Foreign investment in Myanmar : a resource boom but a development bust?

Based on data for actual and approved Foreign Direct Investment (FDI) from 1989-2011, this paper explores the major trends in FDI in Myanmar, focusing on changes over time in the source and sector of investment. It argues that over the last decade Myanmar's inward FDI has become heavily concentrated in the extractive and power sectors, while investment in manufacturing, services and other secondary and tertiary sectors has been almost non-existent. This is mostly the result of a poor investment climate, including import and export regulations, a weak judicial system, currency controls and weak property rights. The paper shows that China, Hong Kong, South Korea and Thailand have been the main investors in Myanmar, while Singapore, India and Western countries invested little in the 2000s. This divergence is driven partly by the differing investment patterns of the source countries, yet also reflects commercial and geopolitical realities, sanctions and concerns over energy security. The paper then examines whether and how FDI can lead to economic development in Myanmar, and closes by discussing the importance of recent political and economic reforms for rebalancing Myanmar's FDI.30 page(s

Globalisation and the informal economy in Myanmar

To understand, quantitatively and qualitatively, the relationship between costs and benefits of globalization and the informal economy of Myanmar. This research will inform economic policy both domestic and international and provide greater insights into the causes and consequences of informal economics in isolated countries. For much of the last half-century, Myanmar’s economy has developed mostly in self-imposed isolation, during which time significant government intervention in and regulation of the economy have spurred a large informal economy and endemic elite rent seeking. This uniquely structured economy is becoming increasingly engaged in regional economic networks, thanks mostly to the recent rapid growth of neighbours such as China, India and Thailand. This dissertation will address how these structural characteristics, namely pervasive economic informality, affect the costs and benefits of economic globalization for small and medium enterprises in Yangon, Myanmar. In order to do this, I will partner with a domestic NGO to conduct a multi-stage survey in Yangon, as well as formal and semi-formal interviews with businesspeople, domestic and international government officials and representatives of international organizations and NGO’s. The survey will investigate the extent of informal activities – including labour and corruption. These surveys and interviews will form the basis of my analysis about the role of informality in shaping the costs and benefits of globalization. Based on this, I will detail the causes and consequences of informality and compare and contrast my findings with existing literature on informal economics and corruption. I will also quantify the consequences of informality to provide a more accurate measure of how these shadow markets influence the country’s macroeconomy.2 page(s

Determinants of firm level growth and hiring in Myanmar

For much of the last half-century, Myanmar’s economy has developed mostly in self-imposed isolation, during which time government intervention in and regulation of the economy affected firm incentives and performance significantly. The dissertation is based on a unique set of firm level data from 153 companies in Myanmar. The randomized, stratified survey was conducted in conjunction with the one of the country’s leading NGOs and with the approval of the country’s chamber of commerce. The survey contained over 110 different questions covering six major topics, including firm characteristics, firm perceptions of the business environment, labor, capital, finance, and firm performance. Using this data, I will first examine determinants of firm level growth for the 150+ firms based on variables including size, ownership, sector, firm characteristics and a number of proxy measures for a firms connections with government (for example percentage of sales to government). The second section will also focus on firm level growth, but will use perceptions based measures of the business environment as the variables. The third section will examine firm hiring, to determine the characteristics of firms that increase hiring and the types of hiring that occur. The last section will draw on these and the qualitative interviews to posit theories about influences on the structure of the economy and how those could affect firm level growth.2 page(s

Myanmar's economic institutions in transition

Improving the business environment has been a major aim of Myanmar's reforms. However, the formal and informal economic institutions that govern exchange and shape the business environment changed significantly under a half-century of socialist and military government. The socialist leadership eliminated many market-supporting institutions made unnecessary because economic activity was to be state planned. Under this framework, personal exchange became dominant and control of economic life widespread. The military government revived market exchange, but many institutions from the socialist era remained and continue to constrain private business today. Thus, the strict economic controls, arbitrary policy-making and lack of processes that affect businesses in present-day Myanmar have direct institutional links with former regimes. They distort the structure of the economy, incentivize clustering in particular sectors and promote the use of networks and personal exchange. As other countries have shown, successful reform is a long process requiring more than changes in the formal institutions of regulation.15 page(s

