Economy Of Myanmar

Myanmar’s economy is recognized as the seventh largest among the countries in Southeast Asia, reflecting its significant role within the regional economic landscape. This ranking takes into account various economic indicators, including gross domestic product (GDP), trade volumes, and industrial output, positioning Myanmar behind larger economies such as Indonesia, Thailand, and Vietnam but ahead of several smaller nations in the region. The country’s economic structure has traditionally been based on agriculture, natural resources, and manufacturing, with recent decades witnessing gradual diversification and integration into global markets. The transition to civilian rule in 2011 marked a pivotal turning point for Myanmar’s political and economic trajectory. The newly established government prioritized comprehensive reforms, initially concentrating on the political system to restore peace and foster national unity after decades of military rule and internal conflict. These political reforms included efforts to democratize governance, improve civil liberties, and engage in peace negotiations with various ethnic armed organizations. The stabilization of the political environment was seen as a necessary foundation for subsequent economic development and social progress. Following the initial phase of political stabilization, the government rapidly advanced a series of economic and social reform programs aimed at revitalizing the country’s economy and improving living standards. These reforms encompassed liberalizing trade policies, encouraging foreign direct investment, and modernizing infrastructure. Additionally, social reforms targeted healthcare, education, and poverty reduction, seeking to address long-standing disparities and promote inclusive growth. The government’s reform agenda was widely welcomed by international actors and investors, leading to increased engagement and financial support from multilateral institutions and foreign governments. Despite these reform efforts, economic statistics in recent years have revealed a significant decline compared to earlier data, reflecting the complex challenges facing Myanmar’s economy. In the fiscal year 2020, the country’s nominal GDP was recorded at $81.26 billion, a figure that underscored both the potential and the limitations of Myanmar’s economic capacity. This nominal GDP value, which measures the total market value of all final goods and services produced within the country without adjusting for price level differences, indicated a contraction relative to previous years, influenced by internal disruptions and external shocks. When adjusted for purchasing power parity (PPP), Myanmar’s GDP in the same fiscal year (2020) was estimated at $279.14 billion. The PPP adjustment accounts for differences in the cost of living and inflation rates, providing a more accurate comparison of economic productivity and living standards across countries. This higher PPP-adjusted GDP figure reflects the relatively lower price levels in Myanmar compared to more developed economies, suggesting that the country’s economic output, when measured in terms of domestic purchasing power, was substantially greater than nominal figures alone would indicate. The economic situation deteriorated markedly following the military coup d’état in February 2021, which precipitated an ongoing economic crisis. The coup disrupted political stability and led to widespread civil unrest, sanctions from Western countries, and a significant withdrawal of foreign investment. The resulting instability severely impacted key sectors such as manufacturing, tourism, and trade, while also exacerbating humanitarian challenges. The crisis has undermined the progress made during the previous decade of reform and has led to increased poverty, unemployment, and inflation, further straining the country’s economic resilience. In light of these developments, the International Monetary Fund (IMF) projected Myanmar’s GDP per capita for the year 2024 to be $1,179. This figure represents the average economic output per person and serves as an important indicator of the country’s overall economic well-being. The relatively low GDP per capita highlights the substantial development challenges Myanmar faces, including the need to rebuild investor confidence, restore political stability, and implement effective economic policies to promote sustainable growth and poverty alleviation. The IMF’s estimate underscores the urgency of addressing both the economic and political dimensions of Myanmar’s crisis to facilitate recovery and long-term development.

Since as early as 100 BC, the territory now known as Burma (Myanmar) occupied a pivotal position as the principal trade corridor linking the vast civilizations of China and India. This geographical advantage facilitated extensive regional commerce, as goods, ideas, and cultural influences traversed the overland and riverine routes that crossed Burmese lands. The region’s role as a conduit for trade was not merely incidental but foundational to its economic development during the classical era, enabling it to serve as a nexus where diverse products such as silk, spices, precious stones, and metals were exchanged. The strategic location of Burma thus integrated it into broader Asian trade networks, contributing to its economic vitality and cultural dynamism. Within this framework, the Mon Kingdom of lower Burma emerged as a significant maritime trading hub, particularly within the Bay of Bengal. The Mon people, inhabiting the fertile deltaic regions, capitalized on their access to the sea to develop thriving port cities that facilitated commerce between inland Burma and distant markets across the Indian Ocean. These trading centers became focal points for the exchange of goods such as rice, timber, precious gems, and textiles, attracting merchants from South Asia, Southeast Asia, and beyond. The Mon Kingdom’s prominence in maritime trade underscored its strategic economic importance and helped to shape the cultural and economic landscape of lower Burma during this period. The backbone of Burma’s economy in the classical era was overwhelmingly agrarian, with the vast majority of the population engaged primarily in rice cultivation alongside various other agricultural pursuits. Rice, as the staple food crop, was central not only to subsistence but also to the economic structure, supporting population growth and urban development. Farmers employed sophisticated irrigation techniques and seasonal planting cycles adapted to the monsoonal climate, ensuring high yields in the fertile river valleys and delta regions. Beyond rice, agricultural activities included the cultivation of pulses, sesame, and other crops, as well as animal husbandry, which together underpinned the rural economy and sustained the socio-political order. The use of silver as the medium of exchange in Burma during this era indicates the presence of a monetized economy that facilitated trade and taxation. Silver coins circulated widely, enabling more complex commercial transactions beyond barter and providing a standardized measure of value. This monetary system supported both domestic trade and international commerce, reflecting the integration of Burma into regional economic networks. The availability and circulation of silver currency also suggest the existence of mining and trade routes that supplied precious metals, which were essential for maintaining economic stability and royal revenues. Land ownership in classical Burma was characterized by a highly centralized system in which all land was technically owned by the Burmese monarch. This concept of royal land ownership was rooted in the traditional political and religious ideology that portrayed the king as the ultimate sovereign and custodian of the realm’s resources. Under this system, land was allocated to nobles, officials, religious institutions, and cultivators on the basis of royal grants or tenure arrangements, which reinforced hierarchical social structures and the authority of the monarchy. The centralized control of land allowed the king to regulate agricultural production, collect taxes, and mobilize labor, thereby consolidating political power and economic control. The economic dominance of the Burmese monarchy extended beyond land ownership to encompass key sectors such as exports, oil wells, gem mining, and teak production. These valuable resources were under direct royal control, reflecting the monarchy’s strategic management of the kingdom’s wealth and its role as the principal economic agent. Oil extraction, although limited in scale compared to later periods, provided important revenue streams, while gem mining—particularly rubies and sapphires—was a lucrative enterprise that attracted foreign interest. Teak, renowned for its durability and resistance to decay, was a highly prized commodity, and its production was carefully overseen by the state. The royal monopoly over these sectors ensured that the benefits accrued primarily to the crown, reinforcing the monarchy’s economic and political supremacy. Burma’s participation in Indian Ocean trade networks further integrated its economy into the broader maritime commerce that connected East Africa, the Middle East, South Asia, and Southeast Asia. Burmese ports and trading centers served as nodes in these extensive networks, facilitating the exchange of goods such as spices, textiles, precious stones, and timber. The kingdom’s access to the sea enabled it to engage with diverse trading partners, contributing to economic diversification and cultural exchange. This maritime connectivity also exposed Burma to new technologies, religious ideas, and political influences, which shaped its historical trajectory. Among Burma’s exports, teak wood held a particularly prominent position from the 1700s through the 1800s. Teak’s exceptional qualities—its strength, resistance to water and pests, and longevity—made it highly sought after for shipbuilding, especially by European maritime powers expanding their naval and commercial fleets. The extraction and export of teak became a focal point of Burmese economic activity, with vast forests in the Irrawaddy valley and surrounding regions exploited for this valuable resource. The demand for teak not only generated significant revenue but also influenced patterns of labor, land use, and state policy, as the monarchy sought to regulate and maximize the benefits of this natural asset. The economic system under the Burmese monarchy was fundamentally based on the principle of redistribution, a concept deeply embedded in local society, religion, and politics. Central to this system was the practice of Dāna, or generosity, which permeated social relations and governance. The king, as the supreme patron, was expected to redistribute wealth through grants, religious endowments, and public works, thereby legitimizing his rule and fostering social cohesion. This redistributive model emphasized the circulation of resources rather than accumulation by individuals, aligning economic activity with Buddhist ethical principles and reinforcing the reciprocal obligations between ruler and subjects. State intervention in the economy extended to the regulation of prices for the most important commodities, reflecting a controlled economic environment in which the monarchy sought to stabilize markets and prevent exploitation. By setting price ceilings or floors on essential goods, the state aimed to ensure affordability for the general population and maintain social order. This regulatory approach was consistent with the broader redistributive ethos of the monarchy and its responsibility to safeguard the welfare of its subjects. Such price controls also facilitated the management of supply and demand, particularly in times of scarcity or crisis, underscoring the active role of the state in economic affairs. Agrarian self-sufficiency was regarded as vital to the Burmese economy, with a primary focus on domestic agricultural production rather than external trade. The emphasis on self-sufficiency reflected both practical considerations—such as the unpredictability of maritime trade and the need to feed a growing population—and ideological commitments to sustaining the kingdom’s stability. While trade was acknowledged and participated in, it was considered secondary to the fundamental goal of ensuring food security and rural prosperity. This prioritization shaped economic policies and social organization, reinforcing the centrality of agriculture as the foundation of Burma’s classical-era economy.

Under British administration in Burma, the social hierarchy was distinctly stratified, reflecting colonial attitudes and policies that privileged certain groups over others. Europeans occupied the apex of this social structure, enjoying the highest status and access to economic and political power. Below them were Indians, Chinese, and Christianized minorities, who often served as intermediaries in commerce, administration, and other urban professions. The indigenous Buddhist Burmese population, despite being the majority, found themselves at the bottom of this hierarchy, marginalized both socially and economically. This rigid stratification reinforced colonial dominance and fostered divisions within Burmese society that would have lasting impacts on social cohesion and identity. Burma was forcibly integrated into the global economy under British rule, with its economic growth primarily driven by extractive industries and cash crop agriculture. The colonial administration focused on exploiting Burma’s rich natural resources and fertile lands to serve the demands of international markets, particularly those of Europe. Extractive industries such as oil and timber extraction were developed intensively, while vast tracts of land were converted to rice cultivation for export. This integration transformed Burma from a relatively self-sufficient agrarian society into a colonial economy heavily dependent on global commodity markets, exposing it to the volatility of international prices and external economic forces. Despite the exploitative nature of colonial rule, Burma achieved the second-highest GDP per capita in Southeast Asia during the British period. This economic performance was largely driven by the booming rice export sector and the development of infrastructure that facilitated trade and resource extraction. However, the wealth generated was predominantly concentrated in the hands of Europeans and a small elite, with the majority of the Burmese population remaining impoverished or only marginally benefiting from economic growth. The disparity in wealth distribution underscored the colonial economic model’s focus on extraction and export rather than broad-based development or social welfare. Burma emerged as the world’s largest exporter of rice during the colonial era, with its production primarily destined for European markets. This export-oriented rice economy distinguished Burma from other British colonies such as India, which suffered devastating famines and mass starvation during the same period. The colonial administration’s emphasis on rice cultivation for export led to the expansion of irrigated paddy fields and the establishment of Burma as a critical supplier in global food markets. However, this focus on export crops often came at the expense of local food security and subsistence agriculture, creating vulnerabilities within the rural population. British colonial policies in Burma were heavily influenced by the prevailing ideologies of Social Darwinism and free market economics, which justified imperial dominance and economic liberalization. These policies facilitated large-scale immigration, particularly from India, to meet the labor demands of the expanding colonial economy. By the 1920s, the port of Rangoon had surpassed New York City as the greatest immigration port worldwide, reflecting the massive influx of migrants seeking economic opportunities. This unprecedented scale of immigration dramatically altered the demographic and social landscape of Burma, intensifying ethnic tensions and reshaping urban centers. Historian Thant Myint-U emphasized the extraordinary scale of immigration into Burma relative to its population of approximately 13 million at the time. He noted that the volume of immigrants entering Burma was equivalent to the United Kingdom accepting 2 million people annually, highlighting the profound demographic transformation that the colony underwent. This influx of immigrants, primarily Indians, contributed to the growth of urban populations and the diversification of the colony’s economy but also exacerbated social divisions and competition for resources. By the 1920s, Indian immigrants had become the majority population in most of Burma’s largest cities, including Rangoon, Akyab, Bassein, and Moulmein. This demographic shift was driven by the demand for labor in commerce, administration, and industry, as well as the colonial administration’s preference for employing Indians in many urban roles. The predominance of Indian communities in these urban centers altered the cultural and economic dynamics, often leading to tensions between the indigenous Burmese population and immigrant groups, particularly as competition for jobs and political influence intensified. The Burmese population under British rule experienced widespread feelings of helplessness and disenfranchisement, which manifested in a complex form of racism combining feelings of superiority and fear. The colonial social order and economic marginalization fostered resentment and anxiety among the indigenous population, who perceived themselves as being displaced both economically and culturally. This ambivalent racial attitude reflected the psychological impact of colonial subjugation and the struggle to assert identity and agency within a system designed to privilege foreigners and minority groups. The indigenous crude oil industry, centered in Yenangyaung, was appropriated by the British colonial administration and placed under the monopoly control of Burmah Oil. This takeover represented a significant shift in control over a vital natural resource, as the British consolidated extraction and production under corporate management aligned with imperial interests. The Burmah Oil Company became a dominant player in the colonial economy, exploiting Burma’s oil reserves to supply both domestic needs and export markets, further integrating the colony into global industrial networks. British Burma began exporting crude oil as early as 1853, marking one of the earliest instances of petroleum production in Asia. Alongside oil, Burma produced approximately 75% of the world’s teak during the colonial period, making it a crucial supplier of this valuable hardwood for global markets. The exploitation of teak forests was carried out on a large scale, with extensive logging operations managed by British companies. These industries not only generated significant revenue but also contributed to environmental degradation and the displacement of local communities dependent on forest resources. Despite the impressive levels of economic production in sectors such as rice, oil, and timber, the distribution of wealth in colonial Burma remained heavily skewed toward Europeans and foreign companies. The colonial economic system prioritized the extraction of resources and the generation of profits for British investors, with limited reinvestment in local development or equitable wealth sharing. This concentration of wealth contributed to persistent social inequalities and limited the economic advancement of the indigenous Burmese majority. During the 1930s, Burma’s agricultural production experienced a sharp decline, primarily due to falling international rice prices amid the global economic downturn of the Great Depression. The collapse in rice prices severely impacted the colony’s export earnings and the livelihoods of rural farmers who depended on rice cultivation. This downturn persisted for several decades, undermining the economic stability of the agricultural sector and exacerbating rural poverty. The prolonged agricultural crisis highlighted the vulnerabilities inherent in Burma’s dependence on a single cash crop and external market conditions. World War II brought widespread devastation to Burma, as the British colonial administration employed a scorched earth policy to deny resources to the advancing Japanese forces. This strategy involved the deliberate destruction of major government buildings, oil wells, and mines containing valuable minerals such as tungsten, tin, lead, and silver. The scorched earth tactics aimed to cripple the Japanese war effort but resulted in extensive damage to Burma’s infrastructure and natural resource base, compounding the hardships faced by the population during the conflict. Allied forces conducted extensive bombing campaigns over Burma during World War II, targeting Japanese military installations and supply lines. These bombings caused widespread destruction across urban and rural areas, further damaging infrastructure and disrupting civilian life. The cumulative effect of the scorched earth policy and aerial bombardment left Burma’s economy and physical landscape in ruins by the war’s end, necessitating significant reconstruction efforts in the post-war period. Following independence in 1948, Burma inherited a devastated infrastructure and an economy in disarray. The physical destruction wrought by the war, combined with the legacy of colonial economic policies, left the newly sovereign nation facing immense challenges in rebuilding its transportation networks, industrial capacity, and agricultural production. The post-independence government had to address these structural weaknesses while navigating the complex political and social dynamics of a diverse and divided society. The loss of India as a British colonial possession diminished Burma’s strategic relevance within the British Empire, thereby facilitating its path toward independence. Previously administered as a province of British India, Burma’s separation in 1937 and the subsequent independence of India in 1947 removed the colonial rationale for maintaining British control over Burma. This geopolitical shift weakened British resolve to retain the colony and opened the door for Burmese nationalist movements to achieve sovereignty. After gaining independence and establishing a parliamentary government, Prime Minister U Nu initiated a policy of nationalization that declared all land as state-owned property. This policy marked a significant departure from colonial land tenure systems and aimed to assert national control over resources and promote equitable land distribution. The nationalization of land was intended to break the power of large landowners and foreign interests, although its implementation faced considerable challenges related to administration and local resistance. The post-independence government also attempted to implement an eight-year economic plan designed to stimulate development and modernize the economy. This plan was partially financed through monetary injections into the economy, which, while providing necessary capital for investment, also led to inflationary pressures. The inflation that ensued complicated economic management and affected the purchasing power of ordinary citizens, illustrating the difficulties faced by the nascent government in balancing growth objectives with macroeconomic stability.

