The Place of Myanmar in South East Asia

Dr Thein Swetheinswe43@gmail.com

Local Resource Centre, YangonOctober 20, 2012

MyanmMyanmarar

Myanmar is the largest country in the Greater Mekong Subregion- 676,600 sq km

•Second largest country in ASEAN (Indonesia – 1,904,600 sq km) With 60 million population and rich natural resources:•--arable land•--forestry•--minerals(incl. copper, gas and oil)•--fresh water and marine resources

Poverty particularly in the remote and border areas, withpoverty incidence -- 26.6% est.

Target is to reduce to 16% in 2015?

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Areas of Changes/Reforms

• Holding of free and fair by elections (April 2012)• Myitsone Dam suspension • Calling for Peace with all ethnic nationalities• Releasing Political Prisoners• Relaxing Press/Media • Permission to form Trade Unions• New code for permission public demonstrations

Recent Economic Outlook:• With the two neighboring booming economies, there is a

growing market for Myanmar agriculture and other products. • Challenges are :

– Weak or lack of infrastructure, – Foreign investment laws and regulations. – Governance and Transparency .– Building Trust and Genuine Peace with all ethnic nationalities.– Real reforms and not just lip services

• Critical that the real reform process continues to be implemented effectively and translates into a better basic economic and social needs of all the people of the country.

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ADB estimated for 2011 to be $759.01 In the early 1960s, Myanmar was one of Asia’s leading economies. Its per capita income in 1960 was about $670 – more than three times that of Indonesia, more than twice that of Thailand. (Booth 2003). Source: Myanmar in Transition, ADB August 2012

Growth Rate(% per Year)

Doubling Timein Years

0.1 700

0.5 140

1 70

2 35

3 23

4 18

5 14

6 12

7 1010 7

The Rule of 70The Rule of 70 is useful for financial as well as demographic analysis. It states that to find the doubling time of a quantity growing at a given annual percentage rate, divide the percentage number into 70 to obtain the approximate number of years required to double. For example, at a 10% annual growth rate, doubling time is 70 / 10 = 7 years. Similarly, to get the annual growth rate, divide 70 by the doubling time. For example, 70 / 14 years doubling time = 5, or a 5% annual growth rate. The following table shows some common doubling times:

2011........................……………………………..$760 per capita income2021……………..7………………………………$760 + $760 = $15202031……………..7………………………………$1520+1520 = $3040

32. Myanmar35. Lao People’s Democratic Republic42. Indonesia55. Cambodia80. Malaysia84. Vietnam96. Thailand98. Philippines150. Singaporehttp://www.globaltvbc.com/canada/vancouver+scientists+unveil+global+index+measuring+economy+and+ecology/6442584985/story.html

Economic and Ecological Health Index

How World Media and Perception has Changed

Myanmar Pawsan chosen world best rice

YANGON, 23 Oct, 2011— Pawsan rice of Myanmar was selected as World Best Rice 2011 in World Rice Conference 2011 on 21 October in Ho Chi Minh City, of Vietnam.

Pawsan rice internationally known as Myanmar pearl rice is the indigenous strain of Myanmar. It has also won third prize in World Rice Conference 2010 in the Philippines.

In this year’s competition, Pawsan stood first grabbing 14 out of the highest mark of 15, 0.2 mark ahead of Jasmine rice of Thailand.

EAS

- Australia - New Zealand

- India

ASEAN+3

- Japan

- Republic of Korea

- People’s Republic of

China

ASEAN - Philippines- Myanmar - Thailand- Lao PDR - Malaysia- Cambodia - Singapore - Brunei Darussalam - Indonesia - Vietnam

APEC

- Russian Federation - Canada - United States - Mexico - Peru - Chile

- Taipei, China - Hong Kong, China

- Papua New Guinea

ASEM

- European Union (27 member countries)

- Mongolia - Pakistan

- Kazakhstan - Uzbekistan CAREC - Afghanistan - Azerbaijan - Kyrgyzstan - PRC - Tajikistan

SAARC - Nepal-Maldives - Bhutan

- Sri Lanka - Bangladesh

- Palau - FSM - Marshall Is. - Kiribati - Nauru - Tuvalu - Niue PIF - Tonga - Samoa - Vanuatu - Cook Is. - Solomon Is. - Fiji Is.

