general), and the larger of the ethnically basedparties. Although Aung San Suu Kyi was placed under house arrest, the electionresulted in an overwhelming victory for the NLD, which won 60% of thevote—this would have translated into 392 seats in the 485-seat legislature. Thepro-junta NUP won only ten seats. However, the junta refused to accept theresult, later insisting that the election had been held simply to select a body todraft a new constitution (see Constitution and institutions).

The junta has remained in power ever since (with Senior General Than Shwe,the commander-in-chief of the army, succeeding General Saw Maung aschairman of the junta’s ruling council in 1992). On November 15th 1997 thejunta was reshuffled and renamed the State Peace and Development Council(SPDC; see Constitution and institutions), but there was no marked change inits policies.

General election results, May 1990

% of vote No. of seats

National League for Democracy 59.9 392

Shan Nationalities League for Democracy 1.7 23

Arakan League for Democracy 1.2 11

National Unity Party 21.2 10

Mon National Democratic Front 1.0 5

National Democratic Party for Human Rights 0.9 4

Chin National League for Democracy 0.4 3

Party for National Democracy 0.5 3

Union Paoh National Organisation 0.3 3

Kachin State National Congress for Democracy 0.1 3

Others 12.8 28

Total 100.0 485

Source: Press reports.

In 2000 the NLD continued to push for the result of the 1990 election to berecognised. The NLD refused to disband the ten-member CommitteeRepresenting the People’s Parliament (CRPP) that had been formed inSeptember 1998 to take decisions on behalf of arrested NLD deputies. TheCRPP (comprising NLD members, including Aung San Suu Kyi, and one ethnic

—and a new militarycouncil formed

The junta has clung topower despite losing the

1990 election—

—and is taking stepsto entrench itself

still further—

6 Myanmar (Burma)


minority party representative who has subsequently been arrested) has beenable to do little except issue statements, and form some policy committees.However, it is a symbol of the junta’s 1990 defeat and the demands of theopposition forces.

In September 2000 the NLD took a further step, announcing that it wouldbegin work on a new constitution. The junta has long pledged to hold anotherelection once a new constitution had been completed (see Constitution andinstitutions). However, work on the junta’s version of the constitution—whichwill enshrine a central place in political life for the military—has progressed ata glacial pace. The National Convention, the body tasked with drafting theconstitution, has not met for years. Yet some within the democratic oppositionfear a junta-appointed committee could unveil a constitution, clearing the wayfor a fresh election.

Angered by the NLD’s bid to develop a constitution of its own, and by renewedefforts by senior NLD leaders to travel to party meetings outside the capital,Yangon, the junta escalated its harassment of the NLD in late 2000. InSeptember 2000 Aung San Suu Kyi and other party leaders were placed undervirtual house arrest, with their telephone lines cut and access to most visitorsdenied. While the junta has not yet dared to make the NLD illegal, mostnormal political activities are severely restricted, and NLD members and theirfamilies have been subjected to severe harassment, including imprisonmentand torture.

At the same time, the junta has continued to build up the Union SolidarityDevelopment Association (USDA) into a 12m-member support base. The juntahas also resisted calls from other countries and international bodies to begindialogue with the NLD (see International relations and defence).

The junta continues to be widely feared and disliked. In addition to the NLD,the junta faces opposition from three broad groups—students, monks andethnic minority groups. Students played a prominent role in organising the1988 protests, a fact that has led the current junta to close the universities formuch of its 12 years in power. The junta risked reopening many universityclasses in 2000, but remains jittery; many classes have been shortened ormoved far from town centres to prevent students gathering. Religious leadersalso played a key role in the pro-democracy movement of 1988, and have alsobeen involved in subsequent protests. Finally, Myanmar has for decades facedarmed opposition from a web of ethnic minority groups in the border states.

To counter these sources of opposition, the junta has developed a vast networkof informers in most institutions—including the civil service and colleges. Eventhe fire brigade has been developed into a pro-junta group. Almost allinformation is controlled and heavily censored. The result is what Aung SanSuu Kyi has termed a “blanket of fear” over the country. However, there isprobably very little real support for the junta within the USDA and othernotionally pro-junta groups. The increasingly desperate political and economicsituation may also have weakened support for the junta within the rank andfile of the armed forces.

—but opposition remainswidespread

—including efforts todismantle the NLD—

Myanmar (Burma) 7


Important recent events

September 1988: The junta seizes power and forms the State Law and OrderRestoration Council (SLORC).

May 1990: An election is held. The National League for Democracy (NLD) winsconclusively, but the results are not recognised.

July 1995: The leader of the NLD, Aung San Suu Kyi, is released from almost six yearsof house arrest.

November 1997: The SLORC is reshuffled and renamed the State Peace andDevelopment Council (SPDC), but there is no change in policy.

May 1998: The NLD demands that parliament is convened. Hundreds of NLDmembers are detained.

September 1998: The NLD forms a ten-member committee to take decisions onbehalf of the arrested elected deputies.

September 2000: The NLD announces plans to draft its own constitution. Aung SanSuu Kyi and other senior leaders are placed under virtual house arrest.

Political forces

The junta’s ruling council, made up of senior military figures, is the dominantpolitical force (see Constitution and institutions). This junta is backed by alarge armed force; according to the International Institute for Strategic Studies,the armed forces (including police and militias) expanded from 170,000 in1988 to 429,000 by mid-1999. The military’s reach is extended by a widespreadmilitary intelligence network.

One threat to the junta comes from weakening support among the militaryrank and file, where poor conditions and low pay may be affecting morale.There are also occasional reports that some officers have been arrested forexpressing support for the NLD.

Only nine of the 93 parties that contested the May 1990 election are stilllegally recognised. Of the 485 deputies elected in 1990, the majority have beendetained or disqualified, resigned under pressure, or gone into exile.

The most important source of opposition to the junta is the NLD. The NLDremains a legal party, but operates under severe restrictions: its leaders areprevented from travelling and from speaking in public; party meetings arepermitted only rarely; and most party material is illegal under Myanmar’sdraconian publishing laws. Harassment of the NLD, which intensified in 1998-2000, has taken a heavy toll. Many thousands of members have resigned andnumerous party offices have closed.

The junta is backed bythe military

Political parties

The NLD

8 Myanmar (Burma)


The lack of political change since 1990 has also resulted in some tensionswithin the NLD itself, including occasional criticism of the tactics of seniorNLD leaders. However, there seems to be no threat to the core NLD leadership.

The military junta established the USDA in 1993, initially to undertake publicworks projects. In 1997 the junta explicitly recognised the USDA as its politicalwing and called for its members to be trained as the “next generation” of leaders.The junta’s head, General Than Shwe, is head of the USDA.

Since early 1997 mass rallies have been held to boost USDA membership—recruitment is heavy-handed, and civil servants and high school students arepressured into joining. By 2000 membership had risen to around 12m(constituting over 35% of the population aged 15 and older), organised in localgroups throughout much of the country. USDA members act as the junta’s eyesand ears, while some USDA members have also received military training.However, real support for the junta from within the USDA is believed tobe limited.

Main political figures

Aung San Suu Kyi: Secretary-general of the National League for Democracy(NLD). Daughter of the independence hero, Aung San, she is extremelycharismatic and her personal popularity remains very high.

Tin Oo: Vice-chairman of the NLD, and one of Aung San Suu Kyi’s closestallies. A former military man.

Senior General Than Shwe: Chairman of the State Peace and DevelopmentCouncil (SPDC), prime minister, defence minister and commander-in-chief ofthe armed forces. Seen as mediator between factions within the junta.Rumoured to be in ill health and on the brink of retirement.

General Maung Aye: Vice-chairman of the SPDC, deputy commander-in-chief of the armed forces and army commander. In theory, second in line toGeneral Than Shwe. Regarded as a hardline opponent of dialogue withthe NLD.

Lieutenant-General Khin Nyunt: Secretary-1 of the SPDC. Has abackground in military intelligence. Those loyal to either General Maung Ayeor to General Khin Nyunt form perhaps the two most powerful factions withinthe junta.

General Ne Win: Came to power in the 1962 coup and did not give up hislast official post until July 1988. Some think that he is still the ultimate powerin the land. Rumours surface periodically that he is seriously ill; his death mayprecipitate a power struggle within the junta.

Others to watch: There is a large number of pro-democracy, student andethnic minority leaders active both within the country and in exile. Some mayplay important roles in the event of any political upheaval in Myanmar.

The question of the degree of autonomy to be given to Myanmar’s manyethnic groups has never been adequately settled, and at times more than

Ethnic groups are stillfighting for autonomy

The USDA

Myanmar (Burma) 9


40 ethnic insurgent groups have been active. In 1989 a series of ceasefires wasconcluded with some of the 29 groups that were thought still to be active atthat time. However, some of these ceasefires have unravelled in recent years. In2000 the junta continued to meet armed resistance from ethnicsplinter groups.

The most important group not to have signed a ceasefire is the Karen NationalUnion (KNU) and its armed wing, the Karen National Liberation Army (KNLA).The KNU has lost its key bases, and in 1997 the junta regained control overmuch of the border region. However, armed resistance is continuing.

The junta has tried to stamp out support for insurgent groups with harshpolicies including forced relocation of ethnic minority villages and the use offorced labour. International agencies, including the UN, have criticised thetorture, rape and extra-judicial killings of ethnic minority members, who areaccused by the junta of sympathising with insurgents. As a result of suchpolicies and the continued fighting, there are around 120,000 ethnic minorityrefugees in camps in Thailand—and an unknown number of ethnic minoritypeople displaced from their homes inside Myanmar.

There are no direct links between these ethnic insurgent groups and the NLD.However, a number of the ethnic minority political and insurgent groups havevoiced support for the aims of the NLD and the restoration of the 1990election result.

A number of pro-democracy political groups operate outside of Myanmar. Twoprominent groups include the following.

• The National Coalition Government of the Union of Burma (NCGUB), agovernment-in-exile comprising those elected in 1990. Dr Sein Win, a cousinof Aung San Suu Kyi, holds the post of prime minister.

• The All Burma Students Democratic Front (ABSDF), composed of studentswho fled the 1988 massacres, which fought against the junta alongside some ofthe ethnic groups. The ABSDF has formed a political bloc to campaign forchange from its base in Thailand.

Constitution and institutions

In 1988 the junta suspended the 1974 constitution and abolished all stateinstitutions, including the Pyithu Hluttaw (People’s Assembly) and the civiliancourts. Myanmar still operates without a constitution, although a NationalConvention has drawn up the principles for a new one, and a junta-controlledcommittee is continuing to work on a new draft. In September 2000 the NLDannounced plans to begin work on its own draft of the constitution, a movestrongly resisted by the junta.

Political groups in exile

No new constitution—yet

10 Myanmar (Burma)


The National Convention

The junta claimed (after the event) that the 1990 election had been held solely to electrepresentatives to a body assigned with the task of drawing up a new constitution,called the National Convention. The National Convention first met in January 1993.However, of the National Convention’s 702 members only 106 (15%) were electedrepresentatives, the rest being appointed by the junta. In November 1995 the NationalLeague for Democracy (NLD) was expelled from the convention for protesting againsttight restrictions on debate. Without the NLD representatives, the number of delegateswho had been elected in the 1990 election was reduced to less than 3% of the total.

By March 1996, at the close of its most recent session, the convention had identified104 basic principles, covering, among other things:

• a central role for the armed forces (Tatmadaw), to be guaranteed by a range ofmeasures including reserving for the army one-quarter of the seats in both a lower andupper house of parliament; the military will also have the right to make appointments tokey government posts (such as the ministries of defence and home affairs); and

• the effective exclusion of Aung San Suu Kyi as head of state (by requiring that thehead of state should have been resident in Myanmar continuously for the previous 20years and should not have been married to a foreigner).

Although the National Convention has not met since early 1996, the NationalConvention’s Convening Committee has held frequent meetings, and work on theconstitution seems to be continuing.

In November 1997 the ruling military council was renamed the SPDC.However, the four most senior figures retained their posts in the new line-up.Senior General Than Shwe and General Maung Aye remained as chairman andvice-chairman respectively. Lieutenant-General Khin Nyunt retained his post asthe council’s Secretary-1, and Lieutenant-General Tin Oo remained asSecretary-2. The newly created post of Secretary-3 was given to Lieutenant-General Win Myint. The size of the council was reduced from 21 to 19. The 12regional military commanders (six of whom were newly appointed) and headsof the navy and air force were appointed as the remaining 14 members ofthe council.

The SPDC, rather than the cabinet, takes all key policy decisions. In 1998-99new committees were set up to oversee agricultural policy, industrial policy andtrade and foreign exchange—the latter seem to be under the control of GeneralMaung Aye. The regional military commanders also wield considerable powerin the areas under their command.

The inner workings of the junta are little known; it is highly secretive, andeven senior diplomats in Yangon have limited opportunities for meaningfulcontact. There are believed to be divisions within the junta, particularlybetween the army commander, General Maung Aye, and the intelligence chief,Lieutenant-General Khin Nyunt (see Main political figures box). General

The military junta hasbeen reorganised—

—but still controlsthe country

Myanmar (Burma) 11


Maung Aye seemed to re-assert control over policymaking in 1999-2000. Bylate 2000 there were rumours that General Than Shwewidely believed tohold the balance of power between the two factionswas in ill health and onthe point of retiring, a move that some believe could precipitate an openpower struggle.

The cabinet forms the second tier of the military government; key decisions aretaken by the SPDC and its committees. The cabinet too was reshuffled in late1997. Two new ministries were added (electricity and military affairs) and22 new ministers were appointed. General Than Shwe (the only person with apost in both the cabinet and the SPDC) remained as prime minister. The largemajority of the 40 cabinet members are high-ranking military figures.

Although civilian courts were fully reinstated in 1992, many judges still havemilitary backgrounds. Pro-democracy campaigners are regularly denied properlegal representation, and cases are often heard in secret. Jail terms for pro-democracy activists are severe; even peaceful anti-junta activities by Myanmarcitizens regularly attract jail terms of seven to 20 years. Conditions in the jailsare very harsh; torture is often used against the junta’s opponents. There areestimated to be at least 1,000 political prisonersalthough the juntadenies this.

International relations and defence

The Association of South-East Asian Nations (ASEAN) has followed a policy of“constructive engagement” with the junta, and in July 1997 Myanmar wasadmitted as a full member of ASEAN. Yet since then some ASEAN membershave begun to question the constructive engagement approach. ASEANinvestors have become increasingly exasperated with the junta, while a seriesof EU-ASEAN meetings have been cancelled over EU objections to thejunta’s inclusion.

The junta’s relations with neighbouring Thailand are perhaps the mostdifficult. Since the Democrat Party-led coalition came to power in Thailand inlate 1997, Thai officials have been more outspoken in voicing their concernsabout the flow of drugs and illegal migrants from Myanmar. The presence ofaround 120,000 refugees from Myanmar in camps in Thailand has furtherstrained relations. The junta blamed the Thai government for freeing armedactivists who took hostages at the Myanmar embassy in Bangkok in October1999. Thailand in turn was angered when early in 2000 a group of insurgentsfrom Myanmar laid siege to a Thai hospital, demanding greater assistance. Yetdespite the concerns from Thailand and elsewhere, ASEAN has stuck to itspolicy of “constructive engagement” with the junta. Plans to send three ASEANrepresentatives to the junta to push for change were vetoed in September 2000by ASEAN members such as Vietnam.

The junta has been shunned by many countries and international bodies forfailing to recognise the 1990 election, as well as for its poor human rightsrecord and complicity in the narcotics trade. Myanmar’s main donors—

The government has morelimited influence

A controlled judiciary andmany political prisoners

The junta remains aninternational pariah—

Relations with ASEANremain tricky

12 Myanmar (Burma)


including Japan and the US—all suspended aid after the September 1988 coup.Japan recognised the new government in February 1989, but the US hascontinued to enforce a strict aid embargo, and in April 1997 banned newinvestment in Myanmar by US companies. The EU and other industrialisedcountries (such as Canada) have also removed trade and aid benefits.