Following Burma’s independence in 1948 and the establishment of a parliamentary government, Prime Minister U Nu embarked on an ambitious policy of nationalisation designed to reshape the country’s economic landscape. This policy aimed to transfer key industries and resources from private ownership to state control, reflecting a broader vision of economic sovereignty and social welfare. U Nu’s government sought to reduce foreign influence in the economy and to direct economic development in a way that would benefit the broader population rather than a small elite. Nationalisation efforts targeted sectors deemed strategic or essential for national development, including banking, insurance, and major industrial enterprises, with the intention of fostering a more equitable distribution of wealth and resources. In line with these nationalisation policies, U Nu endeavored to develop Burma into a welfare state, implementing central planning mechanisms to guide economic activities and allocate resources efficiently across various sectors. The government introduced five-year plans that outlined objectives for agricultural production, industrial growth, and infrastructure development, reflecting a commitment to state-led economic management. Central planning was intended to coordinate investment, control prices, and regulate production to ensure that the needs of the population were met while promoting economic stability. This approach was influenced by contemporary models of planned economies, although Burma’s implementation was constrained by limited administrative capacity and the challenges of post-colonial reconstruction. Despite these efforts, Burma’s export sectors suffered a dramatic decline throughout the 1950s, undermining the country’s economic prospects. Rice, which had been the cornerstone of Burma’s export economy, saw its shipments fall by approximately two-thirds during this period. This steep reduction was attributable to a combination of factors, including disruptions caused by internal conflicts, reduced agricultural productivity, and the adverse effects of nationalisation on market incentives. Similarly, mineral exports experienced an even more precipitous drop, decreasing by over 96%, which reflected both declining global demand and the deterioration of mining operations under state control. The collapse of these vital export industries severely constrained foreign exchange earnings, limiting the government’s ability to import essential goods and invest in development projects. Although nationalisation dominated the economic agenda, the government recognized the need to diversify the economy and stimulate growth in other sectors. Consequently, plans were formulated to develop light consumer industries, such as textiles, food processing, and small-scale manufacturing, through private sector participation. These industries were seen as more adaptable to domestic demand and capable of generating employment opportunities for the growing urban population. The government sought to encourage private entrepreneurs and foreign investors to engage in these sectors, hoping to balance state control with market-driven initiatives. However, the overall climate of economic uncertainty and restrictive policies often hindered private investment and limited the effectiveness of these diversification efforts. The political landscape shifted dramatically in 1962 when General Ne Win led a military coup d’état that overthrew U Nu’s government and established military rule. Under Ne Win’s leadership, the regime introduced a new economic doctrine known as the Burmese Way to Socialism, which sought to consolidate state control over the economy and promote self-reliance. This policy mandated the nationalisation of virtually all industries, with the notable exception of agriculture, which remained in private hands due to its critical role in food production and rural livelihoods. The Burmese Way to Socialism combined elements of Marxist ideology with traditional Burmese values, emphasizing the rejection of capitalism and foreign influence in favor of a centrally planned, state-dominated economy. The implementation of the Burmese Way to Socialism had devastating consequences for Burma’s economy. The extensive nationalisation and rigid state controls led to widespread inefficiencies, mismanagement, and corruption within state enterprises. Industrial output stagnated, agricultural productivity declined, and the country’s infrastructure deteriorated due to chronic underinvestment. The policy’s isolationist tendencies further exacerbated economic difficulties by restricting trade and limiting access to foreign technology and capital. As a result, Burma experienced severe impoverishment and economic decline throughout the 1960s and 1970s, with living standards falling sharply and the country’s once-promising economic potential squandered. By the late 1980s, Burma had become one of the poorest countries in the world, with a largely stagnant economy and limited prospects for recovery under the prevailing system. In recognition of Burma’s dire economic situation, the United Nations officially classified the country as a least developed country (LDC) in 1987. This designation reflected the persistent challenges faced by Burma, including low per capita income, limited industrialization, inadequate infrastructure, and poor human development indicators. The LDC status underscored the need for substantial international assistance and structural reforms to address the country’s entrenched economic problems. However, the political and economic policies of the Ne Win regime continued to impede meaningful progress, leaving Burma trapped in a cycle of poverty and underdevelopment well into the late twentieth century.

Following the political upheaval of 1988, Myanmar’s military regime began to retreat from its previously rigid command economy, initiating a cautious opening that permitted a modest expansion of the private sector. This shift was partly motivated by the urgent need to attract foreign investment to obtain much-needed foreign exchange, which was essential for stabilizing the country’s faltering economy. Although the government maintained significant control over economic activities, it allowed limited participation by private enterprises and foreign investors, marking a departure from the strict central planning that had characterized the economy for decades. This gradual liberalization aimed to stimulate economic growth while retaining the military’s overarching authority over economic affairs. Than Shwe, who emerged as the military leader during this period, advocated for some degree of deregulation in economic policies and took steps to relax certain restrictions that had previously constrained Burma’s economy. Despite these efforts, his economic policies were frequently criticized as ill-planned and inconsistent, often lacking coherent strategic direction. Than Shwe’s approach reflected a tension between the desire to modernize the economy and the regime’s instinct to maintain tight political control, which ultimately limited the effectiveness of reforms. Nonetheless, his tenure saw a cautious opening that allowed for some economic diversification and engagement with regional economic frameworks. A notable aspect of Than Shwe’s economic strategy was his support for Burma’s participation in the Association of Southeast Asian Nations (ASEAN), which Myanmar joined in 1997. This integration into a regional bloc was intended to enhance economic cooperation, attract foreign investment, and improve diplomatic relations with neighboring countries. Concurrently, Than Shwe relaxed some state controls over the economy, permitting greater private sector activity and foreign involvement, albeit within a framework that preserved the military’s dominant role. These policy shifts were part of a broader attempt to align Myanmar more closely with regional economic trends while maintaining internal political stability. In 1997, Than Shwe oversaw a significant crackdown on corruption within the government and military apparatus. This anti-corruption campaign led to the dismissal of several high-ranking cabinet ministers and regional military commanders, signaling an attempt to address the widespread graft that had permeated the state machinery. The purge was intended to consolidate Than Shwe’s control and improve the regime’s legitimacy by projecting an image of internal discipline and reform. However, critics argued that the crackdown was selective and primarily targeted political rivals or those who threatened the military’s economic interests, rather than representing a genuine effort to eradicate systemic corruption. Despite the official anti-corruption measures, Than Shwe was also an advocate of crony capitalism, a system in which private enterprises were often co-owned or indirectly controlled by the state or military elites. This arrangement suppressed the development of basic market institutions and competition, as economic power was concentrated in the hands of a few privileged individuals connected to the regime. The intertwining of political and economic interests created an environment where business success depended largely on patronage and loyalty to the military, rather than market efficiency or innovation. This system entrenched economic inequalities and hindered the emergence of a truly free market economy in Myanmar. By 2009, Myanmar’s economy was widely regarded as the least free in Asia, a dubious distinction it shared with North Korea. This assessment reflected the pervasive state control, lack of transparency, and limited economic freedoms that characterized the country’s economic environment under military rule. The restrictive policies, combined with widespread corruption and inefficiency, contributed to stagnation and underdevelopment, leaving Myanmar isolated from global economic trends and investment flows. Transparency International’s 2007 Corruption Perceptions Index, released on 26 September 2007, ranked Burma as the most corrupt country in the world, tied with Somalia. This ranking underscored the severity of corruption within the country’s political and economic systems, highlighting the challenges faced by any efforts to promote good governance or economic reform. The pervasive corruption affected all levels of government and business, undermining public trust and deterring foreign investment. The national currency of Myanmar, the kyat, operated under a complex dual exchange rate system that resembled the model used in Cuba. By 2006, the market exchange rate for the kyat was approximately two hundred times lower than the official government-set rate. This discrepancy created significant distortions in the economy, as the official rate was used for government transactions and state-owned enterprises, while the black market rate reflected the true value of the currency. The dual system allowed the government to maintain an illusion of currency stability and control over foreign exchange, but it also encouraged rent-seeking behavior and economic inefficiencies. In 2011, the Burmese government sought assistance from the International Monetary Fund (IMF) to evaluate options for reforming the exchange rate system. This initiative aimed to stabilize the domestic foreign exchange market and reduce the economic distortions caused by the dual rate system. The government recognized that a unified and realistic exchange rate was essential for attracting foreign investment, improving trade competitiveness, and fostering overall economic stability. The IMF’s involvement marked a tentative step toward greater engagement with international financial institutions and a willingness to consider more comprehensive economic reforms. The dual exchange rate system enabled the government and state-owned enterprises to divert funds and revenues, effectively allowing the military regime to control significant economic resources. This system also provided the government with greater control over the local economy and the ability to temporarily suppress inflation by manipulating official exchange rates. However, these short-term benefits came at the cost of long-term economic distortions, including reduced investor confidence, inefficient allocation of resources, and the proliferation of black market activities. Inflation in Myanmar was a persistent problem during this period, averaging 30.1% between 2005 and 2007. Such high inflation rates significantly impacted economic stability, eroding purchasing power and increasing the cost of living for ordinary citizens. The inflationary pressures were exacerbated by the government’s monetary policies, structural inefficiencies, and the distortions created by the dual exchange rate system. Inflation contributed to widespread economic hardship and fueled public dissatisfaction with the military regime’s economic management. In April 2007, the National League for Democracy (NLD), the main opposition party, organized a two-day workshop focused on the economy. The workshop concluded that skyrocketing inflation was a major impediment to economic growth and development. Participants highlighted how the rapid increase in prices undermined consumer confidence and constrained investment, thereby limiting the country’s economic potential. The NLD’s engagement on economic issues reflected its broader efforts to challenge the military regime’s policies and propose alternative approaches to governance and development. Soe Win, who moderated the NLD workshop, stated that basic commodity prices had increased by 30% to 60% since the military regime promoted a pay rise for government workers in April 2006. He noted that inflation was closely correlated with corruption, suggesting that graft and mismanagement within the government exacerbated price increases and economic instability. Soe Win’s observations underscored the interconnectedness of political and economic challenges facing Myanmar, where corruption not only undermined governance but also had tangible impacts on everyday economic conditions. Myint Thein, an NLD spokesperson, described inflation as the critical source of Myanmar’s ongoing economic crisis. He emphasized that unchecked inflation eroded the livelihoods of ordinary citizens and hindered efforts to achieve sustainable economic development. Myint Thein’s critique highlighted the failure of the military regime’s economic policies to address fundamental macroeconomic problems and the need for comprehensive reforms to restore economic stability and growth. During this period, Myanmar’s geopolitical position attracted the attention of regional powers, notably China and India, both of which sought to strengthen ties with the country for mutual economic benefit. China’s interest was driven by strategic considerations and the desire to access Myanmar’s natural resources and ports, while India aimed to enhance connectivity and economic cooperation as part of its “Look East” policy. These efforts led to increased bilateral trade, investment, and infrastructure projects, reflecting Myanmar’s growing importance in regional economic dynamics despite its internal challenges. Conversely, Western countries, including the European Union, the United States, and Canada, imposed investment and trade sanctions on Burma during this period. These measures were designed to pressure the military regime to undertake political reforms and improve human rights conditions. The sanctions restricted foreign investment and trade opportunities, further isolating Myanmar’s economy from global markets. The United States, in particular, banned all imports from Burma, a restriction that was part of a broader strategy to penalize the military government for its authoritarian practices. This ban was later lifted, reflecting shifts in U.S. policy as Myanmar began to undertake political and economic reforms in the early 2010s. Despite these sanctions, foreign investment in Myanmar primarily originated from regional neighbors, including China, Singapore, South Korea, India, and Thailand. These countries viewed Myanmar as a strategic partner and a source of natural resources, and they were willing to engage economically despite international restrictions. Investments from these countries focused on sectors such as energy, infrastructure, and manufacturing, contributing to Myanmar’s gradual economic opening. The involvement of these regional investors underscored the complex interplay between geopolitics and economics in shaping Myanmar’s development trajectory during the military regime’s rule.

In 2011, Myanmar embarked on a series of substantial economic reforms under the leadership of President Thein Sein, marking a pivotal shift from decades of military rule and economic isolation. The new government prioritized anti-corruption measures aimed at improving transparency and governance within both public and private sectors. Alongside these efforts, the administration introduced regulations to stabilize the currency exchange rate, which had previously been subject to significant volatility and multiple exchange rates that hindered trade and investment. Reforms also targeted foreign investment laws, which had historically been restrictive and cumbersome, by simplifying procedures and opening the economy to international capital. Taxation policies were overhauled to create a more predictable and investor-friendly environment, including the introduction of more structured tax codes and efforts to broaden the tax base, thereby increasing government revenue and fiscal stability. These reforms catalyzed a dramatic surge in foreign direct investment (FDI), with inflows increasing from a modest US$300 million in the fiscal year 2009–10 to an unprecedented US$20 billion in 2010–11. This represented an extraordinary rise of approximately 6567%, reflecting the global business community’s renewed confidence in Myanmar’s economic prospects following the liberalization measures. The influx of capital was largely driven by sectors such as energy, manufacturing, telecommunications, and infrastructure development, as foreign investors sought to capitalize on Myanmar’s untapped markets and strategic location. This capital surge not only bolstered economic activity but also signaled Myanmar’s re-emergence as a viable destination for international investment after decades of sanctions and isolation. The substantial inflow of foreign capital exerted upward pressure on the Burmese kyat, which appreciated by about 25% during this period. This strengthening of the national currency reflected increased demand for the kyat as foreign investors converted their funds to local currency for operations and investments. In response to the improved currency position and to further stimulate trade and economic openness, the government relaxed import restrictions that had previously limited the availability of goods and raw materials. Additionally, export taxes, which had been a significant burden on exporters and discouraged trade, were abolished, thereby enhancing Myanmar’s competitiveness in regional and global markets. These policy adjustments facilitated greater integration of Myanmar’s economy with international supply chains and trade networks. Despite persistent challenges related to currency management and structural economic issues, Myanmar’s economy was projected to grow robustly, with an estimated expansion rate of approximately 8.8% in 2011. This growth was driven by increased investment, improved business confidence, and the gradual opening of key sectors. The government’s reform agenda, combined with favorable external conditions such as rising commodity prices and regional economic dynamism, contributed to this optimistic outlook. However, the economy still faced significant hurdles, including underdeveloped infrastructure, limited access to finance, and ongoing political uncertainties. A landmark infrastructure project during this period was the planned completion of the Dawei deep seaport, estimated at a cost of US$58 billion. This ambitious project was envisioned to transform Myanmar into a major trade hub by linking Southeast Asia and the South China Sea through the Andaman Sea to the Indian Ocean. The strategic location of the Dawei port was expected to facilitate maritime trade routes connecting Myanmar with the Middle East, Europe, and Africa, thereby enhancing regional connectivity and economic integration. The port’s development was anticipated to stimulate growth not only within Myanmar but also across the ASEAN region by providing an alternative gateway for goods and energy supplies, reducing transportation costs, and attracting ancillary industries such as logistics, manufacturing, and services. In 2012, the Asian Development Bank (ADB) formally resumed its engagement with Myanmar after a hiatus of nearly three decades, signaling renewed international confidence in the country’s reform trajectory. The ADB issued a US$512 million loan package aimed at financing critical infrastructure and development projects across multiple sectors. These projects included improvements to banking services, road networks, energy generation and distribution, irrigation systems for agriculture, and educational facilities. The resumption of ADB assistance marked a significant milestone in Myanmar’s reintegration into the global financial system and provided much-needed support for the country’s development priorities, helping to address longstanding deficits in infrastructure and human capital. In March 2012, Myanmar introduced a draft foreign investment law, the first of its kind in over twenty years, which represented a major step towards economic liberalization. This legislation allowed foreign investors unprecedented rights, including the ability to establish businesses without the requirement of local partners, a departure from previous policies that mandated joint ventures with Burmese entities. Furthermore, the law permitted foreigners to legally lease land, removing a significant barrier to investment in sectors such as agriculture, manufacturing, and real estate. These provisions were designed to attract a broader range of investors by providing greater legal certainty and operational flexibility, thereby enhancing Myanmar’s competitiveness in the regional investment landscape. The draft foreign investment law also included provisions aimed at ensuring that the benefits of foreign investment would extend to the local workforce. It stipulated that Burmese citizens must constitute at least 25% of a firm’s skilled workforce, reflecting a commitment to developing domestic human capital and preventing the displacement of local workers. The government planned to progressively increase this requirement to between 50% and 75% over time through targeted training initiatives and capacity-building programs. These measures sought to balance the influx of foreign expertise with the promotion of sustainable employment opportunities for Myanmar’s population, thereby fostering inclusive economic growth. On 28 January 2013, Myanmar announced a significant agreement with international lenders to cancel or refinance nearly US$6 billion of its foreign debt, which accounted for almost 60% of the country’s total external debt. This debt relief package was a critical step in alleviating Myanmar’s financial burdens and improving its creditworthiness on the global stage. Japan contributed by writing off US$3 billion, while the Paris Club of creditor nations agreed to cancel US$2.2 billion. Additionally, Norway forgave US$534 million of Myanmar’s debt. The debt restructuring not only reduced the country’s debt servicing costs but also enhanced its ability to allocate resources towards development priorities and infrastructure investment, thereby supporting the broader reform agenda. Following the initial wave of reforms, Myanmar’s inward foreign direct investment continued to grow steadily. Between January and November 2014, the government approved investment projects worth approximately US$4.4 billion. This sustained increase reflected ongoing investor confidence and the expanding opportunities in various sectors such as manufacturing, energy, telecommunications, and tourism. The approval of these projects indicated that Myanmar was successfully transitioning from a closed economy to an emerging market with diversified economic activities and increasing integration into regional and global value chains. A report published by the McKinsey Global Institute on 30 May 2013 projected that Myanmar’s economy had the potential to quadruple in size by 2030, provided that the country invested strategically in high-technology industries. The report emphasized that such growth would depend on Myanmar’s ability to overcome structural challenges and avoid disruptive factors such as the illicit drug trade and ongoing conflicts with ethnic minority groups. These issues posed risks to political stability and social cohesion, which could undermine economic development. Nevertheless, the report highlighted the transformative potential of technology-driven sectors, including information technology, manufacturing automation, and advanced services, as engines of future growth and modernization. Despite the rapid economic changes and technological advancements, as of October 2017, fewer than 10% of Myanmar’s population had access to formal banking services, underscoring the persistence of financial exclusion. This low level of bank account ownership contrasted sharply with the high penetration of smartphones, which reached approximately 98% during the 2016–17 period. The widespread availability of mobile technology presented an opportunity to bridge the gap in financial inclusion by enabling digital financial services. In response, mobile money schemes were being implemented in Myanmar, drawing on successful models from African countries where mobile-based financial services had expanded access to banking without reliance on traditional financial institutions. These initiatives aimed to provide convenient, affordable, and secure financial products to underserved populations, thereby supporting economic participation and poverty reduction.

