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By Adam McCarty ( adaminhanoi@gmail )

www.mekongeconomics.com. “Myanmar development paths and lessons from Vietnam” Lecture to Yangon Institute for Economics, Rangon , Myanmar (13 September, 2012). By Adam McCarty ( adaminhanoi@gmail.com ). Introduction. Adam McCarty (ANU; Vietnam; SOAS; ISS; MKE; mmtimes )

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By Adam McCarty ( adaminhanoi@gmail )

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  1. www.mekongeconomics.com “Myanmar development paths and lessons from Vietnam” Lecture to Yangon Institute for Economics, Rangon, Myanmar (13 September, 2012) By Adam McCarty (adaminhanoi@gmail.com)

  2. Introduction • Adam McCarty (ANU; Vietnam; SOAS; ISS; MKE; mmtimes) • Development Economics… • Let us assume…

  3. Contents • Perspective: • Key data • development path (Gapminder; Hans Rosling; www.Ted.com) – slower but not stagnant; need to “reindustrialise”. • Three paths to prosperity (LRL) • The positive lessons from Vietnam • The negative lessons from Vietnam

  4. Better, yet poorest in ASEAN

  5. GDP: Roll a dice

  6. Other indicative and key data • Electricity sales grew 4.5% p.a. 2002-2009 • Cement sales grew 1.8% p.a. 2004-2009 • Poverty 26% (IHLCS 2010) • 26% of households have grid electricity • Adult literacy 92% (?) • Infant mortality rate 50/1,000 • Life expectancy 62 years • 13 million (of 60 million) aged 15-28 years

  7. Where, economically, is Myanmar now? Why any need to learn from Vietnam?

  8. How does a poor country “catch up”? • Copying, not inventing (technology transfer, including tacit knowledge) • Openness (not “self-reliance”; protectionism; import-substitution; infant industries; etc.) • Embracing “creative destruction” • Embracing “exploitation” (industrialisation) • Letting households do business (and farmers own land) NOTE: The magic word is “productivity”

  9. Three paths to prosperity • LEFT (Indian sub-continent): red tape; rather protectionist; illiteracy and weak health; some landlords. Result: OK growth. • RIGHT (Thailand, Vietnam, China): literacy with health; farmers own land; SEZs; openness. Result: Fast growth. • LATIN (Latin America, Philippines): rural aristocracy; protectionist; urban enclave; informal sector & NGOs; inequality. Result: Erratic OK growth.

  10. GAPMINDER • Industrialisation (rural-urban) is the essence of catching up (to middle-income status) • Countries copy the policies of their neighbours (e.g. Latin inequality reveals Latin path) – will Myanmar look left or right? • Literacy data confirms the left/right paths

  11. 68% of exports are gas, logs, and legumes. Clothing and footwear are only 8% of exports.

  12. Vietnam: Positive lessons to learn • Land reform • Grass-roots democracy • Microfinance • Primary education • Household enterprises • Industry zones • Targeting help to the poorest

  13. Vietnam: Negative lessons • General Corporations • Banking sector • Macroeconomic management • Pubic Investment Planning • Tertiary education The above have caused Vietnam to become inefficient; growth is accumulation-based not productivity-based.

  14. Vietnam’s low productivity problem GDP Growth, Investment Rates, and ICOR (Selected Countries, 2007-09)

  15. QUESTIONS? “Myanmar development paths and lessons from Vietnam” Lecture to Yangon Institute for Economics, Rangon, Myanmar (13 September, 2012) By Adam McCarty (adaminhanoi@gmail.com)

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