The Over View of Economic Situation and Strategy of Industrialization in CLMV 1. Introduction 2. The Context of ASEAN and the Effectiveness of a Free Trade Area 3. The Strategy for the Economic Development and Industrialization Prof. Minoru Kiryu Faculty of Economics Osaka Sangyo University
ASEAN Member Country of ASEAN
Map of CLMV
12th ASEAN SUMMIT in Cebu
Leaders in the Summit
Leaders in the Summit
Economic Indicators of CLMV (Y2003 ) Myanmar Vietnam Laos Cambodia GDP(M.US $) 21,152 45,210 2,412 4,597 Growth Rate 13.5 7.7 6.5 6.0 Population (M.) 52.1 82.2 5.8 13.6 GDP/Capita($) 406 550 416 337 Rate of CPI(%) 24.9 7.8 10.5 3.9 Export (M.$) 2,510 25,625 361 1,771 Import (M.$) 1,932 31,091 506 1,732 Rate of Currency($1=) 909Kyat 15,773Dong 10,377Kip 1,027Riel
GDP and Population by Country Population and GDP/capita(2003) Population (million) GDP/capita ($) Singapore 4.16 21,825 Malaysia 24.53 4,141 Thailand 63.43 2,244 Indonesia 211.06 947 Philippine 81.82 964 Vietnam 79.73 424 Myanmar 52.17 406 Laos 5.53 337 Cambodia 13.5 297
Industrialization of CLMV GDP Share of Major Group(%) 2004 Agriculture Industry Services Cambodia 32.8 30.7 39.5 M 20.2 Lao PDR 50.2 24.6 25.1 M 21.3 Myanmar 42.9 17.3 39.7 M 9.9 Vietnam 20.2 39.4 M 21.7 Thailand 9.3 46.6 44.1 M 38.7 M=manufacturing industry Sources: ASEAN Statistics and Others
FDI in CLMV Myanmar Vietnam Laos Cambodia Total FDI in Value (M $) Number of enterprise 7,592 45,917 12,789 3,924 (upto 02) 379 5,130 1,082 N.A FY2004(M.$) 91 2,222 509 141 major country of investment type of industry 1.Singapore, 2.U.K 3.Thailand (in value) Since04,inve stment from China is expanding 1.Singapore 2.Taiwan 3.Korea Manufacturing industry, oil &gas 80% is for hydro power station Thailand Investment from China is increasing Hotel, Garment
The Case of Myanmar
Economic Conditions Advantageous Constrains Diversification of Land Reasonable Population Good Location Various Natural Resources Cheaper Labor Unforeseeable Political Situation Economic Sanctions from EU,USA Inappropriate Macro Economic Policy Defect of Transparency Lack of Capital Formation Lack of Infrastructure and Energy
Strategy of Industrialization Basic Policy Development of Agro-based Industry Development of Export-oriented Industry Encourage of FDI Actual Situation Sluggish of FDI (Discouraged by the Policy) Stagnation of Privatization No Progress of Industrialization
Promising Industry in Myanmar Food Processing Industry
Garment Industry in Yangon
Garment Industry in Myanmar State Foreign Firms (JV) Foreign Firms Domestic Total Enterprises State private -100% Private 1993 1 6 0 0 5 12 1994 1 8 1 0 15 25 1995 1 9 1 4 28 43 1996 1 9 1 5 55 71 1997 1 9 1 6 77 94 1998 0 8 2 9 213 232 1999 0 8 3 10 270 291 2000 1 7 5 18 248 279 2001 1 7 5 23 194 230 2002 0 6 4 27 180 217 2003 0 6 4 27 165 202 2004 0 4 4 22 112 142 Provided by Mr..Kudoh,IDE
Economic Key Indicators of Myanmar Myanmar GDP, Trade and Social development figures. (2005-2006) GDP (Kyat Billion) 4661.3 GDP - Official growth rate: 13.20% GDP - per capita (PPP): (Kyat) 221,217 GDP - composition by sector: agriculture: 50.10% industry: 15.20% services: 34.70% Inflation rate (consumer prices): 16.40% Labor force:(in Million) Current account balance:(us$ billion) 1.23 Exports:(US$ billion) 3.56 Imports:(US$ billion) 1.984 Population: (million) 55 Sex Structure Male: 49.71% Female: 50.29% Electricity - production: billion kwh 5.325 Source: Myanmar's Economic Development (Ministry of NPED).
