According to COUNTRYAAH, Burma is rich in natural resources. The country has very fertile agricultural land, forests and hydropower and in addition large deposits of precious stones and jade, resources on natural gas and other fossil fuels and also deposits of a number of important minerals. During the interwar period rice as well as teak, crude oil and precious stones were exported. The last fifty years have been characterized by internal contradictions, financial mismanagement, violations of human rights and, for most residents, a deteriorating welfare. With a socialist character in the 1960s and 1970s, an increasingly isolated isolation towards the outside world. Agricultural production was no longer sufficient for exports and official trade shrank, while smuggling to neighboring countries, mainly opium and precious stones, was increasing. In the late 1980s, the military regime implemented some market economy reforms. Foreign investment was allowed and growth increased, but continued neglect and corruption and the sanctions of the rest of the world slowed down the development. The mining industry could not develop during the wars between the Burmese army and the various ethnic armies of the commodity-rich states. Decades after decades, infrastructure deteriorated due to lack of maintenance.
It is impossible to get a correct picture of the economy and current business in Burma. The public statistics are in many cases inaccessible and the information available is consistently unreliable, as they have so far been underestimated, overestimated or deliberately lied to. In addition, much economic activity is illegal or not registered, such as border trade and smuggling. Officially, GDP growth was more than 10 percent per year between 2000 and 2009, but economic analysts in the Western world have estimated that it has been significantly lower, at most 3 percent per year. GDP growth was then mainly a result of increasing exports of natural gas. Most residents live on a minimum of living with minimal opportunities for economic improvement. On the welfare list HDI (Human Development Index), Burma was ranked 138 out of 182 countries in 2009. Business is still based on agriculture, while the manufacturing industry, including mining and construction, accounted for a smaller share of GDP. The state owns and operates the operations in heavy industry and energy production as well as the trade in rice.
During the 1990s and the 00s, the western world almost without exception distanced itself from Burma. The US gradually tightened its sanctions, which included bans on imports of Burmese goods, exports of financial services to Burma and against investments there. The EU also had sanctions, and large international organizations did not provide loans or development assistance. However, during the 1990s, Burma received increasing investments from China, India, Thailand and other countries in East and Southeast Asia, which considered that Burma could be democratized through increased contacts and trade. Limited technical assistance comes from Asian countries. Burma’s big neighbors are hungry for energy, minerals and timber. Above all, China expanded its involvement in Burma during the 1990s and runs major infrastructure projects there.
A civilian government, backed by the military, took office in 2011 and immediately began to implement political, administrative and economic reforms. In the following years, foreign trade was liberalized, a law was introduced that facilitated foreign investors and the financial sector was reformed. Conditions have improved for NGOs working on development assistance.
Political reforms have resulted in other countries reducing their sanctions and thus opening Burma to the outside world. In the spring of 2012, the EU repealed a series of restrictive measures for at least a year to come, and in the summer of 2012, the United States lifted much of its sanctions. Therefore, foreign trade is increasing, capital inflows are growing and more and more foreign companies are establishing themselves in the country. from China and Singapore. The domestic industry has begun to be modernized and telecommunications are being expanded. However, the large state companies with extensive military contacts still play an important role.
In 2011 and 2012, Burma’s GDP grew by 5-6 percent annually. Large domestic investments are now required, especially in the transport sector and in education and healthcare, the social sectors that have mainly suffered during all the years when the regime allocated more than half the state budget for military purposes.
Agricultural production development is of central importance to Burma’s economy. Production has varied greatly between different periods, which mainly reflects how high the country’s management prioritized agriculture. The yield can also vary considerably between different years due to the variations in the weather. During the latter part of the 1980s, agricultural production decreased dramatically, but a few years later the peasants gained some freedom in terms of production decisions and trade in some agricultural products. The irrigation began to be expanded, and by the end of the 1990s, 20 percent of the agricultural land was artificial irrigation, which makes it possible to take several harvests a year there. Even three crops can be harvested during one and the same year: rice, followed by legumes and then vegetables.
The Irrawaddy River’s lower valley and delta are among Southeast Asia’s best rice growing areas, while central Burma’s dry zone is better suited for growing legumes, cotton and sesame. The arable land has increased since the mid-1990s and accounts for 16 percent of the land area in 2010. Agriculture is almost entirely privately owned. The farms are small, but when you harvest several harvests per year, the area harvested becomes much larger. Rice is by far the most common crop, but most years harvesting is not enough for a more extensive rise export. The government is now calling for increased production of other export crops and agriculture has been stimulated through increased liberalization in 2007 and support for imports and distribution of machinery and input goods.
Abbreviated as MMR by abbreviationfinder.org, Burma has become the world’s second largest producer of legumes and sesame seeds, and its exports to India multiplied in the 00s. At the end of the 1990s, those crops constituted the bulk of agricultural exports. Cultivation of onions, vegetables and fruits as well as wheat and maize has also increased. The devastating flood associated with the Cyclone Nargis in May 2008 hit one-fifth of Burma’s best rice growing areas and nearly 2.5 million people. It killed 138,000 people, wiped out hundreds of villages, drowned the farm animals, destroyed the infrastructure and salted the land. However, in 2011 and 2012, the rice crops were record-high and the surplus was exported mainly to China.
