Report No. 3852-BA FILE COPY Burma: Prioritiesfor ContinuedGrowth Public Disclosure Authorized
May 7, 1982 SouthAsia Programs Department Division C FOR OFFICIAL USEONLY Public Disclosure Authorized Public Disclosure Authorized
Document of the WoridBank Public Disclosure Authorized
This document has.a restricted distribution and may be used by recipients only in the performanceof their officialduties Its contentsmay not otherwise be disclosedwithout World Bank authorization. CURRENCY EQUIVALENTS
K 8.51 = SDR 1.00 K 7.30 = US$1.00 (approximate)
WEIGHTS AND MEASURES
Burmese Units English Units Metric Units.
1 viss (vi) = 3.600 lbs (.001607 lg ton) = 1.633 kg 1 pyi (1.302 vi) = 4.688 lbs (.002092 1g ton) = 2.127 kg 1 basket paddy (9.82 pyi) = 46.0 lbs (.0205 lg ton) = 20.9 kg 1 basket rice (16.0 pyi) = 75.0 lbs (.0335 lg ton) = 34.0 kg
Except otherwise specified, years in the report and statistical appendix refer to fiscal years, as follows:
October 1 - September 30 (up to September 1973) October 1, 1973 - March 31, 1974 April 1 - March 31 (from April 1974)
PRINCIPAL ABBREVIATIONS AND ACRONYMS USED
BRC - Burma Railways Corporation EPC - Electric Power Corporation EPEF - Export Price Equalization Fund FFYP - Fourth Four Year Plan (1982/83-1985/86) GOB - Government of Burma ID - Irrigation Department, Ministry of Agriculture and Forests IWTC - Inland Waterways Transport Corporation RTC - Road Transport Corporation SEE - State Economic Enterprise TFYP - Third Four Year Plan (1978/79-1981/82) 4
This report was prepared by a mission, which visited Burma in November/ December 1981, composed of M. de Melo (Chief of Mission), J. Berkoff (Senior Economist), K. Takeuchi (Senior Economist), and K. Uchimura (Economist). BURMA: PRIORITIES FOR CONTINUED GROWTH
Report No. 3852-BA
May 7, 1982
CORRIGENDUM
Please amend the figures in Chapter V as follows:
Page 89, Table V-4: for 1980/81 "Capital, n.e.i. (net)" should read -14 and "Overall Balance" should read 46.
Page 90, line 6: change US$365 million to US$285 million.
FOR OFFICIAL USE ONLY
TITLE : BURMA: PRIORITIES FOR CONTINUED GROWTH
COUNTRY : BURMA
REGION SOUTH ASIA
SECTOR : COUNTRY ECONOMIC
REPORT TYPE CLASSIF MM/YY LANGUAGES
3852-BA CEM Restricted 05 82 English
PUBDATE : 8205
ABSTRACT : Burma's economic performancehas improved dramaticallyin recent years, following a period of stagnation in the 1960s and early 1970s. This report reviews recent economic developmentsthrough 1980/81 and discusses the priorities for continued growth during the Fourth Four Year Plan period (1982/83-1985/86). It also focuses on long-termneeds for the developmentof exports and physical infrastructure. In this context, medium-term prospects for exports are reviewed, and some elements of a successful export strategy, including diversification,are discussed. The requirementsfor long- run infrastructuraldevelopment are explored for three key sectors: irrigation,hydroelectricity, and transport. The report provides estimates of Burma's aid requirementsfor the next two years and includes a short annex on Burma's health profile.
This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.
BURMA: PRIORITIES FOR CONTINUED GROWTH
Table of Contents
Page No.
List of Tables in the Text Country Data
PREFACE
SUMMARY AND CONCLUSIONS ...... i
I. RECENT ECONOMIC DEVELOPMENTS ...... 1
GDP Growth ...... 1 Revitalization of Agriculture ...... 3 Improved Capacity Utilization in Industry and Transport ...... 4 Recent Developments in Other Sectors ...... 6 Growth in Real Investment ...... 7 Balance of Payments ...... 8 Budgetary Performance ...... 11 Money, Credit, and Prices ...... 13 Conclusion ...... 15
II. PRIORITIES FOR THE MEDIUM TERM ...... 16
Macroeconomic Targets for the FFYP ...... 16 Agricultural Sector Growth ...... 17 Further Improvements in Capacity Utilization and Productivity ...... 19 Investment Allocation ...... 24 Domestic and Foreign Resource Requirements ...... 28 Conclusion ...... 32
III. EXPORT PROSPECTS AND EXPORT STRATEGY ...... 33
Recent Developments ...... 33 Medium-Term Prospects ...... 36 Diversification Strategy and Choice of Industries ...... 38 Measures to Promote Exports ...... 42 Technical Note on Net Foreign Exchange Earnings ...... 49 Page No.
IV. LONG-TERM DEVELOPMENT OF INFRASTRUCTURE ...... 52
A. Introduction ...... 52 B. Irrigation ...... 52 Background ...... 52 Modes of Irrigation Development ...... 55 Issues in Irrigation Development ...... 57 The Scale and Composition of the Investment Program ... 61 C. Hydroelectricity ...... 63 Introduction ...... 63 The Power Market ...... 64 Issues in Power Development ...... 64 The Generation Program ...... 67 Hydroelectricity Resources and Potential ...... 68 D. Transport ...... 73 Transport Demands ...... 73 Organization of Transport in Burma ...... 75 Transport Issues ...... 77 Investment Priorities ...... 81
V. ROLE OF EXTERNAL ASSISTANCE ...... 84
Sources and Uses of External Funds ...... 84 Balance of Payments Projections and Aid Requirements in 1982/83 and 1983/84 ...... 88 Debt Service Burden and Terms of Borrowing ...... 92 Implications for the Government and Donors ...... 93
ANNEXES
A. Burma Health Profile ...... 95 B. Irrigation Projects by Type ...... 101
STATISTICAL APPENDIX ...... 108
MAP LIST OF TABLES IN THE TEXT
Page No.
Table I-1: Economic Indicators - Average Annual Change in Constant 1969/70 Prices ...... 1 Table I-2: Sectoral Growth and Weighted Growth Rates at Constant 1969/70 Prices ...... 2 Table I-3: Production and Utilization of Rice ...... 5 Table I-4: Balance of Payments Summary ...... 9 Table I-5: External Debt ...... 10 Table I-6: Consolidated Public Sector Budget ...... 12 Table I-7: Annual Change in Domestic Credit ...... 13
Table II-1: Macroeconomic Targets in the Third and Fourth Four Year Plans ...... 17 Table II-2: Public Investment Allocation Shares in the Third and Fourth Four Year Plans ...... 25 Table II-3: Projection of Real Growth Over the Fourth Four Year Plan (FFYP), 1982/83-1985/86 ...... 29
Table III-1: Value and Volume of Exports by Major Product Group ...... 34 Table III-2: Indices of Fluctuations in Commodity Prices 39 Table III-3: Export Unit Values of Selected Agricultural Exports .44 Table III-4: Exports of Rice: Quantity, Value and Unit Value by Product Category, 1980/81 .45 Table III-5: The Ratio of Average Export Price to Domestic Price, by Major Product in the Export Price Equalization Fund, 1976/77-1980/81 .47 Table III-6: Present Value of Net Foreign Exchange Earnings from a Copper Smelter/Refinery Project - An Illustrative Case .50
Table IV-1: Trends in Total Irrigated Area by Type of Irrigation. 54 Table IV-2: Irrigation Department: Budgetary Outlays 58 Table IV-3: Irrigation Department Personnel . .58 Table IV-4: Electric Power Corporation: Demand Forecast 65 Table IV-5: Generating Plant to Meet Future Demand: EPC 72 Table IV-6: Comparative Growth in GDP and Freight/Passenger Traffic in the 1970s . .75 Table IV-7: Freight Transport by Ownership and Mode, 1980/81 ...... 77 Table IV-8: Indicators of Efficiency in State Transport Corporations .. 78 Page No.
Table V-1: Gross Disbursements of Foreign Grants and Medium/Long-Term Loans, 1975/76-1980/81 ...... 85 Table V-2: External Debt Commitments, 1975/76-1980/81 ...... 86 Table V-3: Foreign Medium/Long-Term Loan Commitments by Purpose ...... 87 Table V-4: Balance of Payments Projections ...... 89 Table V-5: Aid Pipeline, 1980/81-1983/84 ...... 91 Table V-6: Debt Service Projections ...... 93
ANNEX TABLES AND CHARTS
Table A-1: Status of Health .95 Table A-2: Determinants of Health .96 Chart 1: Organization of Health Services in the Ministry of Health .98
Table B-1: Diversion Projects Operated or Proposed by Irrigation Department .101 Table B-2: Dam and Reservoir Projects Operated or Proposed by Irrigation Department .102 Table B-3: Pump and Groundwater Projects Operated or Proposed by Irrigation Department .105 Table B-4: Flood Protection and Drainage Projects Operated or Proposed by Irrigation Department .106 PREFACE
Burma's economic performance has improved dramatically in recent years, evidenced not only by higher GDP growth but also by higher exports and relatively stable prices. Our report this year focuses on the priorities for continued growth. Over the next few years--roughly the Fourth Four Year Plan period (1982/83-1985/86)--GDP growth of 5 to 6% will require continuing progress in agricultural development, improvements in capacity utilization and productivity, a judicious choice of investment projects, and mobilization of sufficient domestic and foreign resources to finance the development program. Over this same period, it will be important to lay the groundwork for sustained growth by focusing on export development and long-term needs for infrastructure. In the pages that follow, Chapter I reviews recent economic developments. Chapter II indicates the Government's targets for the Fourth Four Year Plan and discusses the priorities for medium-term growth. Chapter III discusses the prospects for exports and some requirements for a successful export strategy; and Chapter IV explores the nature and requirements of long-run infrastructural development in three key sectors: irrigation, hydro- electricity, and transport. Chapter V provides estimates of Burma's aid requirements for the next two years; in addition, it discusses the role of external assistance in the recent past and highlights the continuing need for reliance on concessional assistance. A short annex on Burma's health profile is also included.
NB: This report is based on official data available at the time of the World Bank Mission in November/December, 1981. Although new data normally become available in April of each year, it has not been possible to update the report in time for the Aid Group meeting. A preliminary review of the new data suggests that the focus and broad conclusions of the report would not be changed.
Page 1 of 2 pages
COUNTRYDATA - BURMA*
AREA POPULATION DENSITY 676,581 sq km 34.9 million (1981) 52 per sq km Rate of Growth: 2.3% (from 1980 to 1981) 187 per sq km of arable land
POPULATION CHARACTERISTICS a/ HEALTH (1980) Crude Birth Rate (per '000): 37.2 Population per physician: 4,550 Crude Death Rate (per '000): 13.6 Population per Hospital Bed: 1,407 Infant Mortality (per '000 live births):
INCOME DISTRIBUTION (1972) DISTRIBUTION OF LAND OWNERSHIP (1975) x of national income, highest quintile: 40 % owned by top 14% of owners: 42 lowest quintile: 8 % owned by smallest 62% of owners: 26
ACCESS TO PIPED WATERa/ ACCESS TO ELECTRICITY (1977) % of population - urban: 30.0 % of population: 6.6 rural: 13.0 Total: 17.0
NUTRITION a/ EDUCATION a/ Calorie intake as % of requirements: 106 Adult literacy rate: 67% Per capita protein intake (grams per day): 59 Primary school enrollment: 84%
GNP PER CAPITA IN 1 98 1 :b/ US$164
GROSS NATIONAL PRODUCT IN FY1981 ANNUALRATE OF GROWTH(X, constant prices)
$ Million % 1971-76 1976-81 1971-81
GNP at Market Prices 5,571 100.0 2.1 6.3 4.2 Gross Capital Formation 1,320 23.7 -1.0 17.4 7.8 Gross National Saving 995 17.9 Foreign Saving c/ 325 5.8 Exports of Goods, NFS d/ 472 8.5 -7.2 15.2 3.4 Imports of Goods, NPS di/ 774 13.9 -10.5 21.3 4.2
OUTPUT, LABOR FORCE, AND PRODUCTIVITY IN FY1981
Value Added Labor Force V. A. Per Worker $ Million % Million % US$
Agriculture e/ 2,595 46.3 9.0 66.7 288 Industry ft 148 13.3 1.3 9.6 575 Services/Trade 2,263 40.4 3.2 g/ 23.7 g/ 707
TOTAL 5,606 100.0 13.5 100.0 415
GOVERNMENTFINANCE Public Sector Union Government Kyats Million % of GDP Kyats Million % of GDP FY81 FY81 FY8I FY81
Current Receipts 6,978 h/ 18.8 h/ 5,526 14.8 Current Expenditures 5,066 13.7 4,945 13.3 Current Surplus 1,912 5.2 581 1.6 Capital Expenditures 6,534 i/ 17.6 i/ 1,393 3.7 External Assistance (gross) 2,732 7.4
*All data for FY81 are revised estimates of the Government of Burma.
a/ Most recent estimate, referring to any year between 1976 and 1979. b/ The per capita GNP estimate is based on a straight exchange rate conversion using FY81 GNP and K 6.619 = $1.00 (average exchange rate for the fiscal year). c/ Defined as external current account balance excluding grants. d/ Calculated on accrual, not payments, basis. e/ Includes livestock, fishery, and forestry. f/ Includes mining, power, and construction. 1t Includes workers not elsewhere specified. h/ Includes current surplus/deficit of public corporations. i/ Includes capital expenditures of public corporations.
not available not applicable Page 2 of 2 pages
MONEY, CREDIT, AND PRICES 1975 1976 1977 1978 1979 1980 1981 (Kyats million outstanding at Mar. Mar. Mar. Mar. Mar. Mar. Mar. end of period)
Money and Quasi Money 5,342 6,052 6,377 6,631 8,017 9,619 11,213 Bank Credit to Public Sector 6,222 6,445 6,213 6,550 7,194 8,990 10,885 Bank Credit to Private Sector 639 956 1,489 1,706 1,728 1,653 1,651
(Percentages or Index Numbers)
Money and Quasi Money as % of GDP 27.6 25.8 23.6 22.4 25.4 28.2 30.2 Consumer Price Index at Rangoon (1972 = 100) 206.4 252.6 249.7 234.6 247.9 249.4 248.3 Annual Percentage Changes in: Consumer Price Index at Rangoon 25.9 22.4 -1.1 -6.0 5.6 0.6 -0.4 Bank Credit to Public Sector 26.8 3.6 -3.6 5.4 9.8 25.0 21.1 Bank Credit to Private Sector -6.7 49.6 55.8 14.6 1.3 -4.3 -0.1
BALANCEOF PAYMENTS MERCHANDISEEXPORTS (FY81)
FY79 FY80 FY81 $ Million % (US$ Million)
Exports (GNFS) 260.2 442.3 520.4 Rice and Rice Products 205 43 Imports (GNFS) 602.6 702.4 835.2 Teak 109 23 Resource Balance -342.4 -260.1 -314.8 Base Metals and Ores 29 6 Animal Feedstuff 8 2 Net Factor Income -13.6 -22.1 -26.2 All Other Commodities 127 26 Net Current Transfer 12.5 15.4 16.5 TOTAL 478 100 Current Account Balance -343.5 -266.8 -324.5
Official Grant Aid 59.6 65.5 96.2 EXTERNAL DEBT, March 31, 1981
Net M< Loans 362.9 362.1 289.0 US$ Million Disbursements 390.6 421.7 353.3 Repayments 27.7 59.6 64.3 Outstanding and Disbursed 1,516.7
Short-term Capital -6.7 -5.9 -0.9 Outstanding, including Net Errors and Omissions -14.2 -43.2 -13.5 Undisbursed 2,740.2 overall Balance 58.1 111.7 46.2
Gross Reserves (end-March) 162.1 258.9 274.8 Net Reserves (end-March) 62.7 177.3 232.5 DEBT SERVICE RATIO FOR FY1981 %
Ratio of debt service to exports of 20.1 goods and services RATE OF EXCEANGE
1979 (End of Calendar Year) SDR 1.00 = K 8.51 IBRD/IDA LENDING, March 31, 1982 (US$ Million) US$1.00 = K 6.52 IBRD IDA 1980 (End of Calendar Year) SDR 1.00 = K 8.51 Outstanding and Disbursed 185.1 US$1.00 = K 6.76 Undisbursed 225.8 1981 (End of Calendar Year) SDR 1.00 = K 8.51 Outstanding, including US$1.00 = K 7.40 Undisbursed -- 410.9
As of February 28, 1982 SDR 1.00 = K 8.51 US$ 1.00 = K 7.63
not available not applicable
South Asia Programs Department Division C April, 1982 SUMMARY AND CONCLUSIONS
Recent Economic Developments i. During the first three years of the Third Four-Year Plan, which covers 1978/79 through 1981/82, Burma achieved an average annual GDP growth of 6.7% in real terms, accompanied by rising exports and stable prices. This record continues the improved performance which started 4n the mid-1970s, when the Government initiated a series of economic reforms--including an important tax and pricing reform--that marked the end to a decade and a half of economic stagnation. The higher growth has been largely due to (a) steadily rising agricultural production, resulting mainly from the Government's introduction of high-yielding varieties and increased fertilizer offtake; (b) higher capacity utilization, and hence better performance, in industry and transport; and (c) rapid increases in investment, particularly in the public sector. ii. The Government's introduction of an agricultural intensification program, The Whole Township Program, has contributed to a revitalization of agriculture in Burma in recent years. Program coverage for paddy, the crop which was initially emphasized, expanded from 2% of paddy-sown area in 1977/78 to 46% in 1980/81; during this period, paddy production increased by about 40%. The Whole Township Program has recently been extended to other crops, including groundnuts, maize, wheat, sesamum, cotton, beans, and pulses. Although not entirely attributable to the program, a number of these crops, including oilseeds and fibers, also registered large production increases during 1978/79-1980/81. There are indications, however, that this dramatic agricultural success may be causing capacity constraints in transportation, handling, storage and milling. These constraints will have to be met over the coming years by taking account of the complementary functions of these activities and properly balancing investment. The focus of the Government's agricultural program over the next few years will be on the consolidation of past gains in paddy, with particular emphasis on quality improvements in export rice, and further extension of the Whole Township Program to non-paddy crops. iii. Benefitting from increased domestic supplies of agricultural raw materials as well as from a steady growth of intermediate good imports, capacity utilization in the light and agro-based industries in the public sector has improved, as it has in the state transport sector. These sectors, and particularly industry, have also benefitted from higher gross domestic capital formation, which expanded at an annual rate of 31% in current prices. This rapid increase, due mainly to growth in public investment, was largely responsible for the widening in the overall budget deficit from 3% of GDP in 1977/78 to 10% in 1978/79 and 12% in 1980/81. The financial position of some of the State Economic Enterprises (SEEs) has -ii-
remained relativelyweak; and public savings have shown only a modest growth, despite the Government'sexpressed concern about the need to step up domestic resource mobilization. The increasing deficit has been financed by large increases in external assistance and domestic credit.