In 1998-99 signs emerged that some members of the international communitywere looking for new ways to break the stalemate. The UN was reported tohave considered renewing technical assistance to the junta in exchange forpolitical reforms, while the EU sent a delegation to talk to the junta, andCanada proposed the formation of a human rights commission in Myanmar,backed by foreign assistance. However, these limited attempts to engage thejunta are not expected to result in a marked thaw—not least since the junta haslittle interest in softening its stance in order to appease outside concerns.International criticism of the junta intensified with the renewed crackdown onthe NLD in the second half of 2000, but to little effect.

In 2000 the junta tried to reduce its international isolation, engaging in anumber of diplomatic visits to countries including India. Part of themotivation was to reduce reliance on China, by far the junta’s most importantally. China has provided aid and military hardware, while economic ties haveflourished, resulting in a wave of Chinese investment. Fears have grownamong Myanmar’s neighbours that the ties go even deeper; India has accusedthe junta of allowing China to set up military installations on Myanmar’s CocoIslands, close to India’s Andaman Islands. Some within the junta are alsobelieved to be concerned about the level of dependence on China.

Resources and infrastructure

Population

Population, 1999/2000(mid-fiscal year)

Total (m) 49.1 Male n/a Female n/a

% change 2.0

Source: Internal report.

The government estimated the total population at 49.1m in the middle offiscal year 1999/2000 (according to an official unpublished report—the juntahas delayed publication of its annual statistical review for the last two years).The new data show erratic growth patterns, with the population jumping by3.8% in 1998/99, then by 2% in 1999/2000. Although these figures seem high,rapid population growth would not be surprising, as Myanmar’s population isrelatively young (with 33.2% of the population in the 0-14 age group in

—but has close tieswith China

Population statisticsare dubious

Myanmar (Burma) 13


1997/98). (See Reference table 1 for data on population growth and agestructure.)

However, Myanmar’s population statistics must be treated with some caution;according to a UNICEF report, an internal evaluation of population data in1994 found 40% under-reporting for births and 60% for deaths. Anothercomplicating factor is the flow of refugees and migrant workers (see box). It ispossible that the recent jump in population figures reflects efforts to correctsome of these data problems.

Myanmar’s mobile population: refugees, migrant workers andinternally displaced people

A repressive regime and a stagnant economy have resulted in a large flow of workersand refugees from Myanmar to neighbouring countries. Thailand alone has anestimated 1m illegal migrant workers—the majority from Myanmar—as well as around120,000 refugees from Myanmar housed in border camps. In addition, around 21,000Muslim refugees from Myanmar’s Arakan province are located in camps in Bangladesh.

Inside Myanmar, continued fighting in some border regions, and the junta’s harshpolicies against ethnic minority members, including forced relocation, have resulted inmany people being displaced from their homes. The UN High Commissioner forRefugees has been unable to estimate the numbers of such internally displaced people;exile groups estimate it could be hundreds of thousands.

Myanmar’s labour force numbered 18.8m in 1995/96 (the latest available data),of which 64% were employed in the agricultural sector. The lack of investmentin education and the prolonged closure of the universities in recent years havehad a detrimental impact on the quality of the labour force. Unskilled labour iswidely available; there is no minimum wage, but holiday and other entitlementsare set out under the 1954 Social Security Act. (See Reference tables 2 and 3 fordata on employment and the labour force.)

Data on the size of Myanmar’s numerous ethnic groups are contentious: nodetailed census of ethnic minorities has been attempted since 1931. The 1931census classified 65% of the population as belonging to the majority Burmangroup, followed by the Karen (9%), the Shan (7%), the Chin (2%), the Mon(2%), the Kachin (1%) and the Wa (1%). The majority of ethnic minorities livein the border states—although there are sizeable minority populations in theBurman-majority divisions.

Data on ethnic minoritiesare sparse and out of date

The labour force

14 Myanmar (Burma)


About 89% of the population are Buddhist. An estimated 4% of the populationare Christian (including large numbers of Karen and Kachin) and another 4%are Muslim, most heavily concentrated in Arakan state. A variety of locallanguages is spoken among minority groups, but Burmese is the officiallanguage of the state and is widely spoken and understood.

Religion and language

Myanmar (Burma) 15


Population by state/division: census results, Apr 1983

Annual Population growtha Area Density

State/division ‘000 % (%) (sq km) (per sq km)

Kachin 904 2.56 2.05 89,042 10

Kayah 168 0.48 2.89 11,730 14

Karen 1,058 3.00 2.11 30,381 35

Chin 369 1.05 1.33 36,017 10

Sagaing 3,856 10.92 2.14 94,623 41

Tenasserim 918 2.60 2.46 43,344 21

Pegu 3,800 10.76 1.80 39,404 96

Magwe 3,241 9.18 2.09 44,820 72

Mandalay 4,581 12.98 2.25 37,021 124

Mon 1,682 4.76 2.50 12,295 137

Arakan 2,046 5.80 1.70 36,778 56

Yangon 3,974 11.26 2.20 10,171 391

Shan 3,719 10.53 1.58 155,801 24

Irrawaddy 4,991 14.14 1.85 35,136 142

Total 35,307 100.00 2.02 676,563 52

a Average for 1973-83.

Source: 1983 census returns.

Health

A UNICEF report has described a “dramatic decline” in spending on healthcaresince the late 1980s. Spending on health was equivalent to just 0.3% of GDP in1997/98. Private clinics have sprung up, but they are relatively expensive andlocated mainly in urban areas. As a result, much of the population has accessto little or no basic healthcare. The results can be seen in poor health andnutrition standards; according to World Bank estimates, in 1997, 39% ofchildren under the age of five in Myanmar were moderately malnourished.Border areas suffer the worst healthcare provision, with a higher incidence ofdiseases such as HIV/AIDS and malaria. According to World Bank estimates, lifeexpectancy in Myanmar averaged 60 years in 1997, compared with an EastAsian average of 69 years.

According to a 1995 survey, 56.5% of Myanmar’s injecting drug users wereinfected with HIV. Two years later, around half a million people in the countrywere estimated to be HIV-positive. Rates of infection are high and increasingamong intravenous drug users and sex workers (amid high levels of poverty,there is a flourishing trade in women and children sold into prostitution inMyanmar, China and Thailand). Migrant workers are also a factor in spreadingthe disease to other groups. For several years the junta was reluctant torecognise the problem, and remains unwilling to permit outside assistance.

Health indicators give agloomy picture

HIV/AIDS is agrowing problem

16 Myanmar (Burma)


Education

For more than ten years the higher educational system has been severelydisrupted by regular closures aimed at curbing student dissent. The majority ofuniversities were reopened in 2000, but courses are being significantlyshortened in order to push the huge backlog of studentsmany of whom havebeen waiting years to start collegethrough the system.

The junta’s disdain for education is reflected in low spending—equivalent to1% of GDP in 1997/98. Official figures still put the adult literacy rate at justunder 83% in 1997, comparable with rates in Malaysia and Indonesia.However, this may well be a considerable overestimate. According to theMinistry of Education’s own surveys, only around 30% of children nowcomplete primary school education. Many children are taken out of schooleither because their parents cannot afford ever-increasing unofficial fees(charged to offset weak state spending), or because falling family incomesmean that children start work early. Teachers in state-funded schools are verypoorly paid, and the quality of teaching is low. There is a growing informalschool system—including private classes on such subjects as English languageand computing—but these are mainly in urban areas, and are only accessible tothe relatively well-off. Traditional monastic schools, which have historicallyplayed an important role in education, can only go so far in making up thedeficit. As a result of these problems, the overall standard of education inMyanmar, particularly in rural areas, is believed to have declined sharply inrecent years.

Natural resources and the environment

Myanmar has considerable agricultural potential. The predominantly tropicalclimate allows a wide variety of crops to be grown; among the mosteconomically important are rice, maize, wheat, pulses, oilseeds, timber, rubber,jute, cotton, and many fruits and spices. (Myanmar is, in addition, the world’ssecond largest producer of opium.)

Much of the country is mountainous and forested, and the area of land undercultivation remains unusually low. In 1997/98 less than 13% of the total landarea was cultivated. A further 12% was classified as “wasteland suitable forcultivation”. Since 1999 the junta has offered incentives to bring more landinto production (see The economy: Economic policy).

According to official data, 48% of total land area was forested in 1997/98. Themost economically important forest resources are teak and hardwoods, as wellas oil-bearing trees and bamboo. Myanmar accounts for around 75% of theworld’s remaining teak. In some areas, particularly along the Myanmar-Thaiborder, these resources are endangered by severe overlogging.

Myanmar’s rivers and 2,832-km coastline provide rich waters for fishing.According to official estimates, the maximum sustainable yield for marine

Political turmoil hasdisrupted higher

education—

—and overall standardshave been severely affected

Potentially richagricultural resources

Forest resources

Water-based resources

Myanmar (Burma) 17


fishing is 1.1m tonnes/year (t/y), of which only 600,000 tonnes is beingexploited. Since October 1999, the junta has banned Thai trawlers fromMyanmar waters. The hope is that Myanmar’s own fishing fleet will benefit,although the fleet is poorly equipped. In addition to fishing, Myanmar’s watershave massive hydroelectricity potential, of which only around 1% is currentlyestimated to be exploited. However, several Chinese firms plan investments inthis area, while surveying has already begun for a controversial dam project onthe environmentally sensitive Salween river.

Myanmar’s mountains contain reserves of a wide variety of minerals, ores andgemstones, including: copper, gold, nickel, coal, lead, zinc, silver, gemstones,tungsten and tin. A full assessment of these resources has not been undertaken,but some mining specialists believe that Myanmar could be a major producerof several minerals, including tin and copper. All minerals and metals belongto the state (in some cases this right has been ceded to regional militarycommanders). Investors must negotiate a profit- or production-sharing agree-ment with the state (or one of six state-owned mining companies), or in somecases with the regional military command. In addition, Myanmar has majoroffshore oil and gas reserves, some of which are already being exploited in co-operation with foreign firms.

Transport and communications

Transport in Myanmar is slow and unreliable. According to press reports, at theend of 1998/99 there were 29,370 km of roads. However, all but the majorroads are unpaved, and during the rainy season some of the network becomesimpassable. Efforts are being made to repair and extend the road system; forexample, the road between Lashio and Muse (close to the border with Yunnanprovince in China) is being upgraded. A bridge-building programme is alsohelping to reduce journey times between some cities (a new bridge willeliminate the hour-long ferry crossing that extends the journey betweenYangon and Bassein, the major town in the southern delta). A number ofefficient private coach companies service the main road routes. The railwaynetwork is underutilised; the network is in very poor repair and trains are slowand unreliable. The country’s extensive inland waterways (covering around12,800 km compared with around 6,099 km of railway track) remain theprincipal means of long-distance transport in many areas, and may carry morefreight than the railway (the freight statistics included in Reference table 4cover operations of state-owned companies only).

The main airports are at Yangon, Mandalay and Pagan. In September 2000 amajor new international airport was opened at Mandalay, although fallingtourist arrivals mean there is little traffic. Myanmar has three airlines, MyanmaAirways and Myanma Airways International, Air Mandalay, and YangonAirways. A number of crashes of Myanma Airways airplanes in recent yearsraised concerns over the safety record of domestic flights.

Yangon seaport is the largest in the country, handling 90% of seaborne trade,but it cannot accommodate vessels of more than 10,000 tonnes. New seaports

Minerals and metals

Road, rail and waterways

Air and sea services

18 Myanmar (Burma)


are being developed at Thilawa, on the outskirts of Yangon, and Kyaukpyu inRakhine (Arakan) state.

According to the latest available statistics, at the end of 1997/98 there wereonly 222,082 telephones in the whole of Myanmar, the equivalent of about0.5 phones per 100 people, few even for a low-income country (although thenumber of phones had increased by 16.6% compared with 1996/97). Almosthalf of all telephones are in Yangon. Despite the installation of new cellphoneequipment and digital phone systems in some towns, the service remains un-reliable, and international calls are extremely expensive. In August 1999 inter-national direct calls were permitted from all telephones, but the cost was raisedsharply (and payment was required in US dollars or dollar-equivalent foreign-exchange certificates). The use of telecoms equipment is strictly monitored.

E-mail is available only in companies and some large organisations, and ismonitored. Internet access is not available (although the Ministry ofCommunications is planning to establish itself as Myanmar’s Internetservice provider).

Censorship of telecommunications and the media

The 1996 Computer Science Development Law regulates the use of modems andcomputers with networking capabilities. These regulations are backed by harshpenalties. The junta’s surveillance capabilities have been enhanced by new technologythat enables the monitoring of cellphones and e-mail. Most newspapers and magazinesare run by the state or its agencies, and all are heavily censored. The purchase of mostforeign media, including regional newspapers, is prohibited. There are harsh penaltiesfor unauthorised private video transmission. Foreigners travelling to Myanmar arerequired to obtain permission from three different ministries if they wish to take mobilephones or computers into the country.

Energy provision

In 1997/98 total installed electricity capacity was 1,572 mw, up from 1,394 mwin 1996/97. Of total installed capacity, the state-owned Myanma Electric PowerEnterprise (MEPE) managed 77%, the remainder being run by individualministries. Power supply is inadequatein 1998/99 around 35% of generatedelectricity was lost during generation, transmission and distributionandmany private companies buy their own generators. Many towns and villagesare not connected to the national grid. According to a 1997 survey by theCentral Statistical Organisation, only 37% of all households have access toelectricity for lighting (71.6% in urban areas and 17.7% in rural areas). In fact,Myanmar’s largest source of energy, according to Energy Data Associates,remains items such as fuel wood and sugarcane by-products. (Reference table 5provides national energy data.)

Through much of 1998-99 Yangon and other cities suffered repeated, verysevere power cuts and brown-outs, because of the impact of droughts on

Telecoms and electroniccommunications are poor

Electricity capacityand distribution is

very limited—

—and power cutsare frequent

Myanmar (Burma) 19


hydroelectricity, shortages of imported fuel, and the failure of old plants.Heavy monsoon rains in 1999 and 2000 brought some improvements, butpower cuts are still common even in the larger cities.

Imports of crude oil and petroleum products are not covered fully in officialstatistics. Estimates have put total oil and petroleum imports at between300,000 tonnes/year (t/y) and 600,000 t/y (6,000-12,000 barrels/day) and theannual oil import bill is reported to be around US$100m. However, imports ofoil seemed to increase sharply in 1998-99, according to figures from EnergyData Associates, reaching 1.3m tonnes in 1999. Gas may eventually increase inimportance as an energy source with the coming on stream of the massiveYadana and Yetagun gasfields—although most gas is scheduled for export (seeEconomic sectors: Mining and semi-processing).

Energy balance, 1999(m tonnes oil equivalent)

Elec- Oil Gas Coal tricity Othera Total

Production 0.50 1.52 0.02 0.16b 10.60 12.80

Imports 1.30 0.00 0.00 0.00 0.00 1.30

Exports 0.02 0.00 0.00 0.00 0.00 0.02

Primary supply 1.78 1.52 0.02 0.16b 10.60 14.08

Losses & transfers –0.28 –1.10 0.00 –0.28 –1.45 –3.11

Transformation output – – – 0.36c – 0.36

Final consumption 1.50 0.42 0.02 0.24c 9.15 11.33

a Mainly fuelwood. b Primary electricity production, imports and exports are expressed as inputequivalents on an assumed generating efficiency of 33%. c Output basis.

Source: Energy Data Associates.

