A Simple Analysis on the Influence of FDI on the Foreign Trade of Myanmar
II. Influence of FDI on the Foreign Trade of Myanmar
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the new center of manufacturing in Asia due to its young population and rich natural resources.
Myanmar is one of the countries with the lowest popularizing rate of mobile phones in the world. In order to further stimulate economic growth, the Myanmar government implemented the telecommunications reform since 2012, and in addition to selling cheap mobile phone SIM cards, the government also held an international tender to attract foreign enterprises to open TELE business in Myanmar for the first time. After careful screening, the OOREDOO Telecommunications Company from Qatar and TELENOR Telecommunications Company from Norway won the bid.
Relevant experts believe that foreign investment entering into Myanmar's infrastructure industry is of great significance to the country's economic development.
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other industries. However, with respect to the import of Myanmar, the imports of foreign-invested industry ranked in the first position, followed by industrial raw materials, and finally the daily necessities.
2. Flow Direction of Foreign Trade of Myanmar
For the main source countries of import and export trade in Myanmar, taking fiscal year 2015-2016 as example, the top five countries of import and export were China (USD 9.34 billion), Thailand (USD 4.162 billion), Singapore (USD 2.78 billion), India (USD 1.153 billion) and Japan (USD 767 million) (refer to Table 3).
China is Myanmar's largest trading partner mainly due to geographical location. China and Myanmar are trading frequently, especially the value of trade is extremely high in the frontier of Yunnan and Myanmar. In recent years, the fields of investment between China and Myanmar have driven import and export trade. Thailand, ranking in the second place, is a significant partner both in economic relations and political relations. Thailand has been Myanmar's largest exporting country since the beginning of the new century, and until 2010 Thailand has been Myanmar's largest bilateral trading partner.
Table 3 Statistics of Main Countries of Trade of Myanmar from 2015 to 2016 (January) (Unit: Million USD)
Countries Export Import Total Amount
China 3779.215 5561.267 9340.482
Thailand 2537.063 1625.66 4162.723
Singapore 307.233 2473.028 2780.261
India 686.727 466.809 1153.536
Japan 114.01 653.64 767.65
Indonesia 122.489 500.768 623.257
Malaysia 131.682 459.533 591.215
Vietnam 41.13 227.721 268.851
South Korea 89.98 145.86 235.84
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Philippines 5.3 17.778 23.078
Cambodia 0.002 0.688 0.69
Laos 0.395 0.1 0.495
Brunei 0.282 0.003 0.285
Note: Data Source: Myanmar Trade Board
3. Foreign Trade Policies of Myanmar
In 1988, Myanmar government had established to take market economic system as national economic system and objective of reform and adopted the opening-door policy. Furthermore, the government also issued the Regulations on Import and Ex- port Trade (1991), Law on Import and Export Goods (1991), Regulations on the Bor- der Trade (1991), and the Enforcement Regulations of Import and Export Trade (1992) etc., for the purpose of establishing a trade system taking market economy as center. In the meanwhile, Myanmar implemented the "Border Development Plan" to open border ports with Myanmar neighbors, such as China, Thailand, India, Bangladesh and other border crossings, and sign relevant border trade cooperation agreements to promote the development of foreign trade.
(II) Influence of FDI to the Foreign Trade of Myanmar 1. Positive Influence
(1) Upgrading of Industrial Structure
Figure of Ratio of Fields Myanmar' FDI Flowed into
Figure 1 Ratio of Fields Myanmar' FDI Flowed into from 1988 to 2016 (January)
Gas and Oil Electric Power Manufacturing Industry
Transportation and Communication Mining Industry
Real Estate Hotel and Tourism Others
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According to the Asian Development Bank's data which shows the proportion of industrial structure in Myanmar's GDP in 2014, agriculture was 27.9%, industry was 34.4% and service industry was 37.7%. The three major industries accounted for GDP in 2011, the initial stages for reform and opening-up, were 32.5% of agriculture, 31.3% of industry and 36.2% of service industry. The agriculture in 2014 decreased 4.6% than that of 2011, and the industry and service industry increased 3.1% and 1.5%, respectively, which were closely related to the FDI attracted by Myanmar.
(2) Foreign Trade Scale Expanded with Intervention of Multinational Compa- nies
After 2011, the inward FDI in Myanmar showed a steady growth trend in addition to a decline in 2012. According to Figure (2), it can be seen that Myanmar’s FDI has the same trend with foreign trade.From the number of enterprises, more than 50% are clothing and footwear enterprises, other companies, including catering, plastics, wood and decoration business are more than 30%, the remaining 20% is the enterprises from the hotel, construction and gas and oil industry enterprises.
Therefore, the inward FDI and the entry of multinational enterprises also eliminated trade barriers with foreign countries, so that the size of Myanmar's foreign trade and cooperation will be further expand.
Figure 2 Comparison of FDI and Total Amount of Trade from 2011 to 2015 (Unit: 0.1 Billion USD)
Comparison of FDI and Total Volume of Trade of Myanmar from 2011 to 2015 FDI Attracting Annual Volume of Trade
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(1) Impact Domestic SME
Myanmar is a country with a very low level of industrialization; with the gradual increase in foreign investment and the entry of foreign SME, the domestic market competitiveness gradually increased. The majority of domestic small and medium enterprises suffered great pressure in competition with foreign enterprises in terms of technology, products and capital etc., which made SME suffer difficulties in operation and further influenced the foreign trade of Myanmar.
(2) Influence the Export and Natural Environment of Host Country
The capital, technology, business management and other scare resources brought by FDI attracted by Myanmar have formed the new productivity that is good for the reasonable allocation of resources of economy at home and abroad. However, the introduction of FDI will have adverse effects relatively. Since FDI is mainly concentrated in projects with high profits, short-term investments, high resource consumption and serious environmental pollution, such as natural gas and petroleum, mining, forestry, beverages, textiles and garments, which cause repeated introduction of these projects.
III. Countermeasures and Suggestions Using FDI to Promote the Development of