iv. The overall balance of payments showed a surplus during the 1978/79-1980/81period, as foreign loans and grants more than covered the current account deficit, which stabilized at about 6% of GDP. Merchandise exports increased on average by 26% and imports by 23% a year in nominal terms. Most of the export gains derived from rice and teak, which together comprise about two-thirds of Burma's export earnings. The higher imports were accounted for largely by increases in capital good imports, although imports of intermediategoods also expanded. Growing interest payments on external debt have led to widening deficits on the services account, largely reflecting a substantialincrease in loans from private financial institutionsand suppliers' credits. The harder terms characterizingthis type of financing resulted in relatively fast increases in repayments and an increase in the debt service ratio from 13% in 1977/78 to 20% in 1980/81. v. Despite this generally good record, there are certain areas in which recent developmentsgive cause for concern. They include: (a) persistent shortages of imported intermediateinputs and spare parts, particularlyfor the private and cooperativesectors, but also for public enterprises;(b) an increase in the debt service ratio; (c) artificially low prices for some scarce resources; and (d) rapid increases in bank credit to the public sector, which may build up inflationarypressures in the future if allowed to continue.
Priorities for the Medium Term
vi. In order to maintain the growth momentum and avoid undesirable inflationarypressures on the demand side, the Government needs to achieve: (a) continued success in the development of the agriculturalsector; (b) further improvementsin capacity utilizationand productivity,especially in industry and transport; (c) a judicious choice of investment projects; and (d) sufficient resources--bothforeign and domestic--toexpand the investment program at the required rate. The investment program, as outlined in the Guidelines for the Fourth Four Year Plan (1982/83-1985/86), would support continued agriculturaldevelopment, higher capacity utilizationin industry and transport through emphasis on rehabilitation, and some upgrading of existing health facilities. This program represents a consolidationstrategy designed to emphasize quick-yielding,high return and export-orientedprojects, many of which involve agriculturalproduction and processing. Historically,however, agriculturalinvestment has lagged behind intended levels, and further efforts will be required to identify and prepare a sufficient number of new projects. The upgrading of health facilitieswill be part of a modest effort to increase expenditureson -iii-
social services,which have deterioratedsignificantly in real per capita terms since 1970. However, in view of limited resources, local communities will have to continue to shoulder a substantialshare of the costs of the health delivery system. vii. The targets for the Fourth Four Year Plan may be difficult to achieve because of the large and importantrole of agriculturewhose growth, according to cross-countryevidence, tends to be sluggish. It is a key sector, however, and potential for continued growth exists for both paddy and non-paddy crops. Substantialpotential also remains for higher capacity utilizationin industry and transport,although this will require an adequate supply of intermediateinputs--including petroleum products, which are currently in short supply--andsufficient tools and spare parts to keep existing plant and equipment in good repair. Increased produc- tivity will be important in maintainingand improvingBurma's international cost competitivenessand will depend on a number of factors including effective use of abundant resources, especially labor; conservationand efficient use of scarce resources;and improvementsin organization, management,and technology. An accelerationin the Government'spolicy to encourage greater delegation of authoritywithin government agencies and wider access to and exchange of information,both within the Government and with donors and other interestedparties, might help to increase the adaptabilityand efficiency of public administration. Financing of an expanding investmentprogram over the medium term will require substantial efforts at both domestic and foreign resource mobilization. Public savings, which are expected to decline in 1981/82, should be raised; and domestic bank credit to the public sector should be contained in order to permit an expansion of credit to the private and cooperative sectors for development purposes. Foreign financingwould have to increase modestly in real terms to fill the financing gap.
Export Prospects and Export Strategy viii. With a likely growth of 13% in 1981/82, real export earnings will have roughly equaled the original target growth for the Third Four Year Plan. In terms of export volume, a significantgrowth will have been achieved by virtually all commoditiesexcept oilcakes, cement, and petroleumproducts. Teak and rice, which together accounted for a substantialshare of the increased earnings, also benefitted from favorable internationalprice developmentsuntil the recent weakening of the internationalrice market. Continued growth of around 9% in real export earnings can be expected during the Fourth Four Year Plan. Despite lower prices than anticipateda year ago, the main thrust of the growth is likely to come from rice exports, whose share in total earnings is expected to remain close to 50%. Additional earnings should also be provided by maize, oilcakes, pulses and beans, hardwoods,marine products, and non-fuel mineral exports. Emerging "new" export products, which might prove promising, are secondary processedwood products and garments. -iv-.
ix. The GOB's long-term objective is to reduce the dependence on rice and diversify into non-rice primary products and manufactures. While world demand for rice is expected to grow at a reasonablyhigh rate, there are risks associated with overdependenceon rice due to the volatility of rice prices on the world market and the possibilityof crop failure. In choosing new types of industries or products for export promotion,Burma should be cautious not to waste resources for promotion of products with relativelyweak world market outlook but rather to concentrate on products with relatively good market prospects. It will also be important, at this stage of development,to choose industries and products that are intensive in unskilled and semi-skilledlabor and land rather than capital or energy. Finally, it would be useful in comparing alternativeexport industries,to estimate net export earnings, as opposed to-gross export earnings, for each dollar/kyat of investment. x. Specific measures that might be especially effective in promoting Burma's exports would be to make further improvementsin (a) marketing information,(b) product quality, and (c) pricing policies. The GOB has made significantprogress in the improvementof trade information activities of export-relatedministries and SEEs and has plans for further improvements. Quality improvementand control is important for all exports, and especially for rice. Because of relatively poor quality, the average export price of rice is low; but quality improvementcan be achieved by increasing the share of internationallypreferred varieties and by reducing the share of brokens. Most importantly,improvements in export pricing policies could have far-reachingeffects on the promotion of exports. Exports of preferred rice varieties and qualitieswould be encouraged by further increasingthe premiums offered for procurementof preferred rice. Also, the Government may be able to use the existing Export Price EqualizationFund more systematicallyto promote infant export industries. Finally, although selective price increases for scarce resources are desirable, a low domestic inflation rate vis-a-vis that of Burma's trade partners and export competitorswill continue to provide a beneficial stimulus to both exporting and import-substitutingindustries. If necessary, however, adjustments in the exchange rate should also be considered to maintain export profitability.
Long-Term Development of Infrastructure xi. Irrigation. Irrigation has, to date, played a fairly limited role in Burma's agriculturaldevelopment and has been of less significancethan the provision of flood control and drainage facilities in the delta. Activities in the irrigation sector have, however, expanded rapidly over the last decade, and its potential for contributingto increasedagricul- tural production is considerable. Rapid expansion has created strains within the Irrigation Department and a major reorganizationproposal is currently under consideration. Once implemented,it should consolidate _v
the Department's capacity to undertake an expanded future role, but this will need to be complemented by improvements to physical facilities and increased attention to operational issues, including questions of management in irrigation schemes and the efficient use of water. The overall nature and scale of the irrigation development program will need to be geared to implementation capacity and to be justified essentially in terms of the economic returns of individual projects and their long-term impact on agricultural production. While feasibility and other studies provide a reasonable basis for supporting continued irrigation development, improved monitoring of the impact of irrigation is vital. Also, the overall nature and scale of the program will need to be geared to overall policies for rice production and agricultural diversification. Given the rapid expansion in recent years, priority in the medium term needs to be given to consolidating the investment program. The guiding principles might be: (a) to avoid commitment to too many large multipurpose projects at any one time; (b) to proceed on a project-by-project basis in the implementation of single purpose storage projects, pump schemes and groundwater; (c) to investigate operational issues in the context of rehabilitation programs for existing schemes; (d) to continue land reclamation and drainage programs in the delta at broadly their current level; and (e) to give continued support for low-lift pump programs and other forms of private and communal irrigation.
xii. Hydroelectricity. Electric power accounts for about 14% of commercial energy in Burma, of which more than 80% comes from the facilities of the Electric Power Corporation (EPC). Present EPC generating capacity is sufficient to cover system peak demand, but the mutual isolation of its three main systems has meant that a substantial proportion of the available lower cost hydroenergy (from Lawpita, the only existing hydro station) has gone unused and the overall plant capacity factor has been low. Proposed improvements will lead to the integration of the three systems and, together with the completion of plants now under construction, should help create a fairly comfortable position until the next major project comes on stream around 1990. Demand is, however, expected to continue to expand rapidly, and priority needs to be given to reducing high system losses and strengthening EPC's planning activities. Attention also needs to be given to ensuring the efficient use of power and establishing EPC's finances on a satisfactory basis through an increase and restructuring of power tariffs. An emphasis on transmission, distribution, and management to reduce losses and make the best use of existing facilities is essential for the medium term, but continued rapid growth will inevitably also require major investments in new generating facilities. Burma has enormous hydro potential, and planning studies suggest that hydroelectricity is the least cost form of power generation. The expansion program for the next five years is largely settled and will be relying on relatively high cost gas turbine projects, partly because of higher than anticipated demand. Feasibility studies for the Paunglaung hydro project to be constructed in the late 1980s are far advanced; but, given the long-gestation nature of hydro development, identification and preparation of the project to follow -vi-
Paunglaung should be initiated. This would avoid any undesirable hiatus in investment as at present, when relatively high cost thermal investments have become necessary so as to meet rapid growth in demand. At the same time, it will be important to avoid overinvestment, as new generating capacity will absorb a significant share of the available foreign and domestic resources. xiii. Transport. Like hydroelectricity, transport is largely a derived demand, with the rate of development governed by the supply and demand for commodities. The failure of transport services to respond adequately to demand can depress incentives to produce, however, as in the early 197 0s when services deteriorated significantly. Although passenger traffic has only partially recovered to its 1970 level in recent years, freight traffic has expanded in line with the more rapid growth in output. Indicators of efficiency for state transport corporations have improved over the last few years; however, substantial room still exists for improved operations. In addition, the efficient allocation of traffic among alternative transport modes needs to be encouraged to ensure the proper use of scarce resources, including fuel and new capital investments. To do this, the present low transport tariffs should be adjusted to better reflect economic costs. An increase and restructuring of tariffs would also improve the weak financial position of state transport corporations and provide more effective signals for industrial location. While necessary, these changes in the state transport sector will not be sufficient to address Burma's transport problems, as 80% of freight tons loaded are carried by the private sector. The reintegration of the private transport sector would involve expanded access to credit as well as to domestic and imported tools, tires, and spare parts. Finally, to evaluate the transport sector as a whole and to determine the most effective use of scarce resources, the transport planning staff in the Ministry of Transport and Communications should be strengthened.
The Role of External Assistance xiv. The rising level of investment in recent years has been financed in large part by an increased inflow of foreign capital and external assistance will continue to play a crucial role in maintaining growth over the medium term. Burma's income level is low; and, although a number of options for increasing domestic resource mobilization exist, prospects for substantially raising the domestic savings rate over the next few years are modest. In order to maximize the benefits from external resources, however, substantial flexibility will be required on the part of both the Government and donors. The Government will need to focus on further improving the economy's absorptive capacity for aid. A greater delegation of authority within the government bureaucracy for routine matters would facilitate project preparation and help accelerate the rate of disbursement. The donors, on the other hand, will need to be receptive to the Government's priorities and requirements. Aside from project loans and technical -vii-
assistance, there appears to be scope for commodityand program-typeloans which would focus on productivity-raisingmeasures. From the standpoint of minimizing the future debt service burden, Burma's external borrowing should continue to be on concessionaryterms, to the extent possible. If sufficient assistance on concessionaryterms is not available, however, the GOB may want to consider additional non-concessionaryborrowing in order to carry out its investment program. In doing this, however, it is important that the project's economic rate of return and also its net foreign exchange earnings justify the marginal cost of foreign borrowing. The debt service ratio will continue to warrant close attention; it could present a heavy burden if export targets are not reached.
CHAPTER I. RECENT ECONOMIC DEVELOPMENTS
GDP Growth
1.01 During the first three years of the Third Four-Year Plan (TFYP), which covers 1978/79 through 1981/82, Burma achieved an average annual GDP growth of 6.7% in real terms, accompanied by rising exports and stable prices. With population growth of about 2.2% a year, real per capita GDP increased by 15% over this period. This record continues the improved performance which started in the mid-1970s, when the Government initiated a series of economic reforms--including an important tax and pricing reform--that marked the end to a decade and a half of economic stagnation. 1/ The higher growth has been largely due to (a) steadily rising agricultural production, resulting largely from the Government's introduction of high-yielding varieties and increased fertilizer offtake; (b) higher capacity utilization, and hence better performance, in industry and transport; and (c) rapid increases in investment, particularly in the public sector. These factors are discussed below, following a brief review of overall trends.
1.02 Table I-1 shows average annual changes in constant prices for
Table I-1: ECONOMIC INDICATORS - AVERAGE ANNUAL CHANGE IN CONSTANT 1969/70 PRICES a/ (percent per annum)
1978/79 1979/80 1980/81
Consumption 5 3 9 Fixed Investment 30 17 14 Exports -3 35 22 Imports 38 8 42 GDP 7 5 8 GDP Deflator 1 2 1
a/ Data used in this table are on the national accounts basis (see Appendix Table 2.6).
Source: Report to the Pyithu Hluttaw.
1/ See Chapters I and II, Burma: Development Performance and Policies, No. 2347-BA, dated March 8, 1979, for more details. -2-
consumption, fixed investment, exports, imports, GDP, and the GDP deflator in recent years. The high growth of both consumption and investment has been permitted by the rapid growth in imports as well as the growth in GDP. High import growth was accompanied by high export growth in 1979/80 and 1980/81, contributing to an increase in the degree of openness as measured by the average of exports and imports of goods and non-factor services as a proportion of GDP. This ratio, in current prices, increased from 6% in 1977/78, the base year for the TFYP, to 11% in 1980/81.
1.03 Table I-2 shows real sectoral growth rates and weighted growth
Table I-2: SECTORAL GROWTH AND WEIGHTED GROWTH RATES AT CONSTANT 1969/70 PRICES a/ (percent per annum)
1978/79 1979/80 1980/81 Weighted Weighted Weighted Growth Growth Growth Growth Growth Growth Goods Agriculture b/ 7.3 2.5 5.4 1.8 11.9 4.1 Forestry 14.3 0.3 6.9 0.2 2.5 0.1 Mining 7.6 0.1 12.4 0.2 3.2 - Manufacturing & Processing 2.5 0.3 4.0 0.4 11.3 1.1
Infrastructure Construction 32.1 0.7 18.8 0.4 20.2 0.5 Power 4.1 0 11.3 0.1 11.4 0.1 Transport & Communications 5.7 0.2 9.5 0.5 8.3 0.4
Trade 4.2 1.0 3.4 0.8 3.4 0.8
Other Services 7.1 1.4 5.0 1.0 5.8 1.2
TOTAL GDP GROWTH 6.5 6.5 5.4 5.4 8.3 8.3
a/ Weighted growth rates are calculated by multiplying the sectoral growth rates by their GDP shares, thereby indicating the contribution to overall growth. b/ Includes livestock and fishery.
