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Back to Burma

 

Myanmar's Economy

Almost three quarters of Myanmar's population either grows or processes crops, with roughly only ten percent of of population working in the industrial sector. Myanmar is considered an agricultural country and before World War II, it had been the world's top exporter of rice.  Since the population increased after the war, it decreased the amount of surplus rice on hand for export.

Although there aren't many visitors to Myanmar (in 1996, there were about 185,000), tourism is the leading resource of foreign exchange.  The government had tried to improve the economy by pushing socialism and nationalizing most of the industries, but it was on the whole unsuccessful in its efforts.  In the early 90's, the government tried a different approach, accepting foreign investments, but again, it is not very successful.  The most successful economy in Myanmar is the black market, which has little government interference.

Since the late 90's Myanmar's economy has worsened due to U.S. economic sanctions (due to a negative human rights record) and the widespread Asian economic problems.  These issues decreased the amount of foreign investment and increased inflation even more.  

Economy - overview:
Burma, a resource-rich country, suffers from pervasive government controls, inefficient economic policies, corruption, and rural poverty. Despite Burma's emergence as a natural gas exporter, socio-economic conditions have deteriorated under the regime's mismanagement, leaving most of the public in poverty, while military leaders and their business cronies exploit the country's ample natural resources. The transfer of state assets, especially real estate, to cronies and military families in 2010 under the guise of a privatization policy further widened the gap between the economic elite and the public. The economy suffers from serious macroeconomic imbalances - including unpredictable inflation, fiscal deficits, multiple official exchange rates that overvalue the Burmese kyat, a distorted interest rate regime, unreliable statistics, and an inability to reconcile national accounts. Burma's poor investment climate hampers the inflow of foreign investment; in recent years, foreign investors have shied away from nearly every sector except for natural gas, power generation, timber, and mining. The exploitation of natural resources does not benefit the population at large. The business climate is widely perceived as opaque, corrupt, and highly inefficient. Over 60% of the FY 2009-10 budget was allocated to state owned enterprises - most operating at a deficit. The most productive sectors will continue to be in extractive industries - especially oil and gas, mining, and timber - with the latter two causing significant environmental degradation. Other areas, such as manufacturing, tourism and services, struggle in the face of inadequate infrastructure, unpredictable trade policies, neglected health and education systems, and endemic corruption. A major banking crisis in 2003 caused 20 private banks to close; private banks still operate under tight restrictions, limiting the private sector's access to credit. The United States, the European Union, and Canada have imposed financial and economic sanctions on Burma. US sanctions, prohibiting most financial transactions with Burmese entities, impose travel bans on senior Burmese military and civilian leaders and others connected to the ruling regime, and ban imports of Burmese products. These sanctions affected the country's fledgling garment industry, isolated the struggling banking sector, and raised the costs of doing business with Burmese companies, particularly firms tied to Burmese regime leaders. The global crisis of 2008-09 caused exports and domestic consumer demand to drop. Remittances from overseas Burmese workers - who had provided significant financial support for their families - slowed or dried up as jobs were lost and migrant workers returned home. Although the Burmese government has good economic relations with its neighbors, significant improvements in economic governance, the business climate, and the political situation are needed to promote serious foreign investment.
GDP (purchasing power parity):
$76.47 billion (2010 est.)
country comparison to the world: 80
$72.65 billion (2009 est.)
$69.1 billion (2008 est.)
note: data are in 2010 US dollars
GDP (official exchange rate):
$42.95 billion (2010 est.)
GDP - real growth rate:
5.3% (2010 est.)
country comparison to the world: 65
5.1% (2009 est.)
3.6% (2008 est.)
GDP - per capita (PPP):
$1,400 (2010 est.)
country comparison to the world: 202
$1,400 (2009 est.)
$1,300 (2008 est.)
note: data are in 2010 US dollars
GDP - composition by sector:
agriculture: 43.1%
industry: 20%
services: 36.9% (2010 est.)
Labor force:
31.68 million (2010 est.)
country comparison to the world: 18
Labor force - by occupation:
agriculture: 70%
industry: 7%
