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Annual Report 2001

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Myanmar

Economic performance

GDP in Myanmar grew by 13.7% in FY2000 (ending 31 March 2001). Although agriculture sector growth moderated in FY2000, a spurt in manufacturing activity helped support aggregate growth. As a consequence of the growth of central bank credit, inflation reached an average of around 21.0% in the 1990s. However, in FY2000, inflation fell, with prices decreasing by 1.7%, due to ample food supply (food weighs heavily in the price basket), reduced deficit spending and recourse to inflationary finance, and the introduction of tax-free markets. By March 2001, prices were rising again, continuing throughout the year. The overall public sector deficit has averaged around 5.0% of GDP. In FY2000, the deficit rose to 109.7 billion kyat (MK) from MK91.9 billion a year earlier. To pare the deficit, the Government cut expenditure. However, the deficit was also caused by poor revenue mobilization and losses in some state economic enterprises. About 1.4% of GDP was spent on public health and education. Faster export growth and slower imports narrowed the trade deficit in FY2001, compared with the previous year. Commodity exports performed well and garment exports picked up. Myanmar’s trade regime was characterized by wide tariff dispersion, and a variety of nontariff barriers were used to compress import demand. Myanmar’s international reserve position remained fragile, with reserves sufficient to cover about 1 month of imports. In FY1997, of a total population of 46.4 million, the labor force consisted of about 22.5 million. Agriculture was the largest employer—accounting for 63.0% of the labor force. About 30%–40% of state sector employees were classified as casual labor.

ADB operations

Operational strategy: ADB continues to monitor economic developments in Myanmar. An operational strategy will be formulated when appropriate.

Loans and technical assistance: No loans have been provided to Myanmar since 1986 and no technical assistance since 1987.

Project implementation: There are no ongoing loans in Myanmar. However, Myanmar is involved in ADB’s regional cooperation initiative for the Greater Mekong Subregion (GMS), participating in regional meetings and workshops supported by ADB’s regional technical assistance. In November 2001, Myanmar hosted the 10th GMS Ministerial Conference in Yangon.

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