The economy

Economic structure

Main economic indicators, 1999

Real GDP growtha (output basis; %) 5.7b

Consumer price inflation (av; %) 18.4

Current-account balance (US$ bn) –0.2

Foreign debtc (US$ bn) 5.7

Official exchange ratea (Kt:US$) 6.34

Free-market exchange ratea (Kt:US$) 341

Populationd (m) 49.13

a Fiscal year beginning April 1st. b IMF figure. The 10.8% growth figure produced by the junta iswidely believed to be an overestimate. c End-1998. d Mid-fiscal year, 1999/2000.

Source: EIU.

20 Myanmar (Burma)


Data problems make an accurate assessment of the size and structure of theeconomy extremely difficult. However, by any measure, Myanmar countsamong the world’s lowest-income countries. According to UNICEF, in 1994GDP per head in Myanmar, based on a purchasing power parity basis, was thelowest in South-east Asia. A survey undertaken in 1997 indicated that 23% ofMyanmar’s population lived below the poverty line. According to official,probably inflated, estimates of GDP growth for fiscal year 1999/2000, GDP perhead reached Kt44,579—over US$7,000 at the official exchange rate, but amere US$130 if exchanged at the more realistic free-market exchange rate. Thereal level could be even lower (see Reference table 8 for a comparison of GDPfigures per head).

The use of the massively overvalued official exchange rate to measure somestatistics severely distorts Myanmar’s economic data. In addition, a very largeinformal sector and extra-legal economy are not captured in the figures. Theextra-legal economy includes illegal logging, widespread smuggling and opiumexports. This introduces further distortions in trade and other data. Thetimeliness and quality of official statistics are also inadequate. For example, thejunta ceased publication of its full annual statistical review in 1998. Publisheddata are patchy with frequent, unexplained revisions. Unpublished data for1999/2000 obtained by the EIU show a surge in GDP growth that contradictsearlier published data. As a result of these many problems, some of Myanmar’sofficial statistics can, at best, give only a broad indication of prevailing trends.

The considerable problems can be seen in a comparison of one key number,the GDP growth rates, as presented in various official sources.

Gross domestic product growth(% change, year on year)

1997/98 1998/99 1999/2000

Official internal report, 2000 version one 5.7 5.8 10.5 version two 5.7 5.8 10.9

IMF, International Financial Statistics 5.7 5.8 5.7

IMF, Myanmar: Recent Economic Developments 5.7 5.0 n/a

Sources: Internal report, 2000; IMF, International Financial Statistics; IMF, Myanmar: Recent Economic Developments, November 1999.

As can be seen from this table, it is not clear whether GDP growth slowed, orrose strongly, in 1999/2000although anecdotal evidence supports aslowdown.

National savings are low, at 13% of GDP in 1999/2000 according to the junta’sestimates, reflecting the undeveloped banking sector and low income levels.The collapse in foreign investment (see The external sector) has further reducedthe resources available for investment.

Myanmar remains a predominantly agricultural economy. Agricultureaccounted for 53% of current-price GDP and employed 66% of the workforce in1998/99. By contrast, the industrial sector remains very undeveloped (industry,including manufacturing, energy, mining and construction, accounted for only9% of current-price GDP in 1998/99). Industrial output is hampered by

Myanmar is a low-income country

An economy dominated byagriculture

Data problems

Myanmar (Burma) 21


inadequate power and infrastructure, and limited investment. The smallmanufacturing sector is dominated by food-processing. The energy and miningsector is growing in importance with the start of gas exports from the massiveYadana and Yetagun fields, and as investments in Myanmar’s considerablemineral resources yield results.

Comparative economic indicators, 1999

Myanmara Thailand Malaysia Indonesia Vietnam Japan

GDP (US$ bn) 6.4b 125.8 78.9 155.0 27.8 4,351.0

GDP per head (US$) 130b 2,045 3,608 747 350 34,341

Consumer price inflation (av; %) 18.4c 0.3 2.8 20.4 –1.5 –0.3

Current-account balance (US$ bn) –0.2c 11.2 12.5 5.2 -0.5 107.0

Exports of goods (US$ bn) 1.1c 56.6 83.1 49.4 14.2 404.0

Imports of goods (US$ bn) 2.1c 43.2 61.1 29.4 14.7 311.0

Foreign traded (% of GDP) 50.0e 79.3 182.7 50.8 104.0 16.4

a Fiscal year beginning April 1st. b Converted at the free-market exchange rate; data are for fiscal year 1999/2000, based on inflated officialgrowth figure. c Calendar year. d Merchandise exports plus imports. e Foreign trade accounts for only 0.9% of GDP when the latter is convertedat the official exchange rate.

Sources: National sources; EIU.

The state sector’s share of GDP has remained steady at around 22-23% ofconstant price GDP in recent years. However, the state dominates some sectorsincluding mining and power, and has an important role in transport, domestictrade and manufacturing. The state also controls exports of many keycommodities, and as a result accounted for 28% of exports (in kyat terms) in1999/2000. However, in 1999 private investors in land reclamation projectswere granted permission to export up to half of their crops (see Economicpolicy). The military and the Union Solidarity Development Association(USDA) are also involved in businesses including gems and logging.

Economic policy

In the early 1990s real GDP growth was boosted by the junta’s limited efforts ateconomic reform, including agricultural price liberalisation, and efforts toattract foreign direct investment (FDI). However, an acute lack of technicalcapability has continued to hamper policymaking. The following policyproblems remain unresolved:

• The junta has failed to improve its budgetary management, resulting inwide budget deficits and continued strong money supply growth.

• Health and education spending remains very low.

• Although the private sector now accounts for around two-thirds of GDP,government interference in many sectors continues.

• Poor data hamper decision-making; data availability deterioratedduring 1999-2000.

The state plays acentral role

The junta has not tackledeconomic reform

22 Myanmar (Burma)


• There has been growth in the private banking sector, and some effort toimprove regulation, according to the IMF, but this has not extended to thestate banks.

• Privatisation efforts have stalled, and the state-owned enterprise (SOE)sector continues to accumulate heavy losses.

• In 2000 the junta at various times commented on the need to scrap theovervalued official exchange rate. However, it has made clear that it willnot adjust the exchange rate without international assistance (most aid hasbeen cut off since 1988).

• The junta has been unable to stem sharp falls in FDI approvals and touristarrivalswhich have brought pressure on the free-market kyat, and erodedforeign-exchange reserves.

As efforts to attract more foreign investment stalled in the late 1990s, the juntarefocused its attention on boosting agricultural output.

Since late 1998 the junta has offered incentives to investors in a bid to bringmore unused land into production. The incentives comprise:

• a 30-year land lease for farms of more than 2,000 ha;

• the waiver of land revenue and income taxes for a fixed period; and

• the right to export up to half of the rice and some other commoditiesproduced (the state controls export of most commodities).

The economic policies of the NLD

The junta’s lack of economic reform contrasts with the stated policies of the NationalLeague for Democracy (NLD). In a September 1997 policy document the NLD set outthe policies it would implement if it were in power. These included:

• the official exchange rate to be devalued and brought into line with the market rate;

• a devaluation following studies carried out in consultation with the IMF, and astabilisation fund to be set up with assistance from the IMF and other internationalagencies;

• all state-owned enterprises (SOEs) to be sold, except in cases where this wouldseriously increase unemployment;

• the removal of SOEs from the government’s budget and strict control over budgetexpenditure;

• the Central Bank of Myanmar to be given responsibility for implementing monetarypolicy and producing reliable forecasts; and

• foreign direct investment to be encouraged.

A renewed focus onagriculture

Myanmar (Burma) 23


The SOE sector: stalled privatisation?According to the IMF report, Myanmar: Recent Economic Developments, in 1999 therewere 54 non-financial SOEs. These enterprises manage around 1,600 factories. The SOEsector accounts for around one-fifth of GDP and around 2% of total employment. Since1989 SOE accounts have been merged with those of the central government, makingthe imposition of hard budget constraints very difficult. SOEs enjoy privileges such aseasier access to foreign exchange for imports. Yet the IMF estimates that SOE losses areincreasing.

A privatisation programme began in 1995, and in December 1997 the junta called for42 of the remaining SOEs to be privatised. However, progress has been sluggish,constrained by lack of investor capital.

These policies helped to boost output of some key crops in 1998/99 and1999/2000. But the success of the policy is hampered by a severe shortage ofkey inputs, the lack of modern farming techniques and continued pricedistortions caused by the state procurement policy (see Economic sectors:Agriculture, forestry and fishing).

Another policy focus has been substantial public expenditure on infrastructure,although the quality of some of the projects has been questioned.

Myanmar’s history of piecemeal reforms

Agriculture: Since 1987 farmers have been allowed to sell most of their output, exceptrice, at market prices. In 1997-98 the junta tried to lift state rice procurement quotasand raise the price paid by the state for rice, but fear of shortages caused a retreat. Since1998, private investors have been offered incentives to bring more land into production.

Trade: In 1988 border trade was legalised and the role of the private sector recognised.In 1988-90 exporters were permitted to retain an increasing share of their exportearnings. However, private traders remain (mostly) barred from exporting rice, teak andminerals. In 1998 the junta extended the state monopoly on exports to include keycommodities such as sugar and pulses. Tough restrictions were imposed on imports in1998, and extended in 2000.

Foreign exchange: In 1995 private money-changers were licensed to deal in foreignexchange. But in 1998 the junta imposed a new limit of US$50,000 per month onaccess to foreign exchange for repatriation, subsequently reduced to US$30,000 permonth. Foreign-exchange licences were removed from private banks. Foreign-exchangemarkets are often closed at times of severe pressure on the currency. The junta hasspoken of the need to realign the grossly overvalued official exchange rate, but hasindicated that this remains unfeasible without external support.

Taxation: In mid-1996 the official rate used for valuing imports for customs duties wasraised from Kt6:US$1 to Kt100:US$1, and the top tariff rate on imports was cut from500% to 40%. Revenue from customs duties soared as a result. But tax evasionremains rife.

24 Myanmar (Burma)


Myanmar was admitted as a full member of the Association of South-East AsianNations (ASEAN) in July 1997. Under the common effective preferential tariff(CEPT) scheme of the ASEAN Free-Trade Area (AFTA), Myanmar was required tobegin cutting tariffs from January 1st 1998, with tariffs falling to 0-5% by 2008.However, as reserves dwindled, a series of import restrictions were imposed in1998-2000. In March 1998 the junta banned imports of non-essential goodsnot on two priority lists. Imports did fall in 1999, but reserves continued toslide. In September 2000 the junta introduced new import restrictions, limitingtraders to a maximum of Kt1m in imports per month (US$154,000 per monthat the official exchange rate, or around US$3,000 per month measured usingthe more widely used free-market rate). Imports above that value are nowsubject to fines or confiscation.

A range of factors including poor tax compliance and a large informaleconomy mean that tax revenue is very low, at around 3% of GDP. The IMFestimated total government revenue, including transfers made by SOEs, at8.3% of GDP in 1998/99. (Reference table 6 provides data on governmentfinances.) Unable to significantly boost revenue, the junta has sought tocontrol the deficit in the last few years by compressing capital spending, forexample by slashing spending on investment projects. As a result of thesecutsas well as inflated estimates of GDP growth in recent yearsthe centralgovernment deficit appears to have declined as a percentage of GDP. However,the official budget and GDP data are contradictory and also exclude high levelsof off-budget defence spending. Defence spending remains a high priority forthe junta, while spending on education and health has dwindled. The IMFestimates that spending on education fell to 0.4% of GDP in 1998/99, downfrom 0.7% in 1995/96; spending on health was even lower, at 0.1% of GDP.

According to the IMF, the junta’s budget projections are regularly wide of themark. This again proved to be the case in 1999/2000. The junta set a target ofcutting the budget deficit to Kt53.4bn, but the junta’s estimates show thedeficit rising to Kt109.7bn (US$17bn at the official exchange rate, aroundUS$322m at the free-market rate). Based on the junta’s inflated GDP growthfigure, the budget deficit dwindled to 5% of GDP in 1999/2000. That is stillalarmingly high, and the real figure may be much higher if, as seems likely,GDP growth was lower than the junta indicated.

Fiscal trends, consolidated budget(Kt bn unless otherwise indicated)

1995/96 1996/97 1997/98 1998/99 1999/2000

Total revenue 40.2 53.8 88.3 113.9a n/aTotal expenditure –77.7 –105.6 –145.3 –184.0a n/aTotal balance –37.5 –51.8 –57.0 –70.1a n/a % of GDPb –6.2 –6.6 –5.1 –4.5a n/a

Memorandum itemTotal balance: alternative measurec –38.8 –51.7 –58.8 –91.9 –109.7 % of GDPc –6.4 –6.5 –5.1 –5.7 –5.0

a IMF estimate. b As estimated by the IMF, based on GDP data available in late 1999. c Official data obtained by the EIU. Data show a muchlarger budget deficit for 1998/99.

Sources: Internal report, 2000; IMF, Myanmar: Recent Economic Developments, November 1999.

The fiscal deficitremains high

Erratic trade policy

Recent fiscalperformance—

Myanmar (Burma) 25


In the absence of significant foreign lending (see The external sector: Capitalflows and foreign debt), the junta has financed the budget deficit through bankborrowing, the issuance of Treasury bills and bonds, and the accrual of arrearson external debt. The government’s need to finance large fiscal deficits hasbeen the main cause of monetary expansion. (See Reference table 7 for data onmoney supply, domestic credit and interest rates.) In 1995-99 (calendar years)M2 expanded by an annual average of 33.6%.

The monetary policy tools available to the government remain very blunt, andinterest rates are controlled. Interest rates have been lowered steadily through1999 and 2000, partly in a bid to boost growth. Yet as inflation has comedown, interest rates have turned positive in real terms. However, credit growthremains quite strong. The private sector’s share of credit rose from around 23%in 1995 to just over 32% in 1999. Nevertheless, the state sector continues totake the lion’s share of credit; the central government absorbed 58.7% of allcredit in 1999, down from 72.2% in 1995but the share going to publicenterprises jumped to 9.2%, from 4.2% in 1995.

Economic performance

Gross domestic product(% real change)

Annual average,1998/99 1994/95-1998/99

Agriculture 4.5 4.8

Industry 6.1 9.7

Services 7.0 7.2

Investment 16.3 19.6

Consumption n/a n/a

GDP 5.8 6.5

Sources: Internal report, 2000; Ministry of Planning and Economic Development, Review of Financial, Economic and Social Conditions for1997/98.

There is considerable confusion over Myanmar’s recent economic performance.In mid-2000 the junta declared real GDP growth had reached 10.9% in1999/2000 (April/March). However, anecdotal evidence suggests that such asurge in growth was unlikely. The junta appears to have ceased publishing itsannual statistical review. An internal report obtained by the EIU confirmed the10.9% figure (the report also gave a figure of 10.5%, on an output rather thanexpenditure basis). Yet other official data published in the IMF’s InternationalFinancial Statistics indicate that real GDP growth slowed to 5.7% in 1999/2000,down from 5.8% in 1998/99. Meanwhile, earlier IMF estimates suggested thatgrowth in 1998/99 slowed to only 5%. (See Reference tables 8-10 for constant-price GDP data.)

It is possible that efforts to improve data collection have brought moreeconomic activity into the official statistics, giving an apparent boost togrowth. However, there are still reasons to question the junta’s 1999/2000growth figures. Agriculture is by far the largest economic sector, and new

The economy mayhave stagnated

Doubts over new data

Monetary policyinstruments are very blunt

—financed by bankborrowing

26 Myanmar (Burma)


incentives for private investors did boost output of some key crops in1999/2000. However, the 10.9% agricultural growth figure (including forestryand fishing) given by the junta seems improbable, as certain growing regionsfaced adverse weather conditions and the sector suffers from shortages of keyinputs. Agriculture rose by a modest 4.8% in 1994/95-1998/99 (see Economicsectors: Agriculture, forestry and fishing).

