Myanmar

Politics:

• Analysis

  Myanmar politics: Quick View - Weapons controversy underscores ethnic divis

  Event

  A Swedish journalist, Bertil Lintner, has reportedly discovered that the Burmese armed forces are using illegally imported Swedish weapons in their fight against ethnic-Kachin rebels in the north of the country.

  Analysis

  Mr Lintner took photographs of new weapons recovered by Kachin rebels during a recent visit to northern Myanmar. Intrigued by their Swedish markings, he contacted the manufacturer, Saab Bofors Dynamics, which confirmed that the weapons-an anti-tank missile launcher and ammunition-had been smuggled into the country in violation of EU trade sanctions. The EU has had an embargo on weapons sales to Myanmar since 1996.

  According to their serial numbers, the weapons had initially been sold by the manufacturer to India's armed forces in 2003 and were apparently smuggled into neighbouring Myanmar under unexplained circumstances. The controversy, which has led to a series of questions about Sweden's legislature and an inquiry in India, is now focusing international attention on Myanmar's various ethnic conflicts. Since the Burmese military handed power to a nominally civilian government in 2011, several ceasefires have been signed with rebel groups such as the Shan and Karen, who live mainly in Myanmar's rugged border areas. However, given the long backdrop of conflict in Myanmar such ceasefires often fall apart, and the ongoing tensions in Kachin state underscore the difficulty of securing a lasting peace. Hostilities resumed there in June 2011 after a 17-year interregnum and fighting is escalating after the collapse of a series of peace talks in recent months.

  The controversy over how the Swedish-made weapons ended up in the hands of Burmese troops touches on one of the most difficult questions facing the government. Although progress has been made in some areas, the problems in Kachin state point to the difficulty in implementing a lasting solution to Myanmar's ethnic rivalries. The country's previous, military regime seized power in a coup in 1962 in part because a civilian government had struggled to find a way to keep the different groups together. Preserving the union is still the defining challenge for any Burmese government.

  December 17, 2012

• Background

  Myanmar: Constitution and institutions

  Work on a new constitution continues

  In 1988 the junta suspended the 1974 constitution and abolished all state institutions, including parliament and the civilian courts. The junta claimed (after the event) that the 1990 election had been held in order to elect representatives to the NC. The NC first met in January 1993. However, of its 702 members only 106 (15%) were elected representatives, the rest being appointed by the junta. In November 1995 the NLD was expelled from the convention for protesting against the restrictions on debate. The convention was closed the following year.

  In 2003 the junta unveiled its road map for political reform, starting with completion of a draft constitution. The NC was reconvened for short sessions in 2004, although the SPDC imposed tight restrictions on debate, and the NLD continued to boycott the convention. In September 2007 the NC finally finished drawing up guidelines for a new constitution, and the junta promised to prepare a draft. The new constitution is expected to leave considerable power in the hands of the military, with 25% of seats in any future parliament set aside for the military, which would also be granted the right to make appointments to government posts such as the ministers of defence and home affairs. Under the constitution, Aung San Suu Kyi is also likely to be prevented from holding a position in government owing to the fact that she is a widow of a foreigner.

  The SPDC controls the government

  The 12-member SPDC includes the heads of all branches of the armed forces as well as the heads of the four Bureaux of Special Operations (who oversee the regional military commanders). The SPDC is headed by Senior General Than Shwe, who is also commander-in-chief of the armed forces. Deputy Senior General Maung Aye holds the post of vice-chairman (and is also commander-in-chief of the army). Other leading SPDC members include General Thura Shwe Mann (joint chief-of-staff of the armed forces), and Lieutenant-General Thein Sein, who is thought to have taken on the post of prime minister on a permanent basis following the death in early October 2007 of General Soe Win. Lieutenant-General Thein Sein's replacement in the post of secretary-1 of the SPDC is Lieutenant-General Tin Aung Myint Oo. The SPDC meets several times a year to set key policies.

  The junta also has a government with a full cabinet and prime minister. In theory, this forms a second tier behind the SPDC. In reality, however, all major decisions are taken by the SPDC. All government appointments are made by the junta, and the vast majority of government ministers hold military positions.

  The opaque nature of the SPDC and its government, combined with widespread cronyism and corruption, has severely undermined the effectiveness of policymaking. Periodic clean-ups tend to target those who have fallen out of favour with the regime, leaving in place many other corrupt officials.

  The judiciary is not independent

  Civilian courts were fully reinstated in 1992, but many judges still have military backgrounds. The regime's opponents are regularly denied proper legal representation, and cases are often heard in secret. Jail terms for pro-democracy activists are severe; even peaceful anti-junta activities by Myanmar citizens regularly attract jail terms of up to 20 years. Conditions in the jails are harsh.

