Transcript “Myanmar in ASEAN: Working Toward the ASEAN Economic
Kyaw Soe Thein Director ASEAN Division Foreign Economic Relations Department Ministry of National Planning and Economic Development
Introduction: Southeast Asia, Myanmar and ASEAN
Myanmar in ASEAN
Establishment of ASEAN Economic Community
Issues and Challenges Relating Myanmar’s to Join AEC
Conclusion
1.1 What is Southeast Asia
The term Southeast Asia was occasionally used by European, especially German writers, in the late 19 th century.
Myanmar, Thailand, Laos, Cambodia, Vietnam, Malaysia, Brunei, Singapore, and Indonesia, were considered as some kind of geographical unit.
Ten Nations Each country has its individual style.
Unity and diversity
1.2 Socio-economic characteristics of Southeast Asian Nations: A Brief Overview
ASEAN member countries vary widely in size, population, and income.
Total population of nearly 600 million and land area of 4,495 thousand sq.km.
Indonesia is the largest, Brunei is the smallest.
In 2011, Singapore had the highest per capita GDP of US$ (50129.9) followed by Brunei with US$ (38702.5).
Malaysia with US$ (9940.6), Thailand and the Philippines had US$ (5115.8) and US$ (2340.9) respectively. Cambodia had US$ (879.7) and Laos had US$ (1278.5). Myanmar’s per capita GDP was US$ (875.1), and Vietnam had US$ (1403.3). The average per capita income of ASEAN countries would be about US$ (11422.9).
GDP growths also differ between countries.
In 2011, the fastest growing economies were Myanmar and Lao PDR with rates of 10.4% and 8.0% respectively, closely followed by Cambodia with 7.1%.
Thailand economic growth disappointing, with a rate of 0.1%.
in 2011 was In term of social indicators, ASEAN 6 (Brunei, Singapore, Malaysia, Indonesia, Thailand, and the Philippines) generally perform better than the CLMV countries
Table (1.1) Selected Economic Indicators (2011): ASEAN
Countries Land Area (‘000) (sq km) Pop (million) Pop Growth (%) Labor Force (Million) GDP At current prices (US$ million) Real GDP Growth (%) GDP Per capita At current prices (US$) Export Growth Rate (%) Import Growth Rate (%) Inflation Brunei Cambodia Indonesia Laos Malaysia Myanmar The Philippines Singapore Thailand Vietnam 5,765 181,036 1,919,317 236,800 329,758 676,577 300,000 648 514,000 330,955 94.2
5.18
67.6
87.8
0.4
14.5
241.6
6.38
28.96
60.4
1.7
2.1
0.4
1.0
2.0
1.5
1.7
2.0
1.3
1.0
40.0
3.2
38.8
51.4
0.21
7.2
117.3
n.a
12.5
30.1
16,359.6
12,775.0
846,821.3
8,163.3
287,922.3
52841.5
224,337.4
259,858.4
345,810.8
123,266.9
3.9
4.9
0.1
5.9
2.2
7.1
6.5
8.0
5.1
10.4
38702.5
879.7
3563 1278.5
9940.6
875.1
2340.9
50129.9
5115.8
1403.3
-6.7
7.5
11.7
34.2
33.1
35.8
29.0
6.1
8.7
0.4
Source: Asian Development Bank, Key Indicators for Asia and Pacific 2012, ASEAN Statistics 9.5
8.6
19.1
25.8
19.6
25.9
30.8
17.6
8.6
37.3
4.6
5.2
3.8
18.6
2.0
6.3
5.4
7.6
3.2
5.0
Table (1.2) Selected Social Indicators (2011): ASEAN
Countries HDI Life expectancy (yrs) Adult literacy (%) Education expenditure % of GDP Health expenditure % of GDP Infant mortality rate (per 1000) Access to improved water (% of pop) Brunei Cambodia Indonesia Laos Malaysia Myanmar The Philippines Singapore Thailand Vietnam 0.84
0.52
0.61
0.52
0.76
0.48
0.64
0.87
0.68
0.59
77 61 68 63 73 64 70 82 70 72 97 85 95 82 95 95 95 97 96 95 n.a
n.a
26 13.2
18.9
n.a
16.9
10.3
22.3
19.8
n.a
5.6
2.6
4.5
4.4
2.0
3.6
4.0
3.9
6.8
6 75 33 52 6 61 29 3 13 19 n.a
61 80 57 100 71 91 100 98 94 Source: World Development Indicators, 2012, Asia Pacific Human Development Report, UNDP.