The 13.1% growth claimed by the junta for the industrial sector in1999/2000 also appears suspect (industrial growth averaged 9.7% in theprevious five years). Myanmar’s small manufacturing sector, which is largelybased around agro-processing, benefited from rising output of key crops andfirmer international commodity prices in 1999/2000. According to the junta,manufacturing output rose by 15.6% in 1999/2000, up from growth of around4-6% in the previous three years. Again, however, problems such as power cuts,shortages of investment and lack of imported inputs suggest double-digitgrowth was very unlikely. The other components of industrialproduction—construction, mining, and power—account for only a smallproportion of GDP. The energy and mining sector showed very strong growthin 1999/2000the energy sector rose by 69.2% in real terms according to thejuntaas recent investments in oil, gas and mining projects came on stream.However, the construction sector remains in the doldrumsthe junta showeda slowdown from 6.3% in 1998/99 to 4.4% in 1999/2000, but even weakergrowth is likely. The property boom of the early 1990s has turned to bust,while the junta has cut capital spending on infrastructure projects (seeEconomic sectors for a fuller discussion).

The junta estimates that services expanded steadily over the last few years,rising by 7% in 1998/99 and by 9.1% in 1999/2000. There has been recentpublic and private investment in transport and communications, and thefinancial sector has expanded following the lifting of controls on private-sectoractivity during the early 1990s. However, the surge shown by the junta in retailand wholesale trade—by far the largest services sector—seems unlikely. Earlierdata had shown a slowdown in retail trade since 1994/95, hit by falling realincomes. Hence a marked turnaround in 1998/99 and 1999/2000when highinflation continued to erode real incomesseems unlikely. (See Reference table10 for historical data on GDP growth rates by sector.)

No official data are produced on private consumption (the junta publishestotal consumption data, which groups public and private consumption).However, real incomes have been eroded in recent years (see below) andconsumer confidence remains poor. As a result, private consumption is likelyto have stagnated; total consumption growth slowed to only 1.9% in 1997/98(the latest published data). (See Reference table 9 for data on expenditure-basedreal GDP.) The junta has claimed that fixed investment rose by 16.3% in1998/99, slowing to 9.2% in 1999/2000. Such a strong rise seems unlikelygiven the collapse in foreign investment, and efforts to reign in publicinvestment spending.

According to the Yangon consumer price index (CPI, the main measure ofinflation used by the government), inflation slowed to an average of 18.4% in

Consumption andinvestment trends

are confused

Official dataunderstate inflation

Myanmar (Burma) 27


calendar 1999, down from 51.5% in 1998. (See Reference table 11 for data onconsumer price inflation.) The slowdown was the result of the high base periodand lower food prices. However, the inflation rate may in fact be higher thanofficial data suggest. The Yangon CPI is based on an unrepresentative lower-income basket of goods chosen in 1985/86, which contains no imported goodsand gives a very low weighting to the key staple, rice.

Consumer price inflation(%)

Annual average,1999 1995-99

Yangon indexa 18.4 27.6

a 1995=100.

Source: IMF, International Financial Statistics.

According to the 1999 IMF report, Myanmar: Recent Economic Developments, thejunta’s wage bill remained static at around Kt8bn-9bn in 1995/96 to 1998/99,despite the price level almost tripling during this period. As a result, althoughpublic-sector wages are supplemented by a range of subsidies, incomes havebeen eroded in real terms. To try to redress the balance, the junta boosted civilservants’ pay fivefold starting from April 1st 2000. The increase brought theminimum monthly wage for civil servants (which includes teachers andmedical staff) to Kt3,000 (around US$476/month at the inflated officialexchange rate, or US$9/month at the more realistic free-market exchange rate).The maximum wage was raised to Kt15,000/month. The increase was the firstsince April 1993. Both the World Bank and IMF estimate that wages in theprivate sector are generally higher than those in the public sector (althoughdata are sparse). However, perhaps the majority of the population relies onseasonal agricultural labour, where wages remain very low indeed. (SeeReference table 8 for data on GDP per head.)

In the 1990s there was an increase in ownership of basic consumer goods, suchas radios and bicycles. However, some studies suggest that farmers’ marginshave been squeezed, resulting in a steady fall in real disposable rural incomesin recent years. City dwellers have also been hit by rising food prices andhigher unemployment. As prices rise, an increasing share of income is spent onbasic food items; the Central Statistical Organisation estimated that rice aloneaccounted for 20% of average monthly expenditure in 1994, and the situationhas deteriorated since then. At the same time, the collapse in public spendinghas left many reliant on expensive private health and educational services. As aresult of these trends, for many people real incomes and living standardsdeclined in recent years.

Regional trends

Growth and incomes are very uneven. Over the years the main divisions havebenefited from consistently higher levels of investment than the mountainousborder states (which are home to many of Myanmar’s ethnic minorities). The

Despite a public-sectorwage hike—

—overall living standardsare deteriorating

Growth is unevenlydistributed—

28 Myanmar (Burma)


fertile lowland regions of the Irrawaddy river valley and the southern delta arethe key rice-growing regions. Industrial output (apart from energy and mining)is concentrated in urban areas, mainly around the cities of Yangon andMandalay. Mandalay in particular has benefited from growing economiccontact with China. Incomes tend to be higher in urban areas, and in thelowland and central regions around Yangon and Mandalay.

The junta’s grip on the border regions remains tenuous, as ethnic tensions andstrife continue (see Political background: Political forces). In the border areas,agricultural land tends to be less productive, investment has been very low,infrastructure is extremely poor and the tourism sector remains undeveloped.The opening of several trading posts along the borders with China, Thailandand India has allowed pockets of prosperous activity to spring up. However,security problems have resulted in the frequent closure of these bordercrossings. Some border regions do, however, have quite large informal and alsoillegal economies (the latter based around the smuggling of timber, gemsand opium).

As ceasefires have been signed with some ethnic groups, the junta has soughtto invest more in some border areas. For example, there has been greaterinvestment in infrastructurealthough many projects are of dubious quality.The junta also plans to focus its incentives to bring more agricultural land intoproduction on the remote Kachin state, from 2001 onwards. Such efforts maybe behind the surge in growth shown in some border states in 1999/2000; GDPin Kachin state for example jumped by 23.9% in real terms (although growthdata are suspect). However, it will be years before the border states catch up.

Economic sectors

Agriculture, forestry and fishing

Agriculture and forestry production, 1998/99(‘000 tonnes unless otherwise indicated)

Rice 17,848

Sugarcane 5,927

Pulses 1,678

Teak & hardwood logs (‘000 cu tonnes) 1,583a

Groundnuts 502

Sesame 186

Cotton 189

Rubber 26

a 1997/98 data.

Sources: Ministry of National Planning and Economic Development, Salient Economic and Social Indicators, March 1998; IMF, Myanmar:Recent Economic Indicators, November 1999.

The junta’s “four pillars” policy seeks to boost production of four key crops—rice, pulses, cotton and sugarcane. The junta is also striving to encourage

—with the border stateslagging behind

The junta wants to boostproduction of key crops—

Myanmar (Burma) 29


production of edible oilseeds, in a bid to reduce reliance on imports. Farmersare encouragedand in some cases pressuredto grow these crops. Inaddition, starting from late 1998, the junta has offered incentives to privateinvestors to bring unused land into production (see The economy: Economicpolicy). Limited returns have constrained private-sector interest in the scheme,but there has been an increase in output of some key crops in recent years. Forexample, by 1998/99 output of pulses was 51% higher than in 1994/95.Output of cotton and sugarcane has also risen in the last few years. (SeeReference table 12 for historical data on key crops.)

However, not all crops have performed well. Rice remains Myanmar’s maincropin 1997/98 (latest available data) around 66% of the total sown area wasplanted with rice. Yet adverse weather conditions and lack of inputs such asfertiliser resulted in steady falls in rice output in 1994/95 to 1997/98, beforeoutput picked up in 1998/99. In the early 20th century Myanmar was one ofAsia’s main rice exporters; the junta’s main priority now is to ensure domesticsupply. In recent years rice exports have collapsed; they totalled 59.7m tonnesin 1999/2000, down from a recent peak of 1bn tonnes in 1994/95. Output ofrubber, traditionally another important source of export revenue, has remainedstatic at an average of around 27m tonnes per year from 1994/95 to 1999/2000.Rubber output has been hit by lack of investment, particularly in the ageingrubber stock.

In addition to erratic weather conditions, there are several reasons for therecent mixed agriculture performance.

• Lack of irrigated land. In 1997/98 only 18.5% of the sown area wasirrigated. Moreover, irrigation has been hampered by rising fuel prices andpower cuts (in 1997/98 irrigation pumps—run by diesel or electricity—accounted for 41% of the irrigated area). Although the junta has built manynew dams and reservoirs since 1988, much of the work has been of poorquality, leaving land classed as “irrigated” vulnerable to droughts and floods.

• Limited scope for further gains from multicropping, given farmers’inability to buy the fuel and fertiliser vital for dry-season crops.

• Drying equipment, pesticides, storage facilities and high-quality seeds areall in short supply.

• Limited use of technology. The junta has confiscated land for use in large,mechanised “model farms”. However, most farms are small family holdingsthat rely on traditional techniques.

Rice output in particular is also constrained by the junta’s burdensomeprocurement policy. Under this scheme, farmers are required to sell 12 46-lbbaskets of paddy per acre (620 kg/ha) to Myanmar Agricultural ProductsTrading (MAPT), a Ministry of Commerce agency, at a procurement price ofaround half the free-market price or less. In late 1997, in an effort to lift riceoutput, the junta announced that the price paid by the state was to be raisedand quotas would be abolished. However, a poor monsoon harvest raised

—but traditional cropsare stagnating—

—hit by shortages of keyinputs and other

constraints—

—and onerousgovernment policies

30 Myanmar (Burma)


concern over food supplies and the new policy was largely abandoned in 1998.The state also controls the export of many agricultural commodities.

The livestock and fishing sectors remain relatively small, together accountingfor 5.7% of current-price GDP in 1998/99. The domestic market is quite small,as many people cannot afford to buy much meat or fish. However, thanks togreater investment in freezing and processing facilities, the fishing industry hasrecently been able to benefit from demand for processed fish exports (there isheavy demand for prawns and other fish in Thailand, for example). The juntaestimates that livestock and fishing surged by 16.5% in 1999/2000 (realnational accounts terms). The value of timber and hardwood exports did surge,but fish exports fell, suggesting such a strong rise in output is unlikely. (SeeReference table 13 for livestock and fisheries data.)

In 1999/2000 there was a strong increase in exports of hardwoods. It is notclear whether this was linked to a rise in output. (See Reference table 14 fordata on timber production, and Reference table 20 for data on timber exports.)Timber output stagnated through much of the 1990s, because many of themost accessible logging areas had already been exploited, and because of theintroduction of protection measures. Teak output fell from 332,000 cu tonnesin 1993/94 to 200,000 cu tonnes in 1997/98 (latest available data). However,production of other hardwoods rose over the same periodand the realincrease may be higher, because of widespread illegal logging.

Mining and semi-processing

Myanmar has considerable offshore reserves of natural gas. Two large offshoregasfields, Yadana and Yetagun, are now on stream. Both were due to export thebulk of their gas to the Petroleum Authority of Thailand (PTT). However,Thailand’s economic crisis has reduced demand for gas, and the PTT is tryingto renegotiate its contracts, which may hit earnings from both projects. (SeeReference table 15 for data on output of gas and minerals.)

Yadana is estimated to have 1.2trn cu ft of recoverable gas reserves. Under theoriginal 30-year contract Thailand was scheduled to purchase 325m cu ft/dayof gas, rising to 525m cu ft/day 15 months after the start of production. Theremaining 20% of output was to be used domestically.

Ownership of Yadana(% share)

Total (France) 31.24

Unocal (US) 28.26

PTT Exploration & Production (Thailand) 25.50

Myanmar Oil & Gas Enterprise (Myanmar) 15.00

Source: Press reports.

Gas exports started in 1998, but remained well below target in 1998-99,because of failure to complete a power plant on the Thai side. Some aspects ofthe contract may now be renegotiated. The junta will not receive earnings

Livestock and fishing

Forestry

Gas has potential

The Yadana naturalgas project

Myanmar (Burma) 31


from the project until its share of the start-up costs has been paid (originallyscheduled for 2000/01), but this too will now be delayed.

Proven and recoverable oil reserves are all located onshore and are estimated at100m barrels. The available data show a slowdown in oil production to 3.4mbarrels in 1999/2000 (although the data are for the state sector only, and mayunderstate output). Myanmar’s three refineries (with a total capacity of51,800 barrels/day, b/d) typically run below capacity because of supplyshortages and poor maintenance.

Foreign firms have been key investors in energy in Myanmar. However, interestis waning, and following the imposition of sanctions, several US companieshave pulled out. Texaco of the US, the main investor in Yetagun, sold its 43%stake to Premier Oil of the UK in 1997, while in 1998 Atlantic RichfieldCorporation (ARCO) of the US allowed leases on two exploration blocks in theGulf of Martaban to lapse.

Myanmar has large deposits of minerals and gems, including copper, tin,sapphires, diamonds, rubies and jade. A new 1994 mining law allowed foreigninvestors to take concessions. For years mining output has been constrained bydeclining deposit grades and lack of investmentsome foreign companieshave pulled out or suspended their rights over various exploration blocks. Theavailable output datafor the state-owned sector onlyshow a fall in outputof many key minerals including zinc, lead, tin and silver in the five years to1999/2000. However, some large projectsfor example, the massive Monywacopper mine, a joint venture between the state’s Number 1 Mining Enterpriseand a Canadian company, Ivanhoehave now come on stream, whileinternational commodity prices have firmed. According to the junta, miningoutput rose by 14.1% in 1999/2000 (in real terms). One area that has definitelyperformed well is gem mining; the export of gems such as rubies remains animportant source of foreign exchange. (See Reference table 15 for historicaldata on minerals production.)

Principal mineral products, 1999/2000a

Crude oil (m barrels) 3.4

Natural gas (bn cu ft) 57.9

Refined lead (‘000 tonnes) 1.7

Zinc concentrates (tonnes) 507

Jade (‘000 kg) 5,243

Rubies (carats) 3,163

a Output by state-owned enterprises only.

Sources: Central Statistical Organisation, Selected Monthly Economic Indicators; IMF, Myanmar: Recent Economic Developments,November 1999.

Foreign investors arepulling out

The mining sector maybe recovering

32 Myanmar (Burma)


Manufacturing

Manufacturing sector(1985/86 constant prices; % change, year on year, most recent data)

Annual average,1997/98 1995/96-1997/98

Manufacturing & processing 5.2 7.2

Food & beverages 2.9 n/a

Clothing 3.4 n/a

Industrial raw materials 6.3 n/a

Mineral & petroleum products 55.7 n/a

Source: Ministry of National Planning and Economic Development, Review of the Financial, Economic and Social Conditions for 1997/98.

Manufacturing is largely agro-based, and the food and beverage industriesaccount for around 82% of total manufactured output. The junta’s policy ofdiversifying agribusiness has yielded some successes. Fish products havebecome an important source of export revenue, boosted by investment inrefrigeration equipment. Investment in refining mills boosted refined sugarproduction steadily in the second half of the 1990s. Myanmar has alsodeveloped a growing forest-product manufacturing sector, producing plywood,veneer, furniture and other wood-based products, including for export.However, much of the manufacturing sector remains small in scale. Many basicproducts—such as foodstuffs and clothing—are produced in small-scale family-based cottage industries, almost entirely outside the formal economy. Theseindustries suffer from lack of access to capital (often available only fromexpensive local money-lenders) as well as the rising cost of inputs.