  October 19, 2007

• Structure

  Myanmar: Political structure

  Official name

  Republic of the Union of Myanmar

  Form of state

  Under its 2008 constitution Myanmar has a multiparty democratic system, but institutions of power are dominated by the military and its leading clique

  The executive

  A new executive, headed by a president, was formally installed in March 2011, when the State Peace and Development Council (the military junta that had held power since 1988) ceased to exist

  National legislature

  There are two national legislative chambers, the 440-seat Pyithu Hluttaw (People's Assembly, the lower house) and the 224-seat Amyotha Hluttaw (Nationalities Assembly, the upper house). In both assemblies 25% of seats are reserved for appointees representing the military, while the other members are directly elected

  Head of state

  The president, chosen by the Presidential Electoral College, which comprises three committees-one formed of members of the upper house, one made up of members of the lower house and one consisting of military appointees. Thein Sein was chosen as president in February 2011 alongside two vice-presidents, Tin Aung Myint Oo and Sai Mauk Kham. The resignation of Tin Aung Myint Oo was announced in July 2012 and his replacement, Nyan Tan, was sworn in a month later

  National elections

  Elections were held in November 2010 for both houses of parliament. The military-aligned Union Solidarity and Development Party (USDP) won an overwhelming victory in the polls; the main opposition party, the National League for Democracy (NLD), chose not to participate. The next general election is due to be held in late 2015

  National government

  A cabinet is appointed by the president and is subject to approval by the national legislative bodies

  Main political parties

  USDP, NLD, National Democratic Force, National Unity Party, Shan Nationalities Democratic Party, Rakhine Nationalities Development Party, other ethnically based parties

  Key ministers

  Agriculture & irrigation: Myint Hlaing

  Border affairs: Major-General Thein Htay

  Commerce: Win Myint

  Construction: Khin Maung Myint

  Defence: Major-General Hla Min

  Electric Power 1: Zaw Min

  Electric Power 2: Khin Maung Soe

  Energy: Than Htay

  Finance & revenue: Hla Tun

  Foreign affairs: Wunna Maung Lwin

  Home affairs: Lieutenant-General Ko Ko

  Industrial development: Major-General Thein Htay

  Industry: Aye Myint

  Information: Aung Kyi

  Mines: Thein Htaik

  Transport: Nyan Tun Aung

  Central bank governor

  Than Nyein

  December 04, 2012

• Outlook

  Myanmar: Key developments

  Outlook for 2013-17

  • The government is expected to maintain its conciliatory stance towards its opponents, including the pro-democracy leader, Aung San Suu Kyi.
  • Although members of the opposition National League for Democracy won 43 of the 45 parliamentary by-elections held in April 2012, the military and its allies will remain numerically dominant in the legislature.
  • The biggest test of the government's commitment to political reform will be the next general election, which is due in late 2015.
  • Progress on political liberalisation is likely to be sufficient to persuade Western governments to lift sanctions in 2013, paving the way for greater capital inflows.
  • GDP growth will strengthen to 5.4% in fiscal year 2013/14 (April-March), from an estimated 5% in 2012/13. In 2014/15-2017/18 growth will average 6.7% a year as the removal of sanctions leads to greater foreign investment.
  • Annual consumer price inflation is expected to average 6.6% in the forecast period. Strong domestic demand, coupled with the inability of the Central Bank of Myanmar to rein in money supply growth, will keep inflation high.

  Review

  • The US president, Barack Obama, visited Myanmar on November 18th and gave a nationally televised speech that praised the Burmese government's recent reforms while pressing for further change on a wide range of issues.
  • Mr Obama's visit has added to the pressure on the Burmese government to limit the sectarian violence that continues to roil parts of western Myanmar and threatens to undermine the country's reform process.
  • Aung San Suu Kyi's latest high-profile foreign trip was to India in November, where she urged the Indian administration to support greater democracy in Myanmar.
  • The IMF said in November that it is nearing an agreement to give extensive technical assistance to Burmese policymakers. The news cheered investors concerned about Myanmar's ability to implement reforms effectively.
  • A recent UN report showed that opium production in Myanmar had risen to its highest level in nearly a decade. Ethnic conflicts and widespread rural poverty have limited the success of the government's eradication efforts.
  • The rate of inflation continued to accelerate in August, according to the latest available official data. Consumer prices rose by 2.2% year on year-the largest increase since September 2011-and by 1% month on month.

  December 04, 2012

Economy:

• Background

  Myanmar: Economic background

  Main economic indicators, 2006
  (Economist Intelligence Unit estimates unless otherwise indicated)
  Real GDP growth (%)	3.0(a)
  Consumer price inflation (av; %)	20.0(b)
  Current-account balance (US$ m)	1,044
  Exchange rate (av; Kt:US$)	1,280
  Population (m)	48.4(b)
  External debt (year-end; US$ m)	6,632
  (a) Latest official data for 2003/04 (April-March) show GDP growth of 13.4%, but this number is overstated. (b) Actual.
  Source: Economist Intelligence Unit, CountryData.