Eastern Burma, mainly the state of Shan, is part of the so-called Golden Triangle, which in the latter part of the 20th century was the center of Asia for the cultivation of opium poppy, the base for drugs. It was then the only source of income for the poor peasants and opium could be smuggled across the borders without hindrance. Opium cultivation had its peak in the mid-1990s and then gradually reduced to only one-seventh of that in 2006. Despite the decline, Burma was still the world’s second largest producer of illegal opium in 2010. According to UN estimates, about 5 percent comes from there, and after 2006 the cultivation has again increased.
In 2005, forest covered 49 percent of the country’s area and to 2/3 it consisted of teak and other deciduous trees. Burma holds 70 percent of the world’s natural teak stocks and is the largest exporter of teak. In 2008, timber and wood products accounted for 8 percent of the country’s registered exports. In addition there is an illegal export, mainly to China.
Already in the 1930s, teak was an export commodity, and during the second half of the 20th century, harvesting and exportation became increasingly extensive. The state then took measures to curb the harsh exploitation of the original forest. At the same time, foreign companies were allowed to invest in the country, which meant that it became increasingly common with logging on a large scale with modern forest machines. To a lesser extent, traditional forestry continued with the help of elephants, which was more gentle on the environment. The war between the Central Army and the guerrilla armies also damaged the teak forests, which are mainly found in the ethnic states. Illegal timber export was also a way to get money for arms purchases.
The harsh exploitation also violated human rights. The locals objected to the destructive felling, which led to massive soil erosion, slurry and acute water shortages due to altered water flow. The government brutally crushed such protests and ignored international opinion with both political organizations and groups of environmental activists. During the latter part of the 1990s, the harvesting of teak was prohibited in northern and northeastern Burma, and both Burma and China have taken measures to stop the illegal trade. However, it is unclear if the monitoring really works. Protests against the powerful interventions in the natural environment continue.
A large part of the wood from trees other than teak is used by households and small industries for heating and as building material. The harvesting of other types of wood also increases to provide raw material for the timber industry.
Fish accounts for the majority of the animal protein in the diet in Burma, while meat is rare and expensive. Traditionally, fishing comes from coastal fishing in the Mergui Archipelago furthest to the southeast and off the west coast as well as from freshwater fishing in the many waterways, especially in the Irrawaddy Delta. Over several decades, fishing increased only slightly, as fishermen could not afford to invest in better tools, but in 1997-2007 the catches tripled. Sea fishing increased and in addition, fish and seafood cultivation grew, which in 2007 accounted for just over 20 percent of the total fish catch. In 2009, approximately 5 percent of export income came from sales of seafood to some 40 countries. Traditional coastal fishing still exists, mainly on the west coast.
For centuries, gold and gemstones have been mined in various parts of Burma, and since the mid-1990s, lead and zinc ore has been mined northeast of Mandalay and tin in the state of Kayah near the Thai border. These mines are still in operation and export refined lead, tin and zinc concentrates. It has gradually been found that Burma has good assets on a number of important minerals, but in the latter part of the 20th century they could only be exploited to a limited extent due to internal unrest, lack of capital and poor transport conditions. In the late 1980s, the military regime opened for foreign investment in mining operations. Large foreign mining companies have signed contracts with the Burmese state, while small, unprofitable state-owned mines have been closed or privatized. Above all, there are profitable mineral deposits in the states of Shan and Kachin in the east and north. The largest mining project during the 1990s was the copper mining in Monywa west of Mandalay, now partly in Chinese ownership. It includes several open-pit mines, which are being gradually expanded and it provides ever-increasing exports of refined copper to China. Another Chinese company has opened a tin mine and is building a smelter near the border in the north. In the vicinity of Mandalay, iron ore is also minewd, which is processed at smaller smelters for local use. Another Chinese company has opened a tin mine and is building a smelter near the border in the north. In the vicinity of Mandalay, iron ore is also mined, which is processed at smaller smelters for local use. Another Chinese company has opened a tin mine and is building a smelter near the border in the north. In the vicinity of Mandalay, iron ore is also mined, which is processed at smaller smelters for local use.
Gold is mined above all in the minority areas. Gold is washed out in Irrawaddy’s and Chindwin’s upper flows, and deep deposits are also broken. Furthermore, Burma is one of the world’s largest producers of gemstones. That recovery has increased significantly since peace agreements were signed with rebel groups at the top of the north. About 80 percent of the rubies that have the highest quality in the world market come from Burma. The country does not have the resources to grind and polish the stones and therefore exports them unprocessed. It has been estimated that half of these are legally exported to the world market while the others are smuggled out. An unusual and highly valued form of jade also occurs in Burma and even that extraction increased during the 00s.
Note: the capital city of Burma is Naypyidaw with a population of 1,160,000 (2014 Census). Other major cities include Rangoon (Yangon) with a population of 5,210,000, Mandalay with a population of 1,230,000 , Pegu (Bago) with a population of 490,000, Hpa-an with a population of 420,000 (2014 census).