One relatively new manufacturing industry is garment manufacturing. By 1996about 30 plants were reported to be producing garments for the export market;at least 16 of the plants were wholly or partly foreign-owned, mostly by HongKong or South Korean firms. Ready-made garment production rose from 29.8mitems in 1992/93 to 57.2m items in 1997/98 (latest available data), much ofwhich was exported to the US. However, the successful consumer boycottmovement in the US and elsewhere persuaded many garment manufacturersand retailers, including Levi Strauss, Reebok and British Home Stores, to ceasesourcing in Myanmar. Garment exports fell in 1997/98; recent data on garmentexports are not available, although US data show that garment and knitwearexports to the US rose in 1998. (Discrepancies in the US and Myanmar datasuggest under-reporting by Myanmar.)

Revised data contained in an internal report produced by the junta showmanufacturing growth in 1999/2000 of 15.6%, on a national accounts basis.Previously published data had shown manufacturing growth slowingsuccessively in each year between 1993/94 and 1997/98. (See Reference table16 for historical data on manufacturing output in current prices and volumes.)It is possible that higher output of key crops in 1999/2000 boosted theagribusiness sectors. However, such a strong rise seems surprising, as themanufacturing sector continued to face the following problems:

—but the sector facesmany problems

There has been somediversification—

Myanmar (Burma) 33


• Market access. Both domestically, as a result of poor infrastructure, andinternationally (many countries including the US have withheld fromMyanmar the trade privileges normally accorded to low-income countriesbecause of concerns over labour rights and other human rights abuses).

• Shortages of key inputs. Import restrictions were imposed in early 1998and tightened in 2000. Imports of intermediate goods fell sharply in1999/2000 (see Reference table 21 for import data).

• Power shortages. In 1998-99 the manufacturing sector was hit byprolonged and widespread power cuts; the problems continued into 2000.

• Growing competition. The opening of border trade with China, Thailandand India has resulted in a flood of low-cost consumer goods, from householditems to packaged foods and electronics. Despite restrictions, imports ofconsumer goods rose by 22.4% year on year in 1999/2000. Local manufacturershave little capacity to produce many of these items.

• Inadequate access to finance. Particularly for small-scale manufacturers(although the expansion of the private banking sector may be reducing thelending bias towards state-owned industries—see Financial services).

• Falling foreign investment. Foreign direct investment (FDI) approvals inthe manufacturing sector peaked at US$924m in 1996/97, but havesubsequently collapsed, totalling US$13m in 1999/2000. A number of high-profile manufacturing companies, including Pepsi, have pulled out ofMyanmar, partly in response to international pressure (although in some casestheir products continue to be sold under franchise).

Construction

In the early 1990s the construction sector showed consistent, rapid growth.The construction boom was broad-based, ranging across residential housing,industrial zones, infrastructure, dams, hotels and office space. Muchconstruction work was not captured in the official statistics because of the useof forced labour (see box). (See Reference table 17 for data on construction, andReference table 10 for growth in the construction sector.)

The state and forced labour

In 1997/98, according to the latest available data, the state accounted for 65% of thevalue of construction work undertaken, having fallen from around 80% in 1993/94. Thestate’s role may be higher than these figures suggest, as the extent of governmentinvolvement is obscured by the use of uncompensated (for example, forced) labour. TheUS embassy estimated in its Foreign Economic Trends Report: Burma, published in July1996, that the market value of forced labour employed by the government on public-works projects was Kt17.5bn (US$2.8bn/US$588m) in 1994/95, equivalent to 3.7% ofGDP. Since then, the junta has increasingly used the armed forces to build infrastructureprojects, although forced labour remains common practice in some parts of the country.The International Labour Organisation has sharply criticised Myanmar for the use offorced labour.

A boom in construction—

34 Myanmar (Burma)


However, the construction boom rapidly turned to bust, and Yangon is nowringed by unfinished and empty property investments. Building in the hoteland tourism sector stalled as tourist arrivals slowed (see Other services).Sluggish FDI inflows dampened demand for new office space (althoughMyanmar’s main cities have very limited international-standard office space).In addition, in 1999-2000 cuts in public spending on infrastructure further hitthe construction sector. Cement imports fell in 1999/2000, although it is notclear whether this was the result of slack demand or of import restrictions. Thejunta’s own internal figures show a slowdown in the construction sector in1999/2000, with growth of 4.4% in national accounts terms, down from 6.3%in 1998/99.

Financial services

The most notable trend in Myanmar’s financial services in recent years hasbeen the rapid expansion of private-sector banking. Private commercial bankswere permitted starting in 1992, and the number of private banks reached 20in March 1999. According to the IMF, private banks have been able to attract agrowing share of deposits and to make around 20% of all loans, thanks to theirmore efficient services and wider range of products compared with the state-owned banks. By 1998/99 (the latest available data), private banks accountedfor 49% of all savings, up from 10.4% in 1994/95. (See Reference table 18 forbanking statistics.)

Myanmar’s banking sector is still dominated by five state-owned commercialbanks: the Myanma Economic Bank (MEB), the Myanma Investment andCommercial Bank (MICB), the Myanma Foreign Trade Bank (MFTB), theMyanma Agricultural Development Bank (MADB) and the Myanma IndustrialDevelopment Bank. The MEB in particular has suffered from competition fromthe private sector. According to the IMF, the MEB’s share of deposits droppedfrom 86% in March 1994 to 40% in March 1999. However, the Central Bank ofMyanmar still provides some 60% of all credit.

Foreign banks are permitted to enter into joint ventures with local privatebanks, and a number of memorandums of understanding have been signed.However, so far no joint ventures have started operation, and foreign interestremains muted. The number of foreign banks’ representative offices fell to 21by late 1999, down from 49 at the end of 1997.

Both private and state-owned banks face a number of obstacles. Despite therapid growth in savings held at private banks, overall bank savings remain verylow. For private individuals, the banking system is cumbersome and little usedeven in urban areas. Particularly outside urban centres, the main source ofcapital is private money-lenders, who typically charge interest rates of 12-20%a month (depending on location and availability of collateral), many times theofficial interest rate.

The junta’s policies also hinder bank operations. Interest rates have remainedsteeply negative for several yearsalthough rates turned positive once again in

The private banking sectorhas expanded rapidly—

—but the banks arelittle trusted—

—and are hampered bygovernment policy

—has turned to bust

Myanmar (Burma) 35


2000 in real terms (based on official inflation data), which should help tostimulate savings. The performance of the state-run banks is furtherundermined by the demands of the junta. For example, the MEB has had tocarry the large burden of non-interest-paying government equities into whichthe debts of state enterprises were converted in 1989. The MEB has also beenrequired to purchase Treasury bills with low rates of return.

Private banks also face problems. For example, in March 1998, as foreign-exchange reserves dwindled, the junta revoked nine banks’ licences to conductforeign-exchange trade, leaving only two state-owned banks—MFTB andMICB—with licences to conduct foreign-exchange transactions. Otherproblems noted by the IMF include shortages of qualified staff and poorcommunications and clearance systems, while non-performing loans may berising. However, the IMF notes that the private banking sector is profitable, andsince the Asian economic crisis there have been efforts to improve bankregulation (see box).

Myanmar’s banking regulations

According to the IMF report, Myanmar: Recent Economic Developments, published in late1999, non-performing loans rose to a range of 1-18% of total loans (varying by bank) asof end-1998, compared with a maximum of 12% in early 1998. However, there havebeen efforts to improve regulation of the banking sector. Banks must meet reserverequirements of 5-10%; a liquidity ratio of 20%; and a lending limit to one client of20% of capital and reserves. Banks undergo annual inspection by the Central Bank ofMyanmar, with more regular reporting on key requirements. The IMF notes that privatebanks are believed to be in full compliance with these regulations, although capitaladequacy and reserve requirements “do not appear to be enforced…to the samedegree” for the state-owned banks.

As of mid-1999, Myanmar was without a stockmarket or over-the-countermarket. In June 1996 Daiwa Securities (of Japan) and the MEB set up a joint-venture securities company, the Myanma Securities Exchange Centre, intendedto conduct securities business and eventually to enable Myanmar to create itsown over-the-counter market.

The Insurance Business Law, passed in 1996, opened the insurance industry(which had been a government monopoly since the early 1960s) to private(including foreign) participation. Several Japanese firms have enteredthe market.

Other services

The junta had hoped to develop the tourism sector as a major foreign-exchange earner. The first half of the 1990s saw a flood of foreign and otherinvestment into the sector. Several international-class hotels were upgraded,and a rash of new hotels was built, particularly in Yangon.

Insurance investments

The tourism sector hasproved disappointing—

No stockmarket

36 Myanmar (Burma)


Arrivals for 1997/98 rose by a muted 5.4% to 265,122, picking up by 10.2% in1998/99 to 292,282. However, arrivals then fell by 14.4% in 1999/2000, to246,007 (see Reference table 19 for tourist arrivals). Key problems faced by thetourism sector include:

• concern over political unrest;

• a well-organised worldwide boycott campaign organised by supporters ofthe pro-democracy movement, and targeting foreign tour operators; worldwideawareness of human rights and other abuses in Myanmar;

• relatively expensive accommodation compared with some other South-eastAsian countries;

• poor infrastructure, making travel time-consuming and unreliable; and

• government policy; visitors are prevented from visiting many areas of thecountry, and the cash-strapped junta requires all independent (non-tour)travellers to exchange US$200 into non-refundable local-currency units(foreign-exchange certificates, FECs), regardless of length of stay. (The sum wasreduced from US$300 in 2000.)

Sluggish tourist arrivals have spelled disaster for the sector. Occupancy rates atmost large hotels are very low, and some have temporarily suspended trading.(See Reference table 19 for statistics on tourism.) Unsurprisingly, foreigninvestment in hotel and tourism projects has collapsed. No new foreignprojects were approved in the sector in the whole of 1998/99, with only twoprojects totalling US$15.5m approved in 1999/2000although it is possiblethat some small projects have not been captured in the data. The junta hopesthat the new international airport opened at Mandalay in September 2000 willboost arrivals, but interest is likely to remain muted.

The external sector

Trade in goods

Foreign trade, 1999/2000a

(Kt m; cif-cif)

Exports 7,064 of which: pulses 1,179 teak & other hardwoods 1,309 prawns 530 fish & fish products 233 base metals & ores 129

continued

—and investmenthas slumped

Myanmar (Burma) 37


Imports –15,853 of which: machinery & transport equipment 3,153 base metals & metal goods 1,718 electrical machinery 1,359 edible vegetable oil & other hydrogenated oils 479 fertiliser 329

Memorandum itemsCapital goods 6,492Intermediate goods 2,738Consumer goods 6,623

Trade balance –8,789

a Official trade data exclude some key items. For example, exports of garments are not measured,nor are imports of oil. The data above therefore provide only a partial picture of trade patterns.

Source: Central Statistical Organisation, Selected Monthly Economic Indicators.

Myanmar’s trade statistics are particularly problematic. Although data areproduced on a regular basis, they are subject to large revisions, and differentofficial sources often show a contradictory picture. For example, two officialsourcesthe Central Statistical Organisation (CSO) and an official internalreport obtained by the EIUshow a marked difference in trade figures for1999/2000. According to the CSO data, both exports and imports fell, bringinga reduction in the merchandise trade deficit to Kt8.8bn (US$1.4bn at theofficial exchange rate or around US$230m at the free-market rate). However,according to the internal report, exports rose strongly in 1999/2000, bringingthe merchandise trade deficit down to Kt5.9bna difference of almost Kt3bn.

Merchandise trade balance, differing data sources(Kt m)

1997/98 1998/99 1999/2000

ExportsCSO 6,290.0 7,672.5 7,033.0Internal report 6,290.0 7,700.3 9,393.5

ImportsCSO 14,257.4 16,941.1 15,852.8Internal report 14,257.4 16,941.1 15,247.6

BalanceCSO –7,967.4 –9,268.6 –8,819.8Internal report –7,967.4 –9,240.8 –5,854.1

Sources: Central Statistical Organisation, Selected Monthly Economic Indicators; Official internal report.

The trade data are distorted by:

• widespread smuggling;

• over-reporting of exports for money-laundering reasons, and extensiveillegal drug exports;

• under-reporting of imports to avoid customs duties;

• the use of an unrealistic official exchange rate in measuring data; and

• the exclusion of many military imports.

Trade data are unreliable

38 Myanmar (Burma)


Illegal drug exports are a particular problem. Myanmar is the world’s secondlargest producer of opiates, much of which are exported. The US embassy’sForeign Economic Trends Report: Burma (1996) estimates that the value of opiateexports may be equal to that of legal exports. Legal export invoices may beexaggerated as a result of money-laundering related to the drug trade.

Bearing these data problems in mind, it does seem that Myanmar’smerchandise trade deficit narrowed in 1999/2000. (See Reference tables 20, 21and 22 for export and import data.) It is not clear whether exports rose(internal report) or fell (CSO data). Myanmar remains reliant on exports ofcommodities such as pulses, fish and timber, which have replaced traditionalexport staples such as rice and rubber in recent years. Many commodities havesuffered from sluggish output and weak international prices in recent years.Hence the main reason for the reduction in the merchandise trade deficit in1999/2000 would have been import compression.

Both the junta’s internal report and CSO data show a fall in imports in1999/2000. Imports of capital goods fell by 11.8% year on year while importsof intermediate goods fell by 34.4%. Imports of machinery, transportequipment, electrical machinery and edible vegetable oils all fell. It is possiblethat growth in the manufacturing sector has allowed some import substitution.More likely, the weakness of the kyat and shortages of foreign exchangecombined with restrictions imposed on imports (see The economy: Economicpolicy) curbed imports. Further, slowing foreign and other investment mayhave reduced demand for capital goods.

Key trade regulations

There are 14 tariff bands ranging from 0-40%. In theory the junta is committed to aschedule of tariff cuts under the ASEAN Free Trade Area (AFTA). However, a number ofad hoc non-tariff trade restrictions remain:

• restrictions were imposed on imports in March 1998, when non-priority importswere banned; further restrictions were imposed in September 2000, with traders limitedto importing Kt1m/month (see The economy: Economic policy);

• licences are required to import goods; proof of foreign-exchange earnings isrequired;

• the government has a monopoly or near-monopoly on exports of key items,including rice and teak, which was extended in March 1998 to include othercommodities such as rubber and sugar (this monopoly was relaxed in 1999 for investorsin the junta’s land reclamation scheme, who may export around half of certain crops);

• some exports are subject to a 5% export tax; and

• border trade must be conducted in US dollars.

However, import restrictions have not proved wholly effective. Consumergoods have risen strongly in recent years, rising by 22.4% in 1999/2000. The

The merchandise tradedeficit has narrowed

Myanmar (Burma) 39


opening up of more border checkpoints along the Thai and Chinese bordershas resulted in a flood of previously unavailable consumer imports, includingelectrical items such as computers and many basic household goods.

In addition, investment levels in recent years rising have boosted demand forimports, while exports remained weak.

As a result, by early 1998 Myanmar was facing a balance-of-payments crisis.Unable to tap multilateral institutions for financial support, the junta reactedby imposing tight controls on imports in March 1998, banning all imports ofitems not on two priority lists (see box). Despite these efforts, reservesweakened in 1999-2000.

Hence the junta has placed increased emphasis on import substitution. Forexample, the junta hopes to boost production of edible oils (which are widelyused in traditional cooking, and which accounted for 3% of imports in1999/2000). However, import substitution efforts for items such as machineryare hampered by the extremely low level of industrialisation and the recentcollapse in foreign direct investment (FDI; see Capital flows and foreign debt).