  Download text file (csv format)

  October 19, 2007

• Structure

  Myanmar: Economic structure

  Data and charts: Annual trends charts

  
  

  

  December 04, 2012

• Outlook

  Myanmar: Country outlook

  Myanmar: Country outlook

  FROM THE ECONOMIST INTELLIGENCE UNIT

  POLITICAL STABILITY: In 2013-17 Myanmar's government is expected to maintain its conciliatory approach towards its political opponents, including the pro-democracy leader, Aung San Suu Kyi. The authorities have allowed a significant degree of political liberalisation in the past year. Hundreds of political prisoners have been released, tentative ceasefires have been signed with armed ethnic-minority groups and media restrictions have been relaxed. Aung San Suu Kyi has said that she believes that Myanmar's president, Thein Sein, genuinely desires political reform, and the two leaders appear to be working together in a process of national reconciliation. However, it is still not clear how far hardliners in the government and the military will allow the president to go.

  ELECTION WATCH: The strong showing of the pre-eminent opposition party, the National League for Democracy, in the April by-elections suggests that the number of opposition members of parliament will increase substantially at the general election due in 2015 if the poll is free and fair. This in turn could open a path to the presidency for Aung San Suu Kyi, given that parliament elects the president. She has said that she would consider the position, but the constitution would first have to be altered to remove a ban on candidates who have spouses or children with foreign citizenship.

  INTERNATIONAL RELATIONS: In the forecast period the government is likely to continue to pursue a policy of re-engagement with the West. Many Western governments, including that of the US, have suspended some of their sanctions against Myanmar. US-Burmese relations will to continue to strengthen following a landmark visit by the US president, Barack Obama, to Myanmar in November 2012. However, the full removal of sanctions is likely to require further progress on human rights issues, such as the release of all political prisoners, as well as significant progress towards the resolution of the country's ethnic conflicts. European countries and the US could remove most sanctions as early as 2013. However, Myanmar's relations with Western governments, as well as with Islamic countries, may be damaged by the government's poor handling of sectarian violence between Buddhists and Muslims in Rakhine state.

  POLICY TRENDS: The government's policy agenda will reflect the pace of progress towards the ending of economic sanctions. The suspension of sanctions by the EU and the US, if followed by their permanent lifting, is likely to result in a substantial rise in foreign investment. The government has pledged to tackle widespread unemployment and foster rapid economic expansion. The process of drafting policy initiatives aimed at alleviating poverty is likely to benefit as relations between Myanmar and international donors improve. The World Bank, the Asian Development Bank and the IMF have re-established a presence in the country and will provide badly needed policy advice and technical assistance. In early November 2012 the World Bank announced the resumption of lending to Myanmar, and offers of loans and aid from international institutions are set to multiply.

  ECONOMIC GROWTH: Real GDP will grow by 5.4% in fiscal year 2013/14 (April-March), before accelerating in 2014/15-2017/18. In the early part of the forecast period expansion will be underpinned by large projects funded by investors from China, South Korea and Thailand in a number of sectors, most notably power, petroleum and infrastructure. However, excluding these schemes economic expansion will remain relatively sluggish. Private consumption growth will stay steady at around 4.1% a year in the forecast period. Despite the fact that a sizeable proportion of the population lives below the poverty line, private consumption growth will be a major contributor to economic expansion. Meanwhile, data for January­August 2012 suggest that the much-anticipated surge of inward foreign investment has yet to materialise-it is likely to occur only after further regulatory and legal reforms.

  INFLATION: Myanmar's official consumer price index (CPI) declined on a year-on-year basis in February-June 2012, owing to falling food costs. Although consumer price inflation returned to positive territory in July and August, the deflation that occurred in the first half of the year means that price growth will average just 2.1% in 2012, compared with 5% in 2011. Complicating the picture, however, is the fact that the government's CPI is unlikely to capture inflationary trends accurately. A number of indicators, such as soaring property costs, suggest that the overall price level may be rising faster than indicated by the official index.

  EXCHANGE RATES: The government overhauled the exchange-rate system in April 2012. Under the previous system, the official exchange rate, which applied mainly to international transactions by state-owned firms, stood at around Kt5.3:US$1 in 2011. The black-market rate, used for almost all other transactions, averaged an estimated Kt815:US$1 in 2011. Under the new managed float, the central bank announces a reference rate for the kyat against the US dollar following daily foreign-exchange auctions conducted with authorised domestic dealer banks. On April 1st the reference rate stood at Kt818:US$1, and the currency then weakened to around Kt880:US$1 by mid-2012, before strengthening to Kt851:US$1 by end-November.