Source: Report to the Pyithu Hluttaw. -3-
rates in recent years. The latter show the sectoral contributionto overall increases in GDP. Although all sectors have made a positive contribution,agriculture has played the dominant role, accounting for almost 50% of total growth in 1980/81. Traditionally,the Burmese economy has been rice-dominated;rice is the main staple food, the major export commodity, and a source of fiscal revenue. The success of the Government of Burma (GOB) in introducinghigh yielding varieties of rice and achieving dramatic productionincreases from 9.3 million tons of paddy in 1977/78 to an estimated 13.1 million tons in 1980/81 has been perhaps the most important factor in the country's economic recovery in recent years.
Revitalizationof Agriculture
1.04 Since the Government launched its successful paddy intensification program, the Whole Township Program, in 1975/76, agriculture in Burma has undergone a remarkable transformation. This program has essentially exploited the opportunity created in the early 1970s by the developmentof high-yieldingvarieties (HYVs) adapted to Burmese conditions. While the spread of HYVs responsive to fertilizer and other modern inputs is comparable to the "Green Revolution" that has occurred elsewhere in Asia, the Whole Township Program has a number of unique features, including the participationof the People's Councils in coordinatingproduction and procurement;selectivity and concentrationthrough a campaign-type approach; mobilizationof the community to provide additional labor; and the priority provision of consumer goods to project areas to complement rising incomes. Although some premiums for higher quality rice have been raised, government procurementprices for rice have remained basically unchanged since 1974; but incentives to the adoption of the new technology have remained favorable, assisted by subsidies on inputs, a variety of ''non-price"incentives mentioned above and sales to the free market. Program coverage expanded from two townships in 1977/78 (2% of the paddy- sown area) to 72 townships in 1980/81 (46% of the paddy-sown area). During this period, paddy production increased by about 40%, almost entirely as a result of higher yields. The Whole Township Program has recently been extended to other crops, including groundnuts,maize, wheat, sesamum, cotton, beans, and pulses. Although not entirely attributableto the Whole Township Program, a number of these crops, including pulses and fibers, registered large production increases in 1978/79-1980/81.
1.05 Critical to the paddy production program has been the increased distributionof chemical fertilizersand other inputs. Domestic use of fertilizerhas increased by 60% since 1977/78 and imports have grown fivefold. During the same period, insecticideuse on paddy, wheat, and maize has also doubled. To encourage their use, these inputs are heavily subsidized,and paddy farmers under the program are entitled to official agriculturalcredit at an interest rate of 12%. The borrowing -4-
limits have been recently increased from kyats 70 to kyats 140 per acre and, in certain areas, will be increased further to kyats 200 per acre.
1.06 With the dramatic success of the Whole Township Program, a number of capacity constraints may now be emerging in such areas as transportation, handling, storage and milling. For instance, recent government data show a sharp reduction in the paddy/rice conversion ratio (see Table I-3). This may reflect higher post-harvest losses resulting from these capacity constraints, as well as lower conversion ratios for HYVs due to the inappropriateness of much existing milling capacity. 1/ Inevitably, the rate of increase in paddy production will decline as the readily obtained production opportunities are exploited and the new technologies spread at a slower rate and into less productive regions. Recognizing this, the focus of Government policy over the next few years will be on the consolidation of past gains in paddy, with particular emphasis on quality improvements in export rice, primarily through improved milling and storage, and on the extension of the program to non-paddy crops.
Improved Capacity Utilization in Industry and Transport
1.07 Burma's favorable performance in recent years can also be explained in part by improvements in capacity utilization and productivity in industry and transport. As shown in Table 1-2, value added in processing and manufacturing grew slowly at first but then increased by an estimated 11% in real terms in 1980/81. Growth was concentrated in the State Economic Enterprises (SEEs), where value added grew at an average of 8.5% a year, while value added in the cooperative and private sectors increased by less than 2% a year. Overall capacity utilization in the light and agro-based SEEs under the Ministry of Industry I has improved from an average of 60% during the Second Four Year Plan (1974/75-1977/78) to 67% for the first three years of the TFYP. 2/ These SEEs have benefitted from increased domestic supplies of agricultural raw material and have shared in an average annual increase of more than 20%, in nominal terms, in total intermediate good imports. The slow growth in the private sector is partly attributable to its limited access to credit and foreign exchange. In 1980/81, for example,
1/ On the other hand, it may reflect statistical discrepancies stemming from such factors as overestimation of production and/or underestimation of on-farm consumption, free market sales, and the increase in private and cooperative stocks.
2/ Comparable figures are not available for SEEs under the Ministry of Industry II. -5-
Table I-3: PRODUCTION AND UTILIZATION OF RICE ('000 metric tons)
1977/78 1978/79 1979/80 1980/81
A. Production
Paddy Production a/ 9,313 10,363 10,283 13,107
Rice Output a/ 5,408 5,527 5,824 6,013
(Implicit conversion ratio between paddy and rice) (0.58) (0.53) (0.57) (0.46)
Government Procurement of Paddy a/ 2,246 3,798 3,524 4,078
(Ratio of paddy procurement to total estimated production) (0.24) (0.37) (0.34) (0.31)
B. Utilization of Rice 5,408 5,527 5,824 6,013
Government Procured Rice b/ 1,348 2,279 2,114 2,447 Domestic Sales a/ 1,325 1,242 1,482 1,537 Export a/ 562 158 724 664 Changes in Stock c/ -539 879 -92 246
On-farm Consumption, Free Market Sales, and Private Stocks c/ 4,060 3,248 3,710 3,566 a/ Provided by Burmese authorities. b/ Calculated by applying the official conversion rate of 0.6 to Government procured paddy. While different from the implicit economy-wide conversion ratio, this provides a more consistent and presumably accurate indication of changes in government stocks. c/ Calculated as a residual.
Source: Burmese authorities and Bank staff estimates. -6-
private industrialenterprises received substantiallyless than 1% of domestic credit, compared to their contributionto value added of about 5%. In fact, historically,very little official credit has been provided to the private sector other than seasonal crop loans and small, secured loans. In the future, however, programs to provide medium and long-term credit will have to be developed if the desired levels of investment and employment are to be achieved (paras 2.30 and 2.16). The private sector has also had limited access to official foreign exchange. About 1% of the total free foreign exchange in 1981/82 was allocated directly to the private sector through the Permanent Committee for Coordinatingand SupervisingPurchase and Distributionof Raw Materials, although additional imports were made available through the Ministry of Trade, whose claim on free foreign exchange was about 12% of the total.
1.08 Even for SEEs, shortages of industrial intermediateinputs, although partially alleviated, still exist due to scarcity of foreign exchange. Furthermore,the combined effect of rising demand for fuel, stemming from increased economic activity in recent years, and the decline or slowing down in domestic crude oil production over the past 18 months (see para 1.11) has resulted in shortages of petroleum goods throughout the economy. The GOB has introduceda control system to monitor the needs of various agencies and to help avoid abuse. Nevertheless,it is likely that the recent fuel shortages are having some adverse effects on industrial production and transport services, as well as on pump irrigation,motorized fishing, forestry, and mining.
1.09 There has also been some improvement lately in capacity utilization and productivityin the state transport sector where performancehad greatly deteriorated(see Table IV-8). Railway locomotivesare still underutilized;however, since 1976/77, freight wagon turn-aroundhas improved. Load factors for passenger and cargo fleets belonging to the Inland Waterways Transport Corporationhave risen, and the cargo fleet utilization rate has also improved. With some, but relativelymodest, increases in total capacity available, these improvements,among others, have helped the state transport corporationsaccommodate the rapidly increasing demand for transport services. Little informationis available on transport in the private and cooperativesectors, except that cooperativetransport has been growing rapidly.
Recent Developmentsin Other Sectors
1.10 Forestry. The rate of growth of net output in the forestry sector slowed after achieving a large increase in 1978/79, made possible by new extraction and transportationequipment. Extraction of teak has risen from 320,000 tons to 390,000 tons, a level slightly lower than the currently allowable annual cut of 400,000 tons. Extraction of non-teak hardwoods increased dramaticallyfrom 480,000 tons in 1978/79 to 800,000 -7-
tons in 1980/81, compared to a sustainableannual cut of 1 million tons. Although the value added in forestry accounts for only 1% of GDP, good performance in forestry is importantas it contributesup to 25% of total export earnings.
1.11 Mining. Until quite recently, the major source of growth in mining has been crude oil production,which accounts for more than one-half of value added in the sector. Crude oil production rose from 9.6 million barrels in 1977/78 to 11 million barrels in 1979/80, offsetting the rather disappointingperformance of other minerals and raising the overall growth in net output in 1978/79 and 1979/80. However, in 1980/81 crude oil production stagnated or possibly declined, reportedlybecause of technical problems.
1.12 Constructionand Power. The rapid growth in investmentand output during the TFYP generated increasedactivity in constructionand power. Rapid growth in constructionwas again concentratedin the state sector, reflecting increasedpublic investment in industrial buildings, roads and bridges, irrigationand dams, power lines, and mine development. Constructionby the cooperative sector was undertaken for the first time during this period, although growth in private constructionhas been very small. Value added in the power sector also rose substantially. Installed capacity increased by close to 20% between 1979/80 and 1980/81 alone; and the Electric Power Corporation,which accounts for some 80% of total capacity, increased electricitygeneration by 9% per annum to meet the rapidly rising demand.
1.13 Trade and Other Services. The net output of trade grew on average by 4% per annum during 1978/79-1980/81. This relatively slow overall growth largely reflects the pressure on trade margins resulting from the increased availabilityof agriculturaland other goods in the private sector, which accounts for about one half of the trade value added. Buoyed by increases in foreign trade, value added in the state trading sector grew by 7% per annum. Real net output of other services grew by 6% on average over this period.
Growth in Real Investment
1.14 The impressiveGDP growth since the mid-seventies,but particularlyduring the TFYP, has also reflected a rapid expansion in investment. Real fixed investment rose rapidly starting in 1977/78 and grew by an estimated 20% a year during the following three years. The share of investment in GDP in constant 1969/70 prices increased from 8% in 1976/77 to 13% in 1978/79, and further to an estimated 16% in -8-
1980/81. 1/ This rapid increase was due principally to the expansion of public investment, which accounts for 80% of the total. Higher public investment started with the tax and pricing reform of April 1976, which helped establish a strong revenue base for both the Union Government and SEEs and facilitated the overall savings-investment effort. More recently, during the first three years of the TFYP, public capital expenditures have increased in current prices at 36% per annum, while capital expenditure in the cooperative and private sectors increased at 15% per annum. Public capital expenditures have been particularly heavy in mining, power, and processing and manufacturing (see Table II-2) and have been financed by (a) a surge in external assistance; (b) a small nominal increase in public savings, which nevertheless declined as a proportion of GDP; and (c) increased domestic credit. The nature and sources of this financing are described below in the context of overall trends in the balance of payments, the government budget, and money and credit. Developments in money and credit are important in understanding the causes and implications of the stability in domestic prices.
Balance of Payments
1.15 During 1978/79-1980/81, merchandise exports increased in nominal terms by an estimated 26% annually and imports by 23%. The current account deficit stabilized at about 6% of GDP, and net disbursements of loans and grants at about US$350 million a year (see Table I-4). The relatively small current account deficit reflects the Government's conservative approach to balance-of-payments management, not the real import needs of the economy. The Government controls all imports through a foreign exchange budget, drawn up in accordance with anticipated financing. Although foreign exchange availabilities have improved, shortages of imported intermediate and consumer goods as well as capital goods for the private and cooperative sectors remain. These shortages are partially alleviated through unofficial trade. Capital good imports for the state sector are usually financed by foreign donors as part of project assistance.
1.16 Most of the export gains during 1978/79-1980/81 were provided by rice and teak, which together comprise about two-thirds of Burma's export earnings. The volumes of rice and teak exports increased, and substantial improvements were realized in the unit export prices of these two commodities. The composition of merchandise imports has changed in favor of capital goods, whose share increased from 48% in
1/ In current prices, the ratio of investment to GDP was much higher, i.e., an estimated 23% in 1980/81, reflecting the increase in the relative price of investment since 1970. -9-
Table I-4: BALANCE OF PAYMENTS SUMMARY (US$ million)
1977/78 1978/79 1979/80 1980/81
Exports of Goods and NFS 261.9 260.3 442.3 520.4 Merchandise (f.o.b.) 238.6 240.4 400.8 479.4 Non-factor Services (NFS) 23.3 19.8 41.5 41.0
Imports of Goods and NFS 439.0 602.7 702.5 835.2 Merchandise (f.o.b.) 413.2 562.0 649.7 775.0 Non-factor Services (NFS) 25.8 40.6 52.7 60.2
Resource Balance -177.1 -342.4 -260.2 -314.8
Net Factor Income -8.4 -13.6 -22.0 -26.2 Net Current Transfer 0.0 12.5 15.4 16.5
Current Account Balance -185.5 -343.5 -266.8 -324.5
Official Grants 21.6 59.6 65.5 96.2 Net Medium and Long-Term Loans 218.2 362.9 362.1 289.0 Disbursements 240.8 390.6 421.7 353.3 Repayments 22.6 27.7 59.6 64.3 Short-term capital (net) -17.6 -6.7 -5.9 -0.9
Capital n.e.i. a/ -9.3 -14.2 -43.2 -13.5
Overall Balance 27.4 58.1 111.7 46.2
Memorandum Item
Current Account Deficit as % of GDP 4.5 7.4 5.1 5.8 a/ Includes errors and omissions and SDR allocation.
Source: Appendix Table 3.1.
1977/78 to 60% in 1980/81. Correspondingly, the share of consumer goods, which nevertheless increased marginally in nominal terms, declined from 11% to 5%, and that of intermediate goods fell from 42% to 35%. Growing interest payments on external debt have led to widening deficits on the services account. Preliminary estimates for 1981/82 suggest that exports may have grown by about 8% in dollar terms and -10-
imports by about 10%, resulting in a somewhat higher current account deficit.
1.17 During the period through 1980/81, the deficits on current account were more than offset by increased injections of foreign grants and loans, leading to a build up in internationalreserves. Approximately one-quarterof disbursementsin recent years, however, has been from suppliers'credits and loans from private financial institutions. The harder terms characterizingthis type of financing resulted in relatively faster increases in loan repayments and an increase in the debt service ratio from 13.0% in 1977/78 to 20% in 1980/81, as shown in Table I-5. In
Table I-5: EXTERNAL DEBT a/ (US$ million)
1977/78 1978/79 1979/80 1980/81 1981/82 b/
Total debt service 33.3 47.2 93.7 109.6 164 Amortization (22.6) (27.7) (59.6) (64.3) (109) Interest (10.7) (19.5) (34.1) (45.3) (55)
Exports of Goods & Services 265.2 263.7 454.3 544.6 578
Debt Service Ratio (M) 12.6 17.9 20.6 20.1 28.4 a/ All external debt is publicly held. b/ Estimate based on commitmentsas of March 31, 1981. Amortization includes the prepayment of two commercial loans, without which the debt service ratio would have been 25.0%.
Sources: Amortizationand interest are taken from the World Bank's Debt Reporting System and exports from the Union of Burma Bank.
1981/82, total debt service is estimated to have risen further, partly due to the Government's decision to make early repayments on two commercial loans. Although debt service payments are still less than 3% of GNP, the projectionsprovided under varying assumptions in Chapter V (see Table V-6) suggest that continued caution should be exercised with respect to both the aggregate amount of borrowing on commercial terms and the terms of borrowing. -11-
Budgetary Performance
1.18 In the first three years of the TFYP, the overall deficit in the consolidated public sector budget deteriorated from 3% of GDP to 12%, as the growth of total expenditures--primarily increased investments by SEEs--outstripped revenue increases (Table I-6). Despite the Government's expressed concern about the need to step up public sector resource mobilization, public savings (defined as the combined current account surpluses of the Union Government, local authorities, and SEEs) showed only a modest annual growth in nominal terms. The growing deficit has been financed by domestic borrowing in conjunction with increased external assistance. Public savings are estimated to drop significantly in the 1981/82 budget (see Appendix Table 5.1), i.e. from 5% to 3% of GDP, suggesting an urgent need for new measures to increase public sector resource mobilization (para 2.29).
