RESTRICTED  
  
WT/TPR/G/293  
21 January 2014  
(14-0321)  Page: 1/24  
Trade Policy Review Body  Original: English  
 
TRADE POLICY REVIEW 
REPORT BY 
MYANMAR  
Pursuant to the Agreement Establishing the Trade Policy Review Mechanism (Annex 3 of the 
Marrakesh Agreement Establishing the World Tr ade Organization), the policy statement by 
Myanmar is attached. 
 
 
Note: This report is subject to restricted circulation and press embargo until the end of the 
first session of the meeting of the Tr ade Policy Review Body on Myanmar. WT/TPR/G/293 • Myanmar 
 
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  Contents 
1   OVERVIEW ..................................................................................................................  4 
2   BACKGR OUND ............................................................................................................. 5  
2.1   Parliamentary Democracy, 1948-1962 .......................................................................... 5  
2.2   Burmese Way to Socialism, 1962-1988 ......................................................................... 5  
2.3   Market-orientation under Military Govern ment, 1988- 2011 .............................................. 6  
2.4   Newly-Elected Govern ment since March 2011 ................................................................ 6  
3   TRANSPARENCY AND OTHER IN STITUTIONAL DEVE LOPMENTS .................................. 6  
3.1   Participation in the Mu ltilateral Trad ing System .............................................................. 6  
3.2   Institutionalization of Transparency .............................................................................. 6  
3.3   Regional Integrat ion and Coop eration ........................................................................... 8  
4   RECENT MACRO-ECONOMIC, STRUCTURAL AND OTHER DEVELOPMENTS ..................... 9  
4.1   Macro-econom ic Developments.................................................................................... 9  
4.1.1   Foreign exchange  and moneta ry policy ..................................................................... 10 
4.1.2   Fiscal policy ......................................................................................................... . 11 
4.1.3   Balance of payments .............................................................................................. 12 
4.2   Main Structur al Developments .................................................................................... 12 
4.3   Other Developments ................................................................................................. 13 
4.3.1   Capital market policies ........................................................................................... 13 
4.3.2   Labour market policies ........................................................................................... 13 
4.3.3   Infrastructure ........................................................................................................ 14 
4.3.4   Reform of state-owned economic  enterprises (SEEs) and privatization ........................... 15 
4.3.5   Price Controls ........................................................................................................ 15 
4.3.6   Small and medium-sized enterprises (SMEs) .............................................................. 15 
4.3.7   Land  reform .......................................................................................................... 16 
4.3.8   Competition policy ................................................................................................. 16 
4.3.9   Environmental protection ........................................................................................ 16 
5   TRADE AND INVEST MENT POLICIES .......................................................................... 16  
5.1   Introduction ............................................................................................................. 16 
5.2   Trade Policies ........................................................................................................... 17 
5.2.1   Customs administ ration and pr ocedures .................................................................... 17 
5.2.2   Impo rt tari ffs ........................................................................................................  17 
5.2.3   Expo rt taxes ......................................................................................................... 17 
5.2.4   Non-tariff barriers (NTBs) to trade ............................................................................ 17 
5.2.5   Continge nt protection ............................................................................................. 17 
5.2.6   Technical barriers to trade (TBTs) an d sanitary and phytosanitary (SPS) measures .......... 18 
5.2.7   State trading ......................................................................................................... 18 
5.2.8   Special econ omic zones (SEZs) ................................................................................ 18 
5.2.9   Tax incent ives for exports ....................................................................................... 18 
5.2.10   Tax reform .......................................................................................................... 19 WT/TPR/G/293 • Myanmar 
 
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  5.3   Investment Policies ................................................................................................... 19 
5.4   Other Trade- and In vestment-Relat ed Policies .............................................................. 20 
5.4.1   Intellectual property rights ...................................................................................... 20 
5.4.2   Governme nt procurement ....................................................................................... 20 
6   SECTORAL DEVELOPM ENTS AND POLICIES ............................................................... 20  
6.1   Overview ................................................................................................................. 20 
6.2   Agriculture ............................................................................................................. . 21 
6.3   Natura l Resour ces .................................................................................................... 22 
6.4   Manuf acturi ng .......................................................................................................... 23 
6.5   Services ................................................................................................................ .. 23 
6.5.1   Transport .............................................................................................................  23 
6.5.2   Banking, Finance and Insurance ............................................................................... 23 
6.5.3   Telecommunications ............................................................................................... 24 
6.5.4   El ectricity ........................................................................................................... .. 24 
6.5.5   Tourism ................................................................................................................ 24 
 
TABLES 
 
Table 6.1 Main  Expo rts ..................................................................................................... 20 
Table 6.2 Gas Consortia in Myanmar ................................................................................... 22 
Table 6.3 Tourist Arrivals and Origin ................................................................................... 24 
 
 WT/TPR/G/293 • Myanmar 
 
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  1  OVERVIEW 
1.1.  As recently as 2011, Myanmar was still labelled a pariah state. However, this perception has 
changed as a result of the general election in  2010 followed by the establishment of a civilian 
government and President U Thein Sein's election  in March 2011. In his inaugural speech, the 
President stressed the importance of reform and openness in launching the first stage of reforms, 
with emphasis on solidifying national reconcilia tion and building good governance. A year after 
these reforms were introduced, the President announced a second stage of reforms in May 2012, 
focusing on the economic as well as social transformation of Myanmar. The wide-ranging 
Framework for Economic and Social Reforms  (FESR) was released in late December 2012. It was 
prepared in order to push the ongoing reforms forward and to accelerate Myanmar's integration into the international community. The FESR outlines policy priorities for the Government of 
Myanmar (GOM) during the next three years, with emphasis on agro-based industrial 
development, equitable sharing of resources am ong the regions and the states of the country, 
promoting local and foreign investment, effective implementation of people-centered development, 
and poverty reduction. 
1.2.  In the context of these developments, the GOM welcomes Myanmar's first Trade Policy 
Review (TPR), which is undertaken in the spirit of transparency, as embodied in the TPR 
Mechanism. It provides an excellent opportunity to bring to Members' attention progress during 
the past three years in transforming Myanmar from a centrally-planned into a market-oriented and more open economy at the cross-roads of Asia, and re-integrating it into the global economy, after five decades of isolation and consequent stagnation. This TPR also highlights the formidable 
challenges Myanmar faces in advancing its economic and social development and the key roles of 
trade and related policies in meeting these challenges. Liberalization of trade and foreign investment is an integral part of these economic reforms. Accordingly, Myanmar is looking 
increasingly outward and strongly supports the mult ilateral trading system (MTS). An open global 
trading system, including access to export markets and inward flows of FDI, is a key to Myanmar's economic development and thus poverty reduction.   
1.3.  At the same time, however, as a consequenc e of its membership of the Association of South 
East Asian Nations (ASEAN), and the latter's deepening economic relationship with China, Japan, Korea, India, Australia and New Zealand, My anmar is becoming increasingly integrated 
economically with these regional trading partners.   
1.4.  The opportunities for freer trade created by  the MTS and these regional trade agreements are 
also providing an impetus for unilateral market-driven reforms, which will enable Myanmar to take advantage of these opportunities in order to achi eve sustained growth and diversify its economy, 
which is rich in natural resources, but hitherto largely under-developed. 
1.5.  The single most important economic reform so far has been the replacement of the 
overvalued official foreign exchange rate peg with  a "managed float" in April 2012 (a main step in 
removing restrictions on the purchase and sale of foreign exchange for the import and export of 
goods and services). Among the other major econ omic reforms have been the new, much more 
liberal, law aimed at ensuring a stable and predictable environment for foreign investment, which was passed in November 2012. In addition, Myanmar has, inter alia, abolished import and export 
licensing requirement on an initial selection of 1,928 non-sensitive commodities, made some 
progress on land and tax reform, and made improvements to basic infrastructure (transport and telecoms). Further reforms are envisaged, including:  the granting of more autonomy to the Central 
Bank of Myanmar (CBM) as a consequence of its separation from the Ministry of Finance in 
accordance with the new CBM law, which entered into force on 11 July 2013; a new financial sector law to improve the functioning of the capital market; and an overhaul of Special Economic 
Zones, a key element of the government's industrial development plan.   
1.6.  In order to ensure continued strong, su stainable and inclusive growth, Myanmar faces a 
number of economic policy challenges, many of which are inter-related. These include: establishing a market-oriented economy in which private enterprises play an increasingly 
important role; integration into the global and re gional economy through trade and inward FDI (a 
major source of new technology and managerial know-how); achieving the removal of remaining restrictions imposed by some Members on investme nt in Myanmar; enhancing the transparency of 
economic policies and measures; establishing a fiscally viable Government that can address 
Myanmar's developmental needs, including essential infrastructure (such as that involving WT/TPR/G/293 • Myanmar 
 
