Overview of Burma
While the large economies in the Far East are benefitting from having successfully weathered the storms that have greatly impacted other global markets, there are pockets of Asia doing less well.
Burma is a key example of a country that should really be doing a lot better financially than it actually is. It is a resources-rich land, with key industries including agricultural production, textiles, wool products, construction materials, metals and the mining of oil and natural gas. Ninety percent of the world's rubies are mined in the mountainous Mogok area (although many US and European jewellery companies boycott Burmese products due to concerns about working conditions faced by the ruby miners).
However, much of the country is completely off-limits to tourists, with pervasive government control also having a detrimental effect on the growth of the economy. Burma has begun exporting considerable amounts of natural gas in recent years, but little of the wealth generated has trickled downwards. In fact, almost one-third of the country's population is estimated to live below the poverty line, making Burma the poorest country in South East Asia.
Unfortunately the business climate is seen as opaque and corrupt, certainly not conducive for any amount of significant investment. Burma does generate considerable wealth from its export of natural materials and gemstones, but this is coveted by an elite group of military leaders and their business associates. The chasm in social status enjoyed by the minority at the top and the bulk of the population was exacerbated in 2011. State assets, such as considerable portions of real estate, were transferred to military families in an operation thinly disguised as a ‘privatization policy'.
Burma's economy suffers from similar imbalances, including multiple official exchange rates that deliberately overvalue the Burmese kyat, severe fiscal deficits, lack of commercial credit that is further distorted by a non-market interest rate regime, wildly fluctuating inflation rates, factually suspect economic data, and the regular failure to reconcile national accounts. There are few aspects of the economy that foreign investors would touch with a barge pole, except for the stalwarts of natural gas, power generation, timber, and mining. Alas, the exploitation of these natural resources does not benefit the wider population.
In 2011 the Burmese government took some steps toward reform, attempting to open up aspects of the economy by lowering export taxes and reaching out to international organizations. The government does enjoy good economic relations with neighbouring countries, but seismic shifts are required in Burma's internal political situation for there to be any serious promotion of foreign investment.