1.19 Total Union Government revenue grew roughly at the same rate as GDP in 1978/79-1980/81, its share remaining at around 15%. While tax revenue grew slowly, non-tax revenue was buoyant. The major source of tax revenue during this period was the Commodities and Service Tax; however, receipts from this tax rose by only 5% a year between 1977/78 and 1980/81, or considerably slower than the tax base, that consists of both goods and services in the state sector and merchandise imports. Revenues from import duties, the second largest source of tax revenue, increased by 10% a year, again slower than the growth of imports. Non-tax revenue grew quickly, however, with its share in total revenue increasing from 29% in 1977/78 to 38% in 1980/81. The largest source of non-tax revenue was the contribution from SEEs, which includes revenue from the Export Price Equalization Fund (EPEF). EPEF acts as a tax on profitable exports and a subsidy on unprofitable exports, and an increasingly favorable balance was obtained over this period largely due to rises in the international prices of teak and rice. Proceeds from property income grew rapidly during this period, as did proceeds from administrative fees, charges, and non-industrial sales.
1.20 The Union Government contained its annual current expenditure increases to 14% by holding down the annual growth of the public sector wage bill to 5%. In fact, the share of wages, salaries, pensions, and gratuities in total Union Government current expenditure (including representative bodies and interest on public debt) declined from 42% of the total in 1978/79 to 37% in 1980/81. An average 12% upward adjustment in public sector wages is being implemented in 1981/82, and can be expected to add some pressure on the budget and prices in general. The increase was fully warranted, however, to offset the rise in the cost of living since the last wage adjustment in 1972/73. A main factor in current expenditure growth has been interest payments on both internal and external debt, that accelerated at the rate of 52% per annum. These payments, which include interest on some SEE debt, -12-
Table I-6: CONSOLIDATED PUBLIC SECTOR BUDGET (kyats million)
1977/78 1978/79 1979/80 1980/81 Union Government Revenue 4,186 4,715 5,594 5,526 Current Expenditures 3,322 3,808 4,165 4,945 Capital Expenditures 557 709 957 1,393 Net Lending 46 -5 -35 -77 Overall Balance (deficit -) 261 203 507 -735
Local Authorities Revenue 135 142 149 160 Current Expenditures 93 93 106 121 Capital Expenditures 73 72 51 79 Overall Balance (deficit -) -31 -23 -8 -40
Public Enterprises Revenue 13,062 13,613 15,428 18,648 Current Expenditures 12,193 13,669 14,784 17,365 Current Balance (deficit -) 869 -56 644 1,283 Capital Expenditures 2,033 3,200 4,506 5,053 Overall Balance (deficit -) -1,164 -3,256 -3,862 -3,770
Consolidated Public Sector a/ Revenue 5,190 4,857 6,387 6,969 Current Expenditures 3,415 3,957 4,271 5,066 Capital Expenditures 2,663 3,981 5,514 6,534 Net Lending 46 -5 -35 -77 Overall Balance (deficit -) -934 -3,076 -3,363 -4,554
Financing of the Consolidated Deficit Grants 156 407 430 637 Foreign loans (net) b/ 1,051 1,073 1,795 1,463 Gross Borrowing (1,297) (1,430) (2,375) (2,095) Repayments (-246) (-357) (-580) (-632) Domestic Financing through Bank Borrowing -273 1,596 1,138 2,445
Memorandum Items Public Savings c/ 1,775 835 2,116 1,905 Overall Deficit/GDP -3.2 -9.7 -9.9 -12.3 a/ If the current balance of public enterprises is a surplus, it is included in revenues; if a deficit, it is included in current expenditures. b/ Gross borrowing and repayments are different here than in the balance of payments, partly because of differences in definitions and partly because the budget has in the past excluded some suppliers' credits. c/ Defined here as the sum of the current balances of the Union Government, local authorities, and public enterprises.
Source: Ministry of Planning and Finance. -13-
accounted for 1.6% of gross government current expenditures (including those of SEEs) in 1977/78 and 3.8% in 1980/81. Capital expenditures by the Union Government increased at an estimated average annual rate of about 35% in nominal terms.
1.21 The financial position of some SEEs remained weak, resulting in a decline in the aggregate current surplus from K 869 million in 1977/78 to K 644 million in 1979/80. The estimated recovery to K 1,283 million in 1980/81 appears to be partly attributable to improvements in inter- national prices of rice, rubber, and metal and ores, which benefitted the exporting SEEs. Thus, the consolidated SEE accounts mask substantial differences in financial performance among the corporations. In the aggregate, both current expenditures and receipts of SEEs increased by around 13% a year between 1977/78 and 1980/81. The overall deficit continued to widen, however, as capital expenditures expanded rapidly. Thus, even the expected higher current surplus in 1980/81 is not sufficient to finance the higher level of investment by SEEs and, in fact, represents an implicit drop in the SEEs' equity contribution to gross capital investment from 43% in 1977/78 to 25% in 1980/81. The share of SEEs' capital expenditure in total public sector capital expenditure has averaged 80% over the three year period.
Money, Credit, and Prices
1.22 Given the rapid expansion in public sector expenditures and the much slower growth of revenues, the need for domestic borrowing has increased. Bank credit is virtually the sole source of supplementary financing. As shown in Table I-7, domestic credit to the public sector
Table I-7: ANNUAL CHANGE IN DOMESTIC CREDIT (percent)
1978/79 1979/80 1980/81
Public Sector 9.8 25.0 21.1 Union Government (net) -34.4 -57.8 -91.4 SEEs 127.1 88.3 40.4
Private Sector 1.3 -4.3 -0.1 Agriculture 34.7 28.6 0.2 Cooperatives 0 -13.3 1.1 Other -19.9 -15.2 -5.0
Total Domestic Credit 8.1 19.3 17.8
Source: Union of Burma Bank. -14-
increased by 10% in 1978/79, 25% in 1979/80 and 21% in 1980/81; and credit to the private sector declined. (The separate figures shown in this table for the Union Government and SEEs reflect a transfer of credit outstanding from the former to the latter.) Thus, over the past three years, the public sector has absorbed an increasing share of total domestic credit. By March 31, 1981, the public sector held 87% of total official domestic credit, and the private and cooperative sectors held 13% (Appendix Table 6.1).
1.23 The increase in credit was accompanied by an expansion in total liquidity of 21% in 1978/79, 20% in 1979/80, and 17% in 1980/81. Much of the growth in liquidity, however, has been absorbed by quasi money (-savings deposits, savings certificates, and time deposits), which has expanded rapidly during this period. Relative to low domestic inflation rates, interest rates of 8% for savings deposits and 11% for savings certificates remained attractive to savers. Moreover, the Government has granted tax exemptions on interest incomes. These policies have, therefore, resulted in significant effective resource mobilization from the private sector.
1.24 As a result of the rapidly expanding volume of quasi money, the growth of narrow money (i.e. currency in circulation and demand deposits) averaged only 15% a year over the first three years of the TFYP, or significantly less than the growth in total liquidity. The increase in narrow money appears to have been about twice the rate of real GDP growth, and to have resulted in price increases, as measured by both the implicit GDP deflator and the Rangoon consumer price index, of only 1% per annum. 1/ The difference can be largely explained on the demand side by increased monetization and commercialization of the economy. In addition, it may be partly explained by increases in the supply of unofficially imported consumer goods. Higher incomes in the rural areas have generated increasing demand for these goods, and it is possible that transactions in unofficial imports helped absorb a portion of increases in currency in circulation.
1.25 Price stability may be difficult to achieve in the future, however. It is one of the Government's major policy objectives; and it has been successfully achieved in recent years. Yet, this success has costs. First, a misallocation of resources occurs when prices do not reflect the scarcity value of goods and services (para 2.17). A number of recommendations for price increases are made in this report (see paras 2.17, 4.34-4.36, and 4.52-4.53), and these higher costs will put
1/ In addition to these indicators, the average ratio of selected free market prices to official prices declined from 2.37 in December 1977 to 2.23 in December 1980 (see Appendix Table 9.4). -15-
pressure on other prices in the economy, includingwages. Therefore, sudden, across-the-boardadjustment is not recommended. What is needed is gradual upward adjustments,with priority given to the most important goods and services. These would seem to be energy and transport. In addition, adequate incentives should be given for export commodities procured from the private and cooperativesectors, especially for such profitable commoditiesas rice and rubber. Second, a failure to raise public sector revenues, either through increased tax collectionsor higher prices of SEE goods and services,has led to higher government credit demands, which could result in undesirable inflationarypressures in the future. Moreover, if investment and growth targets for the private and cooperative sectors are to be achieved, the Government will need to extend increasingamounts of medium and long-term credit to these sectors, thus making the need to contain credit to the public sector all the more urgent.
Conclusion
1.26 Compared to the long period of economic stagnation in the late 1960s and the early 1970s, Burma's recent economic performancehas indeed been impressive. GDP at constant prices grew at an annual rate of 6.7% for 1978/79-1980/81. Over the same period, agricultural growth was 8.2% per annum. A steadily increasing investment rate (rising from 13% of GDP in 1977/78 to 23% in 1980/81 in current prices) has been supported by heavy inflows of foreign assistance as well as by a substantialincrease in domestic savings. The overall balance of payments showed a surplus during the first three years of the TFYP, although a deficit is anticipated in 1981/82. Public savings have remained low but positive, and the overall management of monetary and fiscal affairs has been sufficientlyconservative to avoid any serious inflationarypressures. Prices have, in fact, remained remarkably stable, with domestic inflation averaging only 1% per annum.
1.27 However, despite this record of accomplishment, there are certain areas in which recent developments give cause for concern. They include (a) persistent shortages of imported intermediate inputs and spare parts, particularlyfor the private and cooperativesectors but also for the SEEs; (b) an increase in the debt-service ratio; (c) the existence of artifi- cially low prices for some scarce commodities and services, especially energy; and (d) rapid increases in bank credit to the public sector, which may build up inflationary pressures in the future if allowed to continue. -16-
CHAPTER II. PRIORITIES FOR THE MEDIUM TERM
2.01 Burma's economic performance in recent years--as measured by growth in exports, investment, and GDP--has been good. The challenge for the years ahead will be how to maintain this momentum. At this point, it looks as if further high growth--as proposed for the Fourth Four Year Plan (FFYP) period (1982/83-1985/86)--will depend on four factors: (a) continued success in the development of the agricultural sector; (b) further improve- ments in capacity utilization and productivity; (c) a judicious choice of investment projects; and (d) sufficient resources--both foreign and domestic--to expand the investment program at the required rate. In this chapter, each of these priorities is discussed the Government's macroeconomic targets as expressed in the Guidelines for the Fourth Four Year Plan. 1/ Since export development will be an important element in achieving these targets, Chapter III explores export prospects for the medium to long term.
Macroeconomic Targets for the FFYP
2.02 The Guidelines call for continued real GDP growth of 6% per annum--or slightly less than the expected average 6.5% per annum during the Third Four Year Plan (TFYP) period (1978/79-1981/82). This is to be achieved by a continued opening up of the economy, emphasis on agricultural development, and a further rise in the level of real investment. Table II-1 compares constant price macroeconomic targets for the FFYP with (a) TFYP targets and (b) TFYP estimated actuals. A comparison of (a) and (b) shows that growth was achieved with greater investment and foreign savings (defined as in para 2.27) than planned and was accompanied by a more rapid increase in exports. Higher than anticipated domestic savings also appear to have been achieved. The targets for the FFYP are similar to the estimated actuals for the TFYP, except that they call for a sizeable substitution of domestic for foreign resources. The FFYP targets may be difficult to reach, however, in that the gains from non-paddy agricultural programs may come more slowly than the recent "green revolution" effects; there will be a continuing shortage of foreign exchange from export earnings; and the projected doubling of real domestic savings will be difficult to achieve in the context of the Government's current tax and pricing policies. Nevertheless, concentration on the above-mentioned priorities should lead to continued growth and improving per capita incomes. An alternative growth scenario is presented towards the end of this chapter.
1/ At this time, the Fourth Four Year Plan is still under discussion. The Guidelines for the Plan were adopted at the Fourth Party Congress of the Burma Socialist Programme Party held in August 1981. -17-
Table II-1: MACROECONOMIC TARGETS IN THE THIRD AND FOURTH FOUR YEAR PLANS a/ (average annual % change in constant 1969/70 kyats over the period)
TFYP TFYP FFYP Targets Estimates b/ Guidelines
GDP 6.6 6.5 6.0 Imports, GNFS 12.7 20.0 12.5 Exports, GNFS c/ 10.8 14.5 16.1 Investment 11.8 15.0 13.5 Consumption 5.8 5.8 4.4 Domestic Savings 9.9 12.5 18.9 Employment 2.3 n.a. 2.8 a/ The Third Four Year Plan (TFYP) covers 1978/79-1981/82; the Fourth Four Year Plan (FFYP) covers 1982/83-1985/86. b/ Based on GOB actuals for 1978/79, provisional actuals for 1979/80, revised estimates for 1980/81, and Bank staff estimates for 1981/82. c/ Export growth is expressed in volume terms, i.e., excluding adjustments for changes in the terms of trade.
Sources: Government of Burma and Bank staff estimates.
Agricultural Sector Growth
2.03 Continued success in agricultural development will be an important element in achieving the export and GDP growth targets. For the TFYP period, expected average annual real growth in agriculture (including livestock, fishery, and forestry) is 7.5% and alone would account for 42% of the estimated GDP growth. Typically, however, growth in agricultural GDP in developing countries tends to be sluggish. In 1979, for example, the median agricultural growth in low-income countries was only 2.5% in 1960-70 and 2.0% in 1970-79, compared to weighted average GDP growth rates of 4.5% and 4.7%, respectively. 1/ The tendency towards slower growth in agriculture is at least partly due to the large number of people involved and the large geographic area over which activities are dispersed. A lower, but still quite respectable, agricultural growth of around 4% would account for only 24% of the targeted 6% GDP growth in the FFYP, requiring considerably better performance from other sectors.
1/ See Annex on World Development Indicators in the World Development Report 1981. -18-
2.04 Some uncertainty concerning continued growth in agricultural production arises with respect to paddy, which accounts for more than one-third of total agricultural GDP and which has shown the most remarkable progress in recent years. While substantial potential remains for yield increases, growth rates similar to those in the recent past will be more difficult to achieve given that increases will be from a higher base; that extension of the program to less productive regions will inevitably result in diminishing returns; and that weather conditions may not continue to be as favorable as in recent years. Only six new townships are being added to the Whole Township Program for paddy in 1981/82, and future emphasis will necessarily be on consolidation in existing paddy-producing regions and on other crops with less obvious potential than paddy for rapid output growth.
2.05 In addition to expectations of slower growth in paddy, the GOB is reluctant to further increase Burma's export dependence on rice, given the uncertainty about conditions in the international rice market (para 3.15), and also is concerned about its ability to finance the required fertilizer imports. Use of urea, muriate of potash, and triple super phosphate fertilizers all together was about 250,000 tons in 1980/81. Taking into account domestic production of 130,000 tons of urea a year, the import cost was approximately US$35 million. In three years, or by 1983/84, total fertilizer use is targeted at 490,000 tons or almost double the 1980/81 amount. Although the Government plans to replace fertilizer imports by domestic production and will be producing around 210,000 tons of urea by this time, the likely import cost of the remaining fertilizer requirements would be around $85 million, or over 10% of likely free foreign exchange. 1/ In addition to the availability of external financing for fertilizer, the GOB must consider the budgetary implications of the large and rapidly growing fertilizer subsidy. Rather than seriously curtail the sale of fertilizer, it would be advisable to gradually increase the official price so as to encourage its use for the most productive purposes and to contain the drain of the large fertilizer subsidy on the budget.
2.06 If Burma is to achieve 4% average annual real growth in agriculture, further increases in paddy output will undoubtedly be required despite the risk of increased dependence on rice exports. Such
1/ Free foreign exchange available for use by Ministries in any given year is defined as export earnings from goods and non-factor services minus debt servicing obligations (both interest and principle) and other service payments. Annual allocations of projected free foreign exchange are made every year in connection with the budget. -19-
increases will need to come both from further intensification leading to higher yields in areas already suitable for HYVs and from the extension of these areas, through, for instance, low cost rehabilitation and land reclamation programs. However, this effort will have to be complemented by the fulfillment of goals for other major agricultural crops and activities and for the diversification out of paddy wherever appropriate (for instance, in some Dry Zone irrigation schemes). The extension of the Whole Township Program to other crops should lead to yield increases, in particular for maize and wheat, for which suitable HYV technologies are available, and for oilseeds, which are to be supported under a major externally assisted program. The potential for industrial crops such as cotton is also substantial although they face technical problems, such as pest control, that are more intractable than for paddy. Further diversification through increased production of horticultural crops, tree crops, livestock, and fisheries may require an effort with a longer gestation period. Effective transport and storage will also have to be developed to accommodate these increases in output (see paras 4.55-4.56).