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  electricity, transportation, telecommunications, water, educational and health facilities); 
developing Myanmar's abundant natural and human re sources so as to ensure that the fruits of 
economic growth are fairly shared, thereby contri buting to social harmony; and ensuring that 
growth is not detrimental to the environment. These and other challenges, together with the 
policies designed to address them, are laid out in the Framework. 
1.7.  This Review also throws light on Myanmar's institutional capacity constraints and related 
technical assistance (TA) needs. Indeed, Myan mar greatly appreciates the TA provided by 
international organizations and WTO Members, which, among other things, is enabling Myanmar to 
bring its trade policies and measures into line with its WTO obligations, thereby creating a trade regime that is non-discriminatory, predictable and, more importantly in the context of this TPR, transparent. Myanmar relies on Members' continued support in meeting these obligations.   
1.8.  With this and other support, the Governme nt of Myanmar, among the poorest countries in 
ASEAN, is confident that it can pursue the wide-ranging economic and trade reforms necessary to overcome the formidable challenges it faces, thereby enabling Myanmar to realize its full potential 
and thus learn from the success of other countries in the region in lifting per capita income and 
reducing poverty. 
2  BACKGROUND 
2.1.  Prior to World War II, Myanmar briefly enjoyed the economic benefits of its integration into 
the world economy and became a world leading ex porter of rice. However, the 1929 Wall Street 
stock market crash exposed the vulnerability of its resource-based economy. Rice exports, which were then Myanmar's largest source of foreign earnings, dropped by more than half in the 
subsequent three years and made hundreds of thousands of rural families landless. World War II 
subsequently brought a fatal blow to Myanmar with the destruction of much of its infrastructure and industries. 
2.2.  Immediately prior to its independence on 4 January 1948, the 1947 Constitution was 
enacted, marking the end of British rule, an d Myanmar (Burma then) became one of the 
23 original founding members of the General Agre ement on Tariffs and Trade (GATT). From then 
on, the post-war history of Myanmar's political  and economic development may be succinctly 
categorized into four periods of Government: Parliamentary Democracy, 1948-1962; Burmese Way to Socialism, 1962-1988; Mark et-orientation under Militar y Government, 1988-2011; and 
Newly-Elected Government since March 2011. 
2.1  Parliamentary Democracy, 1948-1962 
2.3.  The newly-democratic state had to contend with a multi-ethnic society, devastated 
infrastructure and industries, a diminished national army and a national aspiration to take control 
of key economic activities. The monopolized rice tr ade and timber industry were thus nationalized 
and some key industries were earmarked to be developed by state-owned economic enterprises (SEEs). It is against this background of weak national institutions and political instability that the 
Myanmar's army staged a coup in 1962.  
2.2  Burmese Way to Socialism, 1962-1988 2.4.  The economic strategy of the military Government was termed "The Burmese Way to 
Socialism", which encompassed central planning and self-reliance. The country became ruled 
essentially by decrees issued by the Revolution Council. The Government took swift action by 
nationalizing all enterprises involved in foreign, wholesale and retail trade and main industries, as well as implementing a series of price controls on the agriculture sector. In respect of trade, 
exports were indirectly taxed by maintaining nati onal buying prices of commodities below their 
international prices by SEEs. Imports were managed in accordance with government priorities and availability of foreign exchange. Worsening economic conditions led the military Government to 
make some adjustment in the mid-70s, such as allowing official development assistance and 
encouraging SEEs to improve their efficiency. In 1987, the Government sought and obtained least developed country status.   WT/TPR/G/293 • Myanmar 
 
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  2.3  Market-orientation under Military Government, 1988-2011 
2.5.  The Burmese Way to Socialism finally co llapsed in September 1988, when a new military 
group took over the Government. The State Law and Order Restoration Council (SLORC) removed 
some restrictions on private sector participation in domestic and foreign trade and a new Foreign 
Investment Law (1988) was introduced to encourage foreign investment in the economy. The 
market-oriented reforms brought back econom ic growth and underpinned the Government's 
decision to seek and obtain ASEAN membership  in July 1997. However almost simultaneously, 
government intervention in the economy was rein forced by means of more controls on business 
and trade. In May 2008, the tragic Nargis cyclone swept through the Irrawaddy Delta, leaving in its wake about 140,000 people dead, millions homeless and inflicting economic losses estimated at about 2.7% of GDP. A new Constitution was approved by referendum in 2008 and was 
instrumental in the establishment of a new government in 2011.   
2.4  Newly-Elected Gove rnment since March 2011 
2.6.  The newly-elected Government has launc hed major reforms that have centered on 
three parallel processes: a peace process that strives to end all ethnic conflict ongoing since 
independence and achieve lasting peace; the tran sformation from military rule to democratic 
administration; and the replacement of a centra lized economic system with a market-oriented 
economy. Myanmar, a poor country, is facing tremendous challenges in meeting these objectives. 
After decades of authoritarian rule, systemic changes are now needed to tackle these social and economic challenges. 
3  TRANSPARENCY AND OTHER INSTITUTIONAL DEVELOPMENTS 
3.1  Participation in the Multilateral Trading System  
3.1.  In formulating and implementing its trad e and trade-related policies, the GOM seeks to 
adhere to the basic WTO principles of non-discrimination and predictability as well as 
transparency. As regards the latter, although My anmar, a least developed country, currently lacks 
the capacity to fulfil its obligation to notify Members fully and promptly of changes in those trade policies subject to WTO agreements, it is making every effort to do so, thanks to technical 
assistance (TA) provided by the WTO and its Members as well as other international institutions, 
notably the Asian Development Bank (ADB), Intern ational Monetary Fund (IMF), and World Bank. 
Furthermore, Myanmar welcomes the WTO's first review of its trade and trade-related policies, undertaken in accordance with the Trade Policy Review Mechanism (TPRM).  
3.2.  Given its lack of technical expertise in WTO matters, the GOM also appreciates the extremely 
useful role this first TPR plays in throwing light on, and thereby drawing Members' attention to, Myanmar's TA needs in this regard. It is also extremely grateful to the ADB for its TA, which has 
greatly assisted the Government in its preparations for this Review. Such TA and capacity building 
is essential if Myanmar is to be able to undertake the wide-ranging reforms that are necessary to meet the many formidable challenges it faces, especially with regard to trade and trade-related 
policies. 
3.3.  As regards further trade liberalization, Myanmar is committed to achieving a successful 
conclusion of the ongoing negotiations related to the Doha Development Agenda (DDA). In this context, Myanmar is willing to, inter alia , bind more of its tariff lines and improve its offer of 
commitments pertaining to those service sect ors covered by the GATS, provided mutually 
satisfactory results can be achieved in these negotiations. 
3.2  Institutionalization of Transparency 
3.4.  Myanmar's recent reforms have been aimed not only at "establishing a more transparent and 
inclusive political process" so that the democrat ization process succeeds. The GOM recognizes that 
transparency also provides the solid foundation for a thriving market economy as well as for good 
governance, including informed policy-making,  because transparency reduces the scope for 
administrative discretion, and thus corruption, and ensures public accountability in the formulation and implementation of policy. In accordance wi th its objective of more open and transparent WT/TPR/G/293 • Myanmar 
 
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  government, Myanmar has been undertaking reforms intended to enhance the transparency of its 
trade and trade-related policies and regulation s, thereby increasing public accountability. 
3.5.  As mentioned in the Secretariat's report, enhancing transparency in the public sector has 
been one of the priorities of the Ministry of  Commerce since 2006. The Ministry set up two 
websites (www.commerce.gov.mm and www.myanma rtradenet.com.mm) where businesses can 
obtain trade information. Businesses may apply for licences from www.myanmartradenet.com.mm. The Ministry of Commerce also pu blishes a weekly "Commerce 
Journal" and a monthly "Trade News" booklet that provide trade-related information to the public 
and private sector. In addition, it has been cooper ating closely with the Republic of the Union of 
Myanmar Federation of Chambers of Commerce and Industry (RUMFCCI) and other associations, conveying trade information and notifications to those organizations in a timely manner. 
3.6.  Furthermore, in recognition of the key role of  Parliament (the Hluttaw) in the reform process, 
the Government now consults regularly with Parliament in undertaking economic as well as political and social reform so that the Government functions more effectively and efficiently. For 
example, in connection with the formulation of fiscal policy, the Government and Parliament 
discussed the budget bill for 2013 transparently and effectively, taking into account inputs from various constituencies. As a result, the passage of the budget bill will become increasingly 
systematic over time. In addition, citizens now have access to information regarding all discussions 
and hearings on the budget bill in Parliament. Mo reover, a Tax Service Unit (TSU) was established 
in Yangon in 2012 in order to improve transparency in taxation by providing information to taxpayers and also investigating their complaints . Other TSUs were established elsewhere in 2013. 
3.7.  Two other major developments concerning transparency have been the publication in the 
government media of the texts of all draft laws and discussions thereof since 9 July 2012 and the 
subsequent lifting of press censorship on privately-run newspapers in 2013. 
3.8.  Many of Myanmar's existing laws are very old and out-dated, with some dating back to the 
pre-1948 period. These and much subsequent legislation were also rather vague leaving a great deal of scope for administrative discretion in the application of implementing regulations. In other 
instances, policies and measures had no legislativ e basis at all. However, the laws providing the 
basis for recent reforms are much more precise and detailed (as well as less restrictive), and thus more transparent.  
3.9.  Greater transparency is also levelling the corporate playing field in Myanmar in the natural 
resource and telecommunications sectors. The auction of exploration rights to 30 offshore oil and 
gas blocks is a case in point, with the Government now publicly advertising tenders in English and inviting international companies to apply. Similarly, the recent bidding process for two national 
telecoms licenses was opened to international bidders. 
3.10.  As regards the development of Myanmar's abundant natural resources, the Government is 
also preparing to be a signatory to the Extractive Industries Transparency Initiative, including 
transparent financial accounting, to ensure that there is maximum transparency in these sectors. 
This initiative can enable everyone to know wh ere the revenues from these industries are going 
and thereby ensure that the benefits go to the vast majority of the people and not to just a small group. 
3.11.  In order to ensure the effectiveness of development assistance, the Government has 
instituted a monitoring and evaluation mechanism. It will also try to make the development assistance more effective by regularly sharing with its development partners information about the 
projects and programs being implemented. 
3.12.  An accurate and timely statistical data base  is a prerequisite for transparency and evidence-
based policy making. Without such a data base and key statistical indicators, policies are 
formulated largely in the dark. Accordingly, th e GOM attaches high priority to improving the 
accuracy and timeliness of statistics with a view to making them publicly available. Some useful data are expected to be collected from the nationwide population census, the first in three decades, which will be conducted in 2014, and whose main objective is to obtain the basic 
population and socio-economic data necessary to  formulate, implement, monitor, and evaluate 
development policies. The Government is grateful to the ASEAN, the European Union (EU) and WT/TPR/G/293 • Myanmar 
 
