Charting directions for economic development in Myanmar: A computable general equilibrium (CGE) approach on high quality education in labour-growth strategy
Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University
School of Business and Law
Since 2011, Myanmar has progressively liberalized its trade and investment policies, resulting in both opportunities and challenges. The rising inequality between urban and non-urban areas has become a growing concern for policy makers, in addition to the existing pervasive poverty issue. This research attempts to investigate how Myanmar can affect if the qualified labour supply is increased and what policies are needed to integrate into the existing policies to ensure economic development. This research applies the concept of Computable General Equilibrium (CGE) and the ORANIG model to test a sample of 57 sectors under 15 industries using the GEMPack software. The results obtained confirm that by integrating high-quality educational systems into trade and investment liberalization policies, Myanmar would increase new employment opportunities by 8.8659%. The macroeconomic indicators indicate that the current account deficit problem, and the unemployment problem would decline through an increase in value-added production and new employment opportunities, accompanied by a decrease in the output prices, the purchasers’ prices and the prices for the primary factor composite. The rural concentrated value-added vegetable oil and fat sector, crop sector, and cereal and grain sector have the highest potential by increasing labour demand by 37.0368%. There would also be another 14 winning sectors: 12 urban sectors and 2 regional industries. But, some constraints would hinder the growth of some industries with massive employment opportunities and increase production. To ensure Myanmar is on the right track of growth with equity, Myanmar policy makers need to have intervention policies that control both the rising land and capital price, and the inflation rate. If so, an additional 12 urban sectors, 3 regional sectors, 8 rural sectors and 1 supporting industry have massive potential to grow.