Myanmar’s economy entered a severe crisis following the military coup d’état in February 2021, marking a stark departure from the relative economic progress achieved in preceding years. The coup abruptly disrupted the country’s political stability and economic trajectory, triggering widespread uncertainty and undermining investor confidence. By April 30, 2021, the United Nations Development Programme (UNDP) underscored the gravity of the situation, warning that the combined effects of the COVID-19 pandemic and the military takeover threatened to reverse the economic gains Myanmar had made over the previous sixteen years. This dual shock compounded existing vulnerabilities and precipitated a rapid deterioration in economic conditions. Under the governance of the State Administration Council (SAC), established by the military junta, Myanmar’s economy became characterized by stagnation, soaring inflation, capital flight, and fractured governance structures. The absence of any credible political resolution exacerbated the economic malaise, leaving prospects for recovery and inclusive growth bleak. The SAC’s approach to economic management centered predominantly on regime survival, relying heavily on resource extraction and implementing coercive economic controls. These measures included forced currency conversions and government-mandated price fixing, which severely distorted market operations and further eroded investor confidence. Such policies disrupted the normal functioning of the economy and discouraged both domestic and foreign participation in economic activities. The economic decline since the coup has been precipitous. Myanmar’s economy, once among the fastest growing in Southeast Asia, became the region’s weakest by 2023. The International Monetary Fund (IMF) projected a real gross domestic product (GDP) contraction of 1% for the fiscal year 2024-25, continuing a prolonged downturn that began with an immediate 18% GDP collapse following the coup. This sharp contraction reflected the widespread disruption across multiple sectors. The agricultural sector, a backbone of Myanmar’s economy and a major source of employment, contracted by 4%, while the industrial and services sectors experienced no growth during this period. This stagnation across key economic sectors signaled a comprehensive economic malaise affecting the entire productive base of the country. As the formal economy contracted, informal and illicit economic activities expanded markedly. Myanmar emerged as the world’s largest producer of opium, capitalizing on the instability and weakened law enforcement. Additionally, the country became a significant hub for synthetic drug production and distribution, as well as for online scam centers, which proliferated amid the economic chaos. These illicit sectors grew in prominence, filling the void left by the shrinking formal economy and contributing to a parallel economy that further complicated governance and economic recovery efforts. Foreign direct investment (FDI) approvals plummeted dramatically in the aftermath of the coup. From over $5 billion in fiscal year 2019-20, approvals fell sharply to $662 million in fiscal year 2023-24, reflecting a dramatic decline in investor interest and confidence. This collapse in FDI was driven by a combination of factors, including international sanctions, financial blacklisting, and increasing regulatory opacity. These punitive measures and the unpredictable business environment discouraged both foreign and domestic economic engagement, further isolating Myanmar from global financial and trade networks. The socioeconomic impact of the economic crisis has been profound. Poverty levels surged nationwide, with 77% of households classified as poor or near-poor by recent assessments, up significantly from 58% in 2017. This sharp increase indicated a substantial deterioration in living standards and heightened vulnerability among the population. Inflation, fueled by extensive money printing to finance government expenditures, peaked at 35% in 2022 and remained elevated, particularly affecting the prices of essential goods such as food and transport. The rising cost of living exacerbated economic hardship for ordinary citizens, eroding real incomes and purchasing power. Real wages declined across various economic sectors, deepening household vulnerability and reducing the capacity of families to meet basic needs. Labour shortages intensified due to mass outmigration, especially following the introduction of the 2024 conscription law, which compelled many young people to flee the country to avoid military service. This exodus contributed to a significant drain on the workforce, further undermining productivity and economic potential. Approximately one-fifth of Myanmar’s population had fled their communities due to conflict, economic hardship, or political persecution, compounding the loss of human capital and weakening the country’s economic foundation. Trade activity also suffered setbacks after a brief rebound. In 2023, exports declined by $4 billion, and land border trade was sharply reduced in 2024, further weakening the economy’s external sector. The decline in trade reflected both diminished production capacity and increasing difficulties in cross-border commerce due to political instability and security concerns. The financial sector remained fragile, characterized by liquidity shortages, low public trust, and a shrinking microfinance industry. These conditions severely limited access to credit and financial services, constraining business operations and household financial resilience. The Myanmar kyat experienced significant depreciation, losing approximately one-third of its value relative to its pre-coup level. In an effort to stabilize the currency, the Central Bank of Myanmar intervened by selling $600 million worth of foreign reserves, equivalent to about 10% of the country’s total reserves. Despite these efforts, by April 2022, foreign reserves had dwindled substantially, foreign investment had decreased sharply, and remittances from overseas workers had plummeted. These financial pressures prompted the junta to impose capital controls and import restrictions aimed at preserving foreign currency reserves and managing balance of payments challenges. However, these capital controls and import restrictions had unintended consequences, including shortages of critical medicines. Essential drugs for chronic conditions such as diabetes and cancer became scarce, exacerbating public health challenges in an already strained healthcare system. The overall loss of skilled workers, driven by emigration and conflict-related displacement, contributed to a 9–11% contraction in GDP since 2020. This human capital flight represented a significant blow to Myanmar’s economic capacity, reducing the availability of qualified personnel essential for economic development and service delivery. With the SAC prioritizing military objectives over economic and human development, Myanmar faces a prolonged human resource crisis. The ongoing conflict, political repression, and economic mismanagement have undermined education, health, and labor market outcomes, threatening to hinder the country’s economic recovery for decades to come. The combination of diminished human capital, fractured governance, and economic dislocation creates a challenging environment for rebuilding sustainable growth and improving living standards across Myanmar.

In 2013, the Myanmar government undertook its first comprehensive, countrywide socio-economic study, which revealed alarming statistics about the state of employment and poverty within the population. The study found that 37 percent of the population were unemployed, indicating a severe lack of job opportunities and economic engagement across the country. Additionally, it reported that 26 percent of the population lived below the poverty line, underscoring widespread economic hardship that affected more than a quarter of the nation’s inhabitants. These figures painted a stark picture of the challenges Myanmar faced in fostering inclusive economic growth and improving living standards for its citizens. The data highlighted the urgent need for targeted policies to address unemployment and poverty, which were deeply intertwined with broader social and economic issues. The economic difficulties experienced by many Myanmar households had significant social repercussions, particularly in the realm of family formation and marriage patterns. One of the most notable consequences was the extreme delay in marriage and the establishment of families. The average age of marriage in Myanmar was recorded at 27.5 years for men and 26.4 years for women, a demographic trend that stood out sharply within the Southeast Asian region. This delay was nearly unmatched among neighboring countries, with the exception of highly developed nations such as Singapore, where similar marriage ages were observed. The postponement of marriage was closely linked to economic insecurity; young adults often delayed forming families due to financial instability, lack of stable employment, and the high costs associated with raising children. This shift in social behavior reflected broader transformations in Myanmar’s demographic and economic landscape, influenced by both internal challenges and external regional trends. Myanmar’s fertility rate also exhibited notable changes during this period, reflecting the interplay between economic conditions and demographic behavior. In 2010, the fertility rate was recorded at 2.07 children per woman, a figure that was comparatively low for the region, especially when juxtaposed with countries facing similar economic challenges. For instance, Cambodia, with comparable levels of development and economic hardship, had a fertility rate of 3.18 children per woman, while Laos reported an even higher rate of 4.41 children per woman. The relatively low fertility rate in Myanmar suggested a demographic transition influenced by factors beyond mere economic standing, including social norms, access to family planning, and health services. This demographic shift had important implications for the country’s future population growth and workforce composition, signaling a move towards smaller family sizes and potentially altered age structures. The decline in Myanmar’s fertility rate was particularly striking when viewed over a longer historical timeline. In 1983, the fertility rate stood at a much higher 4.7 children per woman, indicating that the country had undergone a significant demographic transition over the subsequent decades. This reduction occurred despite the absence of a formal, comprehensive national population policy aimed at controlling or managing fertility rates. The decline was therefore attributed to a combination of socio-economic factors and evolving cultural attitudes rather than direct government intervention. The sustained decrease in fertility rates over nearly three decades highlighted the profound changes in reproductive behavior and family planning practices within Myanmar society, reflecting broader shifts in economic conditions, education levels, and access to healthcare. A critical factor contributing to the fertility decline was the economic burden that additional children imposed on family incomes. Many families faced financial constraints that made raising multiple children increasingly difficult, leading to a conscious decision to limit family size. This economic calculus was compounded by the widespread use of birth control methods, which became more prevalent as awareness and availability increased. However, the limited access to safe and legal reproductive health services also resulted in a high incidence of illegal abortions, which posed significant health risks to women. The prevalence of such abortions underscored the gaps in the country’s healthcare infrastructure and the need for improved reproductive health policies. Together, these factors illustrated how economic hardship directly influenced demographic trends, with families adapting their reproductive choices to align with their financial realities. In the realm of economic policy and foreign investment, Myanmar sought to introduce reforms aimed at improving governance and attracting international capital. The 2012 draft of the foreign investment law proposed a significant restructuring of the Myanmar Investment Commission (MIC), the body responsible for overseeing investment licenses. The draft law suggested transforming the MIC from a government-appointed entity into an independent board, a change intended to enhance transparency and reduce bureaucratic inefficiencies in the issuance of investment licenses. This reform was part of a broader effort to create a more investor-friendly environment, signaling Myanmar’s desire to integrate more fully into the global economy and attract foreign direct investment. By establishing an independent commission, the government aimed to build investor confidence and demonstrate a commitment to fair and transparent regulatory practices. Despite these proposed reforms, concerns persisted regarding the entrenched nature of government corruption and its impact on the country’s economic and social development. Investigations and reports documented ongoing links between key government officials and illicit activities, including the drug trade, which remained a significant problem in Myanmar. The narcotics industry, particularly in regions such as the Golden Triangle, was closely intertwined with political and military interests, complicating efforts to combat illegal trafficking. Additionally, corruption was evident in industries that employed forced labor, with the mining sector standing out as a notable example. Forced labor practices in mining not only violated human rights but also undermined the legitimacy of economic activities and deterred ethical investment. These issues highlighted the challenges Myanmar faced in establishing transparent governance and rule of law, which were essential for sustainable economic progress. Several regions within Myanmar remained inaccessible to foreigners due to ongoing internal conflicts, further complicating the country’s economic and social landscape. Areas such as the Golden Triangle, a region historically known for opium production and trafficking, were particularly affected by these restrictions. The government was engaged in armed conflict with various ethnic minority groups and opposition forces in these regions, resulting in instability and insecurity. These conflicts had deep historical roots and were driven by long-standing grievances related to ethnic identity, resource control, and political autonomy. The presence of armed insurgencies and military operations limited access for humanitarian aid, development projects, and foreign investment, thereby perpetuating cycles of poverty and underdevelopment. The unresolved nature of these internal conflicts continued to pose significant obstacles to national unity and economic integration, affecting both the government’s capacity to implement reforms and the overall prospects for peace and stability in Myanmar.

Rice has long been the cornerstone of Myanmar’s agricultural sector, representing the primary staple crop and occupying a dominant position in the country’s cultivated land. Approximately 60% of Myanmar’s total arable land is devoted to rice cultivation, underscoring its critical importance to both the economy and food security. This extensive rice cultivation accounts for an overwhelming 97% of the nation’s total food grain production by weight, highlighting rice as the fundamental dietary component for the majority of the population. The centrality of rice in Myanmar’s agriculture reflects both traditional farming practices and the crop’s suitability to the country’s varied climatic and geographic conditions. Between 1966 and 1997, Myanmar undertook significant efforts to modernize and improve rice production through collaboration with the International Rice Research Institute (IRRI). During this period, the country released 52 modern rice varieties, which were developed to enhance yield, disease resistance, and adaptability to local environmental conditions. This partnership with IRRI played a pivotal role in boosting national rice output, with production rising to 14 million tons by 1987 and further increasing to 19 million tons by 1996. The adoption of these improved rice strains was instrumental in increasing productivity and stabilizing food supplies, marking a period of agricultural advancement that aligned with broader development goals. By 1988, the impact of these modern rice varieties was clearly evident across Myanmar’s rice fields. Approximately half of the country’s rice cultivation area was planted with these improved strains, demonstrating widespread acceptance among farmers. Notably, 98% of the irrigated rice fields had transitioned to modern varieties, reflecting the particular success of these strains in more intensively managed agricultural zones. This extensive adoption not only enhanced yields but also contributed to more efficient water use and better resilience against pests and environmental stresses, thereby strengthening the overall rice production system. In the early 2010s, Myanmar’s rice production continued to show growth, albeit at a more modest pace compared to previous decades. In 2011, total milled rice production reached 10.60 million tons, representing an increase from the 1.8% growth rate recorded in 2010. This production level indicated sustained, though slower, expansion in the rice sector, which remained vital to the country’s food economy and export potential. The milled rice figures reflect the processing stage after harvesting, underscoring the importance of both agricultural output and post-harvest handling in meeting domestic demand and supporting rural livelihoods. In contrast to the prominence of rice, other agricultural commodities have had more regionally specific roles within Myanmar’s economy. In northern Burma, for example, the cultivation of opium poppies had been a longstanding tradition, deeply embedded in the local agrarian culture and economy. However, the government’s opium bans, particularly the one implemented in 2002, led to the cessation of these practices in key areas such as the Kokang region. The ban had profound social and economic consequences, resulting in the displacement of between 20,000 and 30,000 former poppy farmers who left the area as a direct outcome of the prohibition. This shift not only altered agricultural patterns but also had broader implications for regional stability and efforts to combat illicit drug production. Agricultural diversification efforts have also included the promotion of rubber and sugar cultivation in specific geographic zones. Rubber plantations have been actively encouraged in higher elevation areas such as Mong Mao, where climatic conditions favor the growth of rubber trees. Conversely, sugar cultivation is concentrated in the lowland regions, notably in Mong Pawk District, where the terrain and climate support sugarcane farming. These targeted agricultural initiatives reflect attempts to broaden the rural economy beyond rice and opium, aiming to develop alternative cash crops that can contribute to income generation and rural development. Despite these agricultural activities, Myanmar’s economic development faces significant challenges, particularly due to a shortage of an educated workforce equipped with skills in modern technology. This deficit in human capital impedes the country’s ability to adopt advanced industrial processes and to compete effectively in global markets. The lack of technical expertise and professional training limits productivity improvements and constrains the growth of sectors that require specialized knowledge, thereby hindering overall economic progress and industrial diversification. Infrastructural inadequacies further compound Myanmar’s economic difficulties. The country’s transportation and logistics networks remain underdeveloped, with goods primarily transiting through neighboring countries such as Thailand and China. The main port facilitating international trade is located in Yangon, which serves as the principal maritime gateway. However, reliance on external transit routes and limited port capacity restrict the efficiency of trade flows and increase costs for exporters and importers alike. This infrastructural bottleneck underscores the need for investment in transport and logistics to support economic expansion. The state of Myanmar’s railroads exemplifies the broader infrastructural challenges. The railway system, originally constructed during British colonial rule in the late nineteenth century, has seen minimal maintenance and repair since its establishment, resulting in a dilapidated network that hampers efficient transportation. Recognizing the critical importance of rail infrastructure, China and Japan have provided aid aimed at upgrading and modernizing Myanmar’s rail transport facilities. These international partnerships seek to enhance connectivity within the country and improve links to regional markets, thereby facilitating trade and mobility. Road infrastructure in Myanmar presents a mixed picture. While highways are generally paved and maintained in most parts of the country, road quality deteriorates in remote border regions where access is more difficult. These poorer road conditions in peripheral areas limit connectivity and economic integration, posing challenges for the movement of goods and people. Improving road networks in these regions remains a priority for enhancing regional development and reducing disparities between urban centers and rural border zones. Energy shortages represent another significant constraint on Myanmar’s development. Power supply is insufficient to meet the needs of the population and industries, with Yangon, the largest city, experiencing frequent electricity deficits. Approximately 30% of the country’s population lacks access to electricity, and of this group, 70% reside in rural areas where infrastructure is less developed. This widespread lack of electrification restricts economic activities, educational opportunities, and quality of life, particularly in rural communities that remain disconnected from the national grid. In response to these energy challenges, the civilian government has announced plans to import electricity from neighboring Laos. This initiative aims to alleviate domestic power shortages by supplementing Myanmar’s own generation capacity with imported energy. The strategy reflects a broader regional approach to energy cooperation and seeks to stabilize supply, support industrial growth, and improve living standards by ensuring more reliable access to electricity across the country. Beyond agriculture and energy, Myanmar’s industrial landscape includes several other significant sectors. Agricultural goods processing remains important, alongside the production of textiles, wood products, and construction materials. The country is also notable for its extraction and processing of gems and metals, which contribute to export earnings and employment. Additionally, Myanmar possesses substantial reserves of oil and natural gas, which play a crucial role in the national economy and energy supply. These diverse industries illustrate the multifaceted nature of Myanmar’s economic base, encompassing both primary resource extraction and manufacturing activities. The structure of Myanmar’s economy reflects a division of control between the private sector and the government. Agriculture, light industry, and transport activities are predominantly managed by private enterprises, allowing for market-driven growth and entrepreneurship in these areas. In contrast, the government retains control over energy production, heavy industry, and military-related industries, maintaining a significant role in sectors deemed strategic or critical to national security. This dual system shapes the dynamics of economic development and influences the allocation of resources and investment priorities within the country.

