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Myanmar economy

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Myanmar economy

  1. 1. Outlines ofMyanmar EconomyPrepared byWin Htut Aung & Associates
  2. 2. Economic Policy4 Economic Objectives To Promote Agriculture as Based Sector. To Adapt Market-oriented Economic System gradually. To Accept Foreign Investment & Know- how. To Keep the Control Measures of the Economy by the State & Citizens. 2
  3. 3. Legal Frame Work(Before 1988) Myanmar Companies Act, 1914 Special Companies Act, 1950 • For Joint Ventures where a Government Entity is a Shareholder Myanmar Companies Regulations, 1957 • For Establishment of Foreign Companies & Branches 3
  4. 4. Legal Frame Work(Investment) 1988 – Myanmar Foreign Investment Law 1989 – State-owned Economic Enterprises Law 1990 – Private Industrial Enterprise Law 1994 – Myanmar Citizens Investment Law 2002 – Co-operative Society Law 4
  5. 5. Legal Frame Work(Reservation List) Extraction and sale of teak. Cultivation and conservation of forest plantation. Exploration, production and sale of oil and gas. Exploration, production and export of gems and pearl. Exploration, production and export of minerals. Post and telecommunication. Air and railway transport. Banking and insurance. Broadcasting and television. Electricity generation. Arms, ammunitions & security related items. 5
  6. 6. Legal Frame Work(Agriculture) 1990 – Pesticide Law 1990 – Myanmar Agricultural & Rural Development Bank Law 2002 – Fertilizer Law 6
  7. 7. Legal Frame Work(Fishery, Forestry, Mining) 1989 – Law relating to Fishing Rights of Foreign Fishing Vessels 1989 – Law relating to Aquaculture 1990 – Myanmar Marine Fisheries Law 1991 – Freshwater Fisheries Law 1992 – Forest Law 1994 – Myanmar Mines Law 1996 – Myanmar Pearl Law 1996 – Myanmar Gemstone Law 7
  8. 8. Legal Frame Work(Financial) 1990 – Central Bank of Myanmar Law 1990 – Financial Institutions of Myanmar Law 1992 – Saving Banks Law 1993 – Myanmar Insurance Law 1996 – Insurance Business Law 2002 – Control of Money Laundering Law 8
  9. 9. Legal Frame Work(Others) 1990 – Myanmar Tourism Law 1993 – Myanmar Hotel & Tourism Law 2000 – Highways Law 2007 – Law Relating to Private Health Care Services 9
  10. 10. Fiscal Policy Deficit Budget  Average Increase of Money Supply during 2000~2008 – 28.5% p.a. GDP Growth Rate  Continuous Double digit growth High Inflation Rate  Average Increase of Consumer Price Index (CPI) during 2000~2008 – 24.9% 10
  11. 11. GDP Growth Consumer Price Index Bank Interest Rate - Saving 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09GDPGrowth 13.7 11.3 12.0 13.8 13.6 13.6 13.1 11.9 10.7CPI -1.72 34.50 58.11 24.94 3.77 10.74 26.33 32.93 22.50BankInterest 9.00 9.00 9.00 9.00 9.00 12.00 12.00 12.00 12.00Rate (Source: MNPED) 11
  12. 12. Foreign Trade (Changes) Promote Foreign Trade.  Form Trade Council. Allow Import First Export  Change of Trade Policy. Later System &  Stop “Permit to Trade” to Consignment Import Foreign Trading & System. Service Companies. Less Control over Issue  Strict Control over Issue of Export / Import of Export / Import Licence. Licence. Minus Foreign Trade  Surplus Foreign Trade Balance during 1987-88 Balance during 2002-03 to 2001-02 (15 years). to 2008-09 (7 years). 12
  13. 13. Foreign Trade (Trend) 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09Export 12,736 17,130 19,955 14,119 16,697 20,647 30,026 35,297 37,028Import 16,073 18,378 14,910 13,398 11,339 11,514 16,835 18,419 24,874Total 27,809 35,508 34,865 27,517 28,036 32,161 46,861 53,716 61,902TradeBalanc -,2337 -1,247 5,045 722 5,358 9,133 13,191 16,878 12,154e (Source: MNPED) 13
  14. 14. Foreign Trade(Procedures) Has licence control system. Need prior clearance and price recommendations from various dept./organization before application of licence. All licence are issued with the approval of Trade Council, which is nearly equivalent to Cabinet. Licence is valid only for 3 months. 14
  15. 15. Foreign Trade(Banking System) Export  Allow only FOB (Yangon) basis.  Allow only TT and L/C at sight.  Bank (government bank) prefer TT. Import  Allow only CIF (Yangon) basis.  Allow only L/C at sight. 15
  16. 16. Current Issues(Origin-wise) Foreign Companies  Permit to trade was suspended since 2003.  Visa & Stay Permit is issued only with the recommendations of respective ministry.  No general rule on issue of recommendation.  Different taxation and fees applied. Local Companies  Lack of bank facilitation. 16
  17. 17. Current Issues(Sector-wise) Manufacturing  Lack of transparency complication of procedures in issue of Investment Permit.  Lack of infrastructure (Port, Transport, Electricity, etc.)  Prohibition of second hand machinery import.  Need capital remittance into Myanmar. 17
  18. 18. Current Issues(Sector-wise) Oil and gas  HR issues on major investment. Mining  Lack of transparency in issue of permit. Construction  Licence control over construction materials. 18
  19. 19. Current Issues(Sector-wise) Trading  3 months validity of export / import licence.  Lack of trade financing. 19
  20. 20. Current Issues(General) International sanctions. High inflation rate & negative interest rate. Short of electric power supply (4~6 hours per day). Short-term validity of company. Prohibition of remittance other than opening L/C. Complication of tax laws. New Government after 2010. 20

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