Trade, Foreign Investment and Myanmar's Economic Development during the Transition to an Open Economy

Throughout the 1990s and up to 2005, the adoption of an open-door policy substantially increased the volume of Myanmar's external trade. Imports grew more rapidly than exports in the 1990s owing to the release of pent-up consumer demand during the transition to a market economy. Accordingly, trade deficits expanded. Confronted by a shortage of foreign currency, the government after the late 1990s resorted to rigid controls over the private sector's trade activities. Despite this tightening of policy, Myanmar's external sector has improved since 2000 largely because of the emergence of new export commodities, namely garments and natural gas. Foreign direct investments in Myanmar significantly contributed to the exploration and development of new gas fields. As trade volume grew, Myanmar strengthened its trade relations with neighboring countries such as China, Thailand and India. Although the development of external trade and foreign investment inflows exerted a considerable impact on the Myanmar economy, the external sector has not yet begun to function as a vigorous engine for broad-based and sustainable development.

Post-1988 civil-military relations in Myanmar

This paper explores the development of civil–military relations in Myanmar since 1988. After the Tatmadaw (Myanmar Armed Forces) took over the state by means of a coup d’état in 1988, the top generals ruled the country without recourse to significant formal political institutions such as a constitution, elections and parliament. A unique authoritarian regime, where political power was predominantly under the military’s influence, lasted for more than 20 years in the country. It seemed to many observers that the military regime was highly durable and that its dictator, General Than Shwe, had no intention of altering the highly repressive character of the political system. However, a new leader, President Thein Sein, who came to power in March 2011, has decided to implement some political and economic reforms that could undermine the Tatmadaw’s dominant role in politics and the economy. This paper examines the background to this sudden political change in Myanmar, focusing on the relationship between its dictator, the military and the state. This paper’s main argument is that Than Shwe has carefully prepared the transition of 2011 as a generational change in the Tatmadaw and in state leadership. The argument is also made that the challenges created by Thein Sein can be understood as a result of his redefinition of national security and balancing of security-centralism with state-led developmentalism.