Myanmar: Opening Up to Its Trade and Foreign Direct Investment Potential

Abstract

Myanmar, which is one of the 13 least developed countries (LDCs) in Asia and the Pacific, is relatively rich in natural resources, has young workforce, and is close to the world’s most dynamic trading economies, including China and India. With an appropriate policy mix, improved business environment and a stable, but reformed political system, the country is expected to fulfill its considerable potential and move ahead with delivering on economic development. As Myanmar starts to rebuild its trade and investment links with the region and the global economy, policymakers and business leaders will need various data, information and advice from analysts and researchers to be able to make proper decisions. Unfortunately this will not be a straightforward process as macroeconomic, trade and investment data for the country are incomplete, and available data are not always reliable. Furthermore, because of the years of isolation imposed on Myanmar, the trade and investment flows recorded during those years do not necessarily reflect the flows that actually occurred, or the patterns of specialization and competitiveness that would have occurred without such isolation. This paper presents a picture of the country’s trade and foreign direct investment (FDI) patterns in the past two decades and an introductory survey of selected policies that affect Myanmar’s trade and FDI potential within its new political and macroeconomic framework. To provide more complete guidance on the integration of Myanmar’s producers into the regional and world economies, a traditional trade competitiveness diagnostics study is necessary. Such an analysis will only be possible once more complete datasets have been compiled after some time of normal trade and investment relations.

Keywords: Myanmar, reform, market access, trade policy, investment policy, regulation, exchange rate, small and medium-sized enterprises (SMEs)

JEL Classification: F14