Further Improvements in Capacity Utilization and Productivity
2.07 As discussed in Chapter I, Burma's favorable performance in recent years has been due in part to better capacity utilization and operating efficiency in industry and transport. This more satisfactory performance followed a period of decline, culminating in the mid-1970s. Thus, although progress has been made, there is substantial room for improvement. For example, when one looks at current indicators of efficiency in transport, they are far below what they were 10 years ago (see Table IV-8). Similar measures of efficiency are not available for manufacturing and processing; however, a review of 38 selected manufactured goods shows that output for almost half is lower than, or the same as, in 1970. Their relatively poor performance presumably reflects some problems in improving capacity utilization and productivity.
2.08 There are a number of factors which affect capacity utilization, including demand for output, cost and availability of inputs, technical and start-up problems, and organization and management. Some SEEs, e.g. Textiles Corporation and General Industries, have, in fact, reached the point where improvement in capacity utilization for some products may depend in part on market demand. For these products, questions of design variation and quality control are important. For other SEEs and for the private and cooperative sectors, the most immediate need will continue to be the availability of intermediate inputs, especially imported inputs. With faster economic growth, however, improvements in organization, management, and technology are becoming increasingly urgent, as is the efficiency of resource use. -20-
(i) Availability of inputs
2.09 The apparently favorable effect on capacity utilization of increased inputs for inter-industry use since the mid-1970s is pointed out in Chapter I. The main domestically supplied inputs are agricultural and petroleum products. Continued emphasis on agricultural growth during the FFYP should result in adequate supply of the former for existing capacity and should, in fact, create demands for new capacity to process some crops, such as oilseeds. The availability of adequate domestic supplies of petroleum in the near future is less sure; and, as discussed below, imports of petroleum could put serious pressure on availabilities of free foreign exchange. Free foreign exchange is also needed for tools, spare parts, and other intermediate goods. It will therefore be important for the GOB to both: (a) maintain flexibility in the investment program, in order to accommodate needs for increased imports of current inputs (including tools and spare parts) and (b) devise ways of minimizing the stocking requirements of these imported inputs by improved inventory control.
2.10 Petroleum products. As discussed in Chapter I, the shortage of petroleum products appears to have become somewhat more acute in the last 18 months. Although longer-term prospects for true self-sufficiency and possible export of petroleum products appear favorable, the effect of petroleum shortages on production and output in the interim can seriously inhibit growth at a time when the mobilization of domestic and external resources through higher GDP and exports is crucial. Fortunately, several promising new oil fields have been identified, but it will take time to explore and develop these resources. Thus, possibilities for accelerating development, such as soliciting expert assistance, should be given priority consideration.
2.11 The GOB eliminated all imports of crude oil starting in 1976 and, between 1976 and 1980, successfully increased domestic production from 7 to 11 million barrels a year. Because of continuing shortages, the share of kerosene in refinery output was progressively reduced during the period to produce more diesel. Assuming that domestic consumption of crude oil in 1979/80 provided minimum acceptable amounts of various petroleum products and that the roughly 10% annual rate of increase in consumption for the previous four years has continued, demand in 1982/83 will be around 13 million barrels and around 17 million barrels by the end of the FFYP. With domestic supply of crude in 1980/81 around 10 to 11 million barrels, the GOB will need to produce or import another 2 million barrels of crude oil by 1982/83 and another 6 million by 1985/86. At some US$35 million per million barrels of crude oil, the cost of importing, in terms of both foreign exchange and public sector funds (to finance the difference between the official price of petroleum products and the price required to cover the import price), would be large. Furthermore, having thus far handled the -21-
situation internally, the GOB would find the decision to import a difficult one. The preferred alternative,to increase domestic production,might be considerablyfacilitated in the short term by technicalassistance in the explorationand developmentof the new fields. Moreover, a proper balance of the various components in the oil explorationand drilling program will be important. It would appear from available data, for example, that additional time and money should be spent in pre-drillingactivities and, in particular,on the amount of seismic work per explorationwell, especially if deep prospects are explored. Furthermore,the potential demands of petroleum imports on scarce foreign exchange call for some contingencyplanning, plus some additional conservationmeasures, including an increase in the present official prices of petroleum products,which are low in both absolute terms and relative to Burma's other internationallytraded commodities such as rice.
2.12 Tools, spares, and other intermediates. The ratio of imports for inter-industryuse to total inter-industrydemand, which stood at 8 to 10% in the 1960s, declined to 3% in the mid-1970s and has since increased to 6.5%. These statistics present only an aggregate picture of relative availabilitiesof imported inputs; demand at the operating unit level is satisfied for some departmentsand plants, but, for others, remains unsatisfied. Shortage of inputs has, for example, been offered as one reason why multiple shifts are not used more frequently. Moreover, only small amounts of intermediategoods are made available to cooperativesand registered private sector enterprisesthrough Trade and other ministries. The growing need for chemical imports for agriculturewas discussed above (para 2.05), and requirementsfor other intermediateimports are likely to increase significantlyin the future, as production increases are achieved and more modern technologyis introduced. Also, many repair workshops are poorly equipped with tools, spares, and manuals; and the proposed emphasis on consolidationof the investment program (para 2.18) suggests that improved organizationand equipment of such workshops should be given the highest priority. Standardizationof equipment and effective measures for inventorycontrol would also help in dealing with shortages of imported intermediategoods in the future, as both over- and under- ordering occurs. Further measures to simplify and make more flexible the timely purchase of intermediategoods by departments and SEEs would also be helpful, and auctions of old equipment and spares could be of mutual benefit to government agencies and the private and cooperativesectors.
(ii) Organization,management, and technology
2.13 Significantincreases in efficiency can be brought about by improvementsin organizationand management and by the introductionof new techniques and technology. Such a statement can be made about any country in the world; but in Burma, with more rapid economic growth, opportunitiesand demands on these fronts are burgeoning. A talent for -22-
organizationhas certainly been demonstratedin the Whole Township Program for agriculturalintensification, and the receptivityfor change has undoubtedly been enhanced by the relatively high level of literacy in the rural areas. Expanding activities,both in agricultureand elsewhere,have placed new strains on the marketing and distribution system and also on departmentsand corporations,requiring organizational change. A comprehensiveproposal for organizationalchange has been forwarded by the Irrigation Department (paras 4.15-4.17),and the ConstructionCorporation is proposing to increase both the quality and quantity of its road maintenanceand rehabilitationthrough better organizationof work, site management, cost accounting, and quality control. Several SEEs, including the Timber Corporationand the Electric Power Corporation,are consideringstrengthening their planning units; and the Textiles Corporation is experimentingwith three separate organizationalgroupings for cotton, jute, and synthetic products in order to improve operationalefficiency. Government departmentsand corporationsshould, in fact, be encouraged to experiment with new organizationalmodes and to become acquaintedwith solutions that have proved useful elsewhere. The establishmentof multiple shift operations would greatly improve the utilizationrate of costly plant and equipment, and the Government'sefforts to further decentralizethe SEE bonus system could improve worker incentives.
2.14 The Government continues to offer management seminars for higher level management, and the Institute of Economics is considering the developmentof a separate Department of Management Studies, which would provide in-service training to public sector managers on a full-time basis. Management services to the rapidly growing cooperative sector are being establishedby the Ministry of Cooperatives,which is also strengtheningits CooperativeTechnology Department to give better technical and economic advice to industrial cooperatives. The quality of management,however, must ultimately depend on the informationand analysis available, the time available to managers to sort through their problems, and the bureaucraticincentives to perform well. Regarding the first, rapid change is taking place in the area of computer-based informationsystems. Hopefully, the storage, access, and manipulation provided by these systems will not be limited to the sponsoring agency. Greater availabilityof data and analysis through wider publicationand distributionof informationwithin the Government,as well as to donors and the general public, would facilitate decision-makingand improve knowledge and understanding. An accelerationin the Government'spolicy to encourage greater delegation of authority for routine matters such as selection of candidates for training abroad, processing of project documents, and, where necessary, appointmentswith outside persons would leave Ministers and other high level decision-makersfreer to concentrate on the most importantmatters. With respect to SEEs, delegation of -23-
management responsibility both to and within the corporation needs to be pursued while simultaneously strengthening incentives, e.g. to set more realistic production targets. 1/
2.15 The rapid increase in investment and the growing interest of managers in information systems, training, and technology development provide ample scope for the introduction of new technology and techniques. So far, for example, Burma has experimented with relatively small-scale plants for cement, fertilizer, and pulp and paper. Yet, each of these resource-based industries is characterized by large economies of scale. A careful assessment of likely costs and benefits of larger-scale operations should be made in the future to determine if and when these should be introduced. Also, although the Government remains cautious in contracting technical assistance, the demands for technical assistance and training provided under UNDP, for example, have grown dramatically both in size and number; and there are a large number of specific requests for which funds are not available.
(iii) Effective use of resources
2.16 Further improvements in the overall efficiency of the economy will also depend on the effective use of both abundant resources such as labor and scarce resources such as energy, fertilizer, exportable timber, and imported capital goods. Full employment of labor is a clearly defined objective of the FFYP and a target rate of employment growth has been set at 2.8% a year, compared to a projected 2.3% annual increase in the labor force. This would reduce the overall estimated rate of unemployment from 6.7% in 1981/82, the base year of the FFYP, to 5.2% in 1985/86, the final year of the FFYP. Specific policies and programs to achieve this employment growth have not yet been designed, however; and rapid employment growth in the SEEs would conflict with their further objective of increasing labor productivity. Traditionally, the GOB has relied on the private and cooperative sectors to generate increased employment, and this will undoubtedly continue to be the case. The state sector presently accounts for only 10% of total employment, so even rapid employment growth by this sector would leave a large pool of
1/ Some interesting work along these lines is being carried out under the Public Enterprise Signalling System in Pakistan and may soon provide an interesting case study. The system will include uniform accounting systems for public enterprises, a performance evaluation system, and an incentive system for managers and workers. -24-
unemployed. 1/ Although statistics are not available, the increased agricultural growth and accompanying activity have undoubtedly generated some employment in recent years. To generate more permanent and higher wage off-farm employment, however, capital formation in the private and cooperative sectors will have to be encouraged by improving access to credit, foreign exchange, and technical assistance.
2.17 Scarce resources present another type of problem. A number of goods and services, including energy, public sector transport services, and fertilizer, are priced below cost (including the opportunity cost of capital). This is largely because the Burmese authorities want to maintain a stable price environment. As a result of low prices, however, users have little incentive to conserve or to substitute less valuable resources, and leakage to the free market can also be a problem. In the case of petroleum products, for example, prices are among the lowest in the world and apparently do not cover the marginal cost of production given the recent increase in exploration and development costs. Both the Myanma Oil Corporation and the Petro Chemical Industries Corporation are borrowing heavily from the Myanma Economic Bank, with loans to these two corporations increasing substantially over the last three years. Current balances, which are calculated before amortization payments, have been low or negative in recent years. Given the shortage of petroleum products on the domestic market, there is a strong argument to raise prices closer to the equivalent import prices, even though imports are not purchased. Higher prices would (a) encourage conservation, (b) encourage more rational use of available energy, and (c) discourage diversion of official supplies for resale. There are other examples of price adjustments which would be likely to encourage a more efficient use of scarce resources, but an adjustment in energy prices, together with required adjustments in transport services, appears the most urgent.
Investment Allocation
2.18 As the Government's investment program for the FFYP is still under review and is, in any case, available on a partial basis only,
1/ Moreover, the capital requirement for employment generation in the state sector appears to be far higher than that in the private and cooperative sectors. The incremental capital-labor ratio for SEEs during the first three years of the TFYP was about K 100,000--as employment increased by 96,000 persons and incremental investment (estimated by capital expenditures in the previous year) was K 9,676 million--compared to an incremental capital-labor ratio of K 10,000 for the private and cooperative sectors, assuming a 1% growth in employment, or K 5,000, assuming a 2% growth in employment. -25-
it is not possible to comment on likely investment allocation with any assurance. Nevertheless, the proposed investment priorities--namely, continued support to high-potential areas in agriculture; some increased investment in health; repair and rehabilitation of plant and equipment, together with selective capacity expansion, in processing and manufacturing and transport; and energy development--appear to be desirable and consistent with an overall strategy of consolidation. Such a strategy would seem most appropriate at this time, as investment in large-scale and long-gestating projects will place a strain on limited resources and contribute to inflationary pressures. In time, Burma's infrastructure needs will make heavy demands on resources, requiring strong and healthy agriculture and manufacturing sectors which are not too capital and foreign exchange intensive. The potential in irrigation and hydroelectricity and the possible future needs for transport are explored in Chapter IV. A major conclusion is that planning capabilities for all three sectors should be supported during the FFYP to facilitate the investment choice in future years under conditions of limited resources.
2.19 Table II-2 compares the proposed sectoral allocation of
Table II-2: PUBLIC INVESTMENT ALLOCATION SHARES IN THE THIRD AND FOURTH FOUR YEAR PLANS a/ (percentage shares)
TFYP FFYP Guidelines Plan Est. Actual Guidelines
Agriculture 28 23 18 20 of which: Livestock & Fisheries (9) (9) (n.a.) (6) Forestry 5 5 4 4 Mining 6 7 13 14 Processing & Manufacturing 27 36 34 27 Power 8 5 6 5 Construction 4 2 3 3 Transport & Communications 13 13 13 13 Trade, Social Services & Other 9 10 10 14
TOTAL 100 100 100 100 a/ See footnotes to Table II-1.
Sources: Government of Burma and Bank staff estimates. -26-
investment in the FFYP with the proposed, planned and estimated actual allocations during the TFYP. As can be seen, the main difference between the TFYP Guidelines and the Plan is the increase in the investment share for manufacturing and processing at the expense of agriculture. In turn, the main difference between the Plan and the estimated actuals for the TFYP is the lower investment share for agriculture and the higher share for mining. The latter largely reflects the increased capital expenditure for on-shore exploration of oil, which amounted to an average of K 357 million a year during the first three years of the TFYP compared to an average of K 62 million a year for the last two years of the SFYP.
2.20 The Guidelines for the FFYP again place priority on agriculture because of the relatively high rates of return and short gestation periods which are characteristic of many programs and projects in this sector. Nevertheless, the target agricultural investment share is lower than in the past. The GOB has obviously encountered difficulties in meeting its previous targets, and these difficulties may be related to the problem of project identification and preparation. The investment share of agricultural projects (including livestock and fisheries) in the top priority list, presented to the Aid Group at its December 1980 meeting, was only 20% of the total (compared to a planned share of 23%). 1/ In recent months, the GOB has identified seven new top priority projects in agriculture, with a total cost of about US$50 million. Additional projects will have to be identified and prepared, however, if the target investment share of 20% in the FFYP is to be achieved.
2.21 Investment in social services, especially health, is also receiving relatively high priority. The GOB's strategy for educational development is currently undergoing some changes, with the elimination of the Regional Colleges System and a new emphasis on English language proficiency. Until a new program can be worked out, investment expendi- tures are unlikely to rise significantly. Higher investment in health is anticipated, however, and this emphasis appears warranted. Per capita health expenditures, which declined in real terms during the mid-1970s, are still below their 1970 level. With better economic performance, Burma should be able to upgrade its health facilities and services, although selectivity in projects and emphasis on self-financing will have to continue for a long time. In view of the Government's interest and the expanding external assistance in health, Annex A provides an overview of the status of health of the population and the Government's health programs.
1/ The share of agricultural projects in the top priority list submitted to the Aid Groups in December 1977 and in April 1979 was 36% and 25%, respectively. -27-
2.22 The major cutback in the proposed FFYP investment program, relative to the TFYP Plan and estimated actuals, is for manufacturing and processing. This is consistent with the emphasis in the Guidelines on increased capacity utilization in the industrial sector, rather than capacity expansion. Present plans are to give priority to the renovation of old rice mills, oil mills, and sawmills and to the rehabilitation of Rangoon steel mill and the two cement plants at Kyangin and Thayet. Many of the rice mills, for example, date back to pre-World War II. As population grew during the post-war period and more rice was consumed domestically and less exported, the qualitative, if not the quantitative, demand on milling facilities declined. With the recent large increase in paddy production, however, both quantitative and qualitative demands have increased (see para 1.06). To compete successfully in the export market, modern rice milling and storage must be developed. The introduction of rubber hulling milling techniques should help prevent breakage. In addition, some expansion of oil mills and sawmills, as well as rice mills, may be required to process expanding production; and some investment balancing, for example, in storage and handling, may be required to make the best use of existing capacity. Repair and rehabilitation of existing transport equipment are expected to be given priority over new purchases. The success of this consolidation effort, however, will depend on the ability of the Government to resolve the implementation problems which inevitably arise.