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  IMF, among others, which have kindly provided te chnical assistance on key statistics (including 
inflation and trade) and would like to request Myanmar's international partners to assist with other key statistics and the census in any way they can. 
3.13.  Corruption is the consequence of opaque laws and regulations, and thus administrative 
discretion. In a crack-down on corruption, includin g the practice of accepting or soliciting kickbacks 
and bribes to award contracts, between April 2011 and December 2012, almost 17,000 state employees were disciplined, nearly 5,000 dismissed, some 400 sent to jail, and 80 forced to return 
money. Also, almost 700 police personnel were punished for corruption. In another significant step 
forward, Myanmar became a Party to the United Nations Convention against Corruption (UNCAC), which entered into force on 19 January 2013. The Convention provides Myanmar with a 
comprehensive framework to fight corruption through preventive measures, law enforcement and 
international cooperation and asset recovery. Adoption of the Convention coincided with the 
President's announcement of "a third phase of reform" targeting corruption in the country. In connection with the UNCAC, an anti-corruption law was enacted on 17 September 2013. 
3.14.  In order to streamline bureaucracy and improve delivery of public services as well as to root 
out corruption, the Public Services Performance Appraisal Task Force was established by the President in June 2013. Comprising 12 to 15 members including cabinet ministers, academics and 
politicians, the body is headed by a former Minister of Commerce, who reports directly to the 
President. The Task Force is required to report back within two months with recommendations that could include the restructuring or elimination of some government departments, changes in personnel, reform of fee structures and bureaucratic processes. Some, but not all, of its 
recommendations will have to be approved by Parliament. But changes are already in place on 
smaller procedures, such as duplication of forms. To gather first-hand information, the Task Force launched consultations in Yangon with business groups, ordinary consumers and bureaucrats. In 
one such session, some 70 key business representatives were gathered for a day-long session to 
question them closely about customs, commercial tax and trade-related procedures, such as export and import licenses. 
3.3  Regional Integration and Cooperation  
3.15.  With other ASEAN Member States to the south and east, China to the north-east, and India 
and Bangladesh to the west, Myanmar borders more than two billion people and the fastest growing markets in the world. Thus, the GOM attach es a high priority to regional integration and 
cooperation with ASEAN's Member States and its Di alogue Partners, namely Japan, Korea, China, 
India, Australia and New Zealand. 
3.16.  Myanmar joined the ASEAN in 1997 and will assume its chairmanship in 2014. While the 
eventual aim of the ASEAN Free Trade Area (AFTA) is  to eliminate import barriers to all products 
within the region by 2015, Myanmar enjoys some flex ibility, which allows it to eliminate tariff and 
non-tariff barriers by 2018. The outcome is that Myanmar's trade with ASEAN Member States and 
its Dialogue Partners accounted for about 95% of total trade in the past few years. In order to 
ensure the free flow of services, Myanmar is also committed to liberalizing intra-ASEAN trade in its services sectors by 2015. In order to increase intra-ASEAN investment and attract foreign investment into ASEAN, the ASEAN Comprehensive Investment Agreement (ACIA) was signed in 
2009 with the intention of streamlining existing ASEAN Investment Agreements. 
3.17.  The potential benefits from further cooper ation and integration with neighbouring countries 
are such that the GOM is focused on meeting the requirements for the establishment of the ASEAN 
Economic Community (AEC), with freer flow of g oods, services, capital and skilled labour. Signed 
by ASEAN Leaders at the 13th ASEAN Summit on November 20, 2007, the AEC Blueprint lays the foundation for realising the goal of ASEAN as an  integrated economic region by 2015. The AEC 
consists of four pillars: a single market and production base; a highly competitive economic 
region; a region of equitable economic development;  and a region that is fully integrated into the 
global economy. Each of the four pillars involves  various measures and initiatives that are being 
implemented to achieve the goals of the AEC. Myanmar plans to address the legislative and 
regulatory limitations that impede the timely implementation of intra- and extra-ASEAN 
commitments. It also plans to strengthen the Ministry of National Planning and Economic Development (MNPED), the national coordinating  agency for AEC, to effectively coordinate 
implementation across various focal points and implementing agencies. The GOM has also 
informed and engaged the private sector to asse ss the preparedness and effectiveness of policies WT/TPR/G/293 • Myanmar 
 
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  and measures. It also facilitated the establishment by the RUMFCCI of a well-functioning 
mechanism to monitor the outcomes, analyse the impacts, and address the capacity gaps to 
ensure that the achievement of the AEC targets will deliver maximum benefits to the private sector. 
3.18.  To ensure a timely implementation of the AEC initiatives, ASEAN has established a 
monitoring mechanism called the AEC Scorecard. As a compliance tool, the AEC Scorecard reports 
progress in implementing the various AEC me asures, identifies implementation gaps and 
challenges, and tracks the realisation of the AEC by 2015. Judging by the latest report issued by 
the ASEAN Secretariat in 2012, Myanmar's progress is comparable to other ASEAN Members, except regarding measures to promote the free flow of capital. However, the AEC Scorecard only states that Myanmar has signed ASEAN-wide agreements and that they have been transposed into 
national laws; the actual degree of implementation and enforcement of specific initiatives may still 
lag behind the agreed schedule. Nevertheless, the Government intends to implement all its ASEAN commitments by 2015 or 2018 in accordance with the built-in flexibility. 
3.19.  As a consequence of its membership of ASEAN, Myanmar also participates in ASEAN's 
preferential agreements with China, India, Japa n, Korea, Australia and New Zealand. Moreover, 
with a view to promoting greater economic integration in the Greater Mekong Sub-region (GMS), 
Myanmar, Cambodia, Lao PDR, Thailand, Viet Na m, and Yunnan Province of China have been 
involved in the GMS Program (launched in 1992), whose purpose is to enhance economic linkages across these countries' borders. In 2010, the GMS countries approved a comprehensive medium-term program of Actions for Transport and Trade Facilitation (TTF). Moreover, Myanmar is 
a member of the BIMSTEC, which provides a forum to facilitate and promote trade, investment, 
and technical cooperation among Bangladesh, Bhutan, India, Nepal, Sri Lanka, and Thailand. 
3.20.  Myanmar's strategic location in the region should provide all its international trading 
partners with ample business opportunities both in the domestic market and in the adjacent 
region. As any enterprise established in Myan mar may benefit from these opportunities, these 
regional agreements and other arrangements grea tly increase the attractiveness of Myanmar to 
foreign investors wishing to enter the neighbouring markets. However, Myanmar is also looking 
beyond its Asian neighbours to develop trade an d investment ties. Accord ingly, the Government 
has recently concluded two agreements with the United States, namely the Trade and Investment Framework Agreement and the Investment Incentive Agreement.   
4  RECENT MACRO-ECONOMIC, STRUCTURAL AND OTHER DEVELOPMENTS 
4.1  Macro-economic Developments  
4.1.  Since the onset of Myanmar's wide-ranging po litical, social and economic reforms aimed at its 
re-integration into the global economy following five decades of isolation and consequent economic 
stagnation, real GDP growth has accelerated from 5.1% in fiscal year 2009/10 (year ending March) to an estimated 6.4% in 2012/13 and 6.8% in 2013/14, led by gas production and both 
domestic and foreign investment. Nonetheless, Myanmar is still a poor country, with per capita 
GDP of only around US$900, the lowest among AS EAN countries. However, with abundant natural 
resources, a young labour force, and its strategic position bordering the fastest growing markets in 
the world with more than two billion people, Myanmar's growth potential is enormous, provided it 
sheds the shackles of policies that have condemned it to stagnation and therefore poverty, during 
the past 50 years. The Asian Development Bank, for example, estimates that Myanmar, on its current development path could sustain an annual growth rate of 7% to 8% during the next couple 
of decades, thereby trebling its per capita income by 2030 and propelling it into the ranks of 
middle-income countries. Clearly, there is considerable scope for catching-up with its partners in the AEC as well as other countries in the region as Myanmar becomes increasingly integrated into 
both the regional and global economies. At the sa me time, however, ensuring that the fruits of 
economic growth are fairly shared, thereby contribu ting to social harmony, and that growth is not 
detrimental to the environment are major challe nges. Realizing the full extent of Myanmar's 
growth potential requires sound monetary and fiscal policies, in order to ensure macro-economic 
stability, together with structural policies, including liberalization of trade and foreign investment, 
as well as major advances in health and education. WT/TPR/G/293 • Myanmar 
 
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  4.2.  In connection with an agreement with the IMF, which involved the latter establishing a staff 
monitored program intended to improve Myanmar' s macro-economic management capacity and to 
establish a track record of sound macro-economic policies, the GOM presented a Memorandum of Economic and Financial Policies (MEFP) concerning the second-stage reforms. The objectives of the 
MEFP were to: (i) ensure macro-economic stability and debt sustainability; and (ii) lay the 
foundations for lasting macro-economic stability by building an appropriate macro-economic framework, and developing the institutions and instruments for effective use of them. The 
macro-economic goals were to maintain stable and low inflation and to build sufficient international 
reserves to provide a cushion against adverse external shocks as well as macro-economic risks arising from the reform process itself. Among the key macro-economic policies in this regard were foreign exchange and related monetary policy together with fiscal policy.  
4.1.1  Foreign exchange and monetary policy 
4.3.  The single most important economic reform so  far has been the liberalization of the exchange 
rate regime starting in September 2011 and the subsequent replacement of the overvalued official 
exchange rate peg with a "managed float" in April 2012, a main step in removing restrictions on 
the purchase and sale of foreign exchange for th e import and export of goods and services and 
also in connection with Foreign Direct Invest ment (FDI). This reform was motivated by 
commitments under the AEC Blueprint, whereby the Central Bank of Myanmar (CBM) was obliged 
to conform with IMF Article VIII principles, just like other ASEAN Members. Prior to this reform, the local currency (kyat) was pegged at the rate  of 8.50847 kyat per SDR. Under that foreign 
exchange regime, different exchange rates occurre d in the different domestic foreign exchange 
markets. This situation was not only detrimental to transparency, but caused price distortions, 
inefficient allocation of resources, and risks to macro-economic stability and economic development. With a view to ensuring macro-economic stability and accelerating economic growth, 
therefore, the GOM has taken steps to unify the co untry's multiple exchange rates into a single 
rate, by replacing the official peg in April 2012 with a "managed float" through the foreign exchange auction market under the supervision of the CBM. Under the new foreign exchange 
regime, the reference rate is determined in th e auction mechanism. At the same time, the GOM 
lifted key exchange restrictions, including the requirement to use only export proceeds for the purchase of imports. The CBM also issued license s to a number of private banks enabling them to 
conduct international banking. Consequently, the difference between the reference rate and the 
informal market rate has diminished significantl y. Moreover, in August 2012 Parliament adopted a 
new Foreign Exchange Management Law, which, once implemented, will remove all the present restrictions on current payments and transfers abroad. The CBM has also announced a redemption 
plan for the Foreign Exchange Certificates (FECs) that were created as a temporary vehicle for the 
convenient use of foreign currency under the previous rigid control mechanism. At the end of June 2013, the utilization of FECs ceased in accordance with the redemption plan. 
4.4.  When the new budget law was enacted by Parliament in April 2012, the Budget Department 
of the Ministry of Finance (MOF) had already incorporated necessary budget estimates and cost calculations based on a reference exchange rate at 800 kyats per dollar, which was in line with prevailing parallel market exchange rates. As a re sult of these reforms, pressure on the exchange 
rate to appreciate has receded and the market exchange rate has been stable at around 970 kyats 
per dollar. Consistent with this, the CBM will eliminate remaining exchange restrictions and multiple currency practices (MCPs), and will seek approval of the IMF's Executive Board for the 
MCP arising from multi-priced foreign exchange auctions, which is non-discriminatory and will be 
maintained on a temporary basis until the foreign exchange market of Myanmar develops. The CBM will also coordinate closely with IMF staff to ensure that new legislation, regulations, and 
bilateral payment arrangements do not create new exchange restrictions, and provide them with 
the necessary information. The CBM will take addi tional steps to deepen and facilitate the smooth 
functioning of the formal foreign exchange markets, enabling private banks to offer foreign exchange operations and services at par with state banks. Currently, although the CBM is 
endeavouring to establish an interbank foreign exch ange market, the market is too tiny for market 
intervention to be effectively conducted. This situation signals that Myanmar's banking and financial sector needs to develop more vigorously. 
4.5.  Equipping the CBM with the instruments to conduct domestic monetary policy is important for 
delivering the stability necessary for sustained economic growth. Inflation remained moderate, averaging 2.8% during the period 2012/13, mainly due to declining food prices and less 
monetization of the fiscal deficit, although there are upward pressures, including from money WT/TPR/G/293 • Myanmar 
 