The garment industry has emerged as a crucial source of employment in the Yangon area, serving as a major driver of urban labor markets. By mid-2015, the sector employed approximately 200,000 workers, reflecting its substantial role in providing livelihoods for a significant portion of the city’s population. This concentration of garment production in Yangon is attributable to the city’s status as Myanmar’s largest urban center, offering access to infrastructure, transportation networks, and a readily available labor force. The industry’s growth has been closely linked to the country’s broader economic reforms and increasing integration into global supply chains, which have encouraged both domestic expansion and foreign participation. In recognition of the garment sector’s importance and the need to improve labor conditions, the Myanmar government implemented a statutory minimum wage specifically for garment workers in March 2018. This wage was set at MMK 4,800 per day, which was equivalent to approximately US$3.18 at the time. The establishment of a minimum wage represented a significant policy intervention aimed at ensuring a baseline income for workers in an industry often characterized by low pay and precarious employment. The wage policy was part of broader labor reforms intended to enhance worker protections, improve standards of living, and maintain the competitiveness of Myanmar’s garment exports by addressing concerns over labor rights and social compliance raised by international buyers. The garment sector in Myanmar has attracted a notable influx of foreign direct investment (FDI), with the growth in foreign participation measured more by the increasing number of foreign firms entering the market than by the absolute value of investment capital. This trend reflects the strategic interest of international apparel manufacturers and investors in leveraging Myanmar’s relatively low labor costs and improving business environment. The presence of foreign firms has introduced new technologies, management practices, and access to global markets, thereby contributing to the modernization and expansion of the domestic garment industry. The influx of foreign enterprises has also intensified competition within the sector, encouraging efficiency gains and product diversification. A pivotal moment in the development of Myanmar’s garment industry occurred in March 2012, when six of Thailand’s largest garment manufacturers announced plans to relocate portions of their production operations to Myanmar, primarily targeting the Yangon area. This decision was driven chiefly by the prospect of significantly lower labor costs in Myanmar compared to Thailand, which offered these firms an opportunity to reduce production expenses and enhance their competitiveness in the global apparel market. The relocation of Thai garment firms marked an important shift in regional manufacturing dynamics, signaling Myanmar’s emergence as an attractive destination for labor-intensive garment production. This move also catalyzed further foreign interest, as other investors sought to capitalize on Myanmar’s cost advantages and expanding export potential. By mid-2015, the garment industry in Myanmar had become increasingly internationalized, with approximately 55% of officially registered garment firms being either fully or partly foreign-owned. This statistic underscores the sector’s transformation from a predominantly domestic industry to one characterized by significant foreign investment and joint ventures. The presence of foreign ownership has been instrumental in driving export-oriented production and integrating Myanmar’s garment sector into global supply chains. Foreign-owned firms have often brought in capital, expertise, and connections to international buyers, facilitating the expansion of Myanmar’s garment exports and the adoption of international standards in production and labor practices. Among the foreign-owned garment firms operating in Myanmar as of mid-2015, a substantial proportion originated from China and Hong Kong, accounting for approximately 25% and 17% of foreign ownership respectively. This concentration of investment from Greater China reflects the region’s role as a major hub for garment manufacturing and trade, as well as its strategic interest in diversifying production bases amid rising labor costs in China and shifts in global sourcing patterns. Chinese and Hong Kong firms have leveraged their experience and networks to establish and expand manufacturing operations in Myanmar, often focusing on export-oriented production for markets in Europe, the United States, and Asia. This influx of investment has contributed to the rapid growth and increasing sophistication of Myanmar’s garment sector. Foreign-linked firms dominate Myanmar’s garment exports, accounting for nearly all of the country’s outbound shipments in this category. These firms are typically integrated into global apparel supply chains, producing garments under contract for international brands and retailers. Their dominance in exports highlights the critical role of foreign investment and management in driving Myanmar’s participation in the global garment trade. The export orientation of foreign-linked firms has also encouraged adherence to international quality standards, compliance with labor regulations, and responsiveness to global market trends, which have collectively enhanced the reputation and competitiveness of Myanmar’s garment products on the world stage. Garment exports from Myanmar have experienced rapid growth in recent years, a trend that accelerated notably following the lifting of European Union sanctions in 2012. The removal of these sanctions opened up new market opportunities for Myanmar’s garment products, particularly in the EU, which is one of the world’s largest apparel importers. This policy change not only expanded access to key export markets but also improved investor confidence and encouraged further foreign direct investment in the sector. The growth in exports has been supported by improvements in production capacity, quality control, and compliance with international labor and environmental standards, enabling Myanmar to capture a larger share of global garment trade. In 2016, Myanmar’s garment and textile exports reached a value of approximately US$1.6 billion, reflecting the sector’s rapid expansion and increasing importance to the national economy. This export performance underscored the success of Myanmar’s garment industry in attracting foreign investment, scaling production, and integrating into international markets. The substantial export earnings generated by the garment sector have contributed to foreign exchange inflows, employment generation, and economic diversification. The growth trajectory of garment exports also highlighted the potential for Myanmar to further develop its textile and apparel industries as part of its broader economic development strategy.

Burma, officially known as Myanmar, stands as the largest global producer of methamphetamines, with a significant portion of the ya ba tablets found in Thailand traced back to Burmese origins. These tablets predominantly emerge from the Golden Triangle region and the Northeastern Shan State, areas strategically located at the convergence of the borders of Thailand, Laos, and China. The Golden Triangle, historically notorious for opium production, has evolved into a major hub for synthetic drug manufacturing, particularly methamphetamines. The geographic positioning of Northeastern Shan State facilitates cross-border trafficking, making it a critical area for the production and distribution of ya ba, a methamphetamine-based drug that is highly popular and widely abused in Southeast Asia. The trafficking routes for Burmese-produced ya ba typically involve transit through Laos before entering Thailand. Once the drugs cross into Thailand, they are primarily transported through the northeastern region known as Isan, which shares a long border with Laos and Myanmar. This route has been favored due to the porous nature of the borders and the relative ease of movement through remote and mountainous terrain. The Isan region serves as a critical distribution point within Thailand, enabling the widespread dissemination of ya ba across the country. The trafficking networks are well-established and involve complex logistics to evade law enforcement efforts, often relying on local knowledge and cooperation with various actors along the supply chain. In 2010, the scale of this illicit trade was starkly highlighted when Burma was reported to have trafficked approximately one billion ya ba tablets to neighboring Thailand. This staggering figure underscores the magnitude of the methamphetamine production and the extensive reach of trafficking networks operating from Burmese territory. The mass production and export of ya ba have had significant social and economic impacts on Thailand, contributing to public health crises and straining law enforcement resources. The volume of drugs trafficked also reflects the entrenched nature of the drug trade within the Burmese economy and the challenges faced in curbing its proliferation. The issue of drug trafficking extends beyond Thailand’s borders. In 2009, Chinese authorities seized over 40 million ya ba tablets that had been illegally trafficked from Burma. This seizure highlights the transnational nature of the drug trade emanating from Myanmar and the growing demand for methamphetamines in China. The provinces bordering Myanmar, particularly Yunnan, have become critical transit points for these drugs entering the Chinese market. The substantial quantity of tablets confiscated by Chinese law enforcement demonstrates the scale at which Burmese-produced methamphetamines infiltrate regional markets and the ongoing efforts by neighboring countries to combat this illicit flow. The production of methamphetamines in Burma is largely controlled by ethnic militias and rebel groups, with the United Wa State Army (UWSA) being one of the most prominent actors involved. The UWSA, an ethnic armed organization based in the Wa region of Shan State, has been implicated in the manufacture and trafficking of large quantities of methamphetamines. These groups leverage their control over territory and local populations to facilitate drug production and distribution. In addition to ethnic militias, Burmese military units are also believed to be heavily involved in drug trafficking activities, either through direct participation or by providing protection and logistical support to traffickers. This complicity within official institutions has hindered efforts to dismantle the drug networks and has perpetuated the cycle of narcotics production and trade. In addition to methamphetamines, Burma remains the world’s second-largest supplier of opium, trailing only Afghanistan. Approximately 95% of the country’s opium cultivation is concentrated in Shan State, which has historically been the epicenter of opium poppy farming. The persistence of opium cultivation in this region is attributed to a combination of factors, including the rugged terrain, limited economic alternatives for local farmers, and the influence of armed groups who derive significant revenue from the trade. Opium production continues to fuel the narcotics economy in Myanmar, with the raw opium often processed locally or trafficked to international markets for conversion into heroin. The illegal narcotics trade in Burma generates substantial economic returns, with estimates suggesting that drug exports bring in between US$1 billion and US$2 billion annually. Remarkably, it is believed that as much as 40% of the country’s foreign exchange earnings are derived from drug-related activities. This significant financial contribution underscores the extent to which the narcotics economy is intertwined with Myanmar’s broader economic landscape. The revenues from drug trafficking provide critical funding for armed groups, corrupt officials, and criminal networks, further entrenching the illicit economy and complicating efforts to promote legitimate economic development and governance reforms. Efforts to eradicate opium cultivation in Myanmar have had unintended consequences, prompting many ethnic rebel groups, including the United Wa State Army and the Kokang, to diversify their illicit activities by increasing methamphetamine production. These groups have shifted focus to synthetic drugs, which offer higher profit margins and are less dependent on agricultural cycles compared to opium poppy cultivation. The transition to methamphetamine production reflects adaptive strategies by armed groups to maintain revenue streams amid intensified eradication campaigns and changing market demands. This diversification has contributed to the proliferation of synthetic drugs in the region and has complicated law enforcement efforts due to the different nature of production and trafficking networks involved. Before the 1980s, heroin trafficking routes from Burma primarily involved transporting heroin to Thailand, followed by maritime shipment to Hong Kong, which has historically remained a major international transit point for heroin. This route capitalized on established smuggling networks and the strategic position of Hong Kong as a global port and financial center. The heroin trade was deeply embedded in the regional drug economy, with Burmese heroin often reaching international markets through these channels. Despite shifts in trafficking patterns, Hong Kong continues to play a significant role in the transit and distribution of heroin, maintaining its status as a critical node in the global narcotics trade. In recent decades, drug trafficking routes have shifted toward southern China, particularly through the provinces of Yunnan, Guizhou, Guangxi, and Guangdong. This change is largely driven by a growing drug market within China itself, which has increased demand for heroin and synthetic drugs before these substances reach Hong Kong. The overland routes through these provinces facilitate the movement of narcotics from Myanmar into China’s interior, where they are distributed to urban centers and beyond. The expansion of trafficking corridors into southern China reflects evolving market dynamics and law enforcement pressures that have altered traditional smuggling pathways. Prominent drug traffickers operating in Burma have expanded their influence beyond the narcotics trade into other sectors of the Burmese economy, including banking, airlines, hotels, and infrastructure industries. This diversification allows traffickers to launder illicit proceeds, legitimize their wealth, and exert broader economic and political influence. Investments in legitimate businesses provide cover for money laundering activities and facilitate the movement of funds generated from drug trafficking. The integration of drug money into formal economic sectors complicates efforts to identify and disrupt illicit financial flows and undermines the integrity of Myanmar’s economic institutions. Infrastructure investments by drug traffickers have played a pivotal role in increasing profits and facilitating drug trafficking operations. By controlling transportation networks, logistics hubs, and communication systems, traffickers can streamline the movement of narcotics and evade detection. Additionally, these investments enable traffickers to engage in sophisticated money laundering schemes, further embedding illicit funds within the formal economy. The control over infrastructure also provides strategic advantages in maintaining territorial influence and negotiating power with both local authorities and rival groups. Myanmar’s informal economy is among the largest in the world and significantly feeds into the trade of illegal drugs. The vast informal sector encompasses a wide range of unregulated economic activities that operate outside formal legal and fiscal frameworks. This environment creates fertile ground for the proliferation of illicit trade, including narcotics, by providing anonymity and reducing regulatory oversight. The intertwining of the informal economy with drug trafficking networks perpetuates cycles of corruption, weak governance, and economic instability, posing significant challenges for development and law enforcement in Myanmar.

Myanma Oil and Gas Enterprise (MOGE) functions as the national oil and gas company of Myanmar, holding a pivotal role as the sole operator responsible for the exploration, production, and domestic transmission of oil and natural gas within the country. Established as a state-owned entity, MOGE oversees the entire upstream and midstream sectors of Myanmar’s hydrocarbon industry, managing exploration and extraction activities across both onshore and offshore fields. The enterprise operates an extensive domestic gas transmission network consisting of approximately 1,900 kilometres (1,200 miles) of onshore pipelines, which facilitate the distribution of natural gas to various industrial and residential consumers throughout the nation. This pipeline infrastructure not only supports domestic energy needs but also serves as a critical conduit for gas exports, underpinning Myanmar’s role as a regional energy supplier. One of the most significant projects under Myanmar’s oil and gas sector is the Yadana Project, which centers on the development and exploitation of the Yadana gas field located in the Andaman Sea. Discovered in the late 1970s, the Yadana gas field is situated offshore in the western maritime boundary of Myanmar and has become a cornerstone of the country’s natural gas production. The project involves the extraction of natural gas from offshore platforms, followed by its transportation through a dedicated pipeline system that traverses Myanmar’s territory en route to Thailand. This cross-border pipeline has been operational since the late 1990s and represents a critical energy link between the two countries, supplying Thailand with a substantial portion of its natural gas imports. The Yadana Project is operated by a consortium of international and local companies, with MOGE holding a significant stake, and it has been instrumental in generating export revenues and fostering bilateral energy cooperation. Complementing the Yadana Project, the Sino-Burma pipelines constitute a major planned infrastructure initiative aimed at enhancing Myanmar’s role as an energy transit hub between the Bay of Bengal and China. These pipelines are designed to connect Myanmar’s deep-water port of Kyaukphyu (also known as Sittwe), located on the Bay of Bengal, with Kunming in Yunnan province, China. The project envisions the construction of two parallel pipelines: one for crude oil and another for natural gas, facilitating the direct transport of energy resources from the Indian Ocean to China’s southwestern region. This strategic infrastructure is intended to reduce China’s dependence on the longer maritime route through the Strait of Malacca, thereby enhancing energy security and reducing transportation costs. The pipelines are expected to traverse several hundred kilometres across Myanmar’s territory, involving complex engineering and geopolitical considerations. The development of this corridor has attracted significant investment and cooperation between the Myanmar government and Chinese state-owned enterprises, reflecting the growing economic ties between the two countries. Offshore oil drilling activities in Myanmar have also attracted international players, including the Norwegian offshore drilling company Seadrill, which is owned by shipping magnate John Fredriksen. Seadrill’s involvement in Myanmar’s offshore sector includes the provision of drilling rigs and technical expertise to support exploration and production operations in Myanmar’s territorial waters. The company’s engagement is anticipated to contribute to the discovery and development of new oil reserves, thereby increasing Myanmar’s oil production capacity. The revenues generated from these offshore oil activities are expected to bolster the Burmese government’s fiscal income through royalties, taxes, and profit-sharing arrangements. Seadrill’s participation underscores the growing interest of global energy companies in Myanmar’s hydrocarbon potential, despite challenges related to regulatory frameworks and geopolitical risks. The economic significance of Myanmar’s natural gas exports is exemplified by data from the fiscal year ending in March 2012, during which the country exported natural gas valued at approximately $3.5 billion. The majority of these exports were directed to Thailand, reflecting the established energy trade relationship between the two neighboring countries. Natural gas exports constitute one of Myanmar’s largest sources of foreign exchange earnings, playing a vital role in the national economy. The export revenues support government budgets and contribute to the development of infrastructure and social services. The prominence of natural gas in Myanmar’s export portfolio highlights the country’s strategic position as a supplier of energy resources within Southeast Asia. In a move to expand its oil exploration activities, Myanmar initiated a bidding process on 18 January 2013 for oil exploration licenses covering 18 onshore oil blocks. This tender marked a significant step in opening up Myanmar’s upstream sector to increased exploration and investment, signaling the government’s intent to attract both domestic and foreign companies to participate in the development of its hydrocarbon resources. The onshore blocks offered for bidding were located in various regions across the country, some of which had been underexplored or held potential for new discoveries. The licensing round was structured to encourage competitive bidding and transparency, aiming to stimulate exploration activities that could lead to enhanced oil production and economic growth. This initiative reflected Myanmar’s broader energy policy objectives to diversify its energy base, increase production, and generate additional revenues from its natural resource endowment.

