The Association of South East Asian Nations (ASEAN) recently endorsed Burma to become the leader of the regional trade bloc beginning in 2014. This is a major milestone for the country, revitalized by a new civilian government that assumed power from a militaristic rule early in 2011. Economic growth in the nation has suffered in the past, due to inefficient government policies, corruption, and wide-spread poverty. However, since the new government came into power, there have been numerous reforms in order to promote economic growth within Burma.
Burma, also known as Myanmar, has massive economic potential. The nation is rich in many natural resources, including rare minerals, timber, and agricultural products. It also has one of the world’s largest natural gas reserves. With ports on the Indian Ocean and Andaman Sea, and a geographic position between India and China; Burma is very well positioned for international trade. As Maung Zarni, of the Burma and Myanmar Research Initiative at the London School of Economics, says, “Burma is basically the backdoor to the Chinese and Indian Markets and economies”. This holds very true, as most of the country’s trade comes from Thailand, Singapore, India, and China.
One of the key reforms that the new government is addressing is the issue of multiple foreign exchange rates. In the past, Myanmar has had an official exchange rate, and an unofficial black market rate that favored businessmen with close ties to the military. Simplifying this complex system would open the doors to many foreign investors and flood the nation’s financial system with capital. Another major legislative change is a new law that allows for the formation of labor unions. This will unite workers and ultimately solidify the nation’s labor force.
Although Myanmar has a huge economic potential, there are many obstacles in its way. The country has a population of 50 million that is among the poorest in Asia. Transportation and ports are run down, and electricity is scarce in some regions. Also, there are plenty of experts that believe that the government is not serious about reform. This has kept a lot of foreign investments out of the nation.
Although the economy of Burma is headed in the right direction, there is still a long road ahead for Burma to start realizing its true potential. Hopefully with the new, less-restrictive government in place, Burma will become more welcoming to businesses and able to capitalize on its vast resources; propelling it to the economic powerhouse that it is capable of. To learn more about the country of Burma, visit here!