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from Part IV - Economic Update
Published online by Cambridge University Press: 21 October 2015
The year 2011 may prove to have been a milestone for the Myanmar economy because until 30 March the State Peace and Development Council (SPDC) military government managed the economy, but after that date a new “civilian” government, exercising power under Myanmar's 2008 Constitution, took office. Even though both governments claimed to support a market-oriented economy, the new government seems to have shifted away from some of the policy stances of the former government. This is an appropriate time, then, to take stock of the results of previous government action and make some comparisons with initiatives of the new government that try to solve problems inherited from the SPDC military government.
Generally, people were quite impressed when they learnt about the inaugural address made by the new president, Thein Sein, to the parliament (NLM 2011a). However, this speech closely reflected what the (government-backed) Union Social and Development Party (USDP) party had promised during the 2010 election campaign. In most points the president's speech reiterated the basic principles of a market economy, but the people of Myanmar, who thirst for economic reform and were unhappy with the administration of the old government, were able to see some hints of change. There are, on the other hand, some cynics who doubt the political will and capacity of the new administration to carry out change.
Myanmar 's Status as a Least Developed Country
Myanmar was designated a Least Developed Country (LDC) in 1987, but after so many years since then, it should have graduated from the LDC list. Myanmar needed to meet three criteria in order to graduate. Two of these it is already able to satisfy: for example, Myanmar's Human Assets Index in 2009 was 66.0, and its Economic Vulnerability index was 37.4. However, gross national income (GNI) per capita in 2009 was only US$306, leaving Myanmar still qualifying as an LDC. Myanmar's low rate of economic growth keeps it at that status.
A quarter of Myanmar's population is still living under the poverty line, even though some improvement has been seen in recent years. As usual, double-digit inflation and negative real interest rates have resulted in severe and continuous government deficit budgets and contributed to this outcome. Moreover, in Myanmar it is difficult to establish a business because of the high cost of infrastructure, high transaction costs, and high barriers to entry.
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