Myanmar possesses significant renewable energy resources, with particularly rich potential in the solar power and hydropower sectors. The country’s geographical location, characterized by abundant sunlight and extensive river systems, provides a natural advantage for harnessing these clean energy sources. Solar radiation levels in Myanmar are relatively high throughout the year, making solar power a viable and promising option for electricity generation. Similarly, the numerous rivers and streams flowing through the country offer substantial opportunities for hydropower development, ranging from small-scale micro-hydropower plants to large-scale dams capable of generating significant electricity. These renewable resources form a critical part of Myanmar’s strategy to diversify its energy mix and reduce dependence on fossil fuels. Within the Greater Mekong Subregion, Myanmar stands out as having the highest technical potential for solar power generation. This region, which includes countries such as Thailand, Laos, Cambodia, Vietnam, and parts of southern China, benefits from various renewable energy sources; however, Myanmar’s solar potential surpasses that of its neighbors due to its favorable climatic conditions and extensive land availability. Technical potential refers to the theoretical maximum amount of energy that could be generated using current technology, without considering economic or social constraints. Myanmar’s solar irradiation levels, often exceeding 5 kilowatt-hours per square meter per day in many areas, contribute to this high potential, positioning the country as a key player in solar energy development within Southeast Asia. This advantage has attracted interest from both domestic and international investors seeking to capitalize on the growing demand for renewable energy in the region. In contrast to solar and hydropower, other renewable energy sources such as wind energy, biogas, and biomass exhibit limited potential within Myanmar and remain largely underdeveloped. Wind energy resources are generally modest due to the country’s topography and prevailing wind patterns, which do not consistently provide the high wind speeds necessary for economically viable wind power projects. Similarly, while biogas and biomass resources exist, their scale and accessibility are insufficient to support large-scale energy production. Biomass energy, derived from agricultural residues, forestry waste, and other organic materials, faces challenges related to collection, transportation, and sustainable supply. Biogas, produced through the anaerobic digestion of organic waste, is primarily utilized on a small scale in rural areas for cooking and lighting rather than for electricity generation. Consequently, these renewable energy sources have not yet become significant contributors to Myanmar’s energy portfolio, and their development remains constrained by technical, economic, and infrastructural barriers. Financing geothermal energy projects in Myanmar is based on an estimated break-even power cost ranging from 5.3 to 8.6 U.S. cents per kilowatt-hour (kWh), which is equivalent to 53 to 86 Myanmar Kyat (K) per kWh, assuming a fixed exchange rate of $1 = 1000 K. This break-even cost represents the price at which the revenues from electricity sales cover the total costs of project development, operation, and maintenance, making the project financially viable without losses. Geothermal energy, which exploits heat from beneath the Earth’s surface, offers the advantage of providing a stable and continuous power supply, unlike intermittent sources such as solar and wind. However, the upfront capital costs for exploration and drilling are substantial, necessitating careful financial planning and risk assessment. The estimated break-even range reflects uncertainties related to resource quality, technology efficiency, and market conditions, and serves as a benchmark for investors and policymakers when evaluating the feasibility of geothermal projects in Myanmar. The assumption of a stable exchange rate is a critical concern for funding power projects due to depreciation pressures in the foreign exchange (FX) market. Many renewable energy projects in Myanmar rely on foreign investment and loans denominated in U.S. dollars or other foreign currencies. When the local currency depreciates against these foreign currencies, the cost of repaying loans and servicing debt increases in local currency terms, potentially undermining project viability. Exchange rate volatility introduces financial risks that can deter investors and complicate project financing. Stable exchange rates facilitate predictable cash flows and cost structures, which are essential for long-term infrastructure projects such as power generation facilities. Therefore, fluctuations in the Myanmar Kyat’s value against foreign currencies represent a significant challenge that must be addressed to attract and sustain investment in the renewable energy sector. Between June 2012 and October 2015, the Myanmar Kyat depreciated by approximately 35%, falling from 850 K to 1300 K against the U.S. Dollar. This period of substantial currency depreciation was driven by a combination of domestic economic factors and external market pressures, including changes in trade balances, inflation rates, and investor sentiment. The sharp decline in the Kyat’s value increased the local currency cost of servicing foreign-denominated debt, placing considerable financial strain on businesses and projects reliant on such loans. The depreciation also contributed to inflationary pressures by raising the cost of imported goods and services. This exchange rate movement underscored the vulnerability of Myanmar’s economy to foreign exchange risks and highlighted the need for effective currency risk management mechanisms to support sustainable economic development. The significant depreciation of the Myanmar Kyat during this period caused local businesses with foreign-denominated loans to urgently seek strategies to mitigate currency risk exposure. Companies engaged in infrastructure development, including renewable energy projects, faced increased debt servicing burdens as their local currency revenues were insufficient to cover rising foreign currency liabilities. In response, businesses explored various risk mitigation approaches such as negotiating loan restructuring, seeking local currency financing alternatives, and attempting to hedge currency risk through financial instruments. However, the availability and accessibility of such hedging solutions were limited in Myanmar’s relatively underdeveloped financial markets. This situation heightened the urgency for policymakers and financial institutions to develop mechanisms that could provide protection against exchange rate volatility and support the stability of investment environments. Myanmar currently lacks effective currency hedging solutions, which poses a substantial challenge to the financing and development of geothermal power projects. Currency hedging involves the use of financial instruments such as forwards, futures, options, and swaps to manage exposure to exchange rate fluctuations. In more developed financial markets, these tools enable businesses to lock in exchange rates or offset potential losses arising from currency movements. However, Myanmar’s financial sector is still in the process of development, with limited availability of sophisticated hedging products and a relatively shallow foreign exchange market. This absence of robust hedging mechanisms increases the financial risks associated with foreign currency borrowing, making investors wary of committing capital to long-term projects like geothermal power plants. Consequently, the lack of effective currency risk management tools remains a significant barrier to the expansion of geothermal energy and other foreign-investment-dependent renewable energy initiatives in Myanmar.

Myanmar’s economy has long been heavily dependent on the extraction and sale of precious stones, which include sapphires, pearls, and jade. Among these, rubies stand out as the most significant source of revenue, largely due to Myanmar’s unique position as the origin of approximately 90% of the world’s rubies. These rubies are internationally renowned for their exceptional purity and their distinctive, vibrant red hue, often referred to as “pigeon’s blood,” which commands premium prices on the global market. The country’s gemstone wealth has played a crucial role in shaping both its economic landscape and its international trade relationships. Thailand serves as the primary purchaser of Myanmar’s gemstones, acting as a major hub for the distribution and further processing of these precious stones. The Mogok region, situated roughly 200 kilometers (120 miles) north of Mandalay, is particularly famous for its gemstone deposits and is often dubbed Burma’s “Valley of Rubies.” This area is celebrated for producing some of the rarest and most valuable rubies, especially the coveted pigeon’s blood rubies, as well as high-quality blue sapphires. The Mogok mines have historically been a focal point for gem traders and collectors worldwide, contributing significantly to Myanmar’s gemstone export economy. The gemstone industry constitutes a fundamental pillar of Myanmar’s economy, with export revenues surpassing $1 billion. This substantial figure underscores the critical economic importance of the sector, which not only generates significant foreign exchange earnings but also provides employment and livelihood opportunities for thousands of people involved in mining, trading, and jewelry manufacturing. The gemstone trade has thus been deeply intertwined with Myanmar’s economic development, despite the challenges posed by political instability and regulatory complexities. In 2007, the gemstone industry became a focal point of international human rights concerns following the brutal crackdown on pro-democracy protests in Myanmar. Human rights organizations, alongside gem dealers and prominent figures such as U.S. First Lady Laura Bush, called for a boycott of Myanmar’s biannual gem auctions. They argued that the proceeds from these auctions were being used to support the country’s dictatorial regime, thereby indirectly funding human rights abuses. This campaign highlighted the ethical dilemmas faced by the global gemstone market in balancing commercial interests with concerns about governance and human rights. Reports from activists and observers have shed light on the harsh working conditions within Myanmar’s gem mining sector. Debbie Stothard, a representative of the Alternative ASEAN Network on Burma, revealed that mining operators resorted to using drugs to enhance the productivity of their employees. This practice not only raised serious ethical issues but also contributed to public health crises, as the sharing of needles among workers increased the risk of HIV infection. Such revelations underscored the need for improved labor standards and health protections within the industry. Bangkok-based gemologist Richard W. Hughes provided further insight into the complexities of Myanmar’s ruby trade, noting that for every ruby sold through official channels controlled by the military junta, another gem of similar value was smuggled across the Thai border. This parallel informal trade indicated the existence of a substantial underground market that supported subsistence miners and bypassed official regulations. The dual nature of the trade reflected both the economic desperation of local miners and the challenges faced by authorities in regulating the gemstone industry. In recent years, Chinese involvement in Myanmar’s gem mining industry and jade exports has become increasingly dominant. Chinese entrepreneurs and investors now control all levels of the supply chain, from financing and operating mining concessions to owning retail outlets in numerous newly established gem markets. This comprehensive control has significantly altered the dynamics of the industry, with Chinese capital and expertise driving expansion and modernization efforts. The scale of Chinese participation is exemplified by reports of a single Chinese-owned jeweler managing 100 gem mines and producing over 2,000 kilograms of raw rubies annually, illustrating the vast economic footprint of Chinese interests in Myanmar’s gemstone sector. The privatization of Myanmar’s gem industry in the 1990s catalyzed significant transformations, particularly through the activities of Burmese jewelers and entrepreneurs of Chinese descent. These groups opened numerous retail jewelry shops that primarily catered to customers from Hong Kong and Taiwan, tapping into lucrative markets with a strong demand for high-quality Burmese gemstones. This shift not only expanded the commercial reach of Myanmar’s gem products but also integrated the industry more closely with regional trade networks, fostering new business models and marketing strategies. On 11 February, the Myanmar ministry announced plans to issue permits for new gem mines in the Mogok, Mineshu, and Nanyar states. This announcement signaled ongoing regulatory activity aimed at managing and potentially expanding the sector’s mining operations. The issuance of new permits reflects the government’s continued interest in harnessing the economic potential of the gemstone industry while attempting to exert greater control over mining activities, which have historically been marked by informal practices and illicit trade. Despite the easing or lifting of many international sanctions on Myanmar’s former regime in 2012, the United States has maintained specific restrictions on the importation of rubies and jade from Myanmar. These measures reflect ongoing concerns about governance, human rights, and the potential for revenues from these valuable resources to support undemocratic practices. The continuation of such sanctions illustrates the complex interplay between economic interests and foreign policy considerations in the context of Myanmar’s gemstone trade. Recent amendments to Myanmar’s foreign investment law have introduced significant changes to the regulatory environment governing the gemstone and mining sectors. The new law removed minimum capital requirements for foreign investments in most sectors, with the notable exception of mining ventures, which still require substantial proof of capital documented through a domestic bank. This regulatory framework aims to balance the attraction of foreign direct investment (FDI) with the need to maintain oversight and financial stability within the mining industry. Furthermore, the investment law eliminated foreign ownership restrictions in joint ventures across most sectors, except for certain restricted areas such as mining, where foreign direct investment is capped at 80%. This partial liberalization of investment policies represents an effort to open Myanmar’s economy to greater foreign participation while retaining strategic control over key industries. The mining sector’s continued restrictions highlight its importance to national interests and the government’s cautious approach to foreign involvement. Myanmar is also internationally renowned for its production of Golden South Sea Pearls, which have gained significant acclaim in global markets. Since 2013, auctions for these pearls have been held in Hong Kong, initially organized by the Belpearl company. These auctions have achieved critical acclaim and commanded premium prices, driven in large part by strong demand from Chinese buyers. The success of these auctions has elevated Myanmar’s profile in the global pearl market and contributed to diversifying the country’s gemstone export portfolio. Among the notable pearls exported from Myanmar is the “New Dawn of Myanmar,” a 19-millimeter round golden pearl that was sold to an anonymous buyer for an undisclosed price. This pearl exemplifies the high value and quality of Myanmar’s pearl exports, showcasing the country’s ability to produce exceptional natural gems that attract international attention and significant commercial interest. The prominence of such pearls underscores the broader importance of Myanmar’s gemstone industry beyond rubies and jade, highlighting its diverse contributions to the global luxury goods market.

Since 1992, the government of Myanmar has actively promoted tourism as a key component of its broader economic development strategy. Recognizing the sector’s potential to generate foreign exchange earnings and stimulate domestic economic activity, authorities implemented policies aimed at attracting international visitors and expanding tourism infrastructure. Despite these efforts, Myanmar’s tourism industry remained relatively underdeveloped for many years, constrained by political isolation, limited accessibility, and restrictive regulations. Until 2008, the country received fewer than 750,000 tourists annually, reflecting a modest inflow compared to regional neighbors. However, this figure began to rise substantially in the years that followed, as the government gradually relaxed restrictions and invested in tourism promotion. By 2012, Myanmar welcomed approximately 1.06 million tourists, marking a significant milestone in the sector’s growth trajectory. This surge was driven by increased international interest in Myanmar’s rich cultural heritage, natural landscapes, and historic sites, as well as improvements in infrastructure and political reforms that enhanced the country’s global image. Projections at the time estimated that tourist arrivals would reach 1.8 million by the end of 2013, underscoring the rapid expansion of the industry. This growth positioned tourism as one of the fastest expanding sectors within Myanmar’s economy, contributing to employment generation, foreign currency earnings, and diversification of economic activities beyond traditional agriculture and resource extraction. Myanmar’s appeal to international tourists is supported by its diverse array of attractions, ranging from ancient Buddhist temples and pagodas in Bagan and Mandalay to scenic natural environments such as Inle Lake and the beaches of Ngapali. The country’s cultural richness, combined with its relatively unexplored status compared to other Southeast Asian destinations, has attracted travelers seeking both heritage tourism and eco-tourism experiences. Accessibility to Myanmar has improved significantly, with numerous international airlines offering direct flights to major cities such as Yangon and Mandalay. In addition, both domestic and foreign carriers operate flights within the country, facilitating travel between key tourist destinations and enhancing connectivity for visitors. Maritime access also contributes to Myanmar’s tourism infrastructure, with cruise ships regularly docking at Yangon’s port, providing an alternative mode of entry for international tourists. This maritime link integrates Myanmar into regional cruise itineraries, thereby broadening the range of potential visitors. Overland entry into Myanmar is permitted at several designated border checkpoints, where travelers may obtain a border pass. These crossings facilitate tourism from neighboring countries, particularly Thailand, China, and India, and serve as important conduits for cross-border cultural and economic exchanges. The government mandates that all tourists and business visitors hold a valid passport and obtain an entry visa prior to arrival, reflecting standard international travel requirements. However, since May 2010, foreign business visitors from any country have been able to obtain a visa on arrival at Yangon and Mandalay international airports without the need for prior arrangements through travel agencies. This policy change was intended to streamline business travel and encourage foreign investment by reducing bureaucratic barriers. Both tourist and business visas are initially valid for 28 days; tourist visas can be renewed for an additional 14 days, providing flexibility for travelers wishing to extend their stay. Business visas may be extended for up to three months, accommodating longer-term commercial engagements. Within Myanmar, personal tour guides are widely utilized by travelers to enhance their experience and facilitate navigation of the country’s cultural and logistical complexities. These guides can be hired through travel agencies operating within Myanmar, offering services that range from historical interpretation to logistical support. The popularity of personal guides reflects both the linguistic challenges faced by foreign visitors and the desire for deeper engagement with Myanmar’s cultural heritage. Despite the government’s efforts to promote tourism, prominent political figures such as Aung San Suu Kyi have publicly requested that international tourists refrain from visiting Myanmar. This appeal was rooted in concerns about the country’s ongoing political repression and human rights abuses under the military junta, which continued to attract international criticism. One significant source of such criticism involved the military regime’s forced labor programs, which were often concentrated in key tourist destinations. These programs compelled local populations to provide unpaid labor for infrastructure projects and other activities benefiting the state and military, leading to widespread condemnation from human rights organizations and tarnishing Myanmar’s reputation as a tourist destination. The economic benefits of tourism in Myanmar have been unevenly distributed. Major-General Saw Lwin, who served as Myanmar’s Minister of Hotels and Tourism, acknowledged that the government received a substantial portion of the income generated by private sector tourism services, excluding official government fees. This arrangement reflected the military government’s tight control over the sector and its revenue streams. However, only a very small minority of Myanmar’s impoverished population has directly benefited financially from tourism-related activities. The majority of local communities, particularly those in rural and remote areas, have seen limited improvements in living standards despite the growth of tourism. Prior to 2012, large areas of Myanmar were completely off-limits to tourists, with the military government exercising strict control over foreign visitors and their interactions with local populations. This policy was designed to minimize foreign influence and prevent the dissemination of information that could be critical of the regime. Local residents were prohibited from discussing political matters with foreigners under threat of imprisonment, severely restricting cultural exchange and the flow of information. In 2001, the Myanmar Tourism Promotion Board issued an order directing local officials to protect tourists and limit “unnecessary contact” between foreigners and ordinary Burmese citizens, further institutionalizing these restrictions. Since 2012, Myanmar has progressively opened up to increased tourism and foreign investment, coinciding with the country’s political transition towards democracy. Reforms implemented during this period included the relaxation of travel restrictions, improvements in infrastructure, and efforts to promote Myanmar as a safe and attractive destination for international visitors. These changes have contributed to the rapid expansion of the tourism sector, fostering greater economic integration with the global community and offering new opportunities for development. However, challenges remain in ensuring that the benefits of tourism are equitably distributed and that the sector operates in a manner respectful of human rights and local communities.