Myanmar’s exports do not enjoy many of the benefits usually accorded byindustrialised nations to low-income countries. In addition, the decision ofmany Western manufacturers not to source in Myanmar has hampereddevelopment of the export-oriented manufacturing sector. Finally, the juntahad hoped for a significant boost to export earnings once the huge Yadana andYetagun gasfields came on stream in 1998-2000. However, weak demand inThailand is likely to keep gas export earnings below initially projected targets.

Obstacles to trade and investment

• US sanctions: In April 1997 the US banned all new investment in Myanmar by UScompanies.

• US selective purchasing laws: One US state (Massachusetts) and a number of UScities have passed selective purchasing laws that penalise firms exporting to Myanmar inbids for government contracts. However, a US federal judge ruled the Massachusetts lawto be unconstitutional in November 1998 following a challenge from the NationalForeign Trade Council, and subsequent appeals have been overturned.

• EU restrictions: In March 1997 the EU withdrew generalised system of preferences(GSP) benefits on agricultural goods. Myanmar had already lost GSP on industrialgoods.

• Canadian restrictions: In August 1997 Canada removed Myanmar’s GSP benefits.

• Consumer boycotts: Active and well-organised consumer boycott campaigns havecontributed to the decision by a number of companies to pull out of, or to ceasesourcing goods from, Myanmar.

Exports are hampered

Limited success in importsubstitution

40 Myanmar (Burma)


Main trading partners, 1999/2000

Exports to: % of total Imports from: % of total

India 12.5 Singapore 28.3

Singapore 11.4 Thailand 12.5

China 10.8 China 10.3

Thailand 5.8 Japan 9.9

Hong Kong 5.4 South Korea 9.4


Myanmar conducts the bulk of its trade with its Asian neighbours. (SeeReference table 23 for data on Myanmar’s main trading partners.) Trade withThailand, India and particularly China has expanded strongly as border tradeposts have been opened. Increased trade with India and China helpedMyanmar survive the Asian economic crisis. However, frequent closures oftrading posts have disrupted trading, particularly with Thailand. Discrepanciesin data from Myanmar and the US also suggest that exports to the US may bebeing under-reported in Myanmar’s official figures.

Invisibles and the current account

Current account (IMF accounts), 1999(US$ m)

Merchandise exports fob 1,125.2

Merchandise imports fob –2,115.9

Trade balance –990.7

Services balance 241.3

Income balance –3.4

Current transfers balance 530.7

Current-account balance –222.1


According to the IMF’s International Financial Statistics (IFS), the current-accountdeficit more than halved in 1999, to US$222.1m, after surging in 1997-98,pushed up by the rising merchandise trade deficit. (See Reference table 25 forbalance-of-payments data in US dollars, and Reference table 26 for nationalestimates in kyat.)

According to the IMF, services inflows have been boosted in recent years byreceipts of royalties from companies involved in oil and gas exploration,“signature bonuses” paid when contracts are signed, land-lease payments byforeign hotels, and rising tourism receipts. From 1995, services payments alsostarted to rise rapidly (perhaps relating to stronger demand for trade-relatedservices and rising foreign investment). Both services debits and credits fell in1999, allowing the services account to remain in surplus.

Perhaps the most notable trend of the last five years is the sharp rise in currenttransfers. In 1999 Myanmar received current transfer inflows of US$530.7m,down from a peak of US$655.4m in 1997, but still sharply higher compared

—but current transfers areplaying an increasingly

important role

Services have remainedin surplus—

The current-account deficithas narrowed

Intra-Asian tradedominates

Myanmar (Burma) 41


with inflows of less than US$100m in the early 1990s. Current transfer inflowsare much higher than FDI inflows and are now one of Myanmar’s largestsources of foreign exchange.

The IFS data do not give a breakdown of current transfers. However, IMFstudies have indicated that official (public) transfers remain relatively small,boosted mainly by inflows of Japanese debt-relief grants (see Capital flows andforeign debt). There may have been a slight increase in other official aid in thelast few years, as some of the unilateral organisations and major internationalnon-governmental organisations have established modest developmentprojects. However, IMF studies suggest that private transfers are much moreimportant in value terms than such public transfers. Hence the jump intransfers in the last few years cane be assumed to reflect private transfers,probably the result of the growing number of Myanmar citizens workingabroad. Political repression and a stagnant economy have driven a hugenumber of Myanmar citizens overseas in search of work; there may be up to1m illegal migrant workers from Myanmar based in Thailand, with other largepopulations elsewhere in South-east Asia and the Middle East (see Resourcesand infrastructure: Population). In addition, more remittances may now endup in the formal banking system, following the liberalisation of rules onretention of foreign exchange. The dip in current transfers in 1999 may reflecta tighter work situation in Thailand, as the Thai authorities began to expelthousands of illegal workers from Myanmar starting in late 1999.

Capital flows and foreign debt

FDI inflows remain an important source of foreign exchange. However, afterseveral years of rapid growth, FDI inflows have stalled. In 1999 actual FDIinflows totalled US$216.3m, the lowest level for five years (see Reference table24 for actual foreign investment inflows). The outlook for a recovery in FDIinflows is not good, as FDI approvalsa guide to future inflowshavecollapsed. FDI approvals for the whole of 1999/2000 (financial year beginningApril 1st) totalled US$55.6m—a sharp drop compared with a peak of US$2.8bnin 1996/97. It is likely that many small FDI projects, particularly from Chinaand elsewhere in Asia, are not being captured in the official data. However,even given this probable under-reporting, the dramatic collapse in FDIapprovals since 1997/98 is likely to be reflected in smaller actual inflows in thenext few years—even allowing for stronger investment from regionalneighbours where an economic recovery is now under way.

FDI approvals have fallen sharply in recent years. Approvals have been hit bythe following factors:

• the regional economic crisis, which slowed FDI inflows from key investorssuch as Thailand;

• consumer boycotts and the sanctions on new US investment imposed bythe US in April 1997; and

• investor concern over political risk and the erratic policy environment.

FDI inflows have stalled

Key trends in FDI

42 Myanmar (Burma)


There has also been a shift away from investment in oil and gas, first tomanufacturing, property and tourism, and more recently to mining.

Foreign direct investment approvals(US$ m)

1995/96 1996/97 1997/98 1998/99 1999/2000

Mining 155.8 178.3 2.7 4.9 18.5

Hotels & tourism 79.2 114.9 40.0 0.0 15.5

Manufacturing & processing 21.3 923.6 319.2 19.6 13.1

Oil & gas 14.8 695.6 172.1 0.0 5.3

Fisheries 13.1 17.5 5.8 5.0 3.3

Transport 118.9 47.9 106.6 0.0 0.0

Real estate 251.5 623.5 122.2 0.0 0.0

Total incl others 668.2 2,814.2 777.4 29.5 55.6


After falling steadily for the last few years, Myanmar’s external debt stock roseto US$5.7bn at the end of 1998, according to the World Bank’s GlobalDevelopment Finance, up from US$5.1bn at the end of 1997. The rise in the debtstock in 1998 is the result of an increase in short-term debt, and a smallincrease in long-term disbursements by bilateral creditors, as well as areduction in debt service paid.

The debt profile is shifting away from long-term concessional debt, towardsshorter-term commercial debt such as exporters’ credits. Concessional lendingto Myanmar has fallen off since 1990, when the country’s traditional donorscut off aid after the junta’s refusal to recognise the results of the election heldthat year. Myanmar’s poverty makes it eligible for generous debt relief from theParis Club of bilateral donors, but such relief has been blocked by the US.(However, since 1991 Japan has provided debt-relief grants equal to the smallamounts of debt service paid by Myanmar to Tokyo.) Myanmar still receivessome UN assistance. But the junta has increasingly relied on commercialcredits, much of it short term, and mostly obtained from neighbouringcountries. According to the IMF, the junta has obtained short-term commercialfunding for a variety of infrastructure projects from Japanese, Chinese, Thaiand other companies. The junta may also have mortgaged part of its earningsfrom gas exports in order to raise loans.

It should be noted that debt statistics may exclude or under-report borrowingsfrom some sources, particularly related to financing for infrastructure projectsand for military imports. (See Reference table 27 for debt statistics andReference table 28 for data on official development assistance.)

Limited access to external lending, combined with a slide in FDI inflows,suggests that Myanmar may continue to face balance-of-payments problems inthe next few years, despite the recent reduction in the merchandise tradedeficit (see Trade in goods). Given this weak payments situation, the junta hascontinued to part-finance its overall balance-of-payments deficit through theaccumulation of arrears on its external debt. By the end of 1998 interest arrears

Lack of financing pointsto a continued build-up

in arrears

The debt profile is shiftingtowards commercial debt

Myanmar (Burma) 43


reached US$471m, accounting for 77% of the short-term debt stock. Principalarrears rose to US$1.6bn, up from US$1.3bn at end-1997.

The junta has changed its policy on debt repayment. As no new lending hasbeen forthcoming from the major multilateral institutions, the junta nowconcentrates on repaying commercial and then bilateral creditors. For example,in 1998 the junta ceased servicing its debt to the International DevelopmentAssociation (IDA), the concessional lending arm of the World Bank.

Foreign reserves and the exchange rate

A widening current-account deficit and falling FDI inflows have put pressureon Myanmar’s foreign-exchange reserves in recent years. After a modestrecovery in 1998, reserves weakened again in 1999 to US$276.6m, and totalledUS$273m at end-June 2000. In response, the junta has introduced draconianrestrictions on imports. The junta also tightened access to foreign exchange.(See Reference table 29 for data on foreign-exchange reserves.)

Since 1977 the official exchange rate has been fixed against the SDR atKt8.51:SDR, and has therefore remained stable at around Kt6.2-6.4:US$1. How-ever, following liberalisation measures taken since 1988, the majority of trans-actions take place at the free-market rate. Citizens are permitted to buy and sellkyat at a limited number of legal foreign-exchange trade centres; more wide-spread trading takes place on the black market, where rates are slightly higher.

The junta does not publish data on the free-market rate; the EIU relies onprivate estimates, which can be taken only as a broad indication of exchange-rate movements. In mid-1997, in a bid to stop the fall in the kyat, theauthorities imposed a limit of US$50,000 per month on the exchange offoreign-exchange certificates (FECs) for foreign currency for imports or transfersabroad, subsequently reduced to US$30,000 per month. Despite these andother measures, the free-market rate remained under pressure through much of1999-2000. In times of pressure on the kyat there is often a flight to gold andto FECs. FECs were introduced in 1993, initially for tourists but subsequentlyfor use in a range of transactions. They are converted to kyat at a rate close tothe US dollar rate, and can be used by Myanmar citizens to open FEC accounts.(See Reference table 30 for data on official and free-market exchange rates.)

Foreign-exchange reserves, end-1999

Total (US$ m) Per head (US$)

Thailand 34,063 544.1

Malaysia 30,588 1,324.2

Indonesia 26,445 125.3

Philippines 13,230 168.8

Singapore 76,843 19,703.3

Myanmar 276.6 5.6a

a Based on the official population estimate for 1999/2000, and actual reserves data for end-1999.


Reserves haveweakened further—

—and the kyat hascontinued to fall

44 Myanmar (Burma)


Appendices

Regional and other organisations

Myanmar was accepted as a full member of the Association of South-East AsianNations (ASEAN) in 1997. The countries of the EU continue to boycottMyanmar’s participation in joint ASEAN-EU meetings.

Myanmar was suspended as a full member of the International LabourOrganisation (ILO) in mid-1999, because of concern over the continued use offorced labour by the junta.

Sources of information

Central Statistical Organisation, Selected Monthly Economic Indicators (bi-monthly), Yangon

Central Statistical Organisation, Statistical Yearbook (various years), Yangon

Ministry of National Planning and Economic Development, Review of theFinancial, Economic and Social Conditions (annual), Yangon

Ministry of National Planning and Economic Development, Salient Economicand Social Indicators (March 1998), Yangon

Asian Development Bank, Key Indicators of Developing Asian and Pacific Countries(annual), Manila

Energy Data Associates, Bishops Walk House, 19-23 High Street, Pinner,Middlesex HA5 5PJ

International Institute for Strategic Studies, The Military Balance (annual),London

IMF, International Financial Statistics (monthly), Washington, DC

IMF, Myanmar: Recent Economic Developments, April 1997, Washington, DC

US embassy, Country Commercial Guide, Yangon, 1998

US embassy, Foreign Economic Trends Report: Burma, Yangon, 1996

World Bank, Global Development Finance (annual), Washington, DC

World Bank, Myanmar: Policies for Sustaining Economic Reform, Washington, DC,1995

World Bank, World Development Report (annual), Washington, DC

Aung San Suu Kyi, Freedom From Fear, London, 1995

Aung San Suu Kyi, Letters From Burma, London, 1997

The Burma Action Group, Burma: The Alternative Guide, London, 1996

Human Rights Watch, World Report, Washington, DC, 1996

National statistical sources

International statisticalsources

Select bibliography andwebsites

Myanmar (Burma) 45


Bertil Lintner, Burma in Revolt: Opium and Insurgency since 1948, Boulder,Colorado, 1994

Rory Maclean, Under the Dragon: Travels in a Betrayed Land, London, 1998

Mya Maung, The Burma Road to Poverty, New York, 1991

Martin Smith, Burma: Insurgency and the Politics of Ethnicity, London, 1991

Internet resources are plentiful, with a well-linked network of sites run by avariety of pro-democracy campaign groups providing information on allaspects of Myanmar, including human rights, recent political developmentsand some aspects of the economy. Two good websites to visit are:

• http://www.soros.org/burma/index.html

• http://www.freeburma.org/

For the junta’s view, see:

• http://www.Myanmar.com

Reference tables

These reference tables provide the most up-to-date statistics available at the date ofpublication. Data are for fiscal years unless otherwise indicated.

Reference table 1

Population estimates(m unless otherwise indicated; mid-fiscal years)

1993/94 1994/95 1995/96 1996/97 1997/98

Male 21.4 21.8 22.2 22.6 23.0

Female 21.7 22.1 22.5 22.9 23.4

Total 43.12 43.92 44.74 45.57 46.40 % change 1.87 1.86 1.87 1.86 1.82

Sex ratio (male:female; %) 98.8 98.8 98.8 98.8 98.6

Age structure: 0-14 14.7 14.9 15.0 15.3 15.4 15-59 25.3 25.8 26.3 26.9 27.4 60+ 3.2 3.3 3.4 3.5 3.6

Sources: Ministry of National Planning and Economic Development, Review of the Financial, Economic and Social Conditions for 1997/98;Salient Economic and Social Indicators, March 1998.

46 Myanmar (Burma)


Reference table 2

Employment by sector1995/96 1996/97 1997/98

‘000 % of total ‘000 % of total ‘000 % of total

Agriculture 11,272 64.1 11,381 63.4 11,507 62.6

Livestock & fisheries 388 2.2 391 2.2 397 2.2

Forestry 188 1.1 188 1.1 189 1.0

Mining & energy 116 0.7 132 0.7 147 0.8

Processing & manufacturing 1,481 8.4 1,573 8.8 1,666 9.1

Power 19 0.1 21 0.1 22 0.1

Construction 354 2.0 378 2.1 400 2.2

Transport & communications 441 2.5 470 2.6 495 2.7

Social services 563 3.2 577 3.2 597 3.3

Administration & other services 776 4.4 835 4.7 888 4.8

Trade 1,715 9.8 1,746 9.7 1,791 9.8

Others 274 1.6 272 1.5 270 1.5

Total 17,587 100.0 17,964 100.0 18,369 100.0


Reference table 3

Labour force1991/92 1992/93 1993/94 1994/95 1995/96a

Labour force (‘000) 16,955 17,391 17,838 18,296 18,766 Urban 3,795 3,892 3,992 4,094 4,199 Rural 13,160 13,499 13,846 14,202 14,567

Unemployment rate (%) 5.6 5.3 5.7 5.8 6.3b

a Estimates. b EIU estimate derived from official employment data.Source: IMF, Myanmar: Recent Economic Developments, April 1997.

