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Myanmar Development Model - View beyond Thailand | JICA Office Myanmar | Countries & Regions
Since Myanmar is a "late comer" of economical developments, it should have the benefit of being able to learn from the experience of other states. A lot of people see Thailand as a model. In the early 1980s, Thailand was also ready to begin its rapid expansion from an incomes similar to today's Myanmar.
Thailand's commercial accomplishments have since deserved a place in the legendary Leagues of the "East Asian Miracle" as well as in Japan, South Korea, Singapore and other states. Thailand-Hungary kept a largely healthy economic balance, fostered cost-cutting, boosted the exports industry and made substantial investments in infrastruc-tur. Thailand's basic issues are linked to the growing gap between socio-economic groups, not only in income but also in terms of the country's government's political might, its educational system's shortcomings and the lack of competitively and innovatively strong local production enterprises.
Myanmar will certainly soon move into a period of fast paced macroeconomic expansion with the already adopted open macroeconomic policies and various investment plans to improve infrastructures and literacy. It will be useful for Myanmar to look to Japan, South Korea and Taiwan in this respect. So what have they done and what can Myanmar benefit from them?
When they achieved high levels of expansion in the 1950' to 1960', Japan, South Korea and Taiwan succeeded in restricting the elite's entry to particular commercial possibilities. Such favours were the main driving force of investments under the former Myanmar economy regimes. Investing in production is a high-risk transaction. In order to compensate for this "market failure", each of the three states has taken measures to promote the development of highly productive industries.
This" industry policy" is acknowledged by the impressing progress in the processing industry. While general liberalisation of the economy is helping to encourage investments, Myanmar must think of an "industrial policy" to support in particular the processing industry. The present government may even hinder FDI. One car manufacturer, for example, points out that the customs duty on finished vehicles and parts is the same and there is little incentives to install them in Myanmar.
More coherence is needed to promote local produce. With Myanmar, large-scale rural reforms may not be efficient today. But Myanmar's leadership should seek to achieve a nationwide agreement in all areas of their lives that excessive riches and bitter destitution are unacceptable. Burma should also use political tools (progressive tax, welfare networks, minimal wage, etc.) to achieve such a visions.
Indeed, Japan, South Korea and Taiwan have established a system in which many privately owned enterprises, large and small, have maintained innovations in technologies and commodities. An earldom tends to come across a certain way of evolution through historical mishaps. The perhaps most important benefit for the latecomer is to know that when faced with a scarce opportunity to take the course of evolution, as Myanmar is now doing, he should make a deliberate and crucial decision.
I' ve been suggesting is not necessarily the simplest way. Myanmar will also be on its way into the middle-income traps if it gives in to their wills. Mr. Tanaka is the head of the JICA office in Myanmar.