2.23 It is not known to what extent the intended consolidation of the investment program will include (a) plans for replacement of vehicles and equipment which have been recently purchased but which have a short expected lifetime, and (b) capital goods for the private and cooperative sectors. It will be important to consider these two requirements, however, if overall production is to be maintained and expanded. As an example of (a), vehicles and equipment costing about US$50 million in current prices have been purchased under foreign assistance for timber extraction and transport. Recently initiated projects would spend another US$40 million on vehicles and equipment. Yet, the economic life of most of these goods is only 10 to 15 years, and it will be necessary to budget for replacement starting in 1983/84. Import requirements for tools and spare parts alone are likely to start at around $3-4 million a year, with replacement imports totalling an additional $10 million by the end of the FFYP. Regarding (b), the increase in transport demands at the local level will require imports of new motors and vehicles as well as tools and spare parts. The GOB has proposed two projects in the past--one to provide marine engines for riverine transport and the other to provide tools, tires, and spare parts for cars and trucks. Government support and donor assistance for these projects could help address present and anticipated transport bottlenecks at the local level. -28-
2.24 Although not specificallymentioned in the Guidelines, some attention is being given to energy developmentand also to more efficient use of existing energy resources. This focus seems highly appropriateand should be intensified. Several new projects in energy developmenthave been identified--acoal production project at Kalewa, a 6 MW coal-fired thermal power station at Kalewa, the 28 MW Baluchaung I hydropower project, and some mini-hydro projects. Also, external assistance from Japan has been obtained for on-shore and off-shore oil development,and financing for several oil and gas pipelines is being sought. Given the importanceof the sector, the large resource requirementswhich are likely to be involved,and the rapid changes in the available technology,this may be an opportune time for the Government to solicit additional internationalassistance in energy planning and project implementation(see para 2.11).
Domestic and Foreign Resource Requirements
2.25 If the GOB is able to achieve continuedagricultural sector growth, higher capacity utilizationand operating efficiency in industry and transport,and an investment program that emphasizes consolidation and conservation,it should be in a good position to attain targets that are similar to, if not equal to, those in the FFYP Guidelines. Table II-3 presents a possible scenario with slightly lower than targeted GDP growth, along with indicationsof the domestic and foreign resource financing requirements. The scenario is largely illustrative in that it projects a consistent set of relationshipsexpressed in 1981/82 constant prices; actual performance could, of course, be better or worse. The growth rates shown here differ from those in the FFYP Guidelines (Table II-1) partly because the constant price series is different; 1/ partly because estimates of imports and investmentin the base year (1981/82)have been revised upward since publicationof the Guidelines; and partly because the projectionshere reflect differing estimates of what is feasible and achievable (e.g., on export growth). When compared to the Guidelines, the projectionshere show a slightly higher growth in total consumption (which here includes changes in stocks), but slower growth in GDP, investment,exports, imports, and domestic savings. The projected need for external financing in real terms is higher than that implied in the Guidelines. Implicationsfor the nominal level and terms of gross foreign borrowing for the next two years are shown in Chapter V on the role of external assistance.
1/ Although projectionsin the Guidelines are expressed in 1969/70 constant prices, projectionshere are expressed in 1981/82 constant prices, as it is relative prices in the latter year which will determine the financingrequirements. Table II-3: PROJECTION OF REAL GROWTH OVER THE FOURTH FOUR YEAR PLAN (FFYP), 1982/83-1985/86 a/ (constant 1981/82 prices)
1981/82 1985/86 Kyats Kyats Avg. Annual Million % of GDP Million % of GDP Growth in FFYP
1) GDP 42,000 100 51,640 100 5.3 2) Imports (GNFS) 6,670 16 8,740 17 7.0 3) Exports (GNFS) b/ 4,040 10 6,020 12 10.5 4) Exports (GNFS) adjusted for Changes in the Terms of Trade 4,040 10 5,710 11 9.1 5) Resource Gap (2-4) 2,630 6 3,030 6 3.6 6) Total Expenditure (1+5) 44,630 106 54,670 106 5.2 of which: i) Fixed Investment 9,200 22 12,060 23 7.0 ia) Public Sector (7,350) (18) (9,100) (18) (5.5) ii) Consumption plus Changes in Stocks (6-6i) 35,430 84 42,610 83 4.7 7) Domestic Savings less Financing of Changes in Stocks (6i-5) 6,570 16 9,030 17 8.3
Financing of Fixed Investment
A) Net Financing from Nationals through Factor Services and Private Transfers -180 - -410 -1 22.9
B) Foreign Savings (5-A) 2,810 7 3,440 7 5.2
C) Public Savings 1,170 3 2,000 4 14.3
D) Private Saving to Finance i) public sector investment (6i-B-C) c/ 3,370 8 3,660 7 2.1 ii) private sector investment (6i-6ia) 1,850 4 2,960 6 12.5 a/ Based on Bank staff estimates for both 1981/82, which is the base year of the Fourth Four Year Plan, and 1985/86. An average annual exchange rate of 7.3 kyats per US$1 is assumed for both years. b/ Volume growth. c/ In calculating residual financing requirements for the budget, it is assumed that total foreign savings, as defined here, are available for budgetary financing.
Source: Bank staff estimates. -30-
2.26 In the scenario shown in Table II-3, real import growth is set at 7%; higher growth may not be possible or advisable, given the uncertaintyof concessionalaid and the undesirabilityof heavy reliance on commercial loans and suppliers' credits (which may be costly in terms of purchase price despite the fairly attractive financing terms). Volume growth in exports of 10.5% is consistent with the commodity-by-commodity projectionsprovided in Chapter III below, adjusted for a slightly slower projected increase in receipts from non-factor services. The projected export price index, which is based on World Bank commodity price projections,suggests a decline in the terms of trade, due largely to the weakening of the internationalrice price which began in late 1981. As a result, the purchasing power of exports is likely to grow at a slower rate. Fixed investment is shown as growing by 7%, a rate which is consideredto be consistent with the real increase in imports, given the relativelyhigh import intensity of public sector investment, the dominance of the public sector in total investment,and the importance of expanding imports of intermediategoods and some consumer goods. Given the much higher level of investment in 1981/82 than at the beginning of the TFYP, growth in real fixed investment at this rate would be an admirable achievement if it emphasizes consolidationand the quality of investment. Consumption (plus changes in stocks) and domestic savings (exclusive of financing for changes in stocks) are derived as residuals.
2.27 The implicationsfor foreign and domestic financing in real terms under this macroeconomicscenario are shown in the bottom half of Table II-3. Item (A) indicates that financing through net factor services and net private transfers is negative in 1981/82, due to the dominance of interest payments on foreign debt, and is expected to become increasinglynegative over the FFYP period. Required foreign savings, which are derived as the sum of this flow and the resource gap, would increase by about 5% a year in real terms, to be financed by increased grants and net loan disbursementsfrom existing as well as new commitments. Assuming public investment declines slightly as a share of total investment,as called for by the Guidelines,additional domestic resources required for public sector investmentwould remain at around 11% of GDP. Of this amount, at least 4% should be obtained from public savings, requiring an increase in real terms of some 14% a year. Although this may seem high, the 2,000 million kyat figure shown in Table II-3 is about the same level as public savings in 1980/81 and represents a smaller proportion of GDP. This amount should therefore be considered a minimum target. Residual financingwould continue to come from bank credit but should allow for a substantialincrease in bank credit to the private and cooperativesectors. Total domestic resources required for private sector investment would increase by about 12% a year. -31-
2.28 The foreign financing called for by this scenario would seem feasible, although it will not be easy to achieve. Official development assistance from OECD countries has been increasingby about 3.5% a year in real terms for the last ten years, but real increasesare likely to be less in the coming years. The implied 5% a year increase in foreign savings may be a reasonableobjective, but recent increases in aid have been large. If Burma is not able to increase the amount of highly concessionalborrowing in real terms, borrowing on somewhat harder terms might be sought, especiallywhere the possibilityof lowering the purchase cost through internationalcompetitive bidding exists. With borrowing on harder terms, however, it will become even more important to show that (a) the returns from the projects to be financed exceed the marginal costs of foreign borrowing and (b) the net foreign exchange earnings--takinginto account debt servicing obligations--arepositive.
2.29 The domestic savings requirementwill be hard to achieve without inflationarypressures in that it will require a political consensus to implement several difficult but necessary reforms. Even a relatively modest increase in gross public savings (i.e. before amortization payments) to 4% of GDP will require substantialefforts at new public sector resource mobilization. This is in part because contributions from EPEF (para 1.19) are likely to decline, given the weakening in internationalrice prices in the short to medium term. The World Bank's last economic report explored a number of options open to the Government for increasingSEE operating surpluses and Union Government revenues.1/ The current situationwas reviewed briefly in Chapter I (para 1.18), pointing to the need for new revenue measures. Formulationand imple- mentation of such measures will take time and, therefore,should not be delayed. The eliminationof exemptions and special cases--especiallywith respect to CST and customs duties on imported goods--wouldperhaps be the quickest way to arrest the deterioratingratios of tax collectionsto the tax base; but new measures--includinga more vigorous application of the commercialguidelines for the operation of public enterprises--willalso be required.
2.30 Finally, despite the rapid growth in private sector incomes in recent years, further institutionalreform may be required to achieve the private and cooperative sector savings and investmenttargets. In recent years, the GOB has rapidly expanded technical assistance, seasonal credit, and access to biological and chemical inputs in support of growth in the agriculturalsector, which is almost entirely in private hands. Plans to expand assistance for a wide range of field and
1/ See Chapter III of Burma: Domestic and External Resource Prospects, No. 3098-BA, dated October 10, 1980, for discussion of various options for public sector resource mobilization. -32-
tree crops, includingmedium and long-term credit, are now underway. There is also substantialgovernment interest in the promotion of cooperativesin a wide range of activities includingprocessing, transport, and marketing; but ambivalence towards support of private sector activities outside agricultureremains. Although the private sector is lightly taxed, it receives little institutionalsupport. There has been some increase in the availabilityat official prices of public sector goods, such as tires and batteries; but private sector entrepreneursin transport and industry still operate largely through their own devices--buyingimported and state-producedtools and spare parts on the free market or producing their own, and seeking short-term credit from informal sources. Informal markets are typically less capable of servicing longer-term investment needs, however; and, if the share of cooperativeand private sector investment is expected to rise, institutionalsupport will have to be developed to facilitate the intermediationprocess between private savings and private investment.
Conclusion
2.31 In sum, although Burma's future over the medium term appears promising, continued growth at the desired rate presupposes substantial new initiativesat the various levels of Government. Many of these initiatives,such as diversificationof agriculture,consolidation of the investment program, greater public sector resource mobilizationand improvementsin organizationand management are supported by the Guidelines for the FFYP. Other initiativessuggested here have less support; these include increasing prices of scarce resources, e.g., energy; giving greater priority to imports of intermediategoods, tools and spare parts, to the extent that these are justified economically; and providing more credit and foreign exchange to the private and cooperative sectors. It will, nevertheless,be important for the Government to somehow address the problems which have been identified, namely energy conservation(at least in the short to medium term), further increases in capacity utilization and productivity,and greater use of the substantialresources outside the public sector. -33-
CHAPTER III. EXPORT PROSPECTS AND EXPORT STRATEGY
Recent Developments
3.01 Assuming 1981/82 growth in merchandise exports of 13% in constant 1980 dollars (8% in current dollars), real export earnings will have increased on average by over 10% per annum over the Third Four Year Plan (TFYP), thus roughly equaling the original target growth. 1/ In terms of export volume, a significant growth (8% per annum or better) is likely to be achieved for virtually all commodities except oilcakes, cement, and petroleum products. Table III-1, which provides information on export values and volumes for 1980/81 actuals and 1981/82 estimates, also shows data for the base year of the TFYP (1977/78), ten years ago (1969/70), and twenty years ago (1961/62).
3.02 In 1980-81, total exports reached $478 million, an 18% increase over the previous year. Although this growth was clearly less than the previous year's 50% increase, it was an admirable achievement for Burma in the midst of a relatively sluggish world economic climate. The main contributors to the 1980/81 growth were teak and rice, which together accounted for 80% of the increase. Export earnings from teak logs and sawnwood rose by 48% in value (USs), based on a 35% increase in volume and a 10% increase in prices. Exports of rice increased by 11% in value compared to 1979/80; a 10% decrease in volume was more than offset by a sharp 25% increase in the average price as a result of higher international prices of rice. Rice exports have continued to perform well during the first half of 1981/82 and are expected to reach 930,000 metric tons (including bran) despite the weakened international rice market in the second half of the year. If an average price of $300 per ton can be maintained, the increased export earnings from rice would offset losses in other export products associated with the recession in industrialized countries.
1/ Note that here and in Table III-1, real export growth is estimated in 1980 dollars, using 1980/81 export values as weights. Table II-1 uses official 1969/70 constant price data and results in a higher estimate of real export growth. Table III-1: VALUE AND VOLUME OF EXPORTS BY MAJOR PRODUCT GROUP
Actual Estimate Projected Average Growth (%) a/ 1961/62 1969/70 1977/78 1980/81 1981/82 1982/83 1983/84 1985/86 1981/82-1985/86
Value (US$ Million) Rice and rice bran 178.3 59.5 120.9 204.8 270 236 305 458 14 Pulsds and beans 12.6 8.3 10.2 21.5 27 30 30 35 7 Maize 1.0 0.6 1.1 1.6 5 5 6 11 2 oilcakes 17.8 7.3 7.8 7.6 6 7 10 13 21 Jute 0.2 0.4 3.1 15.0 5 9 12 11 22 Rubber 6.0 2.7 5.8 12.1 9 12 14 21 24 Fish and fish products - - 4.2 12.4 14 28 37 50 37 Teak 26.2 23.6 54.2 108.8 92 105 125 165 16 Hardwood 1.5 0.1 1.1 10.9 6 11 15 25 43 Cement - - 2.8 3.6 3 5 6 6 19 Base metals and ores 7.1 5.3 11.9 28.7 36 56 68 90 26 Silver 1.3 1.3 1.6 9.7 6 7 11 17 30 Heavy petroleum oil HPO) - - 3.9 16.9 12 14 18 28 24 Other exports 12.8 11.2 11.9 24.4 25 29 34 4& 16
TOTAL 264.8 120.3 240.5 478.0 516 554 691 976 17 (at constant 1980 $) (959.4) (432.7) (364.4) (478.0) (540) (538) (621) (761) (9)
4L Volume ('000 metric tons) Rice and rice bran 1,842 666 670 705 930 1,010 1,100 1,300 9 Pulses and beans 108 55 31 68 64 70 72 77 5 Maize 22 10 10 10 30 30 30 35 4 Oilcakes 245 125 78 73 53 60 70 80 11 Jute 1 1 11 66 20 35 30 20 0 Rubber 10 6 7 10 10 10 11 13 7 Fish and fish products - - 2 7 8 12 15 18 22 Teak ('000 cubic tons) 119 112 84 139 140 150 155 165 4 Hardwood ('000 cubic tons) - 1 11 59 32 55 70 100 33 Cement - - 98 72 64 90 90 90 9 Base metals and ores 35 13 10 16 19 25 30 70 39 Silver ('000 troy oz.) 1,169 759 340 501 540 560 575 610 3 HPO (mil. gals.) - - 18 31 22 25 30 40 16 Other exports (index) (198) (171) (74) (100) (108) (117) (126) (147) 8 a/ Average annual growth from 1981/82 through 1985/86.
Sources: Central Statistical Office and Bank staff estimates. -35-
3.03 Performance of other agricultural export crops has also been reasonably good. Production and export of maize and pulses have been rising. Exports of black matpe, a pulse, have recently grown very rapidly, with Burma's share in the Japanese market rising as Thailand, the traditionally dominant supplier to that market, has diversified its export destinations away from Japan. Production and export of rubber and jute have also been rising, largely in response to the increase in the government procurement prices in the mid-1970s. Although production of oilseeds has risen in recent years, oilcake exports have been stagnant, as domestic consumption demands remain unsatisfied.
3.04 Growth in export earnings of close to 40% a year has been experienced by the fisheries sector, although planned growth was even higher. The People's Pearl and Fishery Corporation (PPFC) received substantial external assistance to upgrade and expand storage and transport facilities and to provide engines and fishing gear to the private sector. Exports of minerals have also expanded rapidly (see Appendix Table 8.7). Since 1975T76, the Ministry of Mines has successfully brought about a recovery of the sector through new investments and rehabilitation of old facilities. Loans from bilateral and multilateral sources have played a major role in this process. Exports of tungsten concentrates, refined lead, zinc concentrates and refined silver showed substantial increases in volume during the first three years of the TFYP period. Exports of crude oil, which had been initiated in 1979/80, were phased out in 1980/81 in view of domestic needs; some exports of heavy petroleum oil have continued.