Regional Groupings in AsiaShanghai Cooperation Organization (SCO)

CIS

BIMSTEC 1997

Pan-Beibu Gulf Economic Cooperation Forum

Lower Mekong Initiative

Greater Mekong Subregion

ASEAN

Are we (Myanmar) ready to take the role of Chair of ASEAN in 2014?

EAS - Australia - New Zealand - India

ASEAN+3

- Japan

- Republic of Korea

- People’s Republic of

China

ASEAN--Indonesia-- Malaysia-- Philippines-- Singapore-- Thailand - Brunei Darussalam - Vietnam - Myanmar - Lao PDR - Cambodia

ASEAN and Dialogue Partners

Dialogue PartnersAustraliaCanadaChinaIndiaJapanKoreaNew ZealandEuropean Union (EEC)RussiaUSAUNDP

ASEAN+6

ASEAN has been working with the Dialogue Partners and other regional groups in order to build Free Trade Agreements to accelerate trade and investments.Significant steps taken with Dialogue Partners with ASEAN + 3 and ASEAN + 6, on Free Trade Agreements. To maintain ASEAN centrality and ASEAN way, proactive engagement with Dialogue Partners and obtain support for the ASEAN Community building, integration and connectivity. ASEAN Economic Community in 2015 is to become a single market and production base. It is important to be an ASEAN led community.

Can ASEAN deepen further and expand its present state

East Asia Summit (EAS) established in 2005 (most important annual gathering of leaders from Asia Pacific)It is important that ASEAN continue to strengthen the current political and security environment. ASEAN should continue to be in the driver’s seat – centrality, with Dialogue Partners’ support in this initiative.ASEAN Regional Forum (ARF) established in 1994 – the only political and security dialogue in the region, building confidence and trust - with constructive and in depth support from the Dialogue Partners should continue.ASEAN Defense Ministers’ Meeting Plus (ADMM Plus) established in 2010 with 8 dialogue partners is the defense and security cooperation mechanism in the region.

Lessons Learned from Euro Zone debt crisis.

With Myanmar to chair the ASEAN in 2014 and ASEAN preparing for ASEAN Economic Community in 2015, ASEAN could learn from Euro Zone debt crisis and lessons learned would be very beneficial for ASEAN.ASEAN could learn share on the merit of integration between countries with different levels of economic development. ASEAN members are also in similar situation with different levels of economic development. The important lessons learned in the recent economic imbalances in the Euro Zone debt crisis is very useful for ASEAN to take this into consideration when implementing the AEC in 2015.

The inter-related factors resulted in the economic imbalances and Euro zone debt crisis were:a.Disparity in economic competitiveness among Euro zone member countries;b.Single currency of the Euro make cheaper borrowing costs, and increased borrowings for imports led to significant increase in debt to GDP ratios;c.Weak monitoring of the Maastrich Treaty on limitation of (i) 3% of GDP borrowing limits (Budget Deficit), and (ii) 60 % debt to GDP ratio to ensure stability in Euro zone.d.This led to Portugal, Ireland, Italy, Greece and Spain (PIIGS) with economic imbalances.e.Large (Germany and France) as well as medium and smaller Euro zone members (PIIGS) did not follow nor monitor closely the above limitation conditionality of Maastrict Treaty.

The Asean Economic Community main objectives are:(a)Create a single market and production base;(b)Highly competitive economic region;(c)Region of equitable economic development; and (d)Region fully integrated into the global economy….. by 2015.

Hence, Myanmar as chair of ASEAN in 2014 should used the lessons learned in order that ASEAN could take necessary precautionary measures and avoid similar economic and financial imbalances, and achieve the main objectives of the ASEAN Economic Community by 2015, including strengthening ASEAN integration and connectivity .