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  growth, real estate prices and wage increases, so that inflation is projected by the IMF to rise to 
around 5.6% in 2013/14. The new CBM Law, which was enacted on 11 July 2013, grants the CBM the budgetary and operational autonomy to counter these pressures, if necessary, as well as to ensure proper accountability. This is in contrast to the situation in the past, when monetary policy 
was determined by the need to finance fiscal deficits, thereby contributing to high inflation. In the 
meantime, the CBM is seeking to build its capacity to conduct open market operations in the form of deposit and credit auctions, which have just begun. In order to contain potential inflationary 
pressure and dollarization under the new exchange rate regime, the CBM monitors domestic 
monetary developments so as to ensure exchange rate stability and price stability. In doing so, the CBM conducts monetary policy in coordination with fiscal policy so that both policies are conducive 
to export-led growth. As the revenues from new natural gas fields is expected to increase in the 
near future, the GOM is also preparing necessary measures to insulate these flows and to minimize 
their impact on exchange rate stability and the inflation rate. 
4.1.2  Fiscal policy 
4.6.  The establishment of a fiscally transparen t and viable Government that can ensure macro-
economic stability and allocate more expenditure to Myanmar's developmental needs as a result of higher tax revenues remains a key challenge. Fiscal policy is now more transparent, and thus 
accountable, as a result of the decision by the Government to allow the 2012/13 budget to be 
debated in and approved by Parliament.   
4.7.  Fiscal policy is also being oriented mo re towards supporting continued macro-economic 
stability, while providing sufficient room for much-needed social and investment spending, 
including on poverty reduction programs and essential infrastructure, such as that involving 
electricity, transportation, telecommunications, water, educational and health facilities. Therefore, the GOM aims to keep the fiscal deficit in 2013/14 and over the medium-term broadly unchanged 
at around 5% of GDP (IMF definition, which corresponds to around 4% of GDP based on the GOM 
definition). Higher expenditures will be financed  mainly by rising revenues from gas projects 
coming on stream. In future, non-concessional ex ternal borrowing will be used only to finance 
economically viable projects in key infrastructure (including energy, transport and 
telecommunications), at levels consistent with debt sustainability and low risk of debt distress. The Ministry of Finance is collaborating with IMF, World Bank, ADB and Multi-Development Partners to improve the Myanmar Public Finance Management Sy stem in order to ensure that spending is 
cost-effective and in line with development priorities. The Ministry of Finance is trying to establish 
the Public Finance Management Reform Strategy and negotiating with Multi-Development Partners to implement the Public Finance Management Reform Process in line with the Government's policy 
and priorities. Currently, debt management functions are jointly carried out by the CBM and the 
Budget Department. However, plans have been made to establish a Treasury Department under the Ministry of Finance and the consolidation of debt management into the Treasury Department. 
Moreover, the Paris Club countries have forgiven  much of Myanmar's debt and the IMF, World 
Bank and ADB have returned to offer credit as well as technical assistance in connection with fiscal reforms. For example, with the assistance of both the IMF and World Bank, the MOF has been 
taking steps to strengthen Myanmar's Public Financial Management (PFM) reforms, Public 
Expenditure and Financial Accountability (PEFA) and Public Expenditure Review (PER), thereby 
providing the basis for more fundamental fiscal reforms. 
4.8.  The 2012/13 budget increased allocations for health and education almost fivefold and 
twofold, respectively, compared to 2011/12, financed to a significant extent by the positive 
revenue impact of adopting a more realistic ma rket-based exchange rate in SEEs operations. 
Moreover, starting from 2011/12, budgetary reforms have been introduced to reflect the new 
Constitution. Accordingly, Region and State F und Accounts are separated from the Union Fund 
Account, delegating the responsibility of the budg et functions and financing budget expenses to 
the regions and states concerned. In this regard , an Intergovernmental Fiscal Relations Division 
will be formed under the Budget Department for Fiscal Relations between the Union and 
Region/State Governments. Moreover, to strengthen budget process, the Fiscal Policy and Strategy 
Division will be established under the Budget Depa rtment. The MOF has also increased civil servant 
pensions from very low levels. At the same time, in a first step to increase their financial 
autonomy, SEEs have been granted limited autonomy to finance part of their operating costs by 
themselves (instead of through direct budget allocations).  WT/TPR/G/293 • Myanmar 
 
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  4.9.  Sustained increases in tax revenues are cr ucial in order to boost expenditure and reduce 
dependence on natural resource revenues. This re quires tax reforms aimed at broadening the tax 
base and improving compliance, including through the planned establishment of a large taxpayer office in 2014, so as to offset the loss in revenues from trade taxes as a consequence of the 
abolition the withholding tax on imports and the export tax on key agricultural exports. 
Furthermore, the MOF has also simplified the commercial tax on domestic sales, broadened the tax base by requiring public sector employees to pa y income tax, and increased the progressivity of 
the income tax. Limiting tax incentives is also important to prevent further erosion of the tax base. 
4.1.3  Balance of payments 4.10.  The overall balance of payments position continued to show a surplus of US$1,105.1 million 
during the 2011/12, compared to a surplus of US$788. 1 million in the previous year. This surplus 
is mainly due to the trade surplus and capital inflows. During the reporting period, the trade 
surplus declined by 80.4% to US$524.9 million comp ared to the previous year owing to the faster 
growth in imports (owing partly to trade liberalization) than exports. Consequently, the current 
account registered a deficit of US$1,404.8 million in 2011/12 compared to a surplus of 
US$876.5 million in the previous year. 
4.11.  In 2011/12, the value of imports increased by 40.3% to US$7,963.9 million compared to 
the previous year owing to increase in capital goods, intermediate goods as well as consumer 
goods. According to provisional data, intermed iate goods constituted 34.5%, consumer goods 
31.6%, and capital goods 33.9% of total imports, while capital goods increased by 58.0%, intermediate goods increased by 33.7% and consum er goods increased by 33.2% compared to the 
previous year. By contrast, the value of exports  increased  by only 1.5% to US$8,488.8 million 
from the previous year, mainly due to increased exports of natural gas, marine products, rice and rice products, pulses and beans as well as garments. According to provisional data, gas exports 
accounted for 37.9% of total exports in 2011/12, up 23.4% from the previous year. 
4.12.  In 2011/12, the services account deficit continued to expand by 20.5% to 
US$2,378.3 million from 2010/11. This wider deficit is mainly the consequence of larger payments 
for partner income of foreign joint venture companies in oil and gas sector. Private transfers, 
consisting largely of remittances and transfers in-kind from Myanmar nationals working abroad and foreign companies, increased by 169.1% to US$448.6 million, while official grants decreased 
by 35.6% from the previous year to US$41.3 million.   
4.13.  The financial account declined by 3.3% to US$2.5 billion in 2011/12 compared to 2010/11, 
owing to a drop in FDI. Nevertheless, as a result of increased exports earnings and other capital inflows, gross official reserves rose to US$4.6 billion in 2012/13 (which is sufficient to finance 
3.7 months of imports), and are projected by th e IMF to reach US$5.5 billion (3.9 months of 
imports) in 2013/14. These reserves are likely to continue rising as FDI inflows are expected to outweigh the widening current account deficit. 
4.2  Main Structural Developments  
4.14.  In accordance with the Government's objective of transforming Myanmar from a 
centrally-planned into a market-oriented and more open economy, the role of the state in trade, production and setting prices has been considerably reduced. As regards trade, for example, 
between 2008/09 and 2011/12, the Government's sh are of imports dropped from 43.0% to 26.8% 
and its share of exports fell from 60.5% to 53.9%. Furthermore, most SEEs have been privatized, with only 42 remaining, so that their share of GDP has fallen correspondingly. Price controls are 
now rare, being confined mainly to energy. 
4.15.  Notwithstanding Myanmar's increased economic integration into ASEAN, this does not 
appear to have caused trade diversion because between 2008/09 and 2012/13, the ASEAN share 
of Myanmar's imports declined from 44.1% to 43. 7%, while their share of exports fell from 56.2% 
to 50.7%.  
4.16.  Myanmar's exports are concentrated in a few primary commodities, notably gas and wood, 
along with agricultural and marine products. The GOM is therefore actively encouraging export 
diversification while promoting downstream proc essing of primary commodities, by inter alia, WT/TPR/G/293 • Myanmar 
 