1.3 Myanmar: Geography, Demography, and Natural Resources
Myanmar has a land area of more than 676,000 sq.km.
occupied by more than (57) million people in 2011.
135 nationalities, multi-ethnic, multi-cultural and multi religious society.
Myanmar, the largest ethnic group, comprises about 70% of the country’s total population followed by the Shan, with 8.5% of the country’s inhabitants.
Other major ethnic group include the Kayin, 6.2% , Rakhine, 4.5%, and other indigenous races, 6.5%.
rich in natural resources: forests, minerals and fish. an abundance of human resources- literate labors
2.1 Why Myanmar Decided to Join ASEAN
In 1967, Myanmar was approached by friends in ASEAN to join the regional association.
as a founding member of the Non-Aligned Movement, adhering to the five principles of peaceful co-existence and neutrality, and decided not to join ASEAN.
In 1995, Myanmar decided to join the regional association and attained observer status, along with Laos and Cambodia, in July 1996.
At least two reasons which led to Myanmar’s decision to join ASEAN. (1) internal and external conditions had changed in the country (2) age of globalization and regionalism Politically peace and stability in the region better confidence among members of ASEAN Strengthening of external security Economically increase trade and investment links within the region achieve greater development increased efficiency Culturally contribute to ASEAN through promoting its own rich traditions
2.2 Myanmar Participation in ASEAN
the summits to ministerial meetings to officials meetings. Several committees and sub-committees were formed to assist the ASEAN Economic Minister small-and medium-enterprise activities, transport, and services.
several committees at the national level such as the National Committee on Information and Culture, the National Committee on Science and Technology, and the National Committee on Social Development were formed to coordinate with relevant ASEAN committees and subcommittees.
The National Commission for Environmental Affairs, the Central Committee for Drug Abuse Control (CCDAC), and the Public Services Selection and Training Board (PSSTB) were established to be in line with existing ASEAN committees.
Became a part of AFTA participating in ASEAN activities fully since its first day of entry into the regional association.
2.3 Myanmar - ASEAN Cooperation for Economic Development Table (2.1) Myanmar Exports to ASEAN
Value 1990-91 % (Total) Value 1995-96 % (Total) Value 2000-01 % (Total) Value 2005-06 % (Total)
(Kyat million)
Value 2009-10 % (Total) Singapore Malaysia Indonesia Philippines Thailand Vietnam Lao PDR 845.8
28.6
40.87
0.22
1.4
0.07
387.9
13.1
986.8
147.5
299.6
133.1
534.9
0.97
Cambodia Brunei 1.1
1.59
Source: Statistical Yearbook 2010.
19.6
2.9
5.9
2.6
10.6
0.02
0.02
0.03
737.3
471.1
221.6
37.8
1831.3
29.5
2.8
1.4
5.8
3.7
1.7
0.2
14.4
0.2
0.02
0.01
1532.7
540.4
380.5
73.2
7868.6
7.4
2.6
1.8
0.4
38.1
223.8
0.09
1.08
0.0004
4.99
0.02
3690.9
832.2
205.3
147.6
17431 299.8
4.09
8.9
2.0
0.5
0.4
42.2
0.7
0.01
Table (2.2) Myanmar Imports from ASEAN
Value 1990-91 % (Total) Value 1995-96 % (Total) Value 2000-01 % (Total) Value 2005-06 % (Total)
(Kyat million)
Value 2009-10 % (Total) Singapore Malaysia Indonesia Philippines Thailand Vietnam Lao PDR Cambodia Brunei 532.4
9.6
1819.7
17.7
3646.4
24.2
3240.2
28.1
383.5
17.17
1.06
554.8
6.9
0.3
0.02
615.9
350.3
4.85
5.9
3.4
0.04
794.0
534.3
75.1
5.3
3.5
0.5
810.8
336.1
32.4
7.01
2.9
0.3
10.1
1318.8
12.8
1970.7
13.1
1376.2
11.9
0.04
0.0007
10.6
0.02
0.1
42.7
1.1
0.3
0.01
57.1
0.5
Source: Statistical Yearbook 2010 .