  EXTERNAL SECTOR: Growth in the merchandise import bill will accelerate in 2013-14, driven by the expansion in the number and total value of foreign-invested projects in the oil and gas, power, mining and infrastructure sectors. Meanwhile, relatively strong regional demand for Myanmar's largest exports, natural gas and gems, will underpin export revenue. The proceeds from natural-gas sales are expected to rise sharply in 2013 when new fields come on stream. Revenue from other exports, such as pulses and timber, will also strengthen in line with greater regional demand.

  December 01, 2012

• Forecast

  Myanmar: 5-year forecast summary

  Outlook for 2013-17: Forecast summary

  Forecast summary
  (% unless otherwise indicated)
  	2012a	2013b	2014b	2015b	2016b	2017b
  Real GDP growthc	5.0	5.4	6.0	6.5	6.9	7.3
  Gross fixed investment growthc	9.0	10.4	12.2	13.4	14.0	15.0
  Gross agricultural production growthc	3.9	3.5	4.0	4.2	4.2	4.2
  Consumer price inflation (av)	2.1	7.1	6.7	6.5	6.1	6.7
  Consumer price inflation (end-period)	11.0	3.1	7.5	5.6	5.9	5.6
  Short-term interbank rate	13.0	13.0	15.0	15.0	15.0	16.0
  Government budget balance (% of GDP)c	-4.8	-4.4	-4.0	-3.8	-3.7	-4.0
  Exports of goods fob (US$ bn)	8.3	10.2	11.9	14.1	17.2	21.0
  Imports of goods fob (US$ bn)	7.5	9.2	11.7	14.8	18.9	24.4
  Current-account balance (US$ bn)	-1.5	-1.6	-2.6	-4.1	-5.5	-6.9
  Current-account balance (% of GDP)c	-3.2	-3.1	-4.6	-6.6	-7.9	-9.0
  External debt (year-end; US$ bn)	5.5	5.3	5.7	6.0	6.6	7.0
  Official exchange rate Kt:US$ (av)d	5.5	–	–	–	–	–
  Exchange rate Kt:US$ (av)e	854.6	869.2	882.5	899.2	916.7	932.5
  Exchange rate Kt:¥100 (av)e	1,076.8	1,052.0	1,017.8	1,010.4	994.6	1,020.1
  Exchange rate Kt:Bt (av)e	27.5	28.5	29.3	29.9	30.6	31.3
  a Economist Intelligence Unit estimates. b Economist Intelligence Unit forecasts. c Fiscal years (beginning April 1st of year shown). d Fixed exchange rate until March 31st 2012. e Free-market rate until March 31st 2012.

  Download the numbers in Excel

  Download text file (csv format)

  December 04, 2012

View detailed map

Country Briefing

Land area

676,563 sq km

Population

50.5m (IMF mid-2010 estimate)

Main towns

Population in '000 (1983 census)

Yangon: 2,513

Pegu: 320

Mandalay: 533

Moulmein: 220

Note: In 2006 the ruling military junta moved the country's administrative capital from Yangon to the town of Naypyidaw. In the text, places other than Myanmar and Yangon are referred to by their pre-1989 names. Pre-1989 place names appear in brackets on the map at the start of this report

Climate

Subtropical

Weather in Yangon (altitude 5 metres)

Hottest month, April, 24-36°C; coldest month, January, 18-23°C; driest month, January, 3 mm average rainfall; wettest month, July, 582 mm average rainfall

Language

Burmese; numerous minority languages, such as Karen and Shan, are also in use

Measures

Derived from the UK system. Some other units are in use. For example, 0.9842 long or imperial tons = 1 metric tonne = 1.10231 short tons. Local measures include: 1 lakh = 100,000 units; 1 crore = 10,000,000 units; 1 viss or peiktha = 100 ticles = 1.6 kg; 1 basket (paddy) = 20.9 kg; 1 basket (rice) = 34 kg

Currency

1 kyat (Kt); Kt1 = 100 pyas. Average official exchange rate in 2010: Kt5.6:US$1. Average free-market exchange rate (based on private estimates) in 2011: Kt815:US$1

Time

6.5 hours ahead of GMT

Fiscal year

April 1st-March 31st

Public holidays

January 4th (Independence Day); February 12th (Union Day); March 2nd (Peasants' Day); March 27th (Armed Forces' Day); April 12th-20th (Thingyan, New Year); May 1st (Workers' Day); July 19th (Martyrs' Day); November 20th (National Day); December 25th (Christmas Day); plus other holidays, the timing of which depends on lunar sightings

March 01, 2012