Edited by Suiwah Leung, Ben Bingham and Matt Davies
Chapter 9: The Impact of Globalization on Economic Development in Myanmar
9. The impact of globalization on economic development in Myanmar 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...
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