ASEAN Economic Community Scorecard: Performance and Perception

10. Myanmar in the ASEAN Economic Community: Preparing for the Future

10 MyanMar in the aSean econoMic coMMunity: Preparing for the Future Moe Thuzar i. Myanmar before the aec: a Brief Background Myanmar’s admission to the Association of Southeast Asian Nations (ASEAN) in July 1997 was accompanied by the country’s blanket accession to the treaties and commitments of ASEAN, including measures to be implemented for participation in the ASEAN Free Trade Area (AFTA) through the Common Effective Preferential Tariff (CEPT) Scheme. Myanmar’s status as a member of the World Trade Organization (WTO) had facilitated ASEAN’s consideration of Myanmar’s ability to meet her obligations for multilateral trade relations with other WTO and ASEAN members.1 In 1997, the other “new” members of ASEAN, i.e. Vietnam (which had joined ASEAN in 1995) and Lao PDR (which was admitted to ASEAN in 1997 together with Myanmar), were not yet WTO members. Myanmar’s “potential” to participate in regional economic integration Myanmar in the ASEAN Economic Community: Preparing for the Future 205 processes was thus seen by the other ASEAN members as the means by which economic development could underpin political change in the country. However, this potential remained largely unrealized as the military junta in Myanmar hesitated to move forward on its self-styled “roadmap to democracy” and in achieving a functional market economy. ASEAN itself is facing considerable challenges in achieving its goal of regional economic integration. The Asian financial crisis of 1997–98 had set back targets for trade and investment liberalization, and since then ASEAN member states are facing difficulties in gaining the investors’ confidence back into the region. The integration challenges of the four “newer” members of ASEAN — Cambodia, Laos, Myanmar and Vietnam (CLMV) — required ASEAN to devise programmes of partnership to help build capacities in the CLMV countries that would facilitate implementation of regional integration goals. In order to move forward, ASEAN adopted an “ASEAN minus x” formula in 2002 for negotiating liberalization of services. This formula can also seen as broadly applied to the respective schedules for ASEAN member states to achieve their commitments for trade and investment liberalization. The newer members were given more time and extended “deadlines” for tariff reduction and service sector liberalization. With the 9th ASEAN Summit’s confirmation in 2003 of the ASEAN Economic Community (AEC) as one of the three key pillars of the ASEAN Community (the other two being the ASEAN Political and Security Community and the ASEAN Socio-Cultural Community), and the announcement by the 11th ASEAN Summit in 2005 to “accelerate” the establishment of an integrated ASEAN Community by 2015, a Strategic Schedule was worked out for realizing the AEC. The schedule, which appears in the AEC Blueprint, lists timelines for ASEAN member states to implement their AEC commitments under each of the key components of AEC. Under this schedule, Myanmar is expected to achieve most of her AEC commitments by 2018, and to implement all undertakings by 20202 (the original envisaged date for achieving an integrated ASEAN). Myanmar was one of the first ASEAN members to publicly state its unilateral endorsement of the Master Plan on ASEAN Connectivity (MPAC).3 In his congratulatory message on ASEAN’s 43rd anniversary in 2010, the then head of military government in Myanmar, Senior General Than Shwe stated his hope that the MPAC would reach “a 206 Moe Thuzar win-win solution to reflect the interest of all member states and strive for balance between regional and national interest”. Clearly, Myanmar policy-makers recognized the country’s potential role and capacity in taking advantage of the privileges offered under the ASEAN agreements on trade in goods and the benefits that connectivity with other ASEAN and East Asian economies via the MPAC components. This chapter assesses how Myanmar — and particularly the business community in the country — could participate in and contribute more effectively to the AEC. It is a broad macro-level assessment, which also takes into account the implications of the political and economic reforms started in 2011. It provides some recommendations for policy-makers to consider in preparing for Myanmar’s more active participation in ASEAN, and ultimate integration into the regional and global economic communities. ii. 2011: a year of changes When the Union Solidarity and Development Party (USDP) won the November 2010 elections, the military junta’s past record influenced people’s perception of the military-backed USDP-led government’s accession to executive powers. The release of Daw Aung San...