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  improving support services in areas of trade financing, market access and trade facilitation. In this 
regard, the GOM is also removing barriers to in bound foreign direct investment (FDI) to help 
domestic industries overcome technological, financial and market barriers to upgrading their value-added activities. 
4.17.  Given the key role of FDI in develo ping and diversifying Myanmar's economy and 
re-integrating it into the world economy, the GOM welcomes FDI. Approved inbound foreign investment rose sharply in 2010/11 to almost US$20 billion, exceeding the peak in 2005/06. In 
2011/12, however, it dropped to US$4.6 billion. The bulk of foreign investment has been in electric 
power, oil and gas, and mining, although a si gnificant amount has also gone into large 
construction projects such as the Nay Pyi Taw airport and telecoms infrastructure. Recently, the main sources of such investment have been  China, Hong Kong, Korea and Thailand.  
4.18.  Between 2009/10 and 2012/13, agriculture's share of GDP fell from 38.1% to 30.5%. By 
contrast, the share of manufacturing increased from  18.1% to 19.9%. Services' share rose slightly 
from 37.4% to 37.5%.  
4.3  Other Developments  
4.3.1  Capital market policies 4.19.  Myanmar's capital market is relatively under-developed (and therefore more susceptible to 
"market failure", which raises firms' costs). Hence, a modern, well-regulated and smooth 
functioning capital market is needed, not just to transmit monetary policy and reduce fiscal deficit monetization, but also to finance the private sector, including SMEs, and ensure an efficient allocation of capital. 
4.20.  Accordingly, the CBM is working with the World Bank to map out a master plan for the 
development of the financial sector and rewrite the Financial Institutions of Myanmar Law, while the IMF has assisted the CBM in rewriting the Ce ntral Bank of Myanmar Law. The CBM is also 
working with the Southeast Asian Central Banks (S EACEN) Centre, ADB, ASEAN partners and other 
countries, such as Japan and Korea, to build staff capacity, mainly in regulatory and supervisory matters, reserve management, payment/settlement system development, information technology, 
research, and monetary management areas. Furthermore, Myanmar has been participating in 
ASEAN Finance Cooperation with a view to its integration into the region's banking and insurance markets. In addition, Myanmar has been taking part in the ASEAN Capital Market Forum with a view to establishing a domestic capital market. The Securities Exchange Law, which was enacted 
on 31 July 2013, had been drafted with the assistan ce of Japan's Daiwa Research Institute. A joint 
venture firm of the Daiwa Research Institute and a state-owned Myanmar Economic Bank was formed to prepare the way for the establishment of Myanmar's capital market.   
4.3.2  Labour market policies 
4.21.  Despite the significant decline in its population growth rate from 2.2% to 1.1% per year 
over the past decade, Myanmar's now has a relatively young population with a high percentage of 
working-age groups relative to non-working,  dependent groups. This presents a golden 
opportunity to reap a "demographic dividend" by creating jobs for this young population, thereby building a stronger economy with inclusive growth. However, the country's youthful population is currently facing the tremendous challenges of unemployment, low levels of education, lack of 
skills, and infectious disease. While the macro- economic reforms and resulting growth already 
mentioned will do much to increase employment opportunities, there is nonetheless the need for 
policies to strengthen the basic education and technical skills as well as health of the population 
and thereby improve human capital. Hence, education and health are top priorities. Consequently, 
the 2012/13 budget increased allocations for health  and education almost five-fold and two-fold, 
respectively, compared to 2011/12, and will increase expenditure further in the coming years, 
both absolutely and as a proportion of the total go vernment budget. In this regard, the Ministry of 
Labour, Employment and Social Security has prepared a draft law on Employment and Skill Development, which is now before Parliament. The Ministry is also drafting a new Foreign Labour Law and will be conducting a labour force survey in 2014 with the assistance of the ILO.   WT/TPR/G/293 • Myanmar 
 
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  4.22.  As Myanmar is actively embracing freedom of association, the GOM is also facilitating 
improved industrial relations between employers,  employees and their representatives. The GOM 
has recently adopted the Labour Organization Law, which grants labour groups the right to freely establish trade unions and representative associations while guaranteeing basic rights of workers. 
The GOM has not only cooperated fully with the ILO in abolishing previous laws and regulations 
that were tantamount to involuntary labour across the country, but also taken initiatives to educate both employers and employees regarding th eir rights and responsibilities as well as the 
provisions of the new Labour Organization Law.   
4.3.3  Infrastructure 4.23.  Major improvements in Myanmar's basic infrastructure are critical for both growth and 
poverty reduction. Consequently, the GOM is proceeding quickly with the completion of the high 
priority infrastructure projects already underway while formulating a longer term strategy and 
program for infrastructure development. In the immediate term, priority also needs to be given to urban transportation systems, upgrading of nation al airports, providing clean water, and improving 
power supply. 
4.24.  Myanmar cannot be a crossroads in the regi on without adequate transport links internally 
and with neighbouring countries. The GOM is thus turning its attention to the development of 
Myanmar's transport and other infrastructure in order to enhance the country's connectivity to 
regional economies and fulfil the goal of integrating Myanmar into the ASEAN Economic Community. It will give priority to building infrastructure projects that will fill the missing links identified in the Master Plan of ASEAN Connectivity, such as transport links with India, China and 
Thailand. In parallel with these links to the neighbouring economies, the GOM will also prioritize 
the development of rural-city connections, renovati on of inter-state highways and the upgrading of 
the existing road infrastructure to the standards set by ASEAN. 
4.25.  As regards the transport, water and public  works sectors, the GOM is in the process of 
establishing a clear and strict separation between  regulatory authorities and service providers and 
operators. For instance, such restructuring can be achieved in the transport sector by separating 
regulators (civil aviation authority or port authority) from service providers/operators (airports and 
port facilities). Public works will be gradually pr ivatized while building the regulatory capacity and 
authority of the relevant department. 
4.26.  Meanwhile, the GOM will emphasize the impr ovement of the quality of the railroad sections 
that connect important economic centres in the country, namely Yangon-Mandalay-Myitkyitna 
section and the Bago-Mawlamyine section, and th e upgrading of locomotives and coaches. This 
emphasis on the core links and services will st rengthen the previous strategy of developing 
railroads that connect various parts of the country to the economic centres with the objective of 
achieving regional equity. Greater attention will be given to regional connectivity and bridging the gaps in operations and compatibility in alignment with region-wide transport strategies. 
4.27.  A master plan is being prepared concerning  power supply, which is one of the most pressing 
economic challenges facing Myanmar. Nearly three-quarters of the population, living mainly in rural areas, lacks access to electricity. Moreover , the electric power production and distribution 
system is plagued by frequent interruptions. Without an accessible and a reliable electricity 
system, Myanmar's economic progress will stall.  Addressing this challenge will require an 
expanded and modernized electricity grid as well as new sources of domestic energy and innovative solutions for rural energy access. 
4.28.  Public-private partnerships (PPPs), especially those involving inward FDI, can play a key role 
in the development and management of infrastruc ture. However, PPPs need to be very carefully 
structured to ensure the appropriate level of public  benefits, which takes time. In order to facilitate 
their development, the GOM intends to put in place as soon as possible a clear legal framework for 
PPPs. WT/TPR/G/293 • Myanmar 
 
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  4.3.4  Reform of state-owned economic  enterprises (SEEs) and privatization 
4.29.  In line with the Government's objective of  reducing the role of the State in the economy, 
thereby rendering it more market-oriented, most SEEs have been privatized. Their presence is large only in energy, forestry, construction, telecommunications, social and public administration.  
With new budget allocations, those SEEs that remain are now subject to stricter financial discipline 
as well as strong incentives for profit-making. The Government has sharply cut direct subsidies to SEEs while opening markets to competition with  the private sector. Furthermore, the GOM is 
removing easy credit from state banks, which has hitherto been available to SEEs, while limiting 
arrears on payments to central government funds. The GOM has also instructed SEEs to undertake more aggressive collection of receivables, to align more closely investment and profitability, and to re-orient goals from output targets to profit. All the managers of SEEs are now expected to focus 
on marketing and product quality, while improving operational efficiency and investment decisions.  
4.30.  Although all SEEs are now required to operate on a commercial basis and use the 
market-determined exchange rate, further reforms on "equitization", commercialization and 
possible privatization, including a privatization law, are envisaged in the future. The GOM also 
takes note of lessons from other developing countries that show there is potential for making major mistakes if privatization proceeds too quickly without properly preparing regulatory 
frameworks and competition policies. The GOM will  ensure that the state privatization authority 
will have sufficient capacity in the areas of project appraisal, valuation and securitization procedures, public auctioning and open tender systems in managing the process of privatizing 
state assets, particularly for large SEEs. The GOM will also take a judicious and cautious approach 
to privatizing public utilities and infrastructure industries that are critical to the functioning of the 
economy and are natural monopolies. It will consider a step-by-step privatization plan by separating or unbundling monopoly parts to be subjected to competition with new firms, 
establishing regulatory frameworks and institutions, commercializing state enterprises and 
encouraging private-public partnerships and joint ventures with foreign participation. 
4.3.5  Price Controls 
4.31.  In accordance with its objective of transforming Myanmar from a centrally-planned into a 
market-oriented economy, the Government rarely intervenes in the setting of prices. Such intervention is confined largely to energy. 
4.3.6  Small and medium-s ized enterprises (SMEs) 
4.32.  Increased foreign competition owing to the liberalization of trade and foreign investment is 
a mixed blessing for Myanmar's local companies. This is especially true in the case of SMEs, which form the backbone of Myanmar's economy, account ing for over 90% of total enterprises and about 
70% of the total work force. Nonetheless, SMEs are characterized by relatively low productivity 
owing to lack of capital and outdat ed technology, among other things. 
4.33.  In recognition of SMEs' importance for Myanmar's industrialization, the GOM is 
implementing a number of policies to foster their development. These policies include: establishing 
one-stop centres for business start-ups that help reduce red-tape, reducing/eliminating 
administrative controls, supporting provision of land use rights, improving access to credit (both private and public), and helping to build enterprise capacity with respect to finance, marketing, 
etc. Development of micro-enterprises will also be encouraged, including through support for the 
development of micro-finance institutions. The GOM is also setting up a specialized SME-support centre in Yangon to help emerging businesses and young entrepreneurs to catch up with the 
reform process. To improve SMEs' access to finance, financing and micro-finance projects are 
being encouraged. One SME Development Bank has been established to facilitate SME financing. A micro-finance law has also been enacted. As a result, hundreds of micro-finance providers have 
been extending micro-credits to rural comm unities. Presently, the Myanmar Industrial 
Development Bank is being transformed into a specialized bank for SMEs, dedicated to supporting incubation projects and research linkages and facilitating access to credit, technology and markets. These emerging SME institutions will facilitate cluster formation between the existing industrial 
zones across the country and regional technological schools and colleges, which in turn will link up 
with access points to regional economic corridors in neighboring countries. Meanwhile, the Myanmar Investment Commission has set out an active policy for supporting foreign investment in WT/TPR/G/293 • Myanmar 
 