Thailand

Land area: 513 thou sq km

Population: 65.3 M

GDP per capita: US$2,727

Cambodia

Land area: 181 thou sq km

Population: 13.8 M

GDP per capita: US$393

Myanmar

Land area: 677 thou sq km

Population: 54.8 M

GDP per capita: US$255

People’s Republic of China

Land area: 633 thou sq km

Population: 93.8 M

GDP per capita: US$1,032

(figures for Yunnan and Guangxi only)

Viet Nam

Land area: 332 thou sq km

Population: 83.1 M

GDP per capita: US$622

Lao PDR

Land area: 237 thou sq km

Population: 5.6 M

GDP per capita: US$491Land area: 2.6 M sq km

Population: nearly 500 M

per capita: US$1,102

The Greater Mekong Subregion (GMS)

Building a Community • Core environment program• Flood management and mitigation• Communicable disease control• Promotion of safe migration and

prevention of trafficking of girls and women

• Establishment of complementary subregional initiatives ,

• Ayeyawaddy Chao Phraya Mekong Economic Cooperation Strategy - ACMECS,

• Emerald Triangle –Thailand, Cambodia and Lao PDR,

• Development Triangle – Lao PDR, Cambodia and Vietnam)

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North-South Economic Corridor (1)

East – West Economic Corridor

Southern Economic Corridor (2)

Southern Economic Corridor (1)

New Corridors

AS MYANMAR isStrategically located betweenINDIA; CHINA; ASEAN

Northwestern CorridorFrom Assam, India – thro’ Myanmar to Kunming

Western Corridor from Sittwe, Myanmar to Kunming,PRC

Economic Corridors

Trilateral Connectivity by 2016INDIA; MYANMAR: THAILAND

Dawei

Also US led Lower Mekong Initiatives

Lower Mekong Initiative (LMI)?The LMI was created in response to the July 23, 2009 meeting

between US Secretary of State Hillary Clinton and the Foreign Ministers of Cambodia, Laos, Thailand and Vietnam -- in Phuket, Thailand. At this first LMI Ministerial Meeting, the Ministers agreed to enhance cooperation in environment, health, education, and infrastructure development.

To counter GMS which includes China and Myanmar.But, the US Secretary of State visited Myanmar, in Dec 2011, and

invited Myanmar to join LMI.And the Cobra Military exercise in Thailand.

• China is set to commence negotiations to create a 16-nation trade bloc, known as the Regional Comprehensive Economic Partnership (RCEP), was announced at the ASEAN summit in Phnom Penh in 2012.

• The RCEP will include the 10 members of ASEAN (includes Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam), plus China, India, Japan, South Korea, Australia and New Zealand, and will have the effect of lowering trade barriers and custom duties across the region by the end of 2015.

• A map of the participating members of the proposed RCEP can be seen in the next slide – in yellow color.

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ASEAN’s Major Export Destination and Major Import Sources, 2010.

Exports Imports

1.China 14. 3% 1. China 17.3 %

2.Japan 12 .6 % 2. Japan 16.2 %

3.U.S.A. 12.6 % 3. U.S.A. 11.6 %

4.Hong Kong (S.A.R of China) 9.3 % 4. Republic of Korea 7.9 %

5.Republic of Korea 5.5 % 5. Saudi Arabia 3.7 %

NOTE: ASEAN International Trade is mainly with non-ASEAN countries, but majority is with Dialogue Partners

Regional Comprehensive Economic Partnership (RCEP) 24

Trans-Pacific Partnership (TPP)

• The TPP negotiations were revitalised by the US in 2010. The talks will be concluded next year.

• With the exclusion of China, the move is seen by some as an attempt to counter the rising economic clout of Beijing and to assert more American influence on Asia.

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China’s Role with the “new Myanmar and Southeast Asian Geopolitics

Mekong River linking China with 5 other GMS countries is emerging as an important conduit of regional trade

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Just wait till I've had my fill

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Territorial disputes on the Spratly and Paracel islands between China Brunei, the Philippines, Vietnam, Malaysia and Taiwan

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UN Law of the Sea Treaty establishes specific jurisdictional limits on the ocean area that countries may claim, including a 12-mile territorial sea limit and a 200-mile exclusive economic zone limit.