The Myanmar Infrastructure Summit held in 2018 underscored the critical necessity for the country to address and close its extensive infrastructure gap. During the summit, experts and policymakers projected that Myanmar would require an estimated US$120 billion in investments dedicated to infrastructural projects over the period spanning from 2018 to 2030. This substantial financial commitment was deemed essential to support the nation’s rapid economic development and integration into regional and global markets. The summit highlighted that without significant improvements in infrastructure, Myanmar’s economic growth could be hampered by inefficiencies and logistical bottlenecks, underscoring the urgency of mobilizing both domestic and foreign capital to modernize the country’s physical foundations. Myanmar’s infrastructural development agenda was shaped around three primary challenges, each addressing a critical sector of the country’s transportation network. The foremost challenge involved the modernization of the road network, which remained underdeveloped and often in poor condition across many regions. Upgrading these roads was not only necessary for improving internal connectivity but also for facilitating seamless integration with the transportation systems of neighboring countries such as China, Thailand, India, and Bangladesh. This integration aimed to enhance cross-border trade, reduce transportation costs, and promote regional economic cooperation. The government and development partners recognized that without a coherent and interconnected road network, Myanmar’s potential as a regional trade hub would remain unrealized. The second priority within Myanmar’s infrastructure development framework focused on the aviation sector, particularly the expansion and modernization of regional airports. As air travel demand increased due to rising tourism, business activities, and international trade, the existing airport facilities faced capacity constraints. Developing new regional airports and expanding the capacities of existing ones were viewed as essential steps to accommodate this growing demand and to improve domestic and international connectivity. Enhanced airport infrastructure would facilitate more efficient passenger and cargo movement, thereby supporting economic diversification and regional development. The government’s plans included upgrading airport terminals, runways, and air traffic management systems to meet international standards and to attract greater foreign investment. Addressing urban transport infrastructure constituted the third major challenge in Myanmar’s infrastructure development priorities. Rapid urbanization, particularly in cities like Yangon and Mandalay, placed increasing pressure on existing transport systems, which were often inadequate and inefficient. To improve urban mobility, the government sought to maintain and consolidate existing infrastructure while incorporating innovative transportation solutions. Among these were the introduction of water-taxis on Yangon’s extensive river network, which offered an alternative mode of transport to alleviate road congestion. Additionally, the deployment of air-conditioned buses aimed to enhance the comfort and appeal of public transit, encouraging greater usage and reducing reliance on private vehicles. These initiatives were part of a broader strategy to create sustainable and inclusive urban transport systems capable of meeting the needs of a growing urban population. Beyond transportation, Myanmar recognized the imperative to strengthen its enabling infrastructure sectors, including power supply and public utilities, to sustain long-term economic growth. Reliable electricity generation and distribution were critical to supporting industrial activities, commercial enterprises, and household consumption. However, Myanmar’s power infrastructure had historically suffered from limited capacity, frequent outages, and insufficient coverage in rural areas. Investments were therefore directed towards expanding power generation facilities, upgrading transmission networks, and promoting renewable energy sources to enhance energy security and environmental sustainability. Similarly, improvements in water supply, sanitation, and waste management services were prioritized to improve public health outcomes and urban living conditions, thereby creating a more conducive environment for economic development. China’s Belt and Road Initiative (BRI) played a significant role in shaping Myanmar’s infrastructure landscape, with several large-scale projects planned or underway within the country’s territory. The BRI infrastructure corridors traversing Myanmar were projected to impact approximately 24 million people, reflecting the extensive geographic and demographic reach of these initiatives. These projects included the development of transportation corridors such as highways, railways, and pipelines designed to enhance connectivity between China and Southeast Asia. The involvement of Chinese investment and expertise promised to accelerate infrastructure development, bringing much-needed capital and technical know-how to Myanmar’s underdeveloped sectors. However, the BRI projects also carried complex implications for the distribution of economic benefits and losses among various actors within Myanmar. While infrastructure improvements could stimulate economic growth, create jobs, and facilitate trade, concerns were raised regarding the equitable allocation of these benefits. Certain regions and communities might experience disproportionate gains, while others could face environmental degradation, displacement, or marginalization. Additionally, the influx of foreign investment and influence raised questions about Myanmar’s economic sovereignty and the long-term sustainability of debt incurred through these projects. Policymakers and analysts emphasized the need for transparent governance, inclusive planning, and robust regulatory frameworks to ensure that the BRI’s transformative potential translated into broad-based and sustainable development outcomes for the Myanmar population.

During the 2006–2007 financial year, Myanmar’s external trade exhibited a notable performance in both normal and border trade categories. The government had budgeted the export value of normal trade at US$4,233.60 million, while imports were projected at US$2,468.40 million, resulting in a planned total trade volume of US$6,702.00 million. However, the actual recorded figures surpassed these estimates, with the total trade volume reaching US$7,076.80 million. Exports exceeded expectations, amounting to US$4,585.47 million, and imports slightly increased to US$2,491.33 million. This discrepancy between budgeted and actual trade values reflected a more dynamic trade environment than initially anticipated, suggesting stronger demand for Myanmar’s exports and a modest rise in imports during that period. In parallel, border trade, which encompasses trade activities conducted through Myanmar’s land frontiers with neighboring countries, was budgeted at US$814.00 million for exports and US$466.00 million for imports, totaling US$1,280.00 million for the financial year 2006–2007. Contrary to these projections, the actual border trade volume was somewhat lower, amounting to US$1,092.61 million. Exports through border trade channels reached US$647.21 million, while imports stood at US$445.40 million. This shortfall relative to budgeted figures may have been influenced by various factors such as regulatory constraints, infrastructural limitations, or fluctuations in demand within border regions. Nonetheless, border trade remained a significant component of Myanmar’s overall external trade, contributing a substantial share to the country’s total trade volume. When combining both normal and border trade figures, the total trade for Myanmar in the 2006–2007 financial year was budgeted at US$7,982.00 million, with exports anticipated to be US$5,047.60 million and imports forecasted at US$2,934.40 million. The actual combined trade volume exceeded these forecasts, totaling US$8,169.41 million. Exports amounted to US$5,232.68 million, reflecting a higher-than-expected performance, while imports were closely aligned with projections at US$2,936.73 million. This overall trade activity highlighted Myanmar’s growing integration into regional and global markets, as well as the government’s efforts to stimulate trade through policy measures and infrastructure development. From the 2006–2007 financial year through to 2009–2010, Myanmar’s total trade value demonstrated a consistent upward trajectory, underscoring the country’s expanding economic engagement on the international stage. In 2006–2007, exports were valued at US$5,222.92 million, and imports at US$2,928.39 million, resulting in a total trade value of US$8,151.31 million. The following financial year, 2007–2008, saw a significant increase in both exports and imports, with exports rising to US$6,413.29 million and imports to US$3,346.64 million. This growth pushed the total trade value to US$9,759.93 million, marking a substantial year-on-year increase and reflecting the positive impact of economic reforms and expanding trade partnerships. The upward trend continued into the 2008–2009 financial year, where exports further climbed to US$6,792.85 million, and imports experienced a more pronounced increase to US$4,563.16 million. This resulted in a total trade value of US$11,356.01 million, illustrating Myanmar’s increasing reliance on imported goods alongside its export expansion. The growth in imports during this period may have been driven by rising domestic demand for capital goods, raw materials, and consumer products, which supported the country’s broader economic development objectives. By the 2009–2010 financial year, Myanmar’s trade figures reached new heights, with exports valued at US$7,568.62 million and imports at US$4,186.28 million. The total trade value peaked at US$11,754.90 million, representing the highest level recorded during this four-year span. This sustained growth in trade volumes was indicative of Myanmar’s gradual integration into the global economy, facilitated by improvements in trade infrastructure, diversification of export products, and the establishment of stronger trade relations with neighboring countries and international partners. The data from this period collectively underscore the dynamic nature of Myanmar’s external trade and its critical role in the nation’s economic development trajectory.

The gross domestic product (GDP) of Burma, measured at market prices and estimated by both the International Monetary Fund and EconStats, demonstrated a pronounced and steady increase over the three decades spanning from 1965 to 1995. In 1965, the GDP was recorded at 7,627 million Myanmar kyats, reflecting the nascent stage of the country’s post-independence economy. Over the subsequent years, despite various political and economic challenges, the economy expanded significantly, reaching 604,728 million Myanmar kyats by 1995. This nearly eightyfold increase in nominal terms underscores a period of gradual economic growth, although it must be contextualized within the broader framework of Myanmar’s complex political and economic environment, which included periods of isolation, state control, and limited foreign investment. Examining key economic indicators from 1999 through 2024 reveals a trajectory of substantial growth when measured in terms of GDP at purchasing power parity (PPP) in billion US dollars. In 1999, Burma’s GDP (PPP) stood at 32.59 billion US dollars, a figure that rose steadily over the following decades to an estimated 283.75 billion US dollars by 2024. This near ninefold increase over a 25-year span reflects not only nominal growth but also improvements in economic productivity and living standards when adjusted for cost of living differences. Correspondingly, GDP per capita in PPP terms increased from 725 US dollars in 1999 to an estimated 5,206 US dollars in 2024, indicating a significant rise in average income levels and suggesting gradual improvements in the economic well-being of the population, albeit unevenly distributed across different regions and social strata. In nominal US dollar terms, Burma’s GDP also exhibited substantial growth, expanding from 6.04 billion US dollars in 1999 to reach a peak of 77.80 billion US dollars in 2020. This peak was followed by fluctuations, with the nominal GDP declining to 64.28 billion US dollars by 2024. The peak in 2020 coincided with the onset of the COVID-19 pandemic and other internal disruptions, which contributed to economic contractions in subsequent years. These fluctuations highlight the vulnerability of Burma’s economy to both global shocks and domestic instability, reflecting the challenges in sustaining consistent nominal growth amid political and economic uncertainties. Real GDP growth rates during this period were generally robust, with several notable peaks and troughs. The year 2004 witnessed an exceptionally high growth rate of 15.3%, reflecting a period of rapid economic expansion possibly driven by reforms and increased investment in key sectors. From 2009 until 2019, Burma maintained consistent real GDP growth rates above 5%, signaling a decade of relative economic stability and expansion. However, this growth trajectory was disrupted by contractions in 2020, 2021, and 2022, with rates of -1.2%, -10.5%, and -4.0% respectively. These declines were primarily attributable to the combined effects of the COVID-19 pandemic, internal political turmoil, and economic sanctions. A modest recovery ensued in 2023 and 2024, with growth rates rebounding to 2.5% and 1.0%, respectively, indicating tentative signs of economic stabilization amid ongoing challenges. Inflation rates in Burma have exhibited significant volatility over the years. The early 2000s were marked by periods of high inflation, with rates reaching 47.5% in 2003 and 34.4% in 2007, reflecting macroeconomic imbalances and the effects of currency depreciation and supply-side constraints. Conversely, there were years characterized by low or near-zero inflation, such as 0.4% in 2012 and 3.7% in 2009, suggesting intermittent periods of relative price stability. However, inflation surged again to 27.1% in 2023, underscoring persistent challenges in achieving sustained monetary stability. These fluctuations in inflation rates have had profound implications for purchasing power, investment decisions, and overall economic confidence within the country. Government debt as a percentage of GDP was extraordinarily high in the early 2000s, peaking at an alarming 269% in 2001. This unsustainable debt burden reflected years of fiscal mismanagement, limited revenue generation, and reliance on borrowing to finance government expenditures. Over the following decade, concerted efforts to reduce debt levels resulted in a steady decline, with government debt stabilizing around 35-40% of GDP between 2014 and 2019. Nonetheless, this positive trend reversed somewhat in the early 2020s, with debt levels increasing again to approximately 60% by 2024. The resurgence of debt ratios coincided with economic contractions and increased fiscal pressures stemming from political instability and the global economic environment. According to the CIA World Factbook, Burma is endowed with abundant natural resources, including significant reserves of oil, natural gas, minerals, and timber. Despite this wealth, the country’s economic potential has been severely constrained by pervasive government controls, inefficient economic policies, and widespread rural poverty. These structural impediments have limited the effective mobilization and utilization of resources, resulting in a dual economy characterized by pockets of resource wealth alongside extensive underdevelopment and poverty in rural areas. The persistence of government intervention and lack of market-oriented reforms have further hindered the country’s ability to integrate fully into the global economy and attract sustainable investment. The military junta, which came to power following the suppression of the democracy movement in 1988, initiated a series of economic liberalization measures in the early 1990s. These reforms were introduced after the failure of the previous economic model known as the “Burmese Way to Socialism,” which had resulted in economic stagnation and isolation. The liberalization efforts included attempts to open up sectors of the economy to private enterprise and foreign investment. However, these reforms were unevenly implemented, often stalled, and in some cases reversed due to political considerations and concerns over maintaining control. As a result, the economy remained heavily regulated, and the benefits of liberalization were limited in scope and duration. Burma’s economy has suffered from a lack of monetary and fiscal stability, which has contributed to serious macroeconomic imbalances. Inflationary pressures have been persistent, and the existence of multiple official exchange rates has distorted the value of the kyat, often leading to an overvaluation that undermines export competitiveness. Additionally, the interest rate regime has been distorted, with artificially low or high rates that fail to reflect market realities, thereby discouraging efficient allocation of capital and investment. These factors have combined to create an environment of uncertainty and inefficiency, impeding economic growth and development. Overseas development assistance to Burma largely ceased after the military junta’s violent suppression of the democracy movement in 1988 and its refusal to honor the results of the 1990 legislative elections, in which the National League for Democracy won a landslide victory. The international community responded by imposing sanctions and withdrawing aid, isolating Burma from much of the global development finance system. This withdrawal of assistance significantly constrained the country’s access to external financing and technical support, further exacerbating economic difficulties and limiting opportunities for reform and growth. In May 2003, following an attack on Aung San Suu Kyi and her convoy, the United States imposed a series of economic sanctions on Burma. These sanctions included bans on imports of Burmese products and restrictions on financial services provided by US persons. The sanctions aimed to pressure the military regime to improve human rights conditions and move towards democratic governance. However, they also had the effect of limiting Burma’s access to international markets and financial systems, contributing to economic isolation and complicating efforts to attract foreign investment. The investment climate in Burma has been adversely affected by a range of structural and institutional weaknesses. Inadequate infrastructure, including poor transportation networks and unreliable electricity supply, has hindered industrial development and increased costs for businesses. Unpredictable import and export policies have created uncertainty for traders and investors, while deteriorating health and education systems have limited the availability of skilled labor. Corruption remains widespread, undermining the rule of law and distorting economic incentives. These factors have collectively impeded growth in the manufacturing and services sectors, which require stable and predictable conditions to thrive. Despite these challenges, the most productive sectors of Burma’s economy have remained the extractive industries, including oil and gas, mining, and timber. These sectors have benefited from the country’s rich natural resource endowments and have attracted some foreign investment, albeit often under opaque arrangements and with limited transparency. The extractive industries have provided significant revenue for the government and contributed to export earnings, but their dominance has also contributed to a lack of economic diversification and vulnerability to commodity price fluctuations. A major banking crisis occurred in 2003, leading to the closure of Burma’s 20 private banks. This crisis severely disrupted the economy by curtailing access to formal credit and undermining confidence in the financial system. As of December 2005, the remaining private banks operated under strict regulatory restrictions that limited their ability to extend credit to the private sector. This constrained access to finance has been a significant barrier to entrepreneurship, investment, and economic diversification, perpetuating reliance on informal financial channels and limiting the growth potential of small and medium-sized enterprises. Official economic statistics in Burma are widely regarded as inaccurate and unreliable. Foreign trade figures, in particular, are greatly understated due to the prevalence of a large black market and extensive unofficial border trade. Informal cross-border trade with neighboring countries, including Thailand, China, and India, is often estimated to be as large as the official economy itself. This substantial parallel economy reflects both the difficulties in enforcing customs regulations and the economic necessity for many traders and communities to engage in unofficial commerce. The existence of such a large informal sector complicates economic planning and policy formulation. Trade relations with neighboring countries have been increasing, reflecting Burma’s geographical position and economic interdependencies. Thailand, China, and India have become key trading partners, with cross-border trade in goods, services, and investment flows expanding over recent years. These relationships have been instrumental in providing markets for Burmese exports and sources of imports, as well as channels for foreign direct investment. However, the full potential of these economic ties remains constrained by domestic policy weaknesses and political instability. Despite relatively good economic relations with its neighbors, Burma requires significant improvements in its investment and business climate to attract foreign investment on a larger scale. Enhancing the political situation to ensure stability and rule of law is also critical for fostering investor confidence. Improved governance, transparency, and infrastructure development are necessary to boost exports and develop sectors such as tourism, which has considerable potential given the country’s rich cultural heritage and natural attractions. Without these reforms, Burma’s ability to integrate into regional and global value chains will remain limited. From 2009 onwards, Burma experienced continuous real GDP growth of at least 5% annually, marking a period of sustained economic expansion. This growth was driven by a combination of reforms, increased foreign investment, and improved macroeconomic management. However, this positive trend was interrupted by economic contractions beginning in 2020, caused by a combination of external shocks, including the COVID-19 pandemic, and internal political and social upheaval. The subsequent years saw a sharp decline in economic output, underscoring the fragility of Burma’s recent economic gains and the need for comprehensive structural reforms to ensure long-term stability and growth.

