Although Myanmar has currently one of the lowest per capita incomes in Southeast Asia, the country has great potential for economic development. It has a population of 60 million; abundant natural resources including petroleum, timber, and gems; and a geostrategic location that connects the large economies of China and India. If supported by the right policies and institutions, the country should be able to see a substantial increase in living standards in the near future.
Myanmar has a wide range of development challenges. It has a high poverty rate, and its social development indicators are among the lowest in the region. Fortunately, the current Myanmar government has launched major efforts to put the country on the path for development and set inclusive growth and poverty reduction as the major development goals. In view of Myanmar’s development needs, industrialization and rural development have been chosen as the principal tools to reduce poverty and increase standards of living. To support these efforts, massive investments will be needed in hard infrastructure and human capital. Although foreign direct and domestic investments will be the major sources of development in the long run, foreign aid can play a vital role in providing basic services and technical assistance in the immediate term.
After five decades of authoritarianism and isolation, Myanmar has finally been reconnected to the international community. The swift and far-reaching reforms introduced by the Thein Sein government brought about normalization of its external relations and notably led to the end or suspension of economic sanctions on Myanmar. Without restrictions imposed by sanctions, most Western governments and major international donors have reinstituted their aid programs for Myanmar.
Foreign aid to Myanmar is still small relative to its development needs but expected to grow significantly over the next few years. The donor environment is becoming competitive, and geopolitical considerations are playing an important role. China had increased its influence on Myanmar during the sanctions period and will continue to be an important economic cooperation partner in the post-reform era. China’s development assistance to Myanmar is largely concentrated in physical infrastructure and closely linked to promoting Chinese business interests in the country. Japan, which is deeply conscious of China’s influence in Myanmar and Southeast Asia, has promised to offer large and wide-ranging aid. In fact, Japan has quickly established itself as a major development partner to Myanmar. On the other hand, the US and the West focus their aid to Myanmar on social programs and political reform, including governance improvement and civil society capacity building.
Korea has keen interests in expanding its economic ties with Myanmar and has offered development assistance in infrastructure improvements, rural development, and technical assistance, most notably in development policymaking, drawing from its own experiences in industrialization. Although Korea’s aid resources are limited compared to the major donors, it has two unique characteristics. First, because it has no geopolitical agenda harbored by countries like China, Japan, and or even the US, it can be used as a counterweight to major donors/powers by Myanmar. Second, although Korea’s aid is limited in size, it is often linked to larger bilateral economic engagement involving Korean businesses. Korea’s foreign direct investment in Myanmar is likely to be concentrated in manufacturing, and this can contribute to industrialization and job creation, which Myanmar desperately needs for inclusive growth.
- 미얀마의 개발과제와 한-미얀마 개발협력방향(Myanmar-development challenges and opportunities)
- 오윤아; 박나리
미얀마의 개발과제와 한-미얀마 개발협력방향(Myanmar-development challenges and opportunities)
서울 : 대외경제정책연구원
|Series Title; No||ODA 정책연구 / 13-07|
|Subject Country||Myanmar(Asia and Pacific)
South Korea(Asia and Pacific)
|Subject||Economy < Economic Administration
Official Aid < Social Infrastructure
Official Aid < Production