3.05 Emerging "new" export products, which might prove promising in the longer term, are secondary processed wood products (mosaic flooring and knock-down furniture) and garments. The Timber Corporation has recently reached an agreement with a Hong Kong firm for technical and marketing assistance in development of furniture exports and has started exporting some knock-down teak bunkbeds on a trial basis. A new garment factory (No. 2 Garment Factory of the Textile Industries Corporation), producing men's dress shirts from imported fabrics, started operation in April 1981. The shirts are exported to a German firm for marketing in Europe, much like an export processing zone operation. Although the economic viability is yet to be proven, the project could possibly provide a replicable model not only in the garment industry but also for other lines of export-oriented manufacturing.
3.06 Impressive as Burma's recent performance in exports has been, it is noteworthy that the current levels of primary product exports do not exceed the levels achieved in earlier periods, implying substantial potential for continued rapid growth. In the period immediately prior to World War II, exports consisted of natural resource-based products -36-
quite similar to the present composition of exports. Burma was a leading producer/exporter of rice, tungsten, and lead and was a significant producer/exporter of tin, zinc, silver, and petroleum. Although global data relating to the pre-World War II period are not available for tropical hardwood, Burma was also an important supplier of teakwood. Domestic consumption of many of these commodities has, of course, increased in the interim, and reserves of some of the mineral-based exports have been locally depleted. Nevertheless, the resource base is still relatively strong; and, given time and sufficient resources for development, Burma's export prospects are bright.
Medium-Term Prospects
3.07 With the rapid growth in exports in the last two years, the ratio of merchandise exports to GDP has increased to 9%. The GOB's objective is to further raise this ratio through rapid growth in exports of 16% per annum in volume terms during the FFYP. However, in view of the uncertain world trade climate and the possible supply-side constraints, a more realistic assessment may be around 11% per annum in volume terms and 9% in real terms; i.e. after adjustments in the expected decline in Burma's terms of trade during this period. This estimate is based on commodity-by-commodity projections under the assumptions of (a) a continuation of present policies and programs which have led to gradual change, (b) no crude oil exports, and (c) no prolonged fuel shortage. Details are shown in Table III-1. The main thrust of the growth is likely to come from rice exports, whose share of total earnings is expected to remain close to 50% despite the current weakening in international rice prices. Among the other product groups, non-fuel minerals are expected to increase their share noderately, mainly due to copper production from the new Monywa mine, although exports of tin, tungsten, zinc, and silver are also likely to increase.
3.08 Rice. Export potential of rice depends on the size of exportable surplus, as the GOB's policy is to give priority to domestic consumption. Domestic consumption of rice has grown at 2.4% per annum in the last decade and can be expected to grow at roughly the same rate in the future. The rate of growth in rice availabilities depends on the total sown acreage, the average yield per acre, and the milling yield. As indicated in Table I-3, improvement in the paddy/rice conversion rate could alone produce a sizable export surplus. A major effort is expected to be made during the FFYP to grow more preferred export varieties; to improve the milling yields and the quality of the milled rice; and to construct new and better warehouses, with better grading and handling equipment for export rice. With these steps, the current export price differential with respect to other internationally traded rice should be maintained, if not improved, despite the increasing quantities which ar,eprojected to be marketed. -37-
3.09 Other agriculturalcrops. Encouragedby the recent success in the rice sector, the GOB has stepped up efforts to introduceHYVs for other agriculturalcrops such as wheat, maize, oilseeds, jute, cotton, rubber, pulses, and beans. Despite the prospects for substantially increased domestic consumptionof maize, due to the growing need for animal feed and industrialuse, exports of maize are likely to rise as a result of expanded production and higher yields. As domestic production of vegetable oil increases, the exportablesurplus of oilcakes (includingoil-extracted bran) is also expected to rise despite likely increases in domestic consumption. Due to the heightened interest in "health foods" around the world and the steadily growing demand by the vegetarian communities throughoutAsia, demand for selected types of pulses and beans is likely to increase,and Burma is reasonably well-positionedto raise its share in the growing market. Since the existing resource base for rubber is rather limited and has deteriorated over the last two decades, rubber exports are expected to rise only moderately. In the longer run, efforts to expand the acreage under rubber and improve the yield (which is currently very low) through replantingcould increase exports, if sufficient incentivesare given to rubber growers. Exports of raw jute are not likely to increase given the expected larger requirementsfor domestic productionof jute manufactures.
3.10 Timber. Teak production reached 390,000 Hoppus tons in 1980/81, compared with an annual allowable cut of 400,000 Hoppus tons as determinedby the Forestry Department. Therefore, unless the GOB steps up teak reforestationefforts to ensure future teak reserves, it would not be prudent to significantlyincrease teak extraction. However, 35% (in terms of log equivalent volume) of teak logs produced is currently being domesticallyconsumed, mostly by government agencies. Assuming that some of this domestic consumptioncan be and will be replaced by non-teak hardwood, teak exports can be expected to increase. In the longer run, if secondary processing of teak for export is stepped up, exports of teak sawnwood would begin to decline. Currently, a forest inventory project is underway in order to determine the availabilityof commerciallyattractive hardwood species other than teak. In the medium term, market demand outlook for tropical hardwood is reasonably bright, and Burma should be able to expand exports of non-teak hardwood quite rapidly from the current very low base. In the longer term, it should be possible to substitute exports of plywood, furniture, and other secondary processed products for exports of logs and simply sawn timber.
3.11 Fishery products. Market prospects for Burma's fishery products, especially prawns, are very good. However, it is important that Burma should be able to improve the quality of products and marketing. Burma's history of significantexports of marine products is only recent; and, in terms of volume, only 2% of total production is currently being exported. Relatively large investmentsthat have -38-
recently taken place in this sector to improve storage and transport facilities and to expand fishing activities by PPFC and the private sector have not yet been fully reflected in better export prices, through the establishment of a reputation for quality, or in the efficiency of harvesting. And yet, the cost of production has increased dramatically because of the need to properly depreciate these investments. Current efforts to learn to utilize these investments effectively, however, are expected to result in marked reductions in costs per unit of output and large increases in fisheries exports over the next few years.
3.12 Non-fuel minerals. Among the non-fuel minerals exported by Burma, the most important products are tin and tungsten ores and concentrates, which currently account for almost two-thirds of export earnings from non-fuel minerals (excluding gems). Projects to rehabilitate and expand the tin and tungsten production capacity are under implementation. In addition, a new tin mining project is being implemented, and a tin smelter project located at Syriam is expected to be completed during 1982. Lead, zinc, and silver are produced at the Bawdwin mining complex at Namtu, where a new refinery replacement plant was completed at the beginning of 1981/82. It has an annual capacity of 160,000 troy oz. of refined silver, 2,300 long tons of refined lead, and 3,000 long tons of zinc concentrates. The initiation of a new project for open-pit mining at Bawdwin is expected to increase the mine's capacity by 25% during 1982/83. Copper production, which is currently very small, will become an important factor in Burma's exports when the ongoing Monywa copper mining project comes onstream by 1983. It has a designed annual production capacity of 60,000 tons of copper concentrates (13,000 tons in Cu content).
3.13 The export growth scenario presented in Table III-I and discussed above presupposes at least partial resolution of the current problem of fuel shortages. Export earnings growth could proceed even faster if petroleum production picks up and crude oil exports are resumed, or if significant new policy changes, such as increases in prices for short-gestation crops, are carried out to stimulate exports.
Diversification Strategy and Choice of Industries
3.14 Over the last decade, the focus of Burma's export development strategy has been to revitalize the exports of selected natural resource-based products in the production of which Burma traditionally has had comparative advantage. This strategy has generally been successful, especially with respect to rice, maize, pulses and beans, and forest products, and more recently, in the fishery and mining sectors. It will be continued in the FFYP period. -39-
3.15 GOB's long-term objective is to contain the dependence on rice and diversify into non-rice primary products and manufactures. While world demand for rice is expected to grow at a reasonablyhigh rate (2-3% per annum), there is some risk associatedwith increasinglyheavy dependence on rice. The indices of price fluctuationin Table III-2,
Table III-2: INDICES OF FLUCTUATIONSIN COMMODITY PRICES a/ (percent change in constant prices)
Average Deviation Average from 5-Year Annual Moving Averages Change
Foodgrains
Rice 14.8 16.8 Wheat 7.2 10.0 Maize 6.7 9.9 Grain Sorghum 5.5 9.2
Other Commodities
Groundnuts 9.1 10.3 Jute 9.3 15.7 Rubber 12.8 16.5 Tobacco 5.9 10.6
Logs (Lauan) 7.9 11.4 Logs (Sapelli) 10.3 13.7 Sawnwood 7.4 10.6
Copper 15.6 18.6 Tin 8.0 10.2 Lead 13.8 15.8 Zinc 15.0 17.9
a/ For the calculationof the indices of fluctuationin commodity prices, annual price data in 1977 constant dollars for 1955-78 were used, ignoring negative signs.
Source: World Bank, Economic Analysis and ProjectionsDepartment. -40-
for example, suggest that rice is the most volatile commodity among foodgrains--primarilybecause such a small proportion of total production is traded internationally. Table III-2 also shows that, with the exceptions of copper and zinc, rice exhibits greater price fluctuationsthan other Burmese export or export-relatedcommodities for which similar informationis available. Another risk for rice exports is the possibilityof crop failure resulting from unfavorableweather. These risks represent positive costs to the economy. Therefore, despite the obvious comparativeadvantage that Burma has in the production and export of rice, it is understandableif the Government desires not to increase the share of rice in total exports much beyond 50%.
3.16 In choosing new types of industries or products for export promotion, several major considerationsdeserve special attention:
(a) long-termmarket prospects for the products under consideration;
(b) the characteristicsof the products in terms of factor input intensities;and
(c) net foreign exchange earnings (as distinguishedfrom gross export earnings).
What follows in this section illustrates the relevance of these three factors in the context of Burma.
(i) "Strong" vs. "weak" commodities
3.17 World demand prospects vary from product to product. For example, primary commodities such as jute, sisal, tea, cocoa, coffee, and wool seem to have relatively poor long-termmarket demand prospects, while demand prospects for fruits, vegetables,rubber, fats and oil, livestock, forest products, fishery products,minerals, and fuel are generally bright. Within the first group, the GOB is currently promoting jute. While Burma may have a comparativeadvantage in jute production from the standpoint of its resource endowment, the long-term market prospects for raw jute exports are not so encouraging. Growth in world demand is projected to be less than 0.5% per annum, because jute is likely to continue to suffer from substitutionby synthetics. It may make sense for Burma to develop its own jute manufacturingindustry in order to meet the growing domestic demand, but due caution should be exercised in expandingexport-oriented production of jute or other weak primary commodities. Market prospects for manufacturedproducts also vary; the products subject to the most widespread tariffs and quotas are textilesmade from cotton, wool, and man-made fibers. Even for these products,however, small quantities are allowed to enter industrialized countries relatively freely. -41-
(ii) Factor input intensities
3.18 The notion of relative factor intensities is never precisely clear as there is usually some variability in the choice of technology for producing a product. Nevertheless, it is often possible to broadly categorize productive activities in terms of factor intensities--e.g., capital-intensive, unskilled-labor-intensive, skilled-labor-intensive, high-technology-intensive, energy-intensive, and land-intensive. These factor intensities should be taken into account when choosing appropriate export industries. It would be more appropriate at this stage of development, for example, to focus on unskilled and semi-skilled labor-intensive, as well as land-intensive, activities rather than capital- or energy-intensive activities since capital and energy are currently scarce in Burma. (Development of energy-intensive industries in the longer term may, of course, be appropriate.) The GOB plans to continue to focus on agricultural exports as the most promising area of development in the medium term, including investments in such long-gestation, labor-intensive crops as oil palm and rubber, both of which have relatively bright world market prospects. In contrast, in view of the large investments undertaken recently, further investments in the fisheries sector, which is relatively capital- and energy-intensive, are being postponed as the GOB considers that a period of consolidation is in order.
3.19 The mining sector in Burma is believed to have a vast potential, although the precise extent of economically relevant resources is not known. Mining projects tend to be highly export-oriented and can contribute significantly toward the country's gross export earnings. However, even an economically viable mining project would probably make sense in a foreign exchange- and capital-scarce economy such as Burma's only if the foreign exchange part of the investment can be made available from foreign sources and is additional to capital which would be otherwise available. There may, nevertheless, be a prima facie justification for a gravel pump tin mining project, as it is a relatively labor-intensive method of mining.
3.20 First-stage mineral processing (e.g., smelting and refining) is not location-bound in contrast to mining proper which has to take place where mineral deposits exist. Depending on the amount of excess capacity in the various world smelting industries, custom smelting may be arranged at substantially less cost than investing in a smelter for local use. Custom smelting is an important option to consider since mineral processing tends to be capital-intensive, foreign-exchange-intensive, and subject to economies of scale. A tin smelter is already under construction at Syriam; however, the Ministry of Mines is contemplating the establishment of a copper smelting plant to process the copper concentrates to be produced at the forthcoming Monywa mine. This project should be carefully reviewed, since currently projected production of the mining project alone would probably be too small to justify an optimal scale smelting plant. A copper smelting project is -42-
likely to be economically viable only when sufficiently large additional supplies of copper concentrates become available from another mine.
3.21 The GOB is beginning to pay increased attention to labor-intensive export industries, as distinguished from capital-intensive, import- substituting industries. As mentioned earlier (para 3.05), such relatively labor-intensive activities as mechanical wood processing (sawnwood, veneers, plywood, mosaic flooring, and furniture) and garments manufacturing are being developed as export industries, although investments are also contemplated for such capital-intensive industries as cement and pulp and paper. Processing of hides and skins (leather/leather goods industry) could be a viable export industry in Burma, in view of the relatively labor-intensive nature of such an industry and increasing local availability of raw materials. Light engineering industry might also be promising in view of the relatively less capital-intensive nature of such an industry and the local availability of semi-skilled labor.
(iii) Net vs. gross foreign exchange earnings
3.22 An export-oriented production project brings in foreign exchange revenues; but, if the construction and/or operation of the project requires imported or exportable inputs on a significant scale, the expected gross export earnings from that project could be a misleading guide in developing an export-oriented strategy. Where exports are based on imported materials, the total cost of imports of raw materials, packing materials and all other foreign exchange "leakages," including repatriated earnings, have been shown in other countries to amount often to 80% or more of gross export earnings. As an example of this, the net foreign exchange earnings from the new garment factory are considerably less than gross earnings because of the dependence on imported fabrics as inputs. This does not mean that the project is undesirable; although, in processing exportable raw materials, it is not uncommon to actually lose foreign exchange when all costs are taken into account. It does mean, however, that in choosing the best projects for an export-oriented strategy, comparisons should be made on the basis of net rather than gross foreign exchange earnings per kyat of investment. A technical note at the end of this chapter illustrates some important concepts.
Measures to Promote Exports
3.23 Although the choice of industries for export diversification is important, the GOB will also want to actively support a more export-oriented strategy with specific measures. The most important of these at this stage would appear to be better market intelligence, improved product quality, and appropriate pricing policies to give adequate export incentives. Steps are already being taken to facilitate exports with these measures, although additional thought should be given -43-
to assuring a favorable incentive structure over the medium to long term.
(i) Market intelligence
3.24 No major changes have been made in the organizationof export marketing functions in the last few years. 1/ However, increased efforts are evident in the area of market intelligenceactivities. The Myanma Export-ImportCorporation continues to handle major agricultural commodities,but each SEE concerned with export marketing has now created its own market intelligenceunit. In addition, a new Trade Promotion and Market Development project will establish a Trade InformationService within the Ministry of Trade for the collection, processing, storage, and retrieval of trade informationto service the needs of all SEEs engaged in exporting. The project will establish and operate a well-equippedtrade documentationunit and provide in-depth informationcollected and organized on selected products and target markets. It is expected to lead to specific proposals for strengthening the infrastructuralframework for export promotion. The project is being executed by the UNCTAD through the InternationalTrade Centre (UNCTAD/GATT),and if the system is properly operated and utilized by all the agencies and corporationsconcerned with exporting, it could contribute significantlytoward expansion of Burma's exports.