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  the SME sector, with incentives for higher local co ntent, and the transfer of skills, knowledge and 
technology. 
4.3.7  Land reform 4.34.  Land reform is essential for rural development and thus for inclusive growth. Towards this 
end, Parliament has recently enacted the Farmland Law as well as the Vacant, Fallow and Virgin 
Land Management Law in March 2012. Although these laws allow long-term use of large tracts of land by private investors in agricultural, industrial and contract farming practices, additional 
measures are required to protect the land rights of small holders and poor farmers. While 
Parliament has formed a Commission to investigate the impact of new land laws on rural households, the GOM has also been looking into overhauling the land use policy. In August 2012, the GOM set up the "Central, Regions/States, District and Township Administrative Body of 
Farmland" in compliance with the Farmland Law to oversee the management of land resources 
throughout the country. The President has also set out policy guidelines for Government agencies to address landlessness and indebtedness of rural farmers.  
4.3.8  Competition policy 
4.35.  In accordance with the ASEAN AEC Blueprint,  the Ministry of Commerce has, in consultation 
with other relevant ministries and the business community, drafted a comprehensive competition 
law covering all sectors. The proposed draft law has been submitted to the President's Office for 
subsequent consideration by Cabinet and ultimately Parliament. The law is aimed at ensuring fair competition by addressing anti-competitive actions, such anti-competitive agreements, 
monopolies, and mergers. It is to be enforced by a Competition Commission.  
4.3.9  Environmental protection  
4.36.  The GOM is committed to protecting Myanmar's biodiversity, conserving natural forests, 
greening the 17 mountain ranges in the dry zone, encouraging people to get involved in 
environmental conservation and management, and extracting natural resources sustainably. The 
GOM also attaches the highest importance to its commitment to international cooperation on climate change, while adopting new technologies for bio-diesel and other clean energy as well as 
actively educating the public about sustainable development. Accordingly, the Environmental 
Conservation Law, enacted on 30 March 2012, provides for the detailed development of environmental rules and regulations, mandatory compliance of environmental impact assessments in development projects, upgrading and standard ization of environmental assessments, and joint 
undertakings with NGOs on broad-based public awareness campaigns. The Foreign Investment 
Law also contains social and environmental protection provisions.   
4.37.  In the case of mining, for example, the GOM is implementing measures, such as 
environmental and social impact assessments, to protect the environment from degradation that 
may result from mining and related operations. As regards forestry, it is also critical that timber and other forest products be extracted sustainably with proper technology. Therefore, the GOM will 
encourage better use of new technology and foreig n investment in processing value-added forest 
products for future exports. It will also promote participatory projects of community forestry in the previously deforested areas while strengthening laws and regulations in prohibiting encroachment in the protected forest areas. The GOM will also consider promoting eco-tourism services in the 
designated areas. 
5  TRADE AND INVESTMENT POLICIES 5.1  Introduction  
5.1.  Trade and inward FDI will undoubtedly play  crucial roles in opening up Myanmar's economy 
and re-integrating it globally as well as regionally and thereby realizing its growth potential, as has been the case throughout East and South East As ia. While important measures have already been 
taken, notably foreign exchange rate unification and the lifting of key exchange rate restrictions 
(particularly the abolition of the requirement to secure private "export earnings" as a pre-requisite for purchasing imports), further reforms are essential. In this regard, the ASEAN Economic Community's targets and objectives for 2015 provide a major impetus for such reforms. WT/TPR/G/293 • Myanmar 
 
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  5.2  Trade Policies 
5.2.1  Customs administration and procedures 5.2.  In order to expedite customs clearance, the GOM has been implementing a National Single 
Window (NSW) in accordance with the principles of transparency, simplicity, efficiency and 
consistency with a view to its integration with  the ASEAN Single Window (ASW) by 2015. This 
Single Window will facilitate Myanmar's trade, no t just with its ASEAN partners, but also globally, 
thereby enhancing Myanmar's role as a trade crossroads. The Customs Department is working on 
the establishment of the Single Window with technical assistance from Japan. 
5.2.2  Import tariffs 5.3.  As tariffs tend to disrupt supply chains, especially when they are levied on raw materials and 
intermediate inputs, with an average applied most -favoured-nation (MFN) tariff rate of just 5.6% 
in 2012 and 2013, tariff protection in Myanmar is relatively low by developing country and 
especially least developed country standards, much lower (and less dispersed) even than in most ASEAN countries. All applied MFN tariffs rates are ad valorem , thereby imparting a high degree of 
transparency to the tariff. While less than 20% of  tariffs are bound and the average of bound rates 
greatly exceeds average applied MFN rates, thereb y providing a great deal of scope for raising 
applied rates, this scope has never been used and so the average applied MFN tariff rate has 
hardly changed since 1996. Myanmar does not impose any tariff rate quotas (or quantitative 
restraints). The GOM is willing to consider binding more tariff lines in order to contribute to a successful conclusion of the current Doha Development Agenda (DDA) negotiations, provided mutually satisfactory results can be achieved in these negotiations.  
5.2.3  Export taxes 
5.4.  Taxes on most exports were removed in 2012/13, so that they are now levied on only a 
handful of natural resource products (namely, gems, oil and gas, teak and other timber) that 
might be expected to generate economic rents. These remaining export taxes are mainly designed 
to capture an appropriate share of natural resource rents for the budget and, as such, are components of Myanmar's tax regime for natural resources. At the same time, however, they can 
also induce downstream processing of the products concerned. 
5.5.  In the case of virgin teak, however, My anmar has announced its intention of replacing the 
existing export tax with an export ban, as of 1 April 2014, thereby no longer being the only country without such a ban. The ban, which is argu ably more transparent than a prohibitive export 
tax, is considered necessary to preserve Myanmar's remaining teak forests and to develop a 
sustainable hardwood timber export industry. 
5.2.4  Non-tariff barriers (NTBs) to trade 
5.6.  In respect of import and export licenses, the Government has so far adopted two important 
trade liberalization measures to facilitate trade transactions. Prior to May 2012, Myanmar's export/import licensing system was non-automatic. Instead, every license application was 
reviewed by the Ministry of Commerce and could be rejected for various reasons. Since June 2012, 
however, the license regime has been converted from non-automatic to automatic licensing with most licenses issued within 24 hours. Moreover, on 28 February 2013, the Ministry of Commerce removed license requirements from a selection of 152 exported commodities and 166 imported 
commodities. Licensing requirements were essentially eliminated on a selection of commodities 
considered as non-sensitive. The outcome was th e elimination of licenses on imports covered by 
1,928 HS tariff lines. As a result, it is estimated that government revenue from import license fees 
dropped by 40%. On the export side, licensing has been maintained on the export of natural gas, 
rice, timber and some other commodities considered as sensitive. The Ministry of Commerce is currently considering broadening the scope of license removal.   
5.2.5  Contingent protection 
5.7.  Myanmar does not have any legislation pertaining to anti-dumping, countervailing or 
safeguard measures. Consequently, no such measures are currently used. The Government WT/TPR/G/293 • Myanmar 
 
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  intends to prepare WTO compatible trade remedy laws and regulations. Technical assistance in 
preparing the relevant legislation and regulations would be welcome. 
5.2.6  Technical barriers to trade (TBTs) an d sanitary and phytosanitary (SPS) measures 
5.8.  As noted by the Secretariat, insofar as Myanmar has standards and technical regulations as 
well as SPS measures, they are based largely on  international standards. For example, food 
standards are adopted from CODEX; fishery standards are based on EU regulations; pharmaceutical standards and regulations are based on British International Standards; and 
animal health risks are those that have been recognized by the OIE. Hence, the GOM has no 
intention of impeding imports of these products without science-based justification. Myanmar does have 65 existing standards of its own, however. 
5.9.  In order to develop a legal framework to enable Myanmar to implement its commitments 
under international agreements, a draft National Standards Law has been prepared with the 
assistance of foreign experts. In 2012 and 201 3, the Ministry of Science and Technological 
Research Department (MSTRD) held four national consultative meetings with concerned 
stakeholders to review the draft law. The draft la w has been submitted to the President's office for 
consideration and subsequent transmission to Parliament. Meanwhile, the MSTRD has set up 
19 standards technical committees involving all stakeholders. In addition, MSTRD has prepared a 
draft Legal Metrology Law as verification and re-verification of measuring equipment are currently 
not mandatory in Myanmar. The draft law was pr epared by UNIDO for Cambodia and Laos, but 
modified according to Myanmar's specific circumstances and with the assistance of an expert from New Zealand. The draft law was also reviewed during the four national consultative meetings with 
stakeholders held in 2012 and 2013. 
5.10.  Moreover, as adherence to internationa lly-agreed SPS requirements is vital for the 
development of the agricultural and food processing  sectors, the GOM is doing its best to ensure 
that they are upgraded in line with International Standards for Phytosanitary Measures, although 
its ability to do so is severely  hampered by a lack of technical expertise and limited resources. 
5.11.  Clearly, inward FDI together with TA can enable Myanmar to implement internationally-
accepted standards, not only for the benefit of domestic consumers, but also for the benefit of 
Myanmar's enterprises, which can then satisfy such standards and therefore enter export markets.   
5.2.7  State trading 5.12.  Several steps have been taken to encourage the active participation of the private sector in 
international trade. In particular, state trading monopolies were largely abolished in November 
2011 so that private enterprises and individuals can now import and export all but a few products.   
5.2.8  Special economic zones (SEZs) 
5.13.  In order to overcome infrastructure bottlenecks, attract FDI and increase exports, the 
Myanmar Economic Zone Law was enacted in 2011. This Law provides additional tax incentives for investment in several strategic locations along Myanmar's 1,300 mile long coast. This is an integral 
part of a strategy to promote Myanmar as a low-cost production base for export destinations 
within the wider region.  
5.2.9  Tax incentives for exports 5.14.  In order to promote export-based industri alization, profits of manufacturers derived from 
exports are eligible for income tax relief of up to 50%. As Myanmar is an economy in transition, 
such relief is justified on the grounds that some firms in the process of restructuring  as well as 
those in "infant" industries need temporary assi stance to enable them to compete in export 
markets and thereby achieve cost reductions associated with economies of scale as well to 
learning-by-doing and technological progress, which are among the major determinants of productivity growth, and thus become viable in the longer term.  WT/TPR/G/293 • Myanmar 
 
