Charting Myanmar s Economy

Transcription

1 Charting Myanmar s Economy Designed to help executives catch up with the economy and incorporate macro impacts into company s planning. Annual subscription includes 2 semiannual issues published in June and December.

2 TABLE OF CONTENT Economic Profile 1 Economic Structure 2 Competitiveness 3 Economic development Part of the country s economic profile, economic structure section gives readers useful views to understand what s important to the Myanmar economy. What is the size of the Myanmar s economy in relation to world s major economies? What is the size of Myanmar s population? What is the demographic structure of Myanmar? Is it favorable for economic growth? How has the structure of Myanmar s GDP changed over the years? How much does the Myanmar s economy rely on external trade? Which sectors matter most to the economy? Part of the country s economic profile, this section explores Myanmar s competitiveness in the global level. It also covers the country s attractiveness to foreign direct investment. Which stage of economic development is the Myanmar s economy in? How is the average wage in Myanmar compared to others in the region? How has the labor productivity in Myanmar changed over the years and in relation with comparable countries? How competitive is Myanmar? How are Myanmar s competitive factors compared to those of other countries? Is it easy to do business in Myanmar? What are most problematic factors in doing business in Myanmar? How good is Myanmar in attracting Foreign Direct Investment? Part of the country s economic profile, this section explores Myanmar s average income and its distribution, poverty as well as other development indicators. What is the level of income for an average person in Myanmar? Is there still a lot of poor people in Myanmar? How does it compare to others? Is unemployment the issue for Myanmar? How is income distributed in Myanmar and how does it compare to others? What is the current level of human development in Myanmar? How has quality of life in Myanmar changed over the years?

3 TABLE OF CONTENT Economic Outlook 4 Economic Growth 5 Macro Risks Appendices Part of the country s economic outlook, this section explores Myanmar s recent economic growth, its key drivers and well as the growth outlook for the coming years. What has been the growth rate of Myanmar s economy over the past 10 years and how does it compare with others? What were the key growth drivers for the Myanmar s economy in the past year? What were the source of growth for Myanmar s economy in the last 5 years? What is the growth outlook for Myanmar s economy over the next 3 years and how does it compare with others? This section explores Myanmar s macroeconomic risks, including inflation, financial sector, budget deficit as well as balance of payment and exchange rate. What is the risk of inflation in Myanmar and how does it compare with others? What is the fiscal risk in Myanmar? What is the balance of payment risk for Myanmar? How good is the country in getting foreign exchange by the mean of commerce? Does Myanmar have enough international reserves to service its debt and for import? What is the FX risk? How has the MMK performed compared to other currencies? Appendix 1: Key projections from latest IMF s world economic outlook report. GDP growth Inflation Population Unemployment rate Government budget and debt Current account Appendix 2: World Bank s Doing Business Report Detailed rankings and scores for Myanmar and comparable economies. Starting a business Dealing with construction permits Getting electricity Registering property Getting credit Protecting Minority Investors Paying taxes Trading across borders Enforcing contracts Resolving Insolvency

4 Myanmar s economy is bigger than Brunei, Cambodia and Laos combined 2015 GDP USD billion, Market Exchange Rate US China Japan Germany UK ASEAN* France India Italy Brazil* Canada Korea* Russia Australia Spain 4,123 3,358 2,849 2,436 2,422 2,091 1,816 1,773 1,552 1,377 1,325 1,224 1,200 10,983 17,947 Indonesia* Thailand* Malaysia* Singapore* Philippines Vietnam Myanmar Cambodia* Laos* Brunei* Measuring the size of an economy Size of any economy is usually measured by calculating its Gross Domestic Product (GDP) which is the market value of all officially recognized final goods and services produced within a country in a given period of time. To compare GDP internationally, there is a need to convert value in local currencies to one main currency, normally USD. There are two popular exchange rate to be used. The first one is the official exchange rate for that particular period. The second one is the so called Purchasing Power Parity exchange rate, which takes into account the difference in living expenses between countries. The first method is more popular in comparing the size of each economy. Size of Myanmar s economy Using the market exchange rate method, Myanmar s GDP is estimated to be around USD 67 billion in 2015, bigger than Brunei, Cambodia and Laos combined. Mexico 1,144 Note: (*) IMF Estimate Source: IMF World Economic Outlook Database April 2016 Charting Economy This is a licensed product and is not to be photocopied 6

