Myanmar’s ‘good’ performance from a comparative viewpoint

Appendix Table 4.1 gives GDP growth rates for the first six years of the new millennium for 19 developing Asian countries, including Myanmar. The countries in the table are grouped into four categories—namely: 1) newly industrialising economies (NIEs); 2) second-tier NIEs; 3) other developing countries; and 4) least-developed countries. The table shows that Myanmar’s GDP growth rate in real terms has been good compared with other countries in the region; Myanmar’s average growth rate was 12.9 per cent a year for this period. Since the average annual growth rates for the four categories of developing Asian countries ranged between 4.5 per cent and 5.8 per cent for the period, Myanmar’s growth performance has been more than double the growth rates of these countries.

The fact that Myanmar’s higher real GDP growth rates have been achieved with considerably lower GDI to GDP ratios, compared with other countries in the region, is illustrated in Appendix Table 4.2. That table shows that while the GDI/GDP ratio averaged 24 per cent per annum for the period 2000–05 for other Asian countries, Myanmar’s GDI/GDP ratio averaged about 12 per cent per annum. This means that Myanmar has been able to achieve a real GDP growth rate double the rate of its neighbours, with half their GDI ratios.

Reservations about Myanmar’s growth performance

Many observers, within the country and abroad, have expressed reservations about Myanmar’s official growth rates. The International Monetary Fund (IMF), for example, has a conservative outlook regarding Myanmar’s economic performance in recent years, because it is of the view that other regional countries in a similar situation as Myanmar have not experienced such robust growth in the same period. The IMF has defined ‘similarity’ in terms of a low level of development, a large agricultural sector, a pervasive role of the State in the economy and a recent history of conflict. Bangladesh, Cambodia, Laos and Vietnam were identified as countries having such attributes. It was pointed out that Myanmar, despite its high official growth figures, did not fare well when its social indicators were compared with those for these countries. It also did not measure up to these countries in terms of per capita GDP in US dollars. Moreover, the IMF had difficulty reconciling Myanmar’s high agricultural growth with its official figures on harvested acreage, irrigated areas and the reported decline in the use of fertilisers and pesticides.

Similarly, high industrial growth does not seem to be consistent with the relatively low increase in industrial power consumption, manufacturing’s use of petroleum products and the decline in capital-goods imports. The IMF concludes that all these imply an implausibly large increase in productive efficiency. The IMF expected near-zero growth for Myanmar in the fiscal year 2003/04, based on its belief that constraints that would arise from a low level of imported inputs, structural rigidities, delayed effects of sanctions and the banking crisis. In sharp contrast with IMF expectations, Myanmar authorities estimated 13.8 per cent growth for that year.