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- GDP (PPP):
- $82.7 billion
- 5.5% growth
- 6.3% 5-year compound annual growth
- $1,325 per capita
- Inflation (CPI):
- FDI Inflow:
Burma’s economic freedom score is 39.2, making its economy the 172nd freest in the 2013 Index. Its score is 0.5 point better than last year due to improvements in freedom from corruption and monetary freedom. Burma is ranked 40th out of 41 countries in the Asia–Pacific region, and its overall score is much lower than the regional average.
A number of notable changes in Burma’s economic environment have occurred since the second half of 2011. Economic sanctions have been eased or lifted. A new foreign investment law, which would permit foreign firms’ full ownership and ease restrictions on land leases, was passed, although its implementation has been delayed.
Despite these reforms, Burma still performs very poorly in many areas. Long-standing problems include poor public finance management and underdeveloped legal and regulatory frameworks. Weak enforcement of property rights and fragile rule of law have driven many people into the informal sector. The inefficient public sector remains the largest source of employment.
The military has dominated Burmese politics since 1962. After the opposition National League for Democracy won a large majority in the 1990 legislative elections, the junta redoubled its efforts to crack down on dissent. The United Nations estimates that the violent government response to pro-democracy demonstrations in September 2007 resulted in over 30 fatalities. Elections were held on November 7, 2010, but the NLD refused to participate, and the election drew sharp criticism from the United Nations. General Thein Sein, who had resigned from the military to run as a civilian, became president and has implemented some reforms. NLD leader and Nobel Peace Prize winner Aung San Suu Kyi was released from jail on November 13, 2010, and in what appear to be the first truly credible elections in decades, she won a seat in parliament in 2012. Burma is richly endowed with natural resources, but government intervention in the economy has made it one of the world’s poorest countries.
Private property is not protected. Private and foreign companies are at a disadvantage in disputes with governmental and quasi-governmental organizations. Corruption is pervasive and continues to be a serious barrier to sustained economic development. In 2012, the government took its first, tentative steps toward institutional reforms, but the positive impact on potential investors remains to be seen.
The top income and corporate tax rates are 30 percent. Official fiscal statistics are not regularly available. Overall tax revenue is estimated to equal less than 5 percent of GDP, although income tax revenue has been rising rapidly in recent years. Government spending amounts to 10.4 percent of total domestic output, but deficits have stabilized. Public debt corresponds to 44.3 percent of GDP.
The regulatory environment is hampered by a lack of legal transparency, and much business activity is concentrated in state-owned enterprises. Inefficiencies in the labor market contribute to chronic unemployment and underemployment. The state sets public-sector wages and influences wage-setting in the private sector. Other state price controls distort domestic prices.
Trade freedom is constrained by myriad non-tariff barriers that increase the cost of trade. The government has discussed liberalization of foreign investment laws, which remain biased against foreign investors. Banking is dominated by state-owned banks, although several private banks have been in operation. Most loans are directed to state-led projects, and access to credit remains poor.