Border Area Development in the GMS: Turning the Periphery into the Center of Growth

Border area development is neither an original nor a brand new idea of the author. It has long been discussed in a variety of words including border industries, growth triangles, growth areas and economic corridors. The Greater Mekong Subregion (GMS) Economic Cooperation revitalized the border area development as a new development strategy for less developed countries such as Cambodia, Lao PDR and Myanmar. This paper examines the location advantages of border areas, in particular of those between less developed regions and more developed ones. They include complementary factor endowment, cross-border infrastructure services and the degree of economic integration and border barriers. An industry located in border areas has a growth potential, as it can exploit the location advantages of the abundant and cheap labor force in less developed regions, while avoiding high service link costs and unstable utility services that accrue from underdeveloped infrastructure in less developed regions, by utilizing cross-border infrastructure services provided from more developed regions. Special economic zones (SEZs) located in the border areas can effectively exploit such location advantages and contribute to the formation of industrial clusters in border areas.Border Area Development; GMS; Border Industry; SEZ.

Myanmar and Japan: How Close Friends Become Estranged

Independent Myanmar and Japan had long held the strongest ties among Asian countries, and they were often known as having "special relations" or a "historically friendly relationship." Such relations were guaranteed by the sentiments and experiences of the leaders of both countries. Among others, Ne Win, former strongman throughout the socialist period (1962-1988), was educated and trained by the Japanese army officers of the Minami Kikan, leading to the birth of the Burma Independence Army (BIA). Huge official development assistance provided by the Japanese government also cemented this special relationship. However, the birth of the present military government (SLORC/SPDC) in 1988 drastically changed this favorable relationship between the two countries. When the military seized power in a coup, Japan was believed to be the only country that possessed sufficient meaningful influence on Myanmar to encourage a move toward national reconciliation between the junta and the opposition party led by Aung San Suu Kyi. In reality, Japan failed to exert such an influence due to its sour relations with the military government and reduced influence in the new international and regional political landscape. What is worse, Japan seems to be losing its say on Myanmar issues in the international political arena, as it has been wavering in limbo between the sanctionist forces, such as the United States and the European Union, and engagement forces, such as China and ASEAN

Myanmar\u27s apparel industry in the new international environment : prospects and challenges

Myanmar’s apparel industry had long been denied access to Western markets due to sanctions against its military government. The birth of a "civilian" government in March 2011 improved Myanmar’s relations with the international community, and Western sanctions were largely lifted. Regained market access is expected to trigger rapid growth of Myanmar’s apparel exports. This paper examines this impact with a comparison to Vietnam’s apparel industry.The industry’s prospects are getting bright, but the business environment has recently changed drastically in Myanmar. A new challenge for Myanmar’s apparel industry is remaining globally competitive. This paper also examines advantages and disadvantages that apparel firms in Myanmar experience. Although its abundance of low-wage workers remains a source of competitiveness, Myanmar needs its government to play a more active role to build the foundation of the industry

Stunted and Distorted Industrialization in Myanmar

More than 15 years have passed since Myanmar embarked on its transition from a centrally planned economy to a market-oriented one. The purpose of this paper is to provide a bird-eye\u27s view of industrial changes from the 1990s up to 2005. The industrial sector showed a preliminary development in the first half of the 1990s due to an "open door" policy and liberalization measures. However, a brief period of growth failed to effect any changes in the economic fundamentals. The industrial sector still suffers from poor power supplies, limited access to imported raw materials and machinery, exchange rate instability, limited credit, and frequent changes of government regulation. Public ownership is still high in key infrastructure sectors, and has failed to provide sufficient services to private industries. What the government must do first is to get the fundamentals right

The Impact of United States Sanctions on the Myanmar Garment Industry

The United States imposed trade sanctions against the military regime in Myanmar in July 2003. The import ban damaged the garment industry in particular. This industry exported nearly half of its products to the United States, and more than eighty percent of United States imports from Myanmar had been clothes. The garment industry was probably the main target of the sanctions. Nevertheless, the impact on the garment industry and its workers has not been accurately evaluated or closely examined. The purpose of this paper is to evaluate the impact of the sanctions and to further understand the present situation. This is done using several sources of information, including the author\u27s field and questionnaire surveys. This paper also describes the process of selection and polarization underway in the garment industry, an industry that now has more severe competition fueled by the sanctions. Through such a process, the impact was inflicted disproportionately on small and medium-sized domestic firms and their workers

Border Industry in Myanmar: Turning the Periphery into the Center of Growth

The Myanmar economy has not been deeply integrated into East Asia’s production and distribution networks, despite its location advantages and notably abundant, reasonably well-educated, cheap labor force. Underdeveloped infrastructure, logistics in particular, and an unfavorable business and investment environment hinder it from participating in such networks in East Asia. Service link costs, for connecting production sites in Myanmar and other remote fragmented production blocks or markets, have not fallen sufficiently low to enable firms, including multi-national corporations to reduce total costs, and so the Myanmar economy has failed to attract foreign direct investments.Border industry offers a solution. The Myanmar economy can be connected to the regional and global economy through its borders with neighboring countries, Thailand in particular, which already have logistic hubs such as deep-sea ports, airports and trunk roads. This paper examines the source of competitiveness of border industry by considering an example of the garment industry located in the Myanmar-Thai border area. Based on such analysis, we recognize the prospects of border industry and propose some policy measures to promote this on Myanmar soil

Myanmar\u27s Economic Relations with China: Can China Support the Myanmar Economy?

Against the background of closer diplomatic, political and security ties between Myanmar and China since 1988, their economic relations have also grown stronger throughout the 1990s and up to 2005. China is now a major supplier of consumer and capital goods to Myanmar, in particular through border trade. China also provides a large amount of economic cooperation in the areas of infrastructure, energy and state-owned economic enterprises. Nevertheless, Myanmar’s trade with China has failed to have a substantial impact on its broad-based economic and industrial development. China’s economic cooperation apparently supports the present regime, but its effects on the whole economy will be limited with an unfavorable macroeconomic environment and distorted incentives structure. As a conclusion, strengthened economic ties with China will be instrumental in regime survival, but will not be a powerful force affecting the process of economic development in Myanmar