Reference table 4

Transport statistics(‘000)

1993/94 1994/95 1995/96 1996/97 1997/98a

RailwaysPassengers 56,260 53,362 53,928 55,283 55,400 Freight carried (imperial tonnes) 3,269 3,297 3,112 3,165 3,200

AirwaysDomesticb

Passengers 537 626 726 776 909 Freight carried (short tonnes) 3 3 2 3 2 Internationalc

Passengers 78 121 181 216 248 Freight carried (short tonnes) 2 2 5 7 6

Inland waterwaysPassengers 36,003 26,582 24,979 23,404 21,524 Freight carried (metric tonnes) 3,172 3,194 3,227 3,565 3,319

continued

Myanmar (Burma) 47


1993/94 1994/95 1995/96 1996/97 1997/98a

RoadPassengersd 139,312 130,276 136,972 128,867 127,668 Freight carried (imperial tonnes) 1,115 1,169 1,340 1,302 1,216

Note. 1 imperial tonne=2,240 lb; 1 short tonne=2,000 lb; 1 tonne=1,000 kg.a Provisional. b From 1994/95 includes activities of Air Mandalay. c Includes statistics of Myanma Airways International from August 1993 and AirMandalay from 1994/95. d Buses, taxis and state haulage.


Reference table 5

National energy statistics

1993/94 1994/95 1995/96 1996/97 1997/98a

Electricity generationb (m kwh) 3,386 3,632 3,762 3,945 4,205 Gas 1,594 1,852 2,061 2,183 2,310 Hydroelectric 1,705 1,659 1,595 1,651 1,655 Thermal 34 79 63 65 198 Diesel 53 42 43 46 42

Total installed capacity (state and other; mw) 1,115 1,151 1,317 1,394 1,572 of which: Myanma Electric Power Enterprise 810 837 982 1,031 1,207

a Provisional. b By the state-owned Myanma Electric Power Enterprise.


Reference table 6

Government finances(Kt m)

1993/94 1994/95 1995/96 1996/97 1997/98a

Central governmentReceipts 27,212 31,907 39,298 54,580 71,502 Taxes 17,036 20,101 22,644 31,357 38,845 State-owned enterprises 6,636 8,195 10,509 16,642 25,451 Others 3,540 3,611 6,146 6,580 7,206 Current expenditure –23,281 –27,732 –32,888 –37,010 –47,972 Foreign loans & aid 620 579 777 422 766 Financial account (net) 10 –335 –522 –258 –366 Amount available for investment 4,560 4,419 6,664 17,734 23,930 Investment –12,304 –20,145 –31,821 –42,920 –44,756 Balance –7,744 –15,727 –25,157 –25,185 –20,826

State-owned enterprisesReceipts 52,358 72,515 87,221 108,608 213,192 Current 52,310 72,400 87,185 108,555 213,099 Capital 48 115 36 53 94 Current expenditure –56,843 –80,978 –91,625 –119,937 –237,435 Current balance (current receipts less current expenditure) –4,533 –8,578 –4,440 –11,382 –24,336 Foreign loans & aid 529 649 643 351 1,314 Financial account –449 –479 –700 –1,227 –1,091 Capital expenditure –3,374 –5,636 –9,210 –14,351 –20,451 Balanceb –7,779 –13,929 –13,671 –26,555 –44,471

continued

48 Myanmar (Burma)


1993/94 1994/95 1995/96 1996/97 1997/98a

Local governmentCurrent receipts 15 19 23 18 22 Current expenditure –9 –9 –11 –12 –18 Current balance 6 10 12 6 4 Foreign loans & aid 0 0 0 0 0 Financial account 0 0 0 0 0 Capital expenditure –1 –1 –4 –4 –15 Balanceb 5 9 8 2 –11

Memorandum itemSummary of published balances –15,517 –29,647 –38,820 –51,738 –65,308

a Provisional. b Official figures do not add.


Reference table 7

Money supply, credit and interest rates(Kt m unless otherwise indicated; calendar years)

1994 1995 1996 1997 1998

Money supplyMoney (M1) 98,288 125,957 167,971 220,006 282,177 % change, year on year 33.8 28.2 33.4 31.0 28.3Quasi-money 33,942 54,572 82,786 102,944 151,363Money (M2) 132,230 180,529 250,757 322,950 433,540 % change, year on year 35.6 36.5 38.9 28.8 34.2

Domestic credit 155,719 196,720 267,068 344,122 454,108 of which: claims on government 115,603 142,103 180,906 217,137 251,598 claims on non-financial public enterprises 11,343 8,351 10,631 11,419 46,688 claims on private sector 28,262 45,956 75,346 115,505 155,761

Interest ratesDeposit rate (six months; %) 9.0 9.8 12.5 12.5 12.5Lending rate (working capital loans; one-year; %) 16.5 16.5 16.5 16.5 16.5


Reference table 8

Gross domestic producta

(at market prices)

1995/96 1996/97 1997/98 1998/99 1999/2000

Total (Kt bn)a

At current prices 604.7 792.0 1,119.5 1,609.8 2,190.3At constant (1985/86) prices 66.7 71.0 75.1 79.5 88.1 % change, year on year 6.9 6.4 5.8 5.9 10.9

Per head (Kt)At current prices 13,515 17,381 24,127 33,426 44,579At constant (1985/86) prices 1,492 1,559 1,619 1,650 1,794 % change, year on year 4.5 4.5 3.9 2.0 8.6

continued

Myanmar (Burma) 49


1995/96 1996/97 1997/98 1998/99 1999/2000

Memorandum itemAlternative measure of GDPb (Kt bn)At current prices 604.7 792.0 1,119.5 1,609.8 n/aAt constant (1985/86) prices 66.7 71.0 75.1 79.5 84.0 % change, year on year 6.9 6.4 5.7 5.8 5.7Per head (Kt)At current prices 13,515 17,381 24,127 33,426 n/aAt constant (1985/86) prices 1,492 1,559 1,619 1,650 1,710 % change, year on year 4.5 4.5 3.9 2.0 3.6

a GDP data are on an expenditure basis, and growth rates differ slightly from output basis data. There are serious question marks over the surgein growth shown for 1999/2000. b Alternative GDP data from the IMF.

Sources: Ministry of National Planning and Economic Development, Review of Financial, Economic and Social Conditions for 1997/98; Internal report, 2000; IMF, International Financial Statistics.

Reference table 9

Gross domestic product by expenditure(Kt m; constant 1985/86 prices; % change year on year in brackets)

1993/94 1994/95 1995/96 1996/97 1997/98a

Total consumption 46,795 47,955 51,027 52,184 53,177 (7.5) (2.5) (6.4) (2.3) (1.9)

Fixed investment 10,234 12,640 16,201 19,887 21,196 (10.6) (23.5) (28.2) (22.8) (6.6)

Change in stocks 236 389 541 –975 –538

Exports of goods & servicesb 6,229 6,528 5,089 5,608 6,340 (15.8) (4.8) (–22.0) (10.2) (13.1)

Imports of goods & servicesb –5,431 –5,106 –6,117 –5,663 –5,846 (41.8) (–6.0) (19.8) (–7.4) (3.2)

GDPc 58,064 62,406 66,741 71,041 74,329 (6.0) (7.5) (6.9) (6.4) (4.6)d

a Provisional. b Non-factor services. c EIU estimates; diverge slightly from official output-basis GDP totals for some years. d In mid-1999 a revisedGDP growth figure of 5.7% for 1997/98 was released. However, the junta has failed to publish its usual detailed statistical review, and in theabsence of a new breakdown, the last full published series has been retained.


50 Myanmar (Burma)


Reference table 10

Gross domestic product by sector(% change, year on year)

1995/96 1996/97 1997/98 1998/99 1999/2000a

Agriculture 5.5 3.8 3.0 3.5 9.9

Livestock & fisheries 3.0 11.9 7.1 9.3 16.5

Forestry –4.5 2.1 2.8 3.2 2.3

Energy 9.2 –2.1 2.3 53.6 69.2

Mining 18.5 12.4 29.7 7.0 14.1

Manufacturing 7.6 4.6 5.0 6.2 15.6

Power 6.5 12.8 17.8 –5.4 13.5

Construction 27.2 24.6 9.8 6.3 4.4

Services 7.3 6.5 6.7 7.0 9.1

GDP at factor cost 6.9 6.4 5.7 5.8 10.5

a Provisional growth figures produced by the junta. A full, revised breakdown for GDP on an output basis, in price terms, has not been published.The high growth rates for 1999/2000 have been widely questioned.

Source: Internal report, 2000.

Reference table 11

Consumer price index(calendar years)

1995 1996 1997 1998 1999

Yangon indexa 100.0 116.3 150.8 228.5 270.5 % change, year on year 25.2 16.3 29.7 51.5 18.4

a 1995=100.Sources: IMF, International Financial Statistics.

Reference table 12

Output and yields of key crops

1994/95 1995/96 1996/97 1997/98a 1998/99b

Net area sown (‘000 ha) 8,721 8,912 9,006 9,035 9,131 Irrigated 1,556 1,758 1,558 1,634 1,743 % of total area sownc 17.4 19.2 16.8 17.5 18.5

Paddy (‘000 ha) 5,930 6,142 5,880 5,939 6,075 Output (‘000 tonnes) 18,195 17,953 17,676 17,308 18,571 Yield (tonnes/ha) 0.519 0.488 0.502 0.508 0.501

Pedesein (green gram, ‘000 ha) 384 460 450 550 537 Output (‘000 tonnes) 272 337 333 415 386 Yield (tonnes/ha) 0.118 0.121 0.123 0.126 0.118

Sesame (‘000 ha) 1,332 1,277 1,146 1,069 1,215 Output (‘000 tonnes) 304 304 344 307 367 Yield (tonnes/ha) 0.044 0.055 0.056 0.059 0.050

Cotton (‘000 ha) 205 379 334 266 324 Output (‘000 tonnes) 86 165 168 169 221 Yield (tonnes/ha) 0.078 0.082 0.090 0.106 0.110

Rubber (‘000 ha) 89 104 119 134 158 Output (‘000 tonnes) 27 26 26 27 29 Yield (tonnes/ha) 0.086 0.087 0.093 0.093 0.093

continued

Myanmar (Burma) 51


1994/95 1995/96 1996/97 1997/98a 1998/99b

Sugarcane (‘000 ha) 53 67 83 108 109 Output (‘000 tonnes) 2,254 3,251 4,043 5,137 5,597 Yield (tonnes/ha) 7.419 0.172 0.166 0.167 0.172

Memorandum itemsOpium poppy (‘000 ha) n/a n/a n/a n/a 163 Output (‘000 tonnes) n/a n/a n/a n/a 2.5

a Provisional. b Plan. c Official data.

Sources: Ministry of National Planning and Economic Development, Salient Economic and Social Indicators, March 1998; US embassy, Country Commercial Guide, 1998.

Reference table 13

Production of livestock and fish(‘000 tonnes unless otherwise indicated)

1993/94 1994/95 1995/96 1996/97 1997/98a

LivestockDraught cattle (‘000 head) 6,496 6,627 6,808 6,922 7,088 Poultry 30.4 38.3 45.8 52.3 56.2 Beef 18.6 18.6 19.1 19.6 20.0 Pork 18.2 22.2 25.5 27.8 29.3

FishFreshwater 81.9 84.2 83.4 88.7 93.6 Marine 230.1 230.8 174.3 241.6 257.6

a Provisional.

Sources: Ministry of National Planning and Economic Development, Review of the Financial, Economic and Social Conditions for 1996/97;Salient Economic and Social Indicators, March 1998.

Reference table 14

Timber production(‘000 cu tonnes)

1993/94 1994/95 1995/96 1996/97 1997/98a

Teak 332 272 230 203 200

Other hardwoods 1,580 1,217 1,250 1,358 1,383

a Provisional.


52 Myanmar (Burma)


Reference table 15

Minerals production(tonnes unless otherwise indicated)

1993/94 1994/95 1995/96 1996/97 1997/98a

Crude oil (‘000 US barrels) 5,200 4,207 4,278 3,788 6,057

Natural gas (m cu ft) 36,042 45,599 54,025 58,579 68,540

Zinc concentrates 1,939 3,475 1,539 1,507 1,500

Refined lead 1,547 2,068 1,862 1,986 2,000

Tin concentrates (65%) 544 648 575 327 401

Tungsten concentrates (65%) n/a 152 148 37 57

Jade (‘000 kg) 584 794 1,791 4,464 2,785

Refined silver (‘000 oz) 120 160 140 120 130

Gold (troy oz) 14,030 19,560 12,702 13,903 20,280

Pig iron 1,000 1,188 1,368 1,506 1,500

Copper concentrate (‘000 tonnes) 25 27 28 26 9

Copper ore (‘000 tonnes) 970 1,201 1,101 1,024 495

a Provisional.

Sources: Ministry of National Planning and Economic Development, Review of the Financial, Economic and Social Conditions for 1996/97; Salient Economic and Social Indicators, March 1998.

Reference table 16

Manufacturing production(Kt m current prices; quantum index 1985/86=100 in brackets)

1993/94 1994/95 1995/96 1996/97a 1997/98a

Food & beverages 131,458 153,743 217,590 305,335 405,542 (n/a) (n/a) (119.1) (123.4) (127.0)

Clothing 3,765 5,063 6,855 7,729 8,500 (n/a) (n/a) (132.6) (138.0) (142.7)

Construction materials 3,946 4,141 4,877 5,562 6,553 (n/a) (n/a) (124.7) (134.5) (143.5)

Personal goods 1,313 2,181 2,930 3,158 4,800 (n/a) (n/a) (114.7) (110.5) (126.0)

Household goods 470 578 689 845 995 (n/a) (n/a) (171.5) (203.2) (204.5)

Printing & publishing 616 598 1,064 1,962 871 (n/a) (n/a) (105.2) (200.1) (85.5)

Industrial raw materials 4,485 8,075 14,335 14,879 24,737 (n/a) (n/a) (154.0) (150.3) (159.8)

Mineral & petroleum products 3,210 4,904 4,805 5,332 32,797 (n/a) (n/a) (91.1) (102.7) (159.9)

Agricultural equipment 603 730 962 1,540 2,362 (n/a) (n/a) (167.3) (265.9) (263.5)

Machinery & equipment 76 103 171 155 209 (n/a) (n/a) (161.3) (232.2) (240.5)

Transport vehicles 424 1,084 1,558 1,571 2,869 (n/a) (n/a) (76.9) (57.9) (79.9)

Electrical goods 125 253 419 441 590 (n/a) (n/a) (38.8) (44.1) (68.6)

Others 1,375 1,830 1,775 2,242 3,050 (n/a) (n/a) (62.4) (72.9) (96.1)

Total 151,866 182,283 258,030 350,751 493,875 (n/a) (n/a) (118.4) (123.7) (130.1)

a Provisional.


Myanmar (Burma) 53


Reference table 17

Construction and renovation work(Kt m at current prices)

1993/94 1994/95 1995/96 1996/97 1997/98a

State sector 13,972 23,470 36,459 44,386 53,120 of which: irrigation & embankments 899 1,074 5,800 4,196 4,069 railways, airstrips & jetties 735 2,163 3,885 8,523 9,427 roads & bridgesb 3,034 5,228 6,284 7,990 11,327 buildingsb 8,331 13,072 17,762 18,785 18,667

Private sector 3,253 4,080 7,841 18,753c 28,080c

Total incl othersb 17,433 27,797 44,489 63,254 81,363

a Provisional. b Includes renovation and upgrading. c Increases steeply because from 1996/97 two large build-operate transfer (BOT) road- andbridge-building projects were begun with private-sector involvement.

Sources: Ministry of National Planning and Economic Development, Review of the Financial, Economic and Social Conditions for 1997/98; Statistical Yearbook, 1997.

