Almost a month after the important result of the by-elections in Myanmar, which saw the victory of the opposition party "National League for Democracy" with the entry into parliament of the leader and Nobel Peace Prize winner Aung San Suu Kyi, the Sace Study Center dedicates an in-depth study to the Asian country.
The attention towards the former Burma arises precisely from the electoral result which seems to herald the possibility of a change of direction in the country's administration until now managed by a military junta. The economic situation on the one hand and the rise of the "National League for Democracy" on the other, have forced the government, led by Thein Sein, to consider a series of reforms to break the economic isolation created over the years decades and take advantage of growth opportunities.
The considerable unexpressed economic potential of the country has been described by some analysts using two parallels with economic phenomena already recorded in the Asian continent. In fact, many argue that Myanmar could become a “new asian tiger” following the successful examples of South Korea and Hong Kong, Taiwan and Singapore. Others do not hesitate to compare Burma's growth potential to that of the Deng Xiaoping's China of 1979 without prejudice to the different dimensions.
However, the data relating to the economy describe an "isolated country and one of the poorest in the world, with a per capita income of around $800 annually” and with one of the lowest human development indexes. To counteract these data are the strengths on which the country could build its recovery, i.e. the vast natural resources, geographical proximity to two of the most dynamic and important economies in the world (China and India), the low cost of labour not specialized with a wage level equal to a fifth of that of China and half of the Vietnamese one and the very high percentage of young people on the total population.
The government's reform plan and the "softening" of the military junta towards opponents and ethnic minorities with the subsequent release of Aung San Suu Kyi, has led many Western countries to change their attitude towards the country granting a credit facility in the form of international sanctions training affecting the country since 1996.
The first effects of the reforms and of the changed international context can be deduced from the data relating to international trade and foreign direct investments. Indeed in the last year the Idea they grew up of 195% primarily driven by investment Chinese, which amount to about 70% of the total flow, mainly concentrated in the energy sector.
One of the main problems that characterizes the investment and international trade sector is given by thecurrency policy which for years led to the creation of an official exchange rate, linked to the Special Drawing Rights decided by the IMF which regulated the movements of current accounts on state banks, and a parallel exchange rate in force for transactions between private individuals with a value that is extremely different from the official rate (820 kyats per dollar against 6,4 kyats per dollar of the official exchange rate). After the elections, the Burmese government decided to change the currency system by creating a new controlled floating exchange rate regime (with daily fluctuation bands of 0,8%) with the kyat pegged to the dollar. The exchange rate has been adapted to that in force in the parallel market resulting in a value that currently fluctuates around 822 kyats per dollar.
However, Myanmar's potential for growth and development remains linked to a real change of power, which could take place following the presidential elections scheduled for 2015, and to a recomposition of internal ethnic clashes as well as a path of political and economic reforms that help the country to emerge from the international isolation that has characterized it in recent decades.
