Global Issues Essay

Submitted By Claus-Li
Words: 1420
Pages: 6

1. Myanmar’s recent developments and global status
1.1 Recent development of Myanmar
Myanmar rich in natural resources and efforts to develop economy. From the world Factbook by Central Intelligence Agency (CIA), Agriculture as 38.0% of Gross Domestic Product(GDP) in Myanmar. Moreover, Industry and services of GDP respectively are 20.3% and 41.7% (CIA World Factbook, 2014).They are the basic compositions of Myanmar. Since 2002, Government of Myanmar has bought a large number of foreign currency by export natural gas for revenue. (Kubo, 2010) And Myanmar has exports 3.6 billion dollars at natural gas in 2014.(ADB, 2014) Furthermore, according to International Monetary Fund (IMF), foreign direct investment (FDI) inflows to Myanmar and infrastructure development of government are the main influences of the economy growth. (Barua, 2014) So that, since Myanmar join global market, a lot of change has been happened. Such as expertise and foreign investment inflows into Myanmar. In addition that tourism sector has been more importance. According to statistic of Myanmar tourism marketing (2013) there were 2 million foreign tourist come to Myanmar and it is double number of tourist in 2012.
1.2 Inflation of Myanmar
However, inflation of Myanmar is a worry. According to world bank (2014), average annual inflation is 2.8% in 2012-13, but it is went up to 5.8% in 2013-14 . The forecast of inflation will go up to 6.5-7.0% in 2014-15. Of course, the short-run inflation grow up might be affected food prices rising. (Numbeo , 2014) The two key reasons of inflation are insufficient domestic rice supply and domestic credit are increasing money supply to the private sector.(Myanmar Times, 2014) As Keynes’s theory, rising aggregate demand is the key reason of increasing inflation. Although, domestic credit are increasing to the private sector is a good thing for banks, because they could lend money to the private sector for investment, and that is a reason of the economy is growing. But that is driving up prices as well. Furthermore, increase salary for government staffs and high electricity bills might are negative influences of inflationary factors. (Myanmar Times, 2014) In addition that, projected demand is more than domestic supply of electricity in Myanmar (Dapice,2012) Moreover, the Asian Development Outlook (ADO) 2014 Update retains forecasts of current account deficits of about 5% of the GDP. Because, there are no stable relationship between inflation and money supply and policy may not improve much in the near term.
1.3 The economic reform of Myanmar
Exports of Myanmar have a well performance in 2014, and it is driven by oil and gas. And imports have remained strong as well. Meanwhile, the Myanmar government has liberalized the telecommunications sector to Norway’s Telenor and Qatar’s Ooredoo (APEO,2014) and Myanmar plans to issue licenses for 10 foreign banks to enter the market since September 2014 to improve the banking sector. Myanmar decided to join the Extractive Industries Transparency Initiative (EITI) in July 2014, and will marking development accountability in the governance of oil, gas, and minerals in next stage.(ADB, 2014)
1.4 The other problems
Although, FDI remain strong in further years, and Myanmar government still needs to create a sound macroeconomic management mechanics as soon as possible. However, In the world economic forum’s global competitiveness rating (2014), Myanmar is in the last position of infrastructure and technological readiness. In the other hand, poor enforcement of contract and low protection for investors are big problems as well. (world bank,2014)
Overall, The transformation of an economy is not easy for Myanmar, despite the problems, the government of Myanmar still need to carry over the impulse in the partnership with the international community. Most importantly, they have to publish a inclusive, stable and democratic political economic structure. (Barua, 2014) Furthermore, risks of Myanmar