Foreign investment in Myanmar has been actively encouraged by the government as a key component of its economic development strategy, yet this approach has yielded only moderate success to date. Despite the government’s efforts to attract foreign capital through various reforms and incentives, the overall inflow of foreign direct investment (FDI) has remained limited relative to the country’s potential and regional peers. Structural challenges, including bureaucratic inefficiencies, underdeveloped infrastructure, and political uncertainties, have constrained the ability of Myanmar to fully capitalize on foreign investment opportunities. Furthermore, ongoing domestic issues and international political dynamics have played significant roles in shaping the investment climate. The United States has imposed trade sanctions on Myanmar, formerly known as Burma, primarily due to concerns over human rights violations committed by the ruling military regime. These sanctions have included restrictions on trade, investment, and financial transactions, aiming to pressure the government to improve its human rights record and move toward democratic reforms. The sanctions have targeted key sectors of the economy and specific individuals associated with the military leadership, thereby limiting the scope of U.S. economic engagement with Myanmar. This policy stance reflected broader international condemnation of the military’s actions, including the suppression of political dissent and ethnic conflicts. Similarly, the European Union (EU) implemented multiple restrictive measures against Myanmar, which encompassed a comprehensive arms embargo, bans on non-humanitarian aid, visa prohibitions targeting senior military officials and regime leaders, as well as limited prohibitions on investment. These measures were designed to isolate the military government economically and politically, signaling the EU’s disapproval of the regime’s human rights abuses and lack of democratic governance. The EU’s sanctions regime was among the most extensive international responses to Myanmar’s political situation, reflecting a coordinated effort to influence the country’s internal policies through economic pressure. Both the United States and the European Union based their sanctions policies primarily on allegations of widespread human rights abuses within Myanmar. These abuses included the violent repression of pro-democracy activists, ethnic minority persecution, and restrictions on freedom of expression and assembly. The sanctions were intended not only as punitive measures but also as leverage to encourage political reforms and respect for human rights. However, the effectiveness of these sanctions has been subject to debate, as they also contributed to Myanmar’s economic isolation and complicated international engagement. Despite the imposition of Western sanctions, several Asian countries, notably India, Thailand, and China, maintained active trade relations with Myanmar. These countries pursued pragmatic economic and strategic interests, often emphasizing regional connectivity, energy cooperation, and cross-border trade. China, in particular, emerged as a dominant economic partner, investing heavily in infrastructure projects and natural resource development. Thailand and India also engaged in bilateral trade and investment, seeking to benefit from Myanmar’s geographic position as a gateway to Southeast Asia. This continued engagement by key Asian neighbors mitigated some of the economic impacts of Western sanctions and underscored the geopolitical complexities surrounding Myanmar’s international relations. A significant turning point occurred on April 22, 2013, when the European Union officially suspended its economic and political sanctions against Myanmar. This suspension marked a shift in international engagement, reflecting cautious optimism about Myanmar’s political reforms and steps toward democratization under the quasi-civilian government. The EU’s decision to lift sanctions was contingent on continued progress in human rights and governance, signaling a willingness to support Myanmar’s reintegration into the global economy. This policy change also encouraged other international actors to reconsider their stance and explore renewed economic cooperation with Myanmar. Within Myanmar’s domestic economy, public sector enterprises remained highly inefficient, posing a persistent challenge to economic modernization. These state-owned enterprises often suffered from poor management, lack of transparency, and limited competitiveness, which hindered productivity and innovation. Efforts to privatize these entities have largely stalled, reflecting political sensitivities, institutional inertia, and concerns about social stability. Although privatization was seen as a potential means to improve efficiency and attract investment, the absence of clear policies and reliable data has complicated reform initiatives. The lack of citations regarding these efforts suggests that comprehensive assessments of public sector reform remain limited. Estimations of Myanmar’s foreign trade have been unreliable due to the significant volume of black market trading occurring within the country. Informal cross-border commerce, smuggling, and unrecorded transactions have distorted official statistics, making it difficult to accurately gauge the scale and composition of Myanmar’s trade flows. This opacity has impeded effective economic planning and policy formulation, as well as the ability to monitor compliance with international trade regulations. The prevalence of informal trade networks reflects both the country’s porous borders and the challenges posed by regulatory and infrastructural deficiencies. A persistent economic challenge confronting Myanmar has been the failure to establish monetary and fiscal stability. The country has grappled with inflationary pressures, currency volatility, and fiscal deficits, which have undermined investor confidence and constrained economic growth. Weak institutional frameworks, limited access to international financial markets, and inconsistent policy implementation have exacerbated these macroeconomic vulnerabilities. Achieving stability in monetary and fiscal policy remains essential for creating a conducive environment for sustainable development and attracting long-term foreign investment. In response to these challenges, the Myanmar government has initiated efforts to capitalize on the country’s substantial natural gas reserves as a means to stimulate economic growth. Myanmar is endowed with significant offshore and onshore natural gas fields, which have attracted interest from international energy companies. The development of these resources has provided a critical source of export revenue and foreign exchange earnings, contributing to government budgets and infrastructure financing. Strategic partnerships and production-sharing agreements have been established to facilitate exploration and extraction, although concerns about environmental impact and equitable distribution of benefits persist. Myanmar has attracted foreign investment from a diverse group of countries, including Thailand, Malaysia, the Philippines, Russia, Australia, India, and Singapore. These investors have been involved in a range of sectors such as energy, manufacturing, telecommunications, and infrastructure development. The diversity of investment sources reflects Myanmar’s strategic importance and the varied interests of regional and global economic actors. Each country’s engagement has been shaped by its geopolitical priorities, economic complementarities, and assessments of Myanmar’s market potential and risks. As of February 2013, trade between Myanmar and the United States amounted to $243.56 million, encompassing 15 investment projects and representing only 0.58 percent of Myanmar’s total foreign trade according to official government statistics. This relatively modest volume of trade and investment underscored the limited economic ties between the two countries at that time, largely influenced by the ongoing U.S. sanctions regime. The figure also highlighted the broader context of Myanmar’s trade relationships, which were dominated by neighboring Asian economies. The official statistics, while providing a snapshot of bilateral economic engagement, likely underestimated the full extent of informal or indirect trade activities.

The political transformation of Myanmar in the early 2010s catalyzed a notable surge in economic activity, as highlighted by a special report on Burma published by The Economist. This revitalization was largely driven by a significant influx of foreign direct investment (FDI) from neighboring Asian countries, which sought to capitalize on Myanmar’s gradual opening and reform efforts after decades of international isolation. The country’s transition from military rule to a quasi-civilian government created a more conducive environment for economic engagement, attracting investors eager to participate in the untapped potential of Myanmar’s markets and resources. This wave of investment marked a departure from the previous era characterized by economic mismanagement and stringent international sanctions, signaling a new chapter in Myanmar’s integration into the regional and global economy. A tangible manifestation of this industrial revival could be observed near the Mingaladon Industrial Park, located on the outskirts of Yangon. Here, Japanese-owned factories began to rise from what was once described as the “debris” left by decades of economic stagnation and the cumulative effects of sanctions. These factories symbolized not only the physical rebuilding of Myanmar’s industrial base but also the restoration of investor confidence, particularly from Japan, which had maintained a cautious yet steadily growing interest in the country. The emergence of these manufacturing facilities represented a critical step in diversifying Myanmar’s economy beyond traditional sectors such as agriculture and natural resource extraction, fostering the development of a more modern industrial sector capable of generating employment and exports. Japanese Prime Minister Shinzō Abe played a pivotal role in promoting Myanmar as a key economic partner for Japan. He identified Myanmar as an economically attractive market with the potential to contribute to stimulating the Japanese economy, which had been grappling with sluggish growth and demographic challenges. Abe’s administration viewed Myanmar not only as a destination for investment but also as a strategic partner in Japan’s broader efforts to expand its economic and geopolitical influence in Southeast Asia. This perspective was reflected in various high-level visits and bilateral agreements aimed at deepening economic ties and facilitating Japanese participation in Myanmar’s development projects. Japan’s involvement in Myanmar extended across multiple sectors and enterprises, underscoring a comprehensive approach to engagement. One of the most significant Japanese-led initiatives was the construction of the Thilawa Port, which formed a critical component of the Thilawa Special Economic Zone (SEZ). The Thilawa SEZ was designed to attract foreign investment by offering favorable regulatory conditions, modern infrastructure, and proximity to Yangon, Myanmar’s largest city and commercial hub. The port itself was intended to enhance Myanmar’s maritime logistics capabilities, facilitating the export and import of goods and thereby integrating the country more effectively into regional supply chains. Alongside port development, Japan also contributed to efforts aimed at improving the electricity supply infrastructure in Yangon, addressing one of the key bottlenecks to industrial growth and urban development. Reliable power supply was essential for sustaining manufacturing activities and improving living standards, making these infrastructure projects critical components of Japan’s economic engagement strategy. Despite Japan’s active and multifaceted involvement, it was not the largest investor in Myanmar. That distinction belonged to China, which had established itself as the dominant foreign investor in the country. China’s investments spanned a wide array of sectors, including energy, mining, infrastructure, and telecommunications, reflecting its strategic interest in securing access to Myanmar’s natural resources and enhancing connectivity with the Indian Ocean. China’s position as the largest investor was indicative of its broader regional ambitions under initiatives such as the Belt and Road Initiative, which sought to create a network of trade routes and economic corridors linking China with Southeast Asia and beyond. Thailand occupied the position of the second largest investor in Myanmar, trailing only China in terms of investment volume and scope. Thai investors were advancing a large-scale project analogous to the Thilawa SEZ, located in Dawei on Myanmar’s Tenasserim Coast. The Dawei project was envisioned as an extensive industrial and deep-sea port development that would serve as a gateway for trade and manufacturing activities between Myanmar and Thailand, as well as other regional markets. This project represented a significant commitment by Thailand to deepen economic integration with Myanmar and to leverage Myanmar’s strategic location for enhancing regional connectivity. The strategic significance of the Dawei project extended beyond immediate economic considerations, as it aligned with a long-standing ambition held by Thai rulers to construct a canal across the Kra Isthmus. The Kra Isthmus is the narrow land bridge that connects the Malay Peninsula to the Asian mainland, and a canal through this isthmus had been proposed for over a century as a means to facilitate maritime trade. The vision of the Kra Isthmus canal was to create a direct shipping route linking the Gulf of Thailand with the Andaman Sea and the Indian Ocean, thereby bypassing the longer and more congested maritime route around peninsular Malaysia through the Strait of Malacca. Such a canal would significantly reduce shipping times and costs for vessels traveling between the Pacific and Indian Oceans, enhancing the strategic and economic importance of the region. The development of the Dawei project was thus seen as a critical step toward realizing this broader maritime ambition. By establishing a deep-sea port and industrial zone at Dawei, Thailand aimed to create a vital maritime connection that would not only facilitate bilateral trade with Myanmar but also enhance regional trade flows and economic integration. The project was expected to attract investment, generate employment, and stimulate economic development in southern Myanmar and adjacent areas of Thailand. Furthermore, the enhanced connectivity provided by Dawei would complement existing transport and logistics networks, positioning the region as a key hub in Southeast Asia’s evolving economic landscape. This strategic infrastructure initiative underscored the intertwined economic and geopolitical interests of Thailand and Myanmar, reflecting their shared aspirations for regional development and integration.

