Myanmar’s Manufacturing Exports After the Lifting of Economic Sanctions

Abstract

This article aims to evaluate Myanmar’s exports of manufacturing products by using a gravity trade model for emerging ASEAN economies. The main focus of this study is to assess whether Myanmar’s manufacturing exports have recovered in terms of the gravity trade standard of the other emerging ASEAN countries for the post-sanction period of 2013–2018. Unlike the previous studies, this article contributes to the literature by targeting the post-sanction period and by applying both in-sample and out-of-sample estimation methods to ensure the consistency and robustness of their results. The main findings from the gravity trade model estimation are summarised as follows: first, Myanmar’s manufacturing exports for the post-sanction period are still significantly below the level of the gravity trade standard. Second, the downward deviation from the standard could be explained by the two Myanmar-specific factors, that is, the low institutional quality and the Dutch Disease effect in Myanmar’s exports to Western countries, but not fully in those to Asian countries. The additional factor for the deviation against Asian countries might come from Myanmar’s sluggish participation in the international production networks.

JEL Codes: F14, O53