Border Area between Myanmar and China
Border Trade :Thailand and Myanmar(Mae Sot)
Border between Myanmar and Thailand (Mae Sai)
The Case of Laos
Center of Vientiane
Economic Conditions Advantageous Political Stability Rich Water Resource Cheaper Labor Linkage with Thai Economy Vast Undeveloped Land Constrains Land Locked Country Few Population Few Usable Resources Lack of Capital Formation Lack of Infrastructure
Strategy of Industrialization Basic Policy Development Subcontracts from Thailand Development Import Substitute Industry Encourage of FDI Utilization of E-W Corridor Actual Situation Expansion of FDI from Thailand and China Established SEZ on the way of E-W Corridor Investment to SMI from Japanese Firms in Thailand
Economic Key Indicators of Laos 2001 2002 2003 2004 2005 Growth Rate GDP % 5.8 5.9 5.8 6.9 Agriculture 3.8 4.1 2.2 3.5 Industry 10.1 10.1 11.5 12.5 Services 5.7 5.7 7.2 7.5 Structure of GDP % Agriculture 51.2 50.4 48.6 47 Industry 23.7 24.5 25.9 27.3 Services 25.1 25.1 25.5 25.7 External Trade change % Export -3.3-5.9 11.6 8.3 52.2 Import -4.7-12.4 3.4 54.2 23.7 Trade Balance 6.9 23.3 13.5-175.7 5.7 Population (million) 5.17 5.29 5.41 5.52 5.62
Promising Industry in Laos
The Case of Cambodia
Economic Conditions Advantageous Constrains Political Stabilization Potentiality of Agriculture Resources of Tourism Industry Progress of Liberalization Utilization of ODA Weakness of Government Administration Lack of Infrastructure Lack of Capital Formation Undeveloped of Industrial Structure
Strategy of Industrialization Basic Policy Encourage of FDI Stabilization of Macro Economy Promotion of Export-oriented Industry Actual Situation Expansion of SEZ FDI for Garment Industry Development of Agro-Industry
Economic Key Indicators of Cambodia 2001 2002 2003 2004 2005 2006* Growth rate of GDP % 7.7 6.2 8.6 10.1 13.4 7.2 GDP per capital (US$) 308 326 345 389 448 456 Total Investment/GDP % 21.4 22.5 19.4 18.6 21.4 22.9 Private Investment/GDP % 14.3 14.2 12.9 12.8 16.1 17.1 National Saving/GDP % 20.3 21.4 16.4 15.4 17.1 17.3 Export/GDP % 39.6 41.1 44.1 47.1 47.1 49.7 Import/GDP % 52.7 54.2 55.8 60.6 63.4 70.1 Trade Balance/GDP % -13.2-13.2-11.6-13.6-16.4-20.4 Population (million) 12.9 13.1 13.3 13.5 13.8 14.1 source: Ministry of Economy and Finance, Cambodia
Promising Industry
Tourism in Cambodia
The Case of Vietnam
The Economic Condition and The Strategy of Industrialization in Vietnam Economic conditions (advantageous) Strong law and regulation Suitable macro economic policy Favorable flow of FDI Political stability (constrains) (1) Strong control by the state (2) Precedence of State enterprises (3) Workers trouble (4) Increase of wage Strategy of Industrialization (Basic Policy) *Utilization and encourage of FDI *Parallel development for Import substitution and export Industry (Actual situation) High growth rate of industrial production Expansion of export FDI smoothly increase (Strategy) From labor intensive to high tech. industry (automobile, various spare parts, electrics)
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