5 Unsurprisingly, Myanmar is behind ASEAN neighbors in most factors The Global Competitiveness Index , ASEAN, score = Myanmar Cambodia Indonesia Laos Malaysia Philippines Singapore Thailand Vietnam The Global Competitiveness Index The Global Competitiveness Index framework divides competitiveness factors into three groups. The first group is Basic requirements, which includes Public and Private institutions, Infrastructure, Macroeconomic environment and Health and primary education. The second group is Efficiency enhancers, including Higher education and training, goods market efficiency, labor market efficiency, financial market development, technology readiness and market size. The last group is Innovation and sophistication, including business sophistication and innovation Basic requirement Public and Private institutions Infrastructure Macroeconomic environment Health and primary education Efficiency enhancers Higher education and training Goods market efficiency Labor market efficiency Financial market development Technological readiness Global Competitiveness Index: Myanmar and ASEAN Unsurprisingly, Myanmar is behind ASEAN neighbors in most factors. It did relatively well in labor market. Charting Economy Source: The Global Competitiveness Report , World Economic Forum This is a licensed product and is not to be photocopied 16 Market size Innovation and sophistication Business sophistication Innovation

6 Income distribution in Myanmar is better than any other ASEAN country GINI Coefficient Myanmar (2001) Cambodia (2012) Japan (2008) Indonesia (2010) Laos (2012) Vietnam (2013) Thailand (2012) US (2013) Brunei (2005) China (2010) Philippines (2012) Malaysia (2009) The Gini coefficient is a measure of inequality of a distribution of income It is defined as a ratio with values between 0 and 1 Here, 0 corresponds to perfect income equality (i.e. everyone has the same income) 1 corresponds to perfect income inequality (i.e. one person has all the income, while everyone else has zero income) Therefore, the lower the ratio the better the income distribution. GINI coefficient The Gini coefficient measures the inequality among values of a frequency distribution (for example levels of income). A Gini coefficient of zero expresses perfect equality where all values are the same (for example, where everyone has an exactly equal income). A Gini coefficient of one (100 on the percentile scale) expresses maximal inequality among values (for example where only one person has all the income) Income distribution in Myanmar Income distribution in Myanmar is better than any other ASEAN country. Its GINI ratio has the lowest value of just 0.3. Singapore (2006) Source: World Bank, ASEAN Community In Figures 2011 Charting Economy This is a licensed product and is not to be photocopied 24

7 Starting a business in Myanmar is now easier than in Philippines or Indonesia Starting a business rank Economy Rank DTF* Procedures (number) Time (days) Cost (% of income per capita) Paid in min. capital (% of income per capita) New Zealand Hong Kong SAR, China Singapore Australia Malaysia Korea, Rep Brunei Darussalam Japan Thailand Timor Leste Vietnam China Lao PDR India Myanmar Philippines Indonesia Cambodia Central African Republic Starting a Business This topic measures the paid-in minimum capital requirement, number of procedures, time and cost for a small- to medium-sized limited liability company to start up and formally operate. To make the data comparable across 189 economies, Doing Business uses a standardized business that is 100% domestically owned, has start-up capital equivalent to 10 times income per capita, engages in general industrial or commercial activities and employs between 10 and 50 people one month after the commencement of operations, all of whom are domestic nationals. The most recent round of data collection for the project was completed in June Starting a Business in Myanmar Starting a business in Myanmar is now easier than in Philippines or Indonesia. Note: (*) An economy s distance to frontier score is indicated on a scale from 0 to 100, where 0 represents the worst performance and 100 the frontier Charting Economy Source: Doing Business 2016: Measuring Regulatory Quality and Efficiency This is a licensed product and is not to be photocopied 43

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