Chapter 5 Industrial Policy, Structure, and Locations during the Transition toward a Market-oriented Economy in Myanmar

This paper examines Myanmar's industrial policy, structure, and locations during the transition from a centrally planned economy to a market-oriented one throughout the 1990s and up to the present. After the military government assumed power in 1988, it abandoned the socialist centrally planned economic system and began instituting a market-oriented one through a series of liberalization and deregulation measures, although most of which have stalled since 1997 and remain half-way implemented. Against this background, it is rather surprising that the impact of these new policies of international trade, finance, regulations, licensing and ownership requirements on industrial structure and location in Myanmar has been poorly documented and examined to date. Some key issues to understanding the impact and effectiveness of the market-oriented policies during the last two decades in Myanmar remain to be answered: Have the new trade and industrial policies changed the industrial structure and organizational behavior in Myanmar? Have they improved the performance of Myanmar's industrial sector? Have they had any impact on industry location in Myanmar? This paper reviews the series of liberalization programs implemented under the military government?the State Law and Order Restoration Council (SLORC) and the State Peace and Development Council (SPDC)?and assesses their impact on industrial structure and its spatial distribution.

Economic integration, location of industries, and frontier regions : evidence from Cambodia

We examine changes in the location of economic activity in Cambodia between 1998 and 2008 in terms of employment growth. During this period, Cambodia joined ASEAN and increased trade with neighboring countries. Drawing on the predictions of the new economic geography, we focus on frontier regions such as border regions and international port cities. We examine the changing state of manufacturing in Cambodia from its initial concentration in Greater Phnom Penh to its growth in the frontier regions. The results suggest that economic integration and concomitant trade linkages may lead to the industrial development of frontier regions as well as the metropolitan areas in Cambodia.

Harmonization of trade in services by APEC members

This study maps out the degree of services trade liberalization by the APEC members toward achieving a Free Trade Area of the Asia-Pacific (FTAAP) and makes some comparative analyses. The study finds that the commitment level differs greatly between sensitive and less sensitive sectors, and that the commitment level under the ASEAN Framework Agreement (AFAS) package 8 is the highest among the four FTAs studied. It also finds that there are cross-country and sector-wide similarities in the pattern of service sector commitment under and across each of the FTAs; this implies that the shared domestic sensitivities can be overcome by an APEC-wide economic cooperation scheme for enhancing competitiveness (through, e.g., the Trans-Pacific Strategic Economic Partnership Agreement or TPP).

Trade obstacles, inventory level of inputs, and internationalization of enterprise activities : a comparison between Southeast Asia and Latin America

This paper investigates the impact of trade barriers such as customs clearance, subjective trade obstacles (customs and trade regulations), and inventory of inputs on the internationalization of enterprises in Southeast Asia and Latin America, using the World Bank's enterprise surveys. Empirical results show a negative association between the internationalization of enterprises and subjective trade obstacles, while the impact of subjective trade obstacles is not significant on enterprises already internationalized. An international comparison between Southeast Asia and Latin America suggests that enterprises in Latin America face unfavorable conditions that discourage them from becoming more closely inserted into international production networks.

Assortative matching of exporters and importers

This paper uses the opening of the US textile/apparel market for China at the end of the Multifibre Arrangement in 2005 as a natural experiment to provide evidence for positive assortative matching of Mexican exporting firms and US importing firms by their capability. We identify three findings for liberalized products by comparing them to other textile/apparel products: (1) US importers switched their Mexican partners to those making greater preshock exports, whereas Mexican exporters switched their US partners to those making fewer preshock imports; (2) for firms who switched partners, trade volume of the old partners and the new partners are positively correlated; (3) small Mexican exporters stop exporting. We develop a model combining Becker-type matching of final producers and suppliers with the standard Melitz-type model to show that these findings are consistent with positive assortative matching but not with negative assortative matching or purely random matching. The model indicates that the findings are evidence for a new mechanism of gain from trade.