China has emerged as the largest investor in Myanmar, with a primary focus on the construction of oil and gas pipelines that traverse the country from the western port city of Kyaukphyu, near Sittwe, through Mandalay, and onward to the Chinese border town of Ruili before reaching Kunming, the capital of Yunnan province. This strategic infrastructure development has been instrumental in reducing China’s dependence on traditional oil import routes that pass through the congested and geopolitically sensitive Singapore Strait, often referred to as the Singapore bottleneck. By securing a direct overland pipeline connection through Myanmar, China has enhanced its energy security and diversified its supply routes, thereby mitigating risks associated with maritime chokepoints. The pipeline projects have not only strengthened bilateral economic ties but also underscored China’s broader regional ambitions to integrate Myanmar into its Belt and Road Initiative framework. The foundation for these close economic and military ties was laid following the military coup in Myanmar in 1988, when the State Peace and Development Council (SPDC) assumed power. During this period, formalized relations between China’s People’s Liberation Army (PLA) and Myanmar’s military forces deepened significantly, fostering a robust strategic partnership. This military-to-military cooperation has been a cornerstone of bilateral relations, facilitating mutual support and coordination in security and defense matters. The alignment of interests between the two militaries has also enabled China to expand its influence within Myanmar’s political and economic spheres, particularly as the SPDC sought international partners amid widespread sanctions and isolation from Western countries. Following the 1988 military takeover, China swiftly became Myanmar’s principal source of aid, loans, and financial assistance, solidifying its status as the country’s largest foreign investor by 2013. Despite Myanmar’s gradual economic opening that attracted investors from countries such as Japan and India, China maintained a dominant position in the investment landscape. This enduring financial support has allowed China to exert considerable influence over Myanmar’s economic development trajectory, particularly in sectors deemed vital to national security and resource extraction. Chinese assistance has often come with fewer political conditions compared to Western aid, making it an attractive partner for Myanmar’s ruling elites during periods of international isolation. China’s financial assistance has translated into substantial structural power over Myanmar’s economy, enabling it to secure a dominant role in the country’s natural resource sectors. This influence extends across multiple industries, including oil, gas, mining, and timber, where Chinese companies have gained preferential access to resource concessions and extraction rights. The strategic allocation of Chinese capital and expertise has not only bolstered Myanmar’s resource production capacity but also integrated its economy more closely with China’s burgeoning industrial demands. This dynamic has had significant implications for Myanmar’s economic sovereignty, as Chinese interests increasingly shape the country’s development priorities and trade patterns. During this period, Myanmar’s underdeveloped industrial sector experienced growth largely driven by Chinese investment, particularly in extractive industries such as mining. This influx of capital and technical know-how shifted the domestic production focus away from consumer goods sectors like textiles and electronics, which remained relatively underdeveloped. The emphasis on resource extraction over manufacturing or value-added industries reflected both Myanmar’s comparative advantages and China’s strategic priorities in securing raw materials. Consequently, the industrial landscape in Myanmar became increasingly oriented toward serving export markets and supplying China’s industrial base, rather than fostering broad-based domestic industrialization. By 1988, legal two-way trade between Myanmar and mainland China had reached approximately US$1.5 billion annually, marking a significant milestone in bilateral economic relations. This trade volume was complemented by additional Chinese investment, economic aid, and military assistance aimed at stimulating Myanmar’s re-emerging economy following decades of isolation and internal conflict. The expansion of trade and investment flows during this time laid the groundwork for deeper economic integration, with China becoming a critical partner in Myanmar’s efforts to revitalize its infrastructure and resource sectors. The growing economic interdependence also facilitated increased cross-border exchanges and the gradual normalization of relations between the two countries. Foreign capital investment from mainland China, as well as from Germany and France, has played a pivotal role in the development of various construction projects across Myanmar. Many of these projects have been managed by Chinese construction contractors and civil engineers, who have brought technical expertise and project management capabilities to the country. Key infrastructure developments include irrigation dams, highways, bridges, ground satellite stations, and the international airport in Mandalay, all of which have contributed to Myanmar’s modernization and improved connectivity. The involvement of Chinese firms in these projects underscores the multifaceted nature of China’s economic engagement, extending beyond resource extraction into critical infrastructure sectors that underpin long-term economic growth. Burmese entrepreneurs of Chinese ancestry have been instrumental in forming numerous joint ventures and corporate partnerships with mainland Chinese state-owned enterprises to facilitate the construction of oil pipeline projects. These collaborations have not only mobilized capital and technical resources but also helped navigate the complex regulatory and political environment in Myanmar. The joint ventures have the potential to create thousands of jobs nationwide, contributing to local economic development and enhancing the livelihoods of communities along the pipeline routes. The active participation of Burmese Chinese entrepreneurs highlights the transnational networks that underpin China-Myanmar economic relations and the role of diaspora communities in fostering cross-border investment. Private Chinese companies have leveraged the established overseas Chinese bamboo network as a conduit to connect mainland Chinese and Burmese Chinese businesses. This informal yet effective network facilitates the navigation of Myanmar’s local economic environment, which can be characterized by regulatory complexity and varying degrees of institutional capacity. By utilizing these ethnic and business ties, Chinese firms have been able to enhance bilateral trade, streamline investment processes, and mitigate risks associated with operating in Myanmar. The bamboo network thus serves as a critical mechanism for sustaining and expanding economic linkages between China and Myanmar, complementing formal state-to-state cooperation. Mainland China stands as Myanmar’s most important source of foreign goods and services and represents a critical source of foreign direct investment (FDI). The dominance of Chinese imports and investments reflects the deep integration of Myanmar’s economy with that of its northern neighbor. Chinese goods, ranging from consumer products to industrial equipment, have flooded Myanmar’s markets, while Chinese capital has financed key sectors of the economy. This economic interdependence has significant implications for Myanmar’s trade balance, industrial development, and economic policy formulation. In the fiscal year 2013, China accounted for an overwhelming 61 percent of all foreign direct investment in Myanmar, underscoring its preeminent role in the country’s economic landscape. This substantial share of FDI highlights the concentration of foreign capital from China, which dwarfs investment from other countries. The influx of Chinese investment during this period was concentrated in strategic sectors, including energy, mining, and infrastructure, reflecting China’s long-term economic and geopolitical interests in Myanmar. The dominance of Chinese FDI also points to the challenges Myanmar faces in diversifying its sources of foreign investment. Between 2007 and 2015, Chinese foreign direct investment in Myanmar surged dramatically from US$775 million to an estimated US$21.867 billion. This exponential growth represented approximately 40 percent of all FDI flowing into Myanmar during that period, signaling a rapid intensification of economic ties. The surge in investment was driven by China’s strategic pursuit of resource security, market expansion, and regional connectivity, as well as Myanmar’s gradual economic liberalization and political reforms. The scale of Chinese investment during these years transformed Myanmar’s economic landscape, particularly in sectors critical to national development and bilateral cooperation. A significant portion of Chinese investment has been directed toward Myanmar’s energy and mining industries, sectors that are vital to both countries’ economic interests. Chinese firms have invested heavily in oil and gas exploration, extraction, and pipeline construction, as well as in mining operations for minerals such as jade, copper, and uranium. These investments have facilitated the expansion of Myanmar’s resource production capacity and enabled China to secure a steady supply of raw materials necessary for its industrial growth. The concentration of Chinese capital in these sectors also reflects the strategic importance China places on controlling resource flows and integrating Myanmar’s economy into its broader regional development plans. Chinese private firms control approximately 87 percent of total legal cross-border trade at Ruili, the key border town on the Myanmar-China frontier. This dominant position grants Chinese companies considerable structural power over Myanmar’s cross-border commerce and, by extension, its illicit economy, which includes smuggling and informal trade networks. The control exercised by Chinese firms at Ruili enables them to influence trade flows, pricing, and market access, thereby shaping economic dynamics in the border region. This structural power also underscores the asymmetrical nature of economic relations between China and Myanmar, with Chinese actors often holding a decisive advantage in cross-border trade activities. China’s structural power over Myanmar’s financial system further consolidates its dominance in the country’s natural resource sectors, particularly in oil, gas, and uranium industries. Through financial assistance, investment, and banking relationships, China has been able to influence Myanmar’s economic policies and resource management decisions. This financial leverage allows China to secure favorable terms for resource extraction and infrastructure development, ensuring long-term access to critical commodities. The intertwining of financial and resource sector dominance underscores the comprehensive nature of China’s influence over Myanmar’s economy. As Myanmar’s primary investor, China also occupies the position of the largest consumer of Myanmar’s extractive industries. Chinese demand drives the production and export of key commodities such as jade, timber, rice, and marine fisheries, which constitute significant components of Myanmar’s natural resource base. This consumption pattern reinforces the economic interdependence between the two countries and highlights the role of Chinese markets in sustaining Myanmar’s resource sectors. The reliance on Chinese demand has implications for Myanmar’s economic diversification and the sustainability of its natural resource exploitation. Numerous Chinese state-owned enterprises have targeted Myanmar’s high-value natural resource industries, including raw jade stones, teak and timber, rice, and marine fisheries. These enterprises have secured concessions and developed operations that capitalize on Myanmar’s abundant natural wealth, often in partnership with local actors or through government agreements. The involvement of state-owned enterprises reflects the strategic importance China places on securing resources that are critical for its domestic industries and export markets. Their activities have significant economic, environmental, and social impacts within Myanmar, influencing local livelihoods and resource governance. Yanlonkyine Gate, situated on the Myanmar-China border within the Kokang Self-Administered Zone, exemplifies a key border crossing point facilitating trade and movement between the two countries as of 2019. This gate serves as an important conduit for legal and informal trade flows, enabling the exchange of goods, services, and people across the frontier. The strategic location of Yanlonkyine Gate within an autonomous region underscores the complex interplay of ethnic, political, and economic factors shaping cross-border interactions. Its role in facilitating bilateral trade highlights the significance of border infrastructure in sustaining China-Myanmar economic relations.

Myanmar, also known as Burma, has historically received one of the lowest levels of international aid worldwide and the least among Southeast Asian nations. Development assistance to Myanmar has amounted to a mere $4 per capita, a figure starkly contrasted with the regional average of $42.30 per capita. This significant disparity highlights the country’s marginalization in terms of foreign aid inflows, which has had profound implications for its socio-economic development and humanitarian conditions. The limited aid reflects both the international community’s cautious engagement with Myanmar’s military government and the operational challenges faced by aid organizations within the country. In April 2007, the United States Government Accountability Office (GAO) published a report entitled “Assistance Programs Constrained in Burma,” which provided a detailed examination of the financial and operational restrictions imposed by Myanmar’s military regime on international humanitarian aid efforts. The report underscored the complex environment in which aid agencies operated, emphasizing how the military government’s policies severely limited the effectiveness and reach of assistance programs. By documenting these constraints, the GAO report brought international attention to the systemic barriers that hindered humanitarian operations and development initiatives in Myanmar. The GAO report elaborated on the active measures taken by the Burmese military regime to obstruct humanitarian efforts by international organizations. Among these measures was the restriction of free movement for international staff throughout the country, which severely curtailed the ability of aid workers to access vulnerable populations, particularly in conflict-affected and remote areas. Such limitations not only impeded the delivery of essential services but also compromised the monitoring and evaluation of aid programs. The regime’s interference extended beyond logistical hurdles, encompassing stringent controls over the implementation of projects and the selection of local personnel, thereby undermining the independence and neutrality of humanitarian operations. The military government’s tightening grip on international assistance programs intensified following the political purge of former Prime Minister Khin Nyunt in October 2004. This event marked a turning point, after which the regime escalated its efforts to control and monitor foreign aid activities more rigorously. The purge signaled a consolidation of power by hardline elements within the military, who viewed unrestricted humanitarian aid as a potential threat to their authority. Consequently, aid agencies faced increasing bureaucratic obstacles and surveillance, which further constrained their capacity to operate effectively and respond to the country’s pressing humanitarian needs. In February 2006, the military government formalized its restrictive approach by issuing new guidelines that mandated all humanitarian programs to “enhance and safeguard the national interest.” This policy shift institutionalized the regime’s control over aid activities and framed international assistance within a nationalistic agenda that prioritized the government’s political objectives over humanitarian imperatives. The guidelines required that international organizations coordinate their activities closely with state agents, effectively subjecting aid programs to government oversight and approval at every stage. This coordination was not merely administrative but served as a mechanism for the military regime to monitor, influence, and often limit the scope of aid interventions. One of the most consequential aspects of the 2006 guidelines was the stipulation that international organizations must select Burmese staff exclusively from government-approved lists. This requirement severely restricted the recruitment process, excluding many qualified individuals who were not aligned with or approved by the military authorities. By controlling personnel decisions, the regime ensured that local staff were loyal or at least compliant, thereby reducing the risk of dissent or unauthorized information flow. This policy compromised the professionalism and impartiality of aid programs and raised concerns about the potential manipulation of humanitarian efforts for political ends. The United Nations officials publicly condemned these restrictive policies, describing them as unacceptable impediments to humanitarian work. UN representatives emphasized that such constraints violated fundamental principles of humanitarian assistance, including neutrality, impartiality, and independence. They warned that the regime’s interference jeopardized the delivery of aid to those most in need and undermined international efforts to alleviate suffering in Myanmar. The UN’s criticism underscored the broader international concern that the military government’s policies were not only obstructing aid but also exacerbating the country’s humanitarian crises. U.S. Representative Tom Lantos (D-CA) was among the vocal critics of the military regime’s obstruction of humanitarian aid. He highlighted the devastating human toll of the government’s actions, noting that in eastern Burma alone, over 3,000 villages had been burned or destroyed. This widespread destruction resulted in at least one million internally displaced persons (IDPs), many of whom were forced to survive in the jungle under dire conditions with little or no access to humanitarian assistance. Representative Lantos’s remarks drew attention to the scale of displacement and suffering caused by the regime’s military campaigns, which targeted ethnic minority areas and civilian populations. Lantos further emphasized that the military regime’s policies had severely decimated humanitarian relief efforts, effectively denying aid to vulnerable communities and obstructing the work of international organizations. He called for an end to these oppressive policies, urging the international community to hold the regime accountable and to press for unfettered access to aid recipients. His statements reflected a broader condemnation of the regime’s tactics, which not only violated human rights but also contravened international humanitarian norms. Similarly, U.S. Representative Ileana Ros-Lehtinen (R-FL) underscored the urgent need for democratic reform in Burma, citing the GAO report as evidence of the military government’s systemic abuses. She criticized the regime for engaging in arbitrary arrests, torture, rape, and executions, as well as the persecution of ethnic minorities. Ros-Lehtinen highlighted the regime’s failure to address critical issues such as refugee crises, illicit narcotics trafficking, human trafficking, and the spread of HIV/AIDS and other communicable diseases. Her critique painted a comprehensive picture of a government that not only repressed its population but also neglected essential public health and social challenges. Ros-Lehtinen also pointed to the paradoxical nature of the regime’s priorities, noting that while it focused resources on the construction of a new capital city, it simultaneously ignored pressing humanitarian and social problems affecting millions of Burmese citizens. This juxtaposition illustrated the regime’s misallocation of resources and its disregard for the welfare of its people. The emphasis on grandiose infrastructure projects contrasted sharply with the ongoing suffering and deprivation experienced by large segments of the population, further fueling international condemnation and calls for reform.

In 2016, Myanmar’s electricity production was estimated at approximately 17,866.99 gigawatt-hours (GWh), reflecting the country’s ongoing efforts to expand its energy infrastructure and meet growing domestic demand. The distribution of electricity consumption in that year demonstrated a significant allocation across various sectors, with residential usage accounting for 7,572.60 GWh, highlighting the reliance on electricity for household needs such as lighting, cooking, and appliances. Industrial consumption followed, utilizing 4,650.90 GWh, which underscored the role of manufacturing, mining, and other industrial activities in the national economy. Commercial establishments consumed 3,023.27 GWh, encompassing electricity for businesses, retail, and service industries. Notably, the electricity loss amounted to 2,384.89 GWh, which included transmission and distribution inefficiencies, technical losses, and unbilled consumption, pointing to challenges in the power sector infrastructure and management. During the same year, Myanmar exported 2,381.34 kilowatt-hours (kWh) of electricity, indicating some level of cross-border energy trade, although this figure was relatively modest compared to domestic production and consumption. This export activity suggested Myanmar’s potential role as a regional energy supplier, albeit on a limited scale at that time. Conversely, Myanmar did not import any electricity as of 2006, which highlighted the country’s self-reliance in electricity generation or the absence of established import agreements with neighboring countries during that period. The lack of imports also reflected the nascent stage of regional energy interconnectivity in Southeast Asia at the time. Agriculture remained a cornerstone of Myanmar’s economy, with the country producing a diverse range of primary agricultural products. Rice was the staple crop and a major export commodity, supporting both domestic food security and foreign exchange earnings. Pulses and beans were also significant, serving as important sources of protein and contributing to crop rotation practices that enhanced soil fertility. Other notable crops included sesame and groundnuts, which were cultivated extensively for both domestic consumption and export markets. Fruit production featured prominently with watermelon and avocado, catering to local demand and emerging export opportunities. Sugarcane cultivation supported the sugar industry, while hardwood represented a valuable forest product contributing to the timber sector. Additionally, fish and fish products formed a vital part of the agricultural output, reflecting Myanmar’s abundant inland and coastal water resources that supported fisheries and aquaculture industries. The currency of Myanmar is the kyat, abbreviated as K, which is subdivided into 100 pyas. The kyat has undergone various changes in its exchange rate regime over the years, reflecting shifts in economic policy and external market conditions. Official exchange rates of the kyat per US dollar exhibited significant fluctuations: in 2003, the rate was 6.0764 kyat per dollar, which adjusted slightly to 5.7459 in 2004 and 5.82 in 2005. However, a dramatic devaluation occurred in 2006, with the official rate moving to 1,280 kyat per dollar, followed by 1,296 in 2007 and 1,205 in 2008. These changes were indicative of Myanmar’s transition from a fixed exchange rate system towards a more market-oriented approach, aimed at improving the competitiveness of exports and attracting foreign investment. Despite the official rates, unofficial exchange rates often diverged significantly, reflecting the presence of a parallel market for foreign currency. In 2004, unofficial rates ranged from 815 kyat per US dollar to nearly 970 kyat per US dollar, demonstrating a substantial premium over the official rate and signaling underlying economic distortions such as currency controls and limited foreign exchange availability. By the end of 2005, the unofficial rate had further depreciated to around 1,075 kyat per US dollar. Data from 2003 to 2005 primarily reflected official rates, but the gap between official and unofficial rates underscored the challenges faced by the Myanmar government in maintaining currency stability and controlling foreign exchange markets during this period of economic transition. Foreign direct investment (FDI) played an increasingly important role in Myanmar’s economic development, particularly in the years following the country’s political and economic reforms. In the first eight months of the financial year 2019-2020, Myanmar attracted US$5.7 billion in FDI, reflecting growing international confidence in the country’s investment climate and the liberalization of key sectors. Singapore emerged as the top source of foreign investment during this period, with 20 Singapore-listed enterprises committing a total of US$1.85 billion. This substantial investment from Singapore highlighted the city-state’s strategic interest in Myanmar’s emerging market and its role as a regional financial hub facilitating capital flows into Southeast Asia. Hong Kong ranked as the second-largest investor in Myanmar in the financial year 2019-2020, contributing an estimated US$1.42 billion from 46 enterprises. The significant presence of Hong Kong investors demonstrated the importance of Chinese-speaking business networks and the integration of Myanmar into broader Asian economic dynamics. Japan also maintained a strong investment footprint, injecting US$760 million into Myanmar during the same period. Japanese investments typically focused on infrastructure, manufacturing, and technology sectors, reflecting Japan’s long-term strategic engagement with Myanmar’s economic development. Total foreign trade in Myanmar reached over US$24.5 billion in the first eight months of the fiscal year 2019-2020, underscoring the country’s expanding integration into the global economy. This robust trade volume included exports of natural resources, agricultural products, and manufactured goods, as well as imports of machinery, consumer products, and raw materials necessary for industrial growth. The substantial trade activity during this period was indicative of Myanmar’s efforts to diversify its economic base and strengthen its position within regional and international markets. As of January 2024, Myanmar had 24.11 million internet users, representing approximately 44.0% of the total population. This level of internet penetration reflected significant growth in digital connectivity over recent years, driven by increased mobile phone usage, expanding telecommunications infrastructure, and government initiatives to promote digital inclusion. The rising number of internet users played a critical role in transforming Myanmar’s information landscape, facilitating access to information, e-commerce, education, and social media platforms, and contributing to the modernization of the country’s economy and society.