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  5.2.10  Tax reform 
5.15.  The GOM is simplifying the current internal tax system and making it more neutral with 
respect to trade. The previously multi-rate commercial turnover tax, the sole domestic indirect tax, has now been largely unified at a relatively low rate of 5%. Only Schedule 6 goods, including 
alcohol, tobacco, petroleum products, and vehicles, which would normally be subject to excise 
taxes elsewhere, are now subject to a range of higher rates. Moreover, the commercial tax on most exports was eliminated at the beginning of 2012/13, thereby reducing the tax component in 
export prices and therefore making Myanmar expo rts more competitive on world markets.    
5.16.  Myanmar has also taken several important steps recently to streamline and modernize its 
direct tax system. In 2012, tax schedules were adjusted to the newly liberalized foreign exchange parity, tax rates for personal and corporate income tax were reduced, and some withholding taxes 
were eliminated. In the longer term, the GOM intends to: improve the capacity of tax (including 
customs) administration; reduce further tax rates and broaden the tax base, by rationalizing tax incentives for investment, thus rendering the tax system more neutral; and gradually shift reliance 
from direct to indirect taxation.  
5.3  Investment Policies  
5.17.  Given the key role of FDI in developing  and diversifying Myanmar's economy from one 
based largely on agriculture and natural resources into one oriented more towards manufacturing 
and services as well as in re-integrating Myanmar into the world economy, attracting FDI (and the associated technology and management know-how) is a very important objective of Government 
policy. Thus, the GOM has been steadily implementing several related measures to improve the 
investment and the business environment. 
5.18.  Accordingly, the GOM attaches the highest priority to drawing up the necessary procedures 
as well as environmental and social guidelines for foreign investment in accordance with the new 
Foreign Investment Law (FIL) promulgated in November 2012. Feedback from the business 
community suggests that it is particularly important that the law and procedures specify which sectors are restricted with respect to foreign investment and does not allow discretion with respect 
to implementation. Hence, whereas the previous law involved a "positive list" approach, whereby 
foreign investment was allowed only in listed sectors, the new FIL adopts a "negative list" approach that allows foreign investment in all activities except those that are listed as prohibited or restricted.  
5.19.  Furthermore, on 29 July 2013 the Citizens' Investment Law (CIL) was adopted. The CIL 
provides for a single investment framework by harmonizing the investment incentives and procedures for national and foreign investors.  
5.20.  The two new laws (FIL and CIL), which were closely scrutinized by Parliament, envisage not 
only wide range of activities where foreign investment can involve 100% equity ownership, but also lower and non-discriminatory minimum capital requirements, tax incentives (especially tax 
holidays), longer leasing of real estate, and vigorous standards for environmental and social 
protection. 
5.21.  At the same time, the GOM has liberalized the company registration process as of 
10 September 2012 and other regulatory processes to further encourage foreign investors. The 
registration procedure for companies has also been simplified since 22 February 2013, and the 
registration period has been exte nded from three to five years. 
5.22.  Moreover, on 10 April 2013, a one-stop service for foreign as well as local investors was 
established in Yangon. Investors who previously had to grapple with red tape in five or more 
different ministries can now get everything done at the new Directorate of Investment and Company Administration (DICA). By reducing contacts between investors and bureaucrats in 
several different ministries, the DICA could also help combat corruption. 
5.23.  In addition, Myanmar has recently undert aken important reforms in order to adapt its 
corporate income tax (CIT) to a more open and business friendly environment. For instance, it has cut the CIT from 30% to an internationally competitive rate of 25%, eliminated special low rate WT/TPR/G/293 • Myanmar 
 
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  regimes (notably for the "cutting, making and pa ckaging" enterprises that were previously not 
subject to the CIT) and outdated tax regimes (e.g., Profit Tax Law), and updated important CIT regulations (revision of asset depreciation rates), all of which will improve the tax system's efficiency and administration. 
5.24.  Specific provisions in the FIL will enhance the transparency of Myanmar's foreign investment 
regime. The GOM is also planning to build capaci ty among the domestic judiciary with regard to 
their regulatory enforcement and intermediation. The Investment Commission is currently 
undergoing a reform process to become an independent board where non-transparent licensing 
practices will be eliminated.  
5.25.  Meanwhile, the GOM is cooperating with international financial institutions to conduct a 
comprehensive investment climate assessment to determine the full spectrum and magnitude of 
constraints on private sector development. The GOM will also focus on critical elements of the FDI 
regime, such as creating a positive business envi ronment, providing a level-playing field (through, 
for example, more open tendering in respect of privatization and other government contracts as 
well a comprehensive competition law to combat anti-competitive practices), and other facilitation 
measures. Moreover, in April 2013, Myanmar became a party to the New York Convention, one of the key instruments in international arbitration. 
5.4  Other Trade- and Investment-Related Policies  
5.4.1  Intellectual property rights 5.26.  Fully aware of the important role played by protection of intellectual property rights (IPRs) 
in attracting inward FDI, the GOM is taking steps to overhaul its outdated IPR laws and ensure that 
these laws are enforced. Accordingly, IPR laws in line with the TRIPs Agreement are being finalized 
subject to advice from the World Intellectual Pr operty Organization (WIPO). These laws concern 
patents, industrial design, trademarks and copyri ght. The Ministry of Science and Technology is 
also preparing related enforcement provisions with WIPO assistance.   
5.4.2  Government procurement  5.27.  At present, Myanmar does not have any specific laws concerning government procurement. 
Nonetheless, all government bodies must adhere to the directives of the President's office on 
2 June 2012 and 5 April 2013. These directives require, inter alia , the use of an open (rather than 
a closed) tendering system. Moreover, there is continuous internal auditing of government procurement to ensure that it is transparent and ensures "value for money", especially regarding 
public works projects in connection with the construction of essential infrastructure.  
6  SECTORAL DEVELOPMENTS AND POLICIES 6.1  Overview 
6.1.  Myanmar is well endowed with fertile land and natural resources, and its population of about 
60 million offers huge consumer and production opportunities. It is also strategically located at the crossroads of the Greater Mekong Sub-Region (G MS) bordering the fastest growing markets in the 
world with more than two billion people. Its growth potential is enormous, but largely under-
developed. 
Table 6.1 Main Exports
 
Main Exports (% of Total) 1990/91 1995/96  2005/06 2012/13 
Gas     30.4% 40.8% 
Agriculture 31.9% 45.9% 12.2% 13.9% 
Garment 0.2% 5.9% 7.6% 7.7% 
Timber 33.8% 20.8% 13.3% 6.4% 
Marine 5.7% 12.2% 5.5% 4.2% WT/TPR/G/293 • Myanmar 
 
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  Main Exports (% of Total) 1990/91 1995/96  2005/06 2012/13 
Base metal and Ores 2.5% 1.5% 3.2% 0.8% 
Precious Stones and Pearls 2.9% 2.8% 6.6% 0.1% 
Others 22.8% 10.8% 21.1% 25.9% 
Total (in $ million) 447 897 3, 558 8,977 
 
Source: Central Statistical Office.  
6.2.  The GOM is underpinning an economic dive rsification strategy by: promoting downstream 
processing of primary commodities; modernizin g essential business services, i.e. banking, 
telecommunications, electricity and transport sectors; and developing a sustainable tourist sector. Improved market access, trade facilitation initia tives and increased FDI in the economy are playing 
key supporting roles in this economic diversification strategy. Myanmar is very much an agrarian 
economy and this is reflected in its export composition, which is concentrated in few primary commodities, notably gas, which now accounts for about 40% of total exports (virtually 
non-existent a decade earlier), agriculture (13.9%) and timber (6.4%). An emerging garment 
industry now accounts for 7.7% of total exports, larger than the historical export pillars, such as timber, marine or precious stones. 
6.2  Agriculture 
6.3.  Agriculture is a major sector of Myanmar's economy with a GDP contribution of 30.5% in 
2012/13 (down from 43.9% in 2006/07) and accounting for 61.2% of total employment in 2010/11. The average farm holding is about 2.4 hectares, and about 58% of the total net sown 
area (13.8 million hectares) involves small scale farms (defined as those below 4 hectares). 
6.4.  Important market liberalization initiatives were first implemented in 1988 in the context of 
the State Law and Order Restoration Council (SLORC ). The export of most agricultural products, 
with the exception of rice, sugar, rubber, cotton and jute (that were either essential for domestic 
consumption or used as raw material for domestic industries), was opened to the private sector. Waste and fallow land was allocated to private investors for agricultural purposes. Importation and distribution of agricultural inputs, previously ha ndled by the state, were opened to the private 
sector, and tariffs on the import of agricultural inputs were removed. Input subsidies were also 
greatly reduced. These measures were accompanied by the Foreign Investment Law of 1988 that allowed full foreign ownership. 
6.5.  In 2004, state-controlled prices and compul sory sale of sugar, rubber and cotton to SEEs 
were lifted, but jute procurement and exports still remained in the hands of SEEs in order to provide export earnings and supply state-owned fact ories. Production and trade of all crops have 
now been liberalized, except for paddy rice, which is still subject to some controls as a "national 
crop important economically, politically and socially". 
6.6.  The importance of agriculture as a national po licy priority is reflected in the first of the four 
national economic objectives, which states that the development of agriculture constitutes the 
basis for the development of other sectors of the economy. In order to achieve the three national 
agricultural policy objectives, i.e. food security , export promotion and increased farmers' income 
and welfare, the following specific targets have been established: achieving surplus rice 
production; reaching self-sufficiency in edible oi ls; and stepping up the production of exportable 
pulses and industrial crops. Rice area and production are targeted to increase by 19.9% and 52.8%, respectively, from 2002 to 2015, presupposing an increase of average yields from about 
3.42 to 4.3 metric tonnes per hectare. 
6.7.  Furthermore, under the wide-ranging Framework for Economic and Social Reforms (FESR), 
policy priorities for 2012-15 include boosting agricultural productivity by increasing extension services and government loans, removing barriers throughout the supply chain, and promoting 
demand-oriented market support mechanisms. Intervention would focus on: increasing 
productivity of the rice sector through improved seed quality, better agronomic practices, optimal 
fertiliser and input dosages, and integrated pest management; promoting dry season 
diversification of small farmers into high-value horticulture, fresh fruit, poultry and small livestock; WT/TPR/G/293 • Myanmar 
 
