publication

Myanmar Diagnostic Trade Integration Study: Opening for Business


Image
© Benny Manser/World Bank

After waiting in isolation for almost four decades, Myanmar’s re-integration into the global economy presents a unique opportunity to leverage growth in trade to reduce poverty, promote shared prosperity and sustain the nationwide peace process.

Key Findings

Myanmar’s trade is growing fast and still has enormous potential for further expansion.

  • The boom in trade and investment has boosted average economic growth beyond 7% per year, yet Myanmar’s trade is still below average for ASEAN countries.
  • Tourism, which has been underdeveloped in Myanmar, posted average annual growth of about 35% between 2009 and 2015.
  • Myanmar shares borders with countries that account for 16% of global GDP, and 40% of global population, which creates unique opportunities as the country develops trade relations with its East and South Asia neighbors.

For trade to grow, Myanmar needs to continue to reform in order to stay competitive and share gains equitably.

  • Following through on reforms to encourage trade openness will help to reduce trade costs.
  • Diversifying into light manufacturing, services and sustainable agri-business would be a powerful way of reducing poverty. Developing the tourism sector can also provide employment and sources of income in rural areas.
  • Infrastructure development can occur in tandem to drive private sector growth. Only 33% of homes have electricity in Myanmar, compared with 60% in Bangladesh and 99% in Vietnam. Myanmar’s logistics infrastructure ranked 137 out of 160 countries in the 2014 Logistics Performance Indicator, the lowest among ASEAN countries

This report recommends the following policies to transform Myanmar’s economy through greater trade:

  • Overhaul trade policy regulations and build capacity in trade policy and promotion by simplifying the import tariff structure and harmonizing trade-related data.
  • Ensure inclusive export-led growth by addressing skills shortages, improving access to finance and providing support to drive local economic activities.
  • Establish a robust quality infrastructure for Myanmar products, such as adopting international quality standards and developing a national accreditation body.
  • Encourage trade growth in the service sector by reducing administrative and regulatory barriers and consolidate coordinating mandate for services trade negotiation into one agency.
  • Develop efficient trade corridors, improving efficiency in Yangon’s port terminals and their connection to roads, railways, and inland waterways.
  • Facilitate trade with better logistics and finance, such as improving cargo turnaround times and reforming customs procedures.