Myanmar in Economic Transition: Constraints and Related Issues Affecting the Agriculture Sector

The paper proceeds from the widely held assessment that Myanmar's economy is handicapped by structural imbalance, instability, inefficient and imperfect markets, and distorted prices. The paper delineates how this general state of affairs is clearly evident in the agricultural sector. It then identifies the constraints retarding the development of agricultural growth. Among the factors blamed for blunting the sector's competitiveness are policies on: land, production, procurement and price, foreign exchange, and subsidy. The excessive controls inherent in these policies, coupled with their erratic implementation, are seen to create a general atmosphere of uncertainty and unpredictability in the economy and an erosion of the government's credibility.

Based on the negative impact of the existing policies and on the need to strengthen the competitiveness of the agricultural sector and thus help it contribute to the sustainable development of the country's economy, the paper recommends alternative policy options. Foremost among these alternatives suggested are the contracting out of land use rights; the shift of focus towards maximizing farmers' incomes and profits, rather than merely output; the liberalization of trade; unification of the exchange rates; reduction of subsidy to, or privatization of state-operated enterprises (SOEs), and allowing the entry of private enterprises to compete freely with SOEs.