Reference table 18

Banking statistics(Kt m)

1993/94 1994/95 1995/96 1996/97 1997/98

Total savings 25,566 37,016 58,935 88,099 108,815 State banks 24,495 33,158 44,313 55,020 63,875 Private banks 1,071 3,858 14,622 33,079 44,940

Loans n/a 28,461 42,977 62,487 n/a of which: extended by private banks n/a 4,262 11,519 20,461 n/a

Sources: Ministry of National Planning and Economic Development, Review of the Financial, Economic and Social Conditions for 1997/98;Central Statistical Organisation, Selected Monthly Economic Indicators.

Reference table 19

Tourist arrivals and receipts

1994/95 1995/96 1996/97 1997/98 1998/99a

Arrivals 95,616 120,205 251,501 265,122 292,282

Receipts (Kt m) 206.1 181.6 190.5 180.2 n/a

a Provisional.

Sources: Ministry of National Planning and Economic Development, Review of the Financial, Economic and Social Conditions for 1997/98;Central Statistical Organisation, Selected Monthly Economic Indicators.

54 Myanmar (Burma)


Reference table 20

Exports(Kt m; cif)

1994/95 1995/96 1996/97 1997/98 1998/99a

Rice & rice products 1,165.8 439.8 125.8 37.7 246.6

Pulsesb 799.4 1,357.9 1,272.1 1,403.3 1,134.1

Raw rubber 122.4 180.0 170.6 133.6 100.4

Prawns 352.0 408.7 564.2 565.4 575.7

Fish & fish products 209.8 159.4 226.6 301.7 302.1

Teakc 953.1 903.0 854.6 697.6 848.3

Other hardwoodsc 107.8 145.5 130.5 155.3 209.9

Plywood, veneer & other forest products 129.7 207.9 300.5 n/a n/a of which: plywood & veneer 31.0 23.5 34.5 34.4 120.4

Readymade garments 342.5 300.1 402.4 345.5 n/a

Gems 97.5 126.4 151.9 135.9 n/a

Sesame seeds 223.4 186.1 191.0 175.6 163.8

Unspecified itemsc 1,318.3 1,099.3 1,771.3 2,707.9 3,206.3

Total incl others 5,405.2 5,032.7 5,487.7 6,290.0 7,082.0 Government 2,950.3 2,353.0 1,910.4 1,655.3 2,174.7 Private 2,454.9 2,679.7 3,577.3 4,634.7 4,907.3

a Preliminary. b Includes matpe, pedesein and other pulses. c Includes border trade.

Sources: Central Statistical Organisation, Selected Monthly Economic Indicators; Ministry of National Planning and Economic Development, Salient Economic and Social Indicators, March 1998; Reviewof the Financial, Economic and Social Conditions for 1997/98.

Reference table 21

Imports(Kt m; cif)

1994/95 1995/96 1996/97 1997/98 1998/99a

Capital goods 2,913.9 3,644.5 4,714.2 6,172.1 8,678.7

Intermediate goods 1,854.3 2,376.8 3,046.0 3,350.1 1,979.4

Consumer goods 3,564.1 4,280.3 4,018.6 4,735.2 6,234.2

Total 8,332.3 10,301.6 11,778.8 14,257.4 16,892.3 Government 2,949.3 3,352.0 2,563.4 4,126.9 5,489.6 Private 5,383.0 6,949.6 9,215.4 10,130.5 11,402.7

Major itemsMachinery & transport equipment 2,092.1 2,402.0 3,032.1 3,597.4 4,649.3 Base metals & manufactures 713.6 971.3 1,535.0 1,498.6 1,951.5 Electrical machinery 561.2 598.2 830.1 1,202.8 1,676.8 Edible vegetable oils 806.5 1,183.6 398.2 805.5 669.6 Cement 107.1 135.1 299.5 502.6 393.3 Unspecified itemsb 3,114.8 3,848.1 4,652.7 4,875.5 6,018.6

a Preliminary. b Mostly border trade.


Myanmar (Burma) 55


Reference table 22

Key exports and imports (volume)(‘000 metric tonnes unless otherwise indicated)

1994/95 1995/96 1996/97 1997/98 1998/99a

ExportsRice & rice products 1,041.0 354.0 93.1 28.3 123.0 Pulses 424.9 609.6 594.8 768.9 621.6 Raw rubber 24.3 24.8 25.8 22.0 29.7 Teak logsb (cu tonnes) 150.0 117.3 138.7 138.0 165.1 Hardwood logsb (cu tonnes) 83.4 83.3 130.8 153.9 235.3 Prawns 10.1 9.0 12.8 13.5 13.2 Fish & fish products 71.8 34.5 32.8 41.2 45.7

ImportsWheat flour 58 54 26 n/a n/a Milk, condensed & evaporated 6,932 14,843 2,432 n/a n/a Edible vegetable oils & other hydrogenated oils 205 218 72 n/a n/a Paper, paperboard & manufactures 31 43 38 n/a n/a Refined mineral oil (‘000 gallons) 5,120 912 13,075 n/a n/a Artificial & synthetic fibres 962 602 262 n/a n/a Tobacco products 54 1,769 963 n/a n/a

a Provisional. b Includes border trade.

Sources: Central Statistical Organisation, Selected Monthly Indicators; Statistical Yearbook; Ministry of National Planning and Economic Development, Statistical Yearbook, 1997.

Reference table 23

Main trading partners(Kt m)

1994/95 1995/96 1996/97 1997/98 1998/99a

Exports to:China 277.5 195.1 336.1 667.7 790.2 India 695.4 1,036.8 929.0 1,421.5 692.8 Singapore 883.5 986.8 1,007.3 828.8 665.2 Thailand 542.8 535.0 544.2 748.8 456.8 Malaysia 102.0 147.5 305.3 165.2 343.2 Total incl others 5,405.2 5,032.7 5,487.7 6,290.0 7,082.0

Imports from:Singapore 1,215.7 1,819.7 2,791.5 4,440.4 5,170.6 Thailand 830.2 1,318.8 1,191.7 1,397.9 2,153.3 Japan 1,962.7 2,505.8 2,465.0 2,181.4 2,143.4 China 1,019.4 1,433.8 1,116.3 1,338.8 1,725.2 Indonesia 320.0 350.3 319.8 677.8 1,263.7 Total incl others 8,332.3 10,301.6 11,778.8 14,257.4 16,892.3

a Provisional.


56 Myanmar (Burma)


Reference table 24

Direction and composition of tradea

(US$ ’000)

US India Singapore Thailand ChinaDerived exports 1998 1998 1998 1997 1998

Food 4,857 87,381 62,636 13,606 5,263 of which: fish 1,985 230 39,112 12,129 245 fruit, vegetables & products 328 85,503 18,622 21 3,072Oilseeds 4,242 62 12,329 129 1,562Rubber & manufactures 0 1,237 7,574 2 430Wood & manufactures 7,453 83,501 16,921 58,511 23,720Ores, slag & ash 0 0 454 51 4,918Pearls, precious stones, metals & jewellery 10,600 7 1,717 41,456 8,172Total incl others 174,805 173,918 120,433 82,303 62,050

China Singapore Thailand Malaysia JapanDerived imports 1998 1998 1997 1998 1998

Food 9,277 27,471 39,961 2,742 161 of which: dairy products 4,242 9,013 13,418 324 0Beverages & tobacco 36,995 17,464 39,523 489 20Mineral fuels 16,120 55,913 29,926 82,423 36Animal & vegetable oils & fats 24 4,600 5,983 135,186 0Chemicalsb 34,467 46,610 63,921 6,977 4,994Textile fibres, yarn, cloth & manufactures 68,534 21,357 32,921 1,822 2,974Iron & steel & manufacturesc 68,938 30,029 19,396 47,248 16,535Tools etc & miscellaneous metal manufactures 2,889 6,873 2,104 396 1,267Machinery incl electric 156,758 166,462 37,205 7,146 110,282Road vehicles & tractors 17,849 12,226 12,305 196 40,447Other transport equipment 59,897 4,396 439 77 325Clothing 1,366 6,065 7,091 8 6Scientific instruments etc 6,757 12,902 696 120 2,094Total incl others 514,335 455,914 403,602 292,915 184,422

a Figures from partners’ trade accounts. b Including crude fertilisers and manufactures of plastics. c Including scrap.

Sources: UN, External Trade Statistics, Series D.

Reference table 25

Balance of payments, IMF series(US$ m; calendar years)

1994 1995 1996 1997 1998

Current-account balancea –129.9 –258.5 –279.8 –412.0 –453.7

Exports, fob 897.4 933.2 937.9 974.5 1,171.4 Imports, fob –1,466.7 –1,756.3 –1,869.1 –2,106.6 –2,455.0 Trade balance –609.4 –823.0 –931.2 –1,132.1 –1,283.6

Services: credit 270.7 360.9 427.7 521.7 543.4 Services: debit –128.9 –243.8 –302.0 –443.4 –444.5 Services balance 141.8 117.1 125.7 78.3 98.9

Income: credit 7.1 15.4 9.1 6.5 10.9 Income: debit –74.1 –124.2 –53.1 –20.3 –39.7 Income balance –67.0 –108.8 –44.0 –13.8 –28.8

continued

Myanmar (Burma) 57


1994 1995 1996 1997 1998

Current transfers: credit 405.2 564.2 598.4 685.1 789.7 Current transfers: debit –0.6 –8.0 –28.8 –29.7 –29.8 Current transfers balance 404.6 556.2 569.6 655.4 759.9

Capital account n/a n/a n/a n/a n/a Financial account 185.2 242.8 266.8 469.1 535.8 Outwards direct investment 0.0 0.0 0.0 0.0 0.0 Inwards direct investment 126.1 277.2 310.4 387.2 315.1 Other investment liabilities 59.1 –34.4 –43.6 81.9 220.7 of which: general government 56.5 –36.7 –40.6 87.5 224.2Errors & omissions (net) –10.3 –16.2 –11.7 –26.0 –22.3 Overall balance 45.0 –31.8 –24.7 31.0 59.7 Change in reserves –45.0 31.8 24.7 –31.0 –59.7

a Components do not add in source due to rounding.


Reference table 26

Balance of payments, national series(Kt m)

1993/94 1994/95 1995/96 1996/97 1997/98a

Exports fob 4,249 5,405 5,255 5,496 6,022

Imports cif –7,952 –8,766 –10,295 –11,501 –13,451

Merchandise trade balance –3,703 –3,361 –5,040 –6,005 –7,429

Services credit 3,150 3,585 4,803 5,737 6,177 Government 1 1 1 1 1 Private services & transfers 1,671 1,897 2,644 2,908 2,894 Travel 720 847 1,062 1,236 1,145 Transport & insurance 30 20 32 44 41 Embassies & international organisations 94 81 68 63 80 Other 634 739 996 1,485 2,016

Services debit –764 –771 –1,584 –2,063 –2,138 Government 1 1 1 1 1 Private 1 2 56 206 124 Travel 62 81 109 188 210 Transport & insurance 125 124 198 192 202 Embassies & international organisations 101 69 82 63 70 Other 474 494 1,138 1,413 1,531

Services balance 2,386 2,814 3,219 3,674 4,039

Interest credit 28 49 101 38 35

Interest debit –457 –445 –790 –154 –174

Interest balance –429 –396 –689 –116 –139

Current-account balance (excl grants) –1,746 –943 –2,510 –2,447 –3,529

Memorandum itemsNet grants 601 632 745 643 762 Net loans 344 347 –229 –668 56 Net foreign investment 581 814 1,824 1,865 2,685 Net short-term loans –7 –7 –5 0 –27

Total balance incl others –140 374 –240 –445 –67

a Provisional.


58 Myanmar (Burma)


Reference table 27

External debt(US$ m unless otherwise indicated; debt stocks as at year-end; calendar years)

1993 1994 1995 1996 1997

Total external debt 5,757 6,555 5,771 5,184 5,074 Long-term debt 5,394 6,154 5,378 4,804 4,640 Short-term debt 362 401 393 381 434 of which: interest arrears on long-term debt 354 380 352 366 390 Use of IMF credit 0 0 0 0 0

Public & publicly guaranteed long-term debt 5,394 6,154 5,378 4,804 4,640 Official creditors 5,105 5,820 5,011 4,438 4,188 Multilateral 1,348 1,458 1,311 1,223 1,171 Bilateral 3,758 4,362 3,680 3,215 3,017 Private creditors 289 334 367 366 452

Total debt service, paid 111 162 248 157 114 Principal 22 42 180 140 101 Interest 89 120 68 18 13 of which: short-term debt 1 1 2 1 2

Ratios (%)Debt-service ratioa 11.8 13.4 19.3 12.1 8.0Short-term debt/total external debt 6.3 6.1 6.8 7.3 8.6Concessional long-term loans/ total external debt 86.6 86.6 84.7 83.5 80.6

Memorandum itemsDisbursements 72 59 86 144 190 Multilateral creditors 14 12 0 –1 0 Bilateral creditors 23 19 16 97 47 Private creditors 35 28 69 47 143

Note. Long-term debt is defined as having original maturity of more than one year. Figures do notadd due to rounding.a Debt service as a percentage of earnings from exports of goods and services.Source: World Bank, Global Development Finance, 1999.

Reference table 28

Net official development assistancea

(US$ m; calendar years)

1993 1994 1995 1996 1997

Bilateral 77.3 142.8 126.2 45.3 23.6 of which: Japan 68.6 133.8 114.2 35.2 14.8 France 3.4 2.0 4.3 2.1 1.9 Australia 0.2 0.4 1.9 1.5 1.7 Norway 0.4 0.7 0.8 1.2 1.6 Germany 1.6 1.4 1.3 1.5 1.4

continued

Myanmar (Burma) 59


1993 1994 1995 1996 1997

Multilateral 24.1 18.8 25.6 10.9 21.7 of which: IDA 0.3 –1.7 –9.5 –10.8 –7.0 UNDP 8.6 10.9 14.3 5.8 14.0 Asian Development Bank –3.4 –10.1 –10.3 –10.3 –11.7 UNICEF 7.5 6.5 6.9 8.0 8.4 UNHCR 0.2 8.2 11.5 9.6 7.9

Total 101.5 161.6 151.8 56.2 45.2

a Disbursements by OECD and OPEC members and multilateral agencies. Official developmentassistance is defined as grants and loans, with at least a 25% grant element, administered with theaim of promoting economic or social development.Source: OECD, Geographical Distribution of Financial Flows to Aid Recipients, 1993-97.

Reference table 29

Foreign reserves(US$ m unless otherwise indicated; end-period; calendar years)

1994 1995 1996 1997 1998

Foreign exchange 422.0 561.1 229.1 249.8 314.9

SDRs 0.1 0.1 0.1 0.1 0.3

Golda 12.8 12.0 11.6 10.9 11.4

Total reserves incl gold 434.9 573.2 240.8 260.8 326.6

Memorandum itemGold (m fine troy oz) 0.251 0.231 0.231 0.231 0.231

a National valuation.


Reference table 30

Exchange rates(Kt:US$; annual averages; calendar years unless otherwise indicated)

1994 1995 1996 1997 1998

Official rate 5.98 5.67 5.92 6.24 6.30

Official rate (financial year beginning Apr 1st) 5.87 5.69 5.99 6.30 6.34

Free-market rate 115 117a 138a 260a 330a

Free-market rate (financial year beginning Apr 1st) 113 120a 155a 237a 340a

a EIU estimate.

Sources: IMF, International Financial Statistics; US embassy (Yangon), Foreign Economic Trends Report: Burma; private reports.

Editors: Georgia Bush (editor); Graham Richardson (consulting editor)Editorial closing date: November 1st 2000

All queries: Tel: (44.20) 7830 1007 E-mail: [email protected]

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