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  improving farm-level water management by prom oting low-cost micro-irrigation; and expanding 
micro-finance in rural areas. Moreover, the GOM re cognized the need to improve the efficiency of 
Myanmar Agricultural and Development Bank, which is the main provider of agricultural finance. The reform approach adopted is based broadly on the model of rural financial institutions operating 
in Thailand. 
6.3  Natural Resources 6.8.  Forestry, fisheries, precious stones and pearls and to a lesser extent mining have been the 
other historical export pillars. Their relative importance has recently declined due to the expansion 
of gas exploitation in partnership with foreign investors. Although the forestry sector's contribution to GDP is less than 1%, timber (mainly teak and other hard wood) has accounted for a significant, 
albeit declining, share of total exports, exceeding 20% prior to 2000, but down to 6.5% in 
2012/13, partly reflecting lower teak prices due to increasing volume of lower grade teak. 
Myanmar is one of few countries in the world with natural teak forests and continuous efforts are deployed to preserve this unique endowment. Systematic forest management in Myanmar was first 
initiated in 1856 and was further consolidated into guiding principles in forest management in 
1894. These principles are enshrined in the Myanmar Forest Policy of 1995. 
Table 6.2 Gas Consortia in Myanmar 
Gas 
Project  Consortium  Production  Export  Start  
 Sellers Country Shares (MMSCFD) Export 
Yadana       900 700 1998 
 TOTAL France 31.2% Offshore Pipeline to  
 UNOCAL USA 28.3%  Thailand  
 PTTEP Thailand 25.5%    
  MOGE Myanmar 15.0%       
Yetagun       460 460 2000 
 PETRONAS Malaysia 40.75% Offshore Pipeline to  
 NIPPON Japan 19.4%  Thailand  
 PTTEP Thailand 19.4%    
  MOGE Myanmar 20.45%       
Shwe       500 400 2013 
 DAEWOO South Korea 51.0% Offshore Oil and gas 
in parallel 
pipelines to 
China  
 OVL India 17.0%   
 MOGE Myanmar 15.0%   
 GAIL India 8.5%   
  KOGAS South Korea 8.5%     
Zawtika       345 245 2013 
 PTTEP Thailand 80.0% Offshore Pipeline to  
  MOGE Myanmar 20.0%   Thailand   
 
Source: Ministry of Energy.  
6.9.  The development of Myanmar's gas reserves effectively began following the adoption of the 
1988 SLORC market-orientation policy, which allowed foreign participation in the economy. In 
2013, there are four gas consortia in operation, all of which are predominantly owned by foreign investors and in which the SEE Myanmar Oil and Gas Enterprise (MOGE) hold a minority stake (see Table 6.2). Gas is now exported through three pipelines to Thailand and there is a fourth gas 
pipeline to China. In parallel with the latter, an oil pipeline transports imported oil to China. 
Important investment has been required to build this pipeline in recent years. Gas now accounts for about 40% of total exports, a share that is like ly to be sustained in the foreseeable future as 
the Shwe and Zawtika pipelines began exporting activities only in 2013.  WT/TPR/G/293 • Myanmar 
 
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  6.4  Manufacturing 
6.10.  Manufacturing which accounted for 19.9% of Myanmar's GDP in 2012/13 (compared with 
14.0% in 2006/07), is growing, but still relative ly small compared with agriculture and services. 
Manufacturing accounted for 11.3% of employment in 2010/11. The main manufacturing 
industries include food and beverage processing and textiles and clothing, where SMEs 
predominate. Relative to Bangladesh and Cambodia, the clothing industry in Myanmar is under-developed. Nonetheless, it offers huge opportunities as low-wage labour is widely available 
to carry out the labour-intensive activities of clothing assembly. In effect, Myanmar is well 
positioned to carry out the assembly process of many manufacturing products. As mentioned 
earlier, the new law on Special Economic Zones provides a more friendly business environment and is instrumental in the overall economic strategy to promote Myanmar as a low-cost production 
base for export destinations within the wider region.  
6.5  Services 6.11.  Services in Myanmar accounted for 37.5% of GDP in 2012/13. The Government's 
wide-ranging FERS recognized the critical importance of major improvements in Myanmar's 
infrastructure in essential business services. International experience clearly shows that expanding the quantity and quality of essential business services in an efficient and effective manner is 
crucial to both growth and poverty reduction.   
6.5.1  Transport 6.12.  The transport sector plays a pivotal role in fa cilitating of the flow of goods and people that is 
vital for the economic development of Myanmar an d the whole South East Asia region. Myanmar is 
now eager to reap the benefits of its strategic location with direct access to the Andaman Sea and 
Indian Ocean for the easier regional movement of goods and people. Improved road, rail, maritime and aviation transportation infrastructure an d improved cross-border regulations will lessen 
dependence on the congested Straits of Malacca, thereby reducing transportation time and logistic 
costs. Its strategic location will provide Myanmar with a competitive advantage.  
6.13.  The transformation from state-control to public-private partnership is underway by 
formulating and implementing transport policies in compliance with Myanmar's commitments in 
international and regional institutions, such as International Maritime Organization, International Civil Aviation Organization and ASEAN. 
6.14.  In the context of ASEAN commitments, My anmar adopted the implementation framework of 
ASEAN Single Aviation Market (ASAM) on 15th December 2011, which is one of the key strategies 
under the Master Plan on ASEAN Connectivity. The Implementation Framework is a significant 
undertaking that will guide the development of ASEAN's aviation sector over the next four years 
and beyond. At the same time, Myanmar signed the Protocol to Implement the Seventh Package of 
Commitments on Air Transport Services under the ASEAN Framework Agreement on Services. 
Myanmar signed Protocol 6 on Railways Border and Interchange Stations under the ASEAN 
Framework Agreement on Facilitation of Goods in Transit that aims to facilitate cross-border 
movement of goods trains within the region. Myanmar is also implementing its commitments in the context of the ASEAN Single Shipping market to develop an integrated and competitive ASEAN 
maritime transport. It is also worth noting that the final draft of the Multimodal Transport Law has 
been submitted to Parliament for approval and wo rk is under way to prepare the necessary rules 
and regulations. Moreover, the formulation of the National Integrated Transport Master Plan is 
progressing well. 
6.15.  Implementation of a regionally-integrated re gulatory framework in transport is instrumental 
in enhancing the attractiveness of Myanmar for the development of key transport infrastructure projects. Considerable interest has already been expressed in several large scale projects, such as 
the Dawei Deep Sea Port and Industrial Estate, and the Thilawa Sea Port.  
6.5.2  Banking, Finance and Insurance 6.16.  As noted earlier, the CBM has successf ully managed the replacement of the former 
overvalued foreign exchange peg rate by a "man aged float" system in April 2012 and is in the WT/TPR/G/293 • Myanmar 
 
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  process of obtaining its full autonomy. The CBM is also working to map out a master plan for the 
development of the financial sector and to rewrite the Financial Institutions of Myanmar Law with the assistance of donors. It is envisaged that once this new regulatory framework is adopted, 
financial institutions will be able to compete more efficiently with each other in offering financial 
products, such as credit cards. 
6.5.3  Telecommunications 6.17.  Reflecting the economic priority attached  to improved telecommunications infrastructure, 
the wide-ranging FESR has set an ambitious target of raising mobile phone penetration from 9% in 
2012 to 80% by 2015. To reach this target, the GOM invited applications for two new nation-wide telecommunications licences, which were ultimately awarded to Norway's Telenor and Qatar's Ooredoo at the end of June 2013. In doing so, it is  envisaged that this will result in the upgrading 
of the internet infrastructure that will allow for a comprehensive e-strategy in educational 
programs, government regulations and knowledge management. 
6.5.4  Electricity 
6.18.  Since 2008, private companies have been allowed to participate in power generation, 
especially in hydropower plant projects. Private sector participation is allowed not only in generation, but also in distribution. Some 77% of total electricity is hydro-powered, followed by 
natural gas, which accounts for about 20%. A master plan for power production and distribution is 
under preparation with a view to replacing old gas turbine plants with new more efficient combined 
cycle plants that use the same amount of gas, bu t produce two to three time the amount of power. 
6.5.5  Tourism 
6.19.  Myanmar, as a year round tourist destinatio n blessed with diverse attractions, has achieved 
steady growth in tourist arrivals and tourism receipts owing to the government's reform policy associated with joint efforts of the public and private partnership of the tourism stakeholders. 
Myanmar has received increasing numbers of international visitors ever since 2008, with a notable 
30% growth rate in 2012. 2013 is well on the way to recording another strong double-digit growth in international arrivals (23.7% growth during the first semester of 2013). In terms of the origin of 
tourists, about two-thirds come from Asia and 20% from Western Europe. 
Table 6.3 Tourist Arrivals and Origin 
 2008  2009  2010  2011  2012  
Tourist Arrivals 731,230 762,547 791,508 816,369 1,058,995 
Asia 66.4% 66.2% 68.4% 66.4% 64.1% 
Western Europe 19.2% 20.0% 19.2% 20.7% 22.0% 
North America 7.9% 7.2% 6.1% 6.5% 7.4% 
Oceania 3.1% 3.3% 2.8% 3.0% 3.5% 
Total Earnings 
(million) 165 196 254 319 534 
Average length of stay 9.0 8.5 8.0 8.0 7.0 
 
Source: Myanmar Tourism Statistics, Ministry of Hotels and Tourism. 
6.20.  One key objective of Myanmar's tourism policy is to focus on the long-term sustainability of 
tourism development, notably through responsible and community-based tourism. The policy aims 
at maximizing economic, social and environmental benefits and minimizing costs. Myanmar is closely working together with the donor community in implementing its tourism development 
strategy. 
 
__________