Globalization and Development in the Mekong Economies

Globalization and Development in the Mekong Economies

Edited by Suiwah Leung, Ben Bingham and Matt Davies

Since the late 1980s, Vietnam, Cambodia, PDR Lao, and Myanmar have been opening their economies to international trade and investment. With the exception of Myanmar, the reforms have yielded impressive results, but the process is far from complete. In this enlightening book, a group of leading scholars outline the continuing reform efforts needed to survive the current global recession and place these economies in a competitive position on the recovery of the world economy.

Chapter 9: The Impact of Globalization on Economic Development in Myanmar

Trevor Wilson, Leslie Teo and Masahiro Hori

Subjects: asian studies, asian development, asian economics, asian urban and regional studies, development studies, asian development, development economics, economics and finance, asian economics, development economics


Trevor Wilson, Leslie Teo and Masahiro Hori INTRODUCTION 1 This study demonstrates that while improved communications, increased regional trade links and migration have strengthened Myanmar’s integration into the global economy, the benefits of globalization are not pervasive and have not brought significant improvements in general social economic conditions. Despite historically strong global ties and attempts at opening up, Myanmar remains a comparatively closed economy. Lack of reinforcing institutions and policies and pervasive government controls render ineffective efforts by the military authorities to open the country economically after 1988. Indicators of economic development and globalization1 leave little doubt about Myanmar’s decades of poor economic performance and isolation. This includes: (i) GDP growth that has been lower than its potential, despite rich resources; (ii) high inflation, caused primarily by large fiscal deficits financed through money creation; (iii) exchange rate2 and trading systems that discourage international transactions and distort economic activity; and (iv) a weak investment climate (poor infrastructure, pervasive controls on economic activity, even after 1988, and nontransparent rules and regulations). The single most important reason for such poor economic performance is poor economic policies that place more weight on control and security than the development of a vibrant private sector-led economy. One consequence is that over the last five decades real per capita GDP has only doubled in Myanmar compared to an average increase of about twelve times for East Asia and Pacific economies. More specifically, such policies not only dilute the effects of globalization but they leave Myanmar one of...

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