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CONCERNs WITHJapan’s Plan to provide $18 billion to Myanmar

(REUTERS and New York Times)1. Debt Forgiveness & Refinancing ………$5 billion - Japanese debt….$3.7 billion - Bridge loan (WB400mln+ADB 500mln) - Thilawa SEZ2. Yangon Road Rehabilitation/Mass Transit System3. Yangon Water Supply Rehabilitation4. Four Power Plant Rehabilitation in Yangon5. Addition of 6 new berths in Thilawa6. Many feasibility studies ongoing including many social and

health projects7. AS GIVE AWAY LOANS?…0.01% interest of 50 years (10

years grace period) ?????????????8. Consultations with the grassroots not yet define?9. MISSION IMPOSSIBLE? The Government requesting

completion by 2015! After nearly 40 years of stagnation?

The 1997 Asian Financial Crisis brought to surface the economic interdependence of the whole of East Asia and Southeast Asia.

At the same time, in Asean and East Asia, the atrocities of the Japanese Imperial Army remains in the minds of the people of East and Southeast Asia

As Lee Kuan Yew said, “We can forgive but not forget”Up to 1977, relationship between Asean and Japan was trade. Only after

that the Fukuda Doctrine – balancing with human, cultural and technological cooperation.

NOW, China growing economic power. China has $3.3 trillion FE reserves; Japan has $1.3 trillion FE reserves in March 2012.

Asean China FTA; Asean Japan FTA; India, Korea, Australia, New ZealandGMS countries are crucial for China and Japan, especially for natural

resources as well as logistic transportation. Asean – China; Asean – Japan serve as building blocksLet us hope it is not stumbling blocks.Now, US is also saying that …….USA is an Asia-Pacific Country;

Geopolitics is heating up in ASIA.????

CONCLUSION: What should be the priorities?

– Agrarian Reforms (to overcome land ownerships and disputes)– Building Planning and Statistical Capacity– Focus on public sector (strengthening public financial

management); private sector (investment climate), and financial sector (regulatory reform and access to finance). Overall Capacity building in the public and private sectors.

– Short term training programs in both the public and private sectors

– Long Term academic capacity building in various professions– World Bank three year in-house training program for various

disciplines could be considered? If available now?– Judicial reforms and technical assistance in the judicial system

reforms including international rules and regulations such as streamlining procurement rules and procedures and international arbitrations and strengthening the rule of law

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Importance of Civil Societies• Zhu Feng, a professor of international relations at Peking

University, told The Economist that “alarm bells started ringing” for the Chinese over Burma when construction of the Myitsone dam on the Irrawaddy River was unexpectedly halted last year.

• China’s mistake was to focus only on building relationships with government officials, not paying any attention to “domestic political nuances.”

• US will also have to go beyond high-profile, high-level meetings between senior leaders, and turns its focus on issues that matter most to ordinary people. CSOs should monitor and be involved.

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Q and A

aus; Zl; wif yg onfThank You

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Source: Myanmar in Transition, ADB August 2012

Myanmar in International Financial Institutions (IFIs)

IMF IBRD IDA IFC ADB

Established 1944 1944 1960 1956 1966

Membership 188 187 172 184 67 (44 +17)

Headquarters Washington D.C., USA. Manila, Philippines.

MYANMAR Year joined 1952 1952 1962 1956 1973

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IFIs Board of Directors- Voting Power (Percentage) APPOINTED IMF(24) IBRD (25) IDA((25) IFC(25) ADB(12)

1. USA 16.75 15.54 10. 81 22.73 12.822. Japan 6.23 9.15 8.58 5.66 12.823. Germany 5.81 4.58 5.56 5.17 4. UK 4.29 4.09 5.54 4.86 5. France 4.29 4.09 3.80 4.86

ELECTEDCHINA 3.81(11) 3.33(14) 2.05(22) 1.01(25) 5.47(12)

MAINLY ASEAN + 3.93 (10) 2.44 (21) 3.22 (16) 2.59(18) 6.18(11)Myanmar 0.13 0.17 0.35 0.06 0.74

Australia, CenAsian +Cambodia+K+Pacific Islands 9.05(3)India,Afganistan,Bhutan, LPDR,Tajikistan,Turkmanistan 8.47(4)Canada,Netherlands + Nordic countries 8.47(4)Korea, Taipei China, SriLanka, Uzbezkistan, Austria, Luxembourg, Turkey 7.42 (8)Philippines, Pakistan, Kazakhstan, Mongolia, Maldives, Marshall Islands 6.43 (9) France, Italy, Belgium, Spain, Portugal, Switzerland 6.22 (10)

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