Economic institutions and the development of Burma/Myanmar's private sector

Theoretical thesis.Bibliography: pages 229-252.Chapter 1. Introduction -- Chapter 2. Literature review -- Chapter 3. Methodology -- Chapter 4. Economic institutions and the private sector through the independence era -- Chapter 5. Economic institutions from socialism through the SLORC and SPDC eras -- Chapter 6. Economic institutions in Myanmar - the institutions and organizations of business -- Chapter 7. A quantitative analysis of institutions, businesses and performance -- Chapter 8. Conclusion.Economic institutions are the rules of the economic game that define the incentives and constraints for businesses, and are integral to the development of an economy. Myanmar’s institutions have a turbulent history, shifting repeatedly due to the frequent changes in ruling regimes. In the 19th century, British colonization brought market-supporting institutions to replace the existing traditional, informal institutions. Despite their success in facilitating export-led economic growth, the Burmese population viewed colonial institutions as exploitative, which contributed to increasing state-domination of institutions throughout the 20th century. The socialist government that came to power in 1962 abolished markets and their supporting institutions, and gave the government widespread authority to control and implement economic activity. Though the government was incapable of exploiting this authority, successive regimes retained many of these formal powers, delegating them through an opaque system which limits access to economic opportunities and gives the state power to dictate economic outcomes. The state also exerts influence over transactions, which often hinge on permissions, connections, and bribery. Property rights, which depend on a ‘strong but limited state’ for their defence, instead face a ‘weak but unlimited state’ in Myanmar, with few bounds on government’s formal authority and weak market-supporting institutions. Arbitrary implementation and unpredictability are fundamental characteristics of Myanmar’s institutional framework, incentivizing businesses to engage in bribery, build relationships and result depend on informal, relation-based mechanisms to facilitate exchange. This thesis examines the impact of economic institutions on businesses in Myanmar, drawing on over 150 quantitative surveys and 60 interviews conducted during almost two years in country. It examines how institutions shape transactions, firm-level outcomes, and decision making, and finds that they have a material impact on firm performance. Weak institutions deter investment, restrict competition, lead to lower productivity, and distort price signals, skewing the allocation of capital and labour. It argues that Myanmar's existing economic institutions are heavily influenced by history, and that the socialist-era governance of business has left a legacy that continues to influence economic outcomes. It also shows that institutional enforcement characteristcs and informal institutions matter for economic outcomes. State weakness leads to an institutional framework characterized by enforcementthat is non-existent, arbitrary, preferential, or opportunistic. The result is heterogeneity of institutional experiences that depend not only on business-government relationships, but also changes in the external environment, changes in personnel within government, poorly codified laws, and weak monitoring and enforcement mechanisms.Mode of access: World wide web1 online resource (xvi, 295 pages) table

Bridging Systems and People-Centred Approaches in Urban Vulnerability Research: Insights for Resilience from Dawei, Myanmar

Dawei, a coastal secondary city in southeastern Myanmar, is poised to face significant social and environmental change. Dawei’s location at the head of the Dawei River estuary, just 30 kilometres from the Andaman Sea and 350 kilometres to the west of Bangkok, has attracted increasing attention from foreign investors. Namely, to develop a Special Economic Zone, build the largest deep-sea port in the region, and connect Dawei by road to the southern economic corridor of mainland Southeast Asia. Little is known about how these developments will affect Dawei, nor how climate change will interact with such changes to shape urban vulnerability. In this chapter, we examine how Dawei’s urban systems are exposed to various climatic and non-climatic stresses and investigate how this plays out through people’s everyday livelihoods. Our analysis then turns to how people cope and adapt to social and environmental change, illuminating how social capital and the ways that people relate are fundamental to shaping resilience. We situate this analysis within the larger context of Myanmar’s political and economic transition, highlighting both the challenges that this transition poses to vulnerability and the possibility of shaping a resilient future