In the 1930s, crude oil was one of Burma’s most important export commodities, but the deposits diminished. Energy recovery had major problems until the end of the 1990s due to a lack of capital and technology. Only around 2000 did oil production regain importance and now oil is extracted in a number of smaller fields in both the central and lower Irrawaddy Valley and in the delta. However, during the latter part of the 1990s, oil imports were twice as large as domestic production.
Natural gas is now Burma’s most important export commodity and accounted for around 40 percent of export revenue at the end of the 00s. State or semi-state companies in neighboring countries have, together with the Burmese state, formed joint ventures for increased exploration of natural gas and oil, and promising natural gas deposits have been found. Several of them are now being prepared for extraction, and the agreements also include the construction of gas pipelines. In 2000, commercial gas production started offshore, in the Yadana and Yetagun fields outside the Irrawaddy Delta. By the end of the 1990s, most of the natural gas was transported via pipeline to Thailand; less than a tenth stayed in Burma. In the large Shwe field off the west coast, gas extraction is expected to start in 2013. Under the agreement, China will take care of most of that production, and China is currently building a gas pipeline through Burma to the southwestern Chinese province of Yunnan, which lacks its own fossil fuel resources. India has also been involved in natural gas extraction. There are also several small coal mines in Burma, including in the state of Shan, and coal production doubled during the first half of the 1990s.
A large lack of electricity is a serious constraint for companies and households. The wiring network has too little capacity and wiring is lacking in large parts of the country. Electricity cuts are also common in the metropolitan area, which is why diesel-powered generators are needed as a complement. At the end of the 1990s, water energy accounted for about half of the electricity generated. Of this, about one third comes from small power plants in smaller watercourses, which means that electricity generation will decrease significantly at the end of the dry season. Natural gas operates most other power plants. Several large hydroelectric dams are being built in the border regions together with Thailand and China.
Burma is Southeast Asia’s least industrialized country. After the military coup in 1988, the business world was opened for foreign investment and for private ownership and private trade on a small scale. However, the increasingly harsh sanctions of the western countries meant that by the end of the 1990s, there were largely no links between western companies and businesses in Burma. The only manufacturing industry connected to global and regional production networks is the garment industry. It grew sharply around the turn of the century in 2000, but has stagnated and shrunk since the US stopped importing goods from Burma.
Of the growing investments that have come from China, India and the countries of Southeast Asia during the 1990s, only a small part is intended for the manufacturing industry. There are great difficulties for effective business in Burma. Admittedly, wage levels are lower there than in all other countries in Southeast Asia and the labor force is large, but vocational training is poor, trade organization inefficient and time-consuming, corruption troublesome and transport conditions and telecommunications substandard. It is also difficult to access modern technology and technical information. However, the most serious problem is the daily interruptions in the electricity supply.
In the garment industry and other light manufacturing industries, most companies are private. The state has sold or reorganized several of its most inefficient companies and privatization seems to continue. However, all extraction of teak, oil, natural gas, jade and gemstones must be state, as well as the generation of electricity as well as post, radio and telecommunications. State-owned is also the heavy industry, such as an oil refinery, a few small steelworks, the production of artificial fertilizers and the large ammunition and weapons industry. Official figures speak of strong industrial growth during the 00s, but this should mainly relate to natural gas extraction and perhaps the production of cement and building materials for the major infrastructure projects that have been started, especially in the new capital and the road construction adjacent to it.
Burma’s exports mainly consist of natural gas and raw materials from agriculture and forestry, while capital goods and other industrial products as well as oil products must be imported. Around the turn of the century, clothing became an increasingly important export product, with almost all sales in the US and EU countries. Subsequently, the increasingly stringent restrictions from the Western countries have made this trade almost completely ceased. In part, Burma has compensated for finding a new market for clothing in Japan. In particular, exports of natural gas to Thailand and of beans and other legumes to India have increased. Trade with China also gradually increased during the 1990s, and China is about to become Burma’s most important trading partner. However, the extent of foreign trade is difficult to assess. Many are still illegal border trade,
In 2008-09, natural gas accounted for almost 40 percent of export income, agricultural products for 18 percent, forest products for 8 percent, fish and shellfish for 5 percent and clothing for just over 4 percent. The size of agricultural exports varies considerably between years. Thailand received close to 39 percent of exports, followed by Singapore, India and Hong Kong. The largest import item was machinery and transport equipment (close to 23 percent), followed by refined oil and other oil products (11 percent) as well as plastics and other chemical products. More than 26 percent of imports came from China, 23 percent from Singapore and almost 9 percent from Thailand. Illegal exports of, for example, teak, gemstones and opium are not included in the above information, nor are illegal imports from China of branded goods, which increased every year.
Foreign currency also comes to Burma in the form of money that emigrated Burmese send home to the family. Burma also has great potential for tourism, but for many reasons tourism was small and it declined further in the latter part of the 1990s. In 2009, only 227,000 tourists visited Burma. Since the civil government took office in 2010 and began to implement political reforms, the number of foreign visitors has doubled. Already in 2012, more than 1 million tourists came to Burma, both from neighboring countries, mainly China, and from many countries in the western world.