6593 871.3
760.4
77 2069.6
148.4
28.9
0.6
3.8
3.3
0.3
9.1
Table (2.3) Foreign Direct Investment Flow into Myanmar from ASEAN
Country Number Projects 31-1-2002 of Amount (US$ million) % of Total Investment Number Projects 31-1-2013 of Amount (US$ million) % of Total Investment Brunei Singapore Malaysia Indonesia Thailand The Philippines 70 31 11 49 2 1541.6
151.1
240.0
1290.2
146.7
20.8
2.0
3.2
17.4
1.9
2 83 43 12 61 2 3.04
2167.0
1031.3
241.5
9568.1
146.7
0.007
5.2
2.5
0.6
22.9
0.4
Cambodia Lao PDR Vietnam 5 361.8
0.9
Source: Directorate of Company Administration and Investment, Ministry of National Planning and Economic Development .
3.1 Why ASEAN decided to establish AEC
9th ASEAN Summit agreed to establish the ASEAN Economic Community (AEC) as the end goal of economic integration as outlined in the ASEAN Vision 2020.
As a single market and production base To make the ASEAN region a more dynamic and stronger segment of the global supply chain the integration of its Member Countries enhancing the region’s economic competitiveness.
and
To strengthen the economic initiatives.
implementation of its existing ASEAN Free Trade Area (AFTA), ASEAN Framework Agreement on Services (AFAS) and ASEAN Investment Area (AIA) accelerate regional integration in the priority sectors facilitate movement of business persons, skilled labor and talents strengthen the institutional mechanisms of ASEAN, Dispute Settlement Mechanism to ensure expeditious and legally binding resolution of any economic dispute.
goals are being pursued through the Initiative for ASEAN Integration (IAI) and the Roadmap for the Integration of ASEAN (RIA).
deepening and broadening of integration of ASEAN shall be accompanied by technical and development cooperation in order to address the development divide and accelerate the economic integration of Cambodia, Laos, Myanmar and Vietnam so that the benefits of economic integration are shared
3.2 Economic Implications of Myanmar to Join AEC
expects general regional trade area (RTA) advantages from joining ASEAN and AEC greater trade, service, and investment links within the region increased attractiveness to foreign direct investment (FDI) from outside the region, more secure access to the greater ASEAN market, improved resource allocation from specialization according to comparative advantage, economies of scale in an enlarged regional market, enhanced industrialization prospects of small and medium enterprises, spill-over effects, and infant industry learning effects with improved quality control, design, and marketing and thus improved competitiveness in the world market .
3.3 How Ready was Myanmar to Join AEC
Myanmar has made a commitment to establish an ASEAN Economic Community (AEC) and actively participating and coordinating with other member countries.
Chair of ASEAN in 2014 To develop a viable stock exchange by 2015 To develop the capital market, and the Capital Market Development Committee and its sub-committee are now endeavoring to implement the road map for the development of capital market in Myanmar, which is drawn up in accordance with time frame of ASEAN Capital Market Forum (ACMF).
Custom modernization preparedness, measures for rationalization, simplification, and harmonization are trying to be consistent with ASEAN Singe Window (ASW) Custom clearance time which usually takes two days for containerized cargo of import and one day for containerized cargo of export is targeted to reduce to 30 minutes.
the aim of facilitating investment procedures and getting opportunities in doing business, government issues two notifications relating to land used and foreign currency One Stop Service in company registration is finished one day if the documents are completed.
the standard and conformance areas performance and factors of IPR in line with AEC measures
Development of capital market in Myanmar need to improve legal and regulatory framework need to the development of issuing system private sector participation SMEs development poor infrastructure with communication, transportation, regards to access to world market, higher cost of materials and inputs, outdated technology, insufficient R&D, management skill.
limited knowledge and power, poor
financial sector Development difficult to develop the correspondent arrangement account with foreign hard currency in EU nations and US.
depends on Singapore and China currency to operate international transaction barrier to attract investment which is a key factor for economic development in financial sector from EU and US
Implementation in standard and conformance lack of initiator, lack of public awareness lack of technical infrastructure lack of laboratory equipments In ASEAN region, harmonization of standard and conformance help to build credibility and reputation for domestic producers and traders
Implementation of AEC lack of awareness on the program areas and implementation progress even among the main beneficiary groups and responsible department and agencies the target areas of some projects are mismatch with the specific requirement of respective sector the priority areas of some programs do not satisfy the needs and development priority of individual country
Myanmar’s Implementation in AEC Phase I : 95% Phase II : 80% Phase III : 77%