Page 27 - Azerbaijan State University of Economics

THE JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE, V.72, # 2, 2015, pp. 23-29

Y.V. Aleskerovа: Economy agriculture countries: Myanmar

(1961) reported that expansion of agricultural exports is considered one of the most
promising means of increasing income and augmenting foreign exchange earnings,
particularly for a country stepping up its development efforts. In the international
trade literature, a number of empirical studies have been undertaken in this context
(Michaely 1977; Feder 1983; Hsiao 1987; and Dutt and Ghosh 1996).
The Past Trade Policy Context The then Myanmar Socialist Government
pursued closed-door policy for many years which actually suited the centrally-planned
socialist economic system. Many analysts agree that the economic policy of Myanmar
during the socialist period (1962-1988), especially up to the early 1970s, was
essentially a policy of agricultural exploitation, with heavy emphasis on rice
production (Soe and Fisher 1990; and Thein 1997). Because of the economic and
political deterioration of socialist system, popular uprising was happened in 1988. As
a consequence, military took the power by coup in the same year. Starting from the
late 1980s and 1990s, Myanmar initiated economic reforms and exportoriented
policies. The State Peace and Development Council (SPDC) further encouraged state
economic enterprises (SEEs) to form the joint ventures with private entrepreneurs.
However, the export growth has declined slightly in the late 1990s and early 2000s
because of the heavy reliance on very few commodities and regional financial crisis
and deterioration overall macroeconomic conditions inside the country. Asian
financial crisis leaded to the reduction of the inflow of foreign direct investment into
the country. Consequently it increased the trade deficit because imports are increasing
while exports are stagnant due to decrease in demand of export. Myanmar
implemented a series of reforms since late 1980s. It liberalized the agriculture sector,
expanded the private sector for trade to some extent, opened the border trade and
allowed foreign investments to inflow into the country. These were done by the
licensing of private bank operations, the legitimizing of foreign exchange transactions
in the parallel market, the privatizing of SEEs and the simplifying of the tariff system.
The country‟s GDP grew by more than 6 percent between 1993 and 1996. But after
1997, its economic growth was slowed to 4 percent per annum due to adverse weather
conditions, the regional financial crisis and deterioration in overall macroeconomic
conditions. Myanmar signed PTA with Malaysia in 1998 whereby Myanmar received
crude oil on beneficial terms in exchange for agricultural products. Foreign trade is
engaged in Myanmar both by public and private sector. All public sector exports and
imports are recorded using the official exchange rate, even though actual transactions

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