services: 23% (2001 est.)
Unemployment rate:
5.7% (2010 est.)
country comparison to the world: 53
4.9% (2009 est.)
Population below poverty line:
32.7% (2007 est.)
Household income or consumption by percentage share:
lowest 10%: 2.8%
highest 10%: 32.4% (1998)
Investment (gross fixed):
15.1% of GDP (2010 est.)
country comparison to the world: 134
Budget:
revenues: $1.411 billion
expenditures: $3.042 billion (2010 est.)
Taxes and other revenues:
3.3% of GDP (2010 est.)
country comparison to the world: 210
Budget surplus (+) or deficit (-):
-3.8% of GDP (2010 est.)
country comparison to the world: 114
Inflation rate (consumer prices):
7.7% (2010 est.)
country comparison to the world: 184
1.5% (2009 est.)
Central bank discount rate:
9.95% (31 December 2010 est.)
country comparison to the world: 20
12% (31 December 2009 est.)
Commercial bank prime lending rate:
17% (31 December 2010 est.)
country comparison to the world: 36
17% (31 December 2009 est.)
Stock of narrow money:
$4.907 billion (31 December 2010 est.)
country comparison to the world: 90
$4.038 billion (31 December 2009 est.)
note: this number reflects the vastly overvalued official exchange rate of 5.38 kyat per dollar in 2007; at the unofficial black market rate of 1,305 kyat per dollar for 2007, the stock of kyats would equal only US$2.465 billion and Burma's velocity of money (the number of times money turns over in the course of a year) would be six, in line with the velocity of money for other countries in the region; in January-February 2011, the unofficial black market rate averaged 890 kyat per dollar.
Stock of broad money:
$7.8 billion (31 December 2010 est.)
country comparison to the world: 109
$6.231 billion (31 December 2009 est.)
Stock of domestic credit:
$11.32 billion (31 December 2010 est.)
country comparison to the world: 93
$7.538 billion (31 December 2009 est.)
Market value of publicly traded shares:
$NA
Agriculture - products:
rice, pulses, beans, sesame, groundnuts, sugarcane; hardwood; fish and fish products
Industries:
agricultural processing; wood and wood products; copper, tin, tungsten, iron; cement, construction materials; pharmaceuticals; fertilizer; oil and natural gas; garments, jade and gems
Industrial production growth rate:
4.3% (2010 est.)
country comparison to the world: 96
Electricity - production:
6.426 billion kWh (2008 est.)
country comparison to the world: 106
Electricity - consumption:
4.63 billion kWh (2008 est.)
country comparison to the world: 115
Electricity - exports:
0 kWh (2009 est.)
Electricity - imports:
0 kWh (2009 est.)
Oil - production:
21,120 bbl/day (2010 est.)
country comparison to the world: 75
Oil - consumption:
37,000 bbl/day (2010 est.)
country comparison to the world: 109
Oil - exports:
0 bbl/day (2009 est.)
country comparison to the world: 153
Oil - imports:
19,700 bbl/day (2009 est.)
country comparison to the world: 113
Oil - proved reserves:
50 million bbl (1 January 2011 est.)
country comparison to the world: 79
Natural gas - production:
11.54 billion cu m (2009 est.)
country comparison to the world: 38
Natural gas - consumption:
3.25 billion cu m (2009 est.)
country comparison to the world: 68
Natural gas - exports:
8.29 billion cu m (2009 est.)
country comparison to the world: 23
Natural gas - imports:
0 cu m (2009 est.)
country comparison to the world: 157
Natural gas - proved reserves:
283.2 billion cu m (1 January 2011 est.)
country comparison to the world: 40
Current account balance:
$1.549 billion (2010 est.)
country comparison to the world: 46
$704.8 million (2009 est.)
Exports:
$8.813 billion (2010 est.)
country comparison to the world: 93
$6.862 billion (2009 est.)
note: official export figures are grossly underestimated due to the value of timber, gems, narcotics, rice, and other products smuggled to Thailand, China, and Bangladesh
Exports - commodities:
natural gas, wood products, pulses, beans, fish, rice, clothing, jade and gems
Exports - partners:
Thailand 38.3%, India 20.8%, China 12.9%, Japan 5.2% (2010)
Imports:
$4.296 billion (2010 est.)
country comparison to the world: 124
$4.02 billion (2009 est.)
note: import figures are grossly underestimated due to the value of consumer goods, diesel fuel, and other products smuggled in from Thailand, China, Malaysia, and India
Imports - commodities:
fabric, petroleum products, fertilizer, plastics, machinery, transport equipment; cement, construction materials, crude oil; food products, edible oil
Imports - partners:
China 38.9%, Thailand 23.2%, Singapore 12.9%, South Korea 5.8% (2010)
Reserves of foreign exchange and gold:
$3.762 billion (31 December 2010 est.)
country comparison to the world: 93
$3.561 billion (31 December 2009 est.)
Debt - external:
$7.998 billion (31 December 2010 est.)
country comparison to the world: 94
$8.186 billion (31 December 2009 est.)
Exchange rates:
kyats (MMK) per US dollar -
966 (2010)
1,055 (2009)
1,205 (2008)
1,296 (2007)
1,280 (2006)

 


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