(ii) Improving product quality
3.25 An important means of increasingexport earnings would be to improve the quality of the products exported. In several commodities, Burma is being penalized in terms of the average prices received because of inferior quality. Table III-3 compares the average export prices of rice, maize, jute, and rubber received by Burma with those received by all developing countries for 1978-80. (Comparabledata on other exports are not readily available.) In 1980, for example, the average export price of Burmese rice was 24% below that for Thai rice; and, if Burma had received the same average price as Thailand, Burma would have earned an additional $44 million from rice, or 10% of total export earnings. Over the next few years, if Burma could improve the quality of its major agriculturalexport commoditiesso as to receive the average prices that developing countries as a whole receive, export earnings could be 10-20% higher than otherwise.
1/ See Chapter VI on Export Policies in Burma: Development Performanceand Policies, Report No. 2347-BA (March 8, 1979), for a description of these functions. -44-
Table III-3: EXPORT UNIT VALUES OF SELECTED AGRICULTURAL EXPORTS a/ (US$ per metric ton)
Burma All Developing Countries
Rice 236.9 342.5 Maize 120.3 121.1 Jute 264.1 346.2 Rubber 1,027.2 1,135.9
a/ Averages for calendar years 1978-80.
Source: FAO, Trade Yearbook 1980
3.26 Quality improvement could be achieved in two ways, i.e., by increasing the proportion of the varieties preferred by the market and by improving the average grade (or quality in the narrower sense) within each type. For example, Burma's exports of rice consist mainly of Ngasein, Emata, and Zeera, among which Emata is the most preferred type, commanding premiums over other varieties, as shown in Table III-4. Furthermore, within Emata and Ngasein types, the lowest quality (35% broken) is the dominant grade in terms of volume. By increasing the share of the preferred varieties and reducing the share of 35% broken, Burma could improve the average price obtained for rice. This is, in fact, the Government's current strategy, and a number of projects, either under implementation or at the planning stage, will help improve the quality of Burmese exports. For rice, projects for upgrading and expanding the milling and storage capacities are planned. Projects to modernize the vegetable oil refining industry would increase the yields of oilseeds and, at the same time, improve the quality of oilcakes by reducing their oil content. Better storage and packaging facilities for pulses and beans would help reduce problems of rodent and insect damages. Better treatment and processing of raw rubber would improve the prices obtained for exports of rubber. Improvements in shrimp and fish processing and the related transportation facilities would improve the export marketability of Burmese fishery products considerably. -45-
Table III-4: EXPORTS OF RICE: QUANTITY, VALUE AND UNIT VALUE BY PRODUCT CATEGORY, 1980/81
Production Quantity Value Unit Value Specification '000 M Tons % in Total $'000 $/M Ton
Ngasein (average) 294.2 43.8 83,250 283.0 15% broken 13.9 2.1 4,688 337.3 25% broken 17.5 2.6 4,863 277.9 S.M.S. 35% broken 206.9 30.8 59,277 286.5 Full-boiled 12% 55.9 8.3 14,422 258.0
Emata (average) 210.5 31.3 70,657 335.7 Super 10% broken 22.8 3.4 8,748 383.7 15% broken 51.6 7.7 16,832 326.2 35% broken 130.6 19.4 43,451 332.7 S.M.S. 35% broken 5.5 0.8 1,626 295.7
Zeera (average) 109.4 16.2 33,484 306.1 10% broken 60.0 8.9 18,012 300.2 35% broken 40.0 5.9 12,440 311.0 S.M.S. 35% broken 9.4 1.4 3,032 322.6
Milcher No. 1 (8% broken) 0.7 0.1 187 267.4
White Rice, n.e.s. 16.3 2.4 5,602 343.7
Sub-total 631.1 93.8 193,180 306.1
Broken Rice 41.8 6.2 8,920 213.4
TOTAL 672.9 100.0 202,100 300.3
Source: Central Statistical Organization.
(iii) Pricing policies
3.27 Perhaps most importantly, any improvements in the pricing mechanism throughout the export sector can be expected to have far-reaching positive effects on promotion of exports in the medium to -46-
long run. Previous Bank reports 1/ have elaborated on the possible implicationsof raising the paddy procurementprice for stimulatingrice production and increasing the exportable surplus. Although the GOB has not changed the basic procurementprice for ordinary rice since 1974, other incentives,including subsidized fertilizer,have been provided and slightly higher premiums are being offered for internationally preferred types of rice (see Appendix Table 7.6). The GOB should further improve the premium pricing system to facilitate the procurement of exportable and internationallypreferred types of rice.
3.28 The existing Export Price EqualizationFund (EPEF) may continue to provide a useful institutionalmechanism for export promotion in the future. EPEF was created in 1976 and has provided budgetary revenue from the profitable traditionalBurmese exports, such as rice and teak, and covered the temporarylosses of new exports. 2/ Close to 100% of exports are currently covered. Table III-5 shows the ratio of the average export price to the domestic price 3/ for exports in 1976/77 through 1980/81. Based on these prices, the commoditiesare classified into four major groups, with Group I representingthe traditionally profitable exports; Group II, exports which may have been initially unprofitablebut which are now profitable;Group III, exports which were once profitable but are now unprofitableor borderline;and Group IV, exports which have not been and are not yet profitable. These ratios, and hence the groupings,must be interpretedwith caution, since domestic costs do not always reflect full economic costs, especially in the areas of energy and transport; thus, there may be an upward bias in the ratios, especially for such energy- and capital-intensiveexports as petroleum products, metals and ores (other than tin mining), cement, and fish. If, however, adjustmentswere made in the export prices by using a "shadow" exchange rate to reflect a higher scarcity value of foreign exchange than that shown by the official exchange rate, all the ratios would be higher than those shown in Table III-5. Nevertheless,some indication of relative profitabilityis given, and it is clear that the large majority of Burma's traditionalexports fall in Groups I and II.
1/ Burma: DevelopmentPerformance and Policies, No. 2347-BA, dated March 8, 1979; and Burma: Domestic and External Resource Prospects, No. 3098-BA, dated October 10, 1980.
2/ See reference in footnote to para 3.24 for a more complete explanation of EPEF.
3/ The domestic price includes a profit margin of 12% (reduced to 5% for exports incurring losses) as well as the applicable commodities and service tax. -47-
Table III-5: THE RATIO OF AVERAGE EXPORT PRICE TO DOMESTIC PRICE, BY MAJOR PRODUCT IN THE EXPORT PRICE EQUALIZATIONFUND, 1976/77-1980/81a/
1976/77 b/ 1977/78 1978/79 1980/81 1981/82
Group I Rice 1.04 1.18 1.33 1.33 1.61 Teak & Hardwood 2.28 2.29 2.36 2.41 2.61 Rice Bran 1.26 1.26 1.14 1.57 1.49 Oil Cakes 1.29 1.37 0.91 1.06 1.27 Petroleum n.a. 1.50 1.46 2.02 3.26
Group II Paraffin Wax 0.86 1.18 1.40 1.75 - Rubber 1.00 0.98 1.13 1.45 1.50 Metal & Ores 0.76 0.95 1.01 1.09 1.18
Group I-II Pulses & Beans 1.42 1.38 1.12 0.98 0.97
Group IV Prawns & Fish 0.59 0.58 0.59 0.64 0.63 Jute 0.57 0.96 0.87 0.83 0.54 Cement 0.40 0.52 0.57 0.64 0.86 Other 1.00 0.50 0.50 0.80 0.79 a/ The comparison of export prices and domestic prices is made here using the official exchange rate. Group I represents the traditionally profitable exports; Group II, exports which may have been initially unprofitablebut which now are profitable;Group III, exports showing declining profitability;and Group IV, exports which have not yet shown profitability. It should be noted that domestic prices do not always reflect economic costs, especially for energy and transport. b/ Based on the last 8 months.
Source: Myanma Foreign Trade Bank.
3.29 Currently, SEEs producing new and profitable exports can keep profits during an initial period, thereby benefitting from an extra incentive. It may also be possible to use EPEF to promote infant industries,although considerablecaution would need to be exercised in choosing the products to be covered. The current rule under which EPEF will not cover losses greater than 50% of total costs suggests at least -48-
one criterion, and is equivalent to assuming a shadow price of foreign exchange twice the official rate. Nevertheless,some judgmentmust be made about the dynamic potential,as Group IV products have shown consistent losses despite their participationin the scheme for five years.
3.30 Finally, one of the important prices in the economy is the price of foreign exchange, i.e. the exchange rate. Although official prices of domestic commoditiesincluding those exported are set by Government centrally, and hence are not automaticallydetermined by the official exchange rate, the exchange rate does play a role in influencingthe internationalcompetitiveness of the export sector and the allocation of domestic resources. This is because the prices which can be offered to exporters are constrainedby budgetary considerations. For example, an increase in the procurementprice of paddy will reduce public revenues from rice exports, unless the official exchange rate of kyats per dollar is raised thereby increasing the export price of rice in kyat terms.
3.31 The alternative strategy to exchange rate adjustments is to contain the costs of Burmese industries. Burma's exchange rate has been fixed at 8.51 kyats per SDR since May, 1977. However, because inflation rates in Burma have been more moderate than in many of its trading partners, the "real" effective exchange rate (i.e., the number of kyats per unit of foreign exchange in real terms), calculated on a trade-weightedbasis, has on the whole increased since 1977, providing greater incentives for exports and protection from imports, including unofficial imports. A comparison of Burma's real effective exchange rate with that of export competitorsin rice and timber shows similar favorable trends. If the differentialin inflation rates can be maintained, it could have a significantlyfavorable impact on Burma's export competitivenessover time. As discussed in Chapter I (para 1.24), however, recent price stabilityhas been achieved at some cost, since existing prices do not reflect the scarcity value of various resources to the economy. Gradual upward adjustmentsin these prices should be made in the future. If the GOB can make the recommendedprice adjustments and still maintain a lower rate of domestic than internationalinflation--a possible development if the latter continues at a relativelyhigh rate--themaintenance of the exchange rate fixed in terms of the SDR will provide a continuing beneficial stimulus to both export and import-substitutingindustries. If, however, the resulting effect is a more rapid increase in the domestic price level in Burma than in her major trading partners, offsetting adjustments in the exchange rate should be made. -49-
Technical Note on Net Foreign Exchange Earnings
A useful first approximationof net export earnings can be made by taking into account direct plus selected indirect foreign exchange costs where the latter might be substantial. Although not a substitute for standard economic cost/benefitanalysis, a ranking of export-orientedprojects by net export earnings per kyat of required investment could help establish priorities. In calculatingtotal kyat investment,local costs other than those for exportableswould be deflated by a conversion factor less than 1.0 to reflect the scarcity value of foreign exchange. (The conversion factor is thus the ratio of the official exchange rate to the so-called shadow exchange rate.) Rankings would be similar to rankings by the more sophisticateddomestic resource cost method, although calculationsare simplified. The following three examples illustrate some importantconcepts.
Teak processing. More than 70% of Burma's teak exports are already being exported in the form of processed products,mostly sawnwood. In 1980/81, 5eak sawnwood was exported at an average price of $576 per cubic meter (m ) of sawlwood. Under the current conditions of Bur ese teak sawmills, about 3 m of teak logs are required to produce 1 m of sawnwool. Therefore, the export earnings from teak sawnwood are only $190 per m of logs used for making the sawnwood, compared to average earnings of $412 per m of logs exported directly. It may be wrong to conclude from these data that the net foreign exchange earnings from teak sawmillingare negative in Burma, because the quality of logs used for local sawmilling is inferior to the quality of logs exported. If the processed logs are not exportable,net foreign exchange earnings would be roughly equal to the gross export earnings less allowances for the foreign exchange cost of the sawmilling machinery and spare parts attributableto the exports of teak conversions. However, if and when exportable logs are used in local sawmilling, the cost of these logs must also be deducted from the gross export earnings to arrive at the net foreign exchange earnings. A similar reasoningwould apply to export-orientedprocessing of non-teak hardwood or of any other primary product which is traded internationally. To generalize, it is important to take account of the opportunity cost of exportable inputs.
Mineral processing. Where existing facilities can be converted to export-orientedactivities, estimates of average annual foreign exchange requirementsfor maintenance and replacementof investment can be added to other foreign exchange costs which in turn can be subtracted from expected gross export earnings to estimate net earnings on an annual basis. However, when a new capital-intensiveproject involves a high proportion of imported goods and services, and foreign exchange earnings will materialize only after a significanttime lag, it is -50-
important to discount the stream of net foreign exchange earnings to take account of the opportunity cost of these funds. This can be illustrated by an example of a copper smelting and refining project. Figures for the example are based on a project outside Burma which has a designed capacity to produce some 130,000 metric tons of refined copper per year for about 15 years. 1/ As shown in Table III-6, the
Table III-6: PRESENT VALUE OF NET FOREIGN EXCHANGE EARNINGS FROM A COPPER SMELTER/REFINERY PROJECT - AN ILLUSTRATIVE CASE (US$ million in constant prices)
(1) (2) (3) (4) Foreign Foreign Net Foreign Exchange Earnings (1+2) Exchange Exchange _ Discounted at: Costs Benefits a/ 0% 10%
1980 - 54 -54- - 54 1981 -151 -151 -136 1982 - 28 - - 28 - 23 1983 - 87 68 - 19 - 14 1984 - 51 126 75 51 1985 - 35 126 91 57 * ~~ ~~. . ( * .. ( 385
* . . ( 1998 - 35 126 91 16
Net Present Value 1,097 282 a/ Excludes the export value of domestically supplied copper concentrates. present value of the net foreign exchange earnings with a 0% time preference is considerably higher than with a 10% discount rate, a rate commonly used as the minimum acceptable rate of return in project analysis. To compare projects using a 10% discount, where the present value of the initial investment is $340 million, the present value of the foreign exchange component is $290 million, and the conversion
1/ A copper smelting plant considerably smaller than this is being considered in Burma; because of economies of scale, however, the net benefits--and net foreign exchange earnings per invested kyat--is likely to be substantially less. -51-
factor for local investment costs is .6, one would divide the present value of $282 million by [$290 + (.6 x 50)] arriving at a ratio of .88. This could be compared to similar ratios for other projects and priority given to the highest ratios.
Cement. Another example of the importanceof properly accounting for capital costs is provided by the cement industry. Estimated annual expenses on depreciation, repair and maintenance for an ongoing rehabilitationproject is less than $15 per ton; however, capital costs of a new plant might range from $250 to $400 per ton, depending on the production scale and terms of finance. Certainly over 70% of total investment would represent foreign exchange costs. With an international selling price of cement at $50 per ton f.o.b. for bagged cement, the net foreign exchange earnings, taking into account other import requirements, would be extremely low compared to alternative export-oriented investments. Moreover, in such a relatively energy-intensive industry as cement, a more realistic cost estimate should be made for energy inputs. Using the official GOB prices of US 2.1 cents (K .15) per kWh of electricity and US 15 cents (K 1.05) per 1,000 cubic feet of gas, cost estimates of energy inputs from this same rehabilitation project total only US$3.50 per ton of cement. Valuing electricity at a long-run marginal cost estimate of US 8.6 cents (K .6) per kWh and natural gas at an estimated opportunity cost for fertilizer production of US$2.9 per 1,000 cubic feet, energy costs per ton of cement would be US$28. 1/ Given the current energy shortage in Burma, it would seem particularly important to value these inputs at a realistic opportunity cost. Finally, if the low prices for internal transport were properly adjusted upward, this would further reduce the attractiveness of export-oriented cement production, since transport cost is an important factor in determining the delivered cost of cement.
1/ The correct valuation of natural gas is a complex issue and would change over time. For example, valuation of unused associated gas would be much less in the short term, although valuation of gas by its heat equivalent in terms of oil would be much more. -52-
CHAPTER IV. LONG-TERM DEVELOPMENTOF INFRASTRUCTURE
A. Introduction
4.01 Chapter I discussed, inter alia, the favorable growth performance achieved by Burma since the mid-1970s. To a large extent, this achievement has reflected the higher levels of productivity and capacity utilization that followed from the policy and institutional reforms initiated in the early 1970s, a process strengthened by a major increase in real rates of investment. Further productivity gains are undoubtedly possible, notably in the agricultural sector, and Chapter II hence argues that growth prospects during the FFYP period are relatively promising. Continued growth in investment will, however, increasingly be limited both by financial resources and by implementation capacity. Chapter II argues, therefore, in favor of a period of consolidation to solidify the achievements of the recent past; to avoid the dangers of over-commitment; and to provide an opportunity for reviewing longer-term investment priorities and the institutional reforms necessary to lay the groundwork for sustained growth.
4.02 This chapter illustrates the issues that will need to be taken into account in determining long-term infrastructural requirements by reference to three key sectors: irrigation, hydroelectricity, and transport. The investment program for the FFYP period is still being finalized but the wide range of longer-term projects in these sectors, the scale and complexity of many of the investments involved, and the crucial role of timing (e.g. in meeting power demand) highlight the importance of planning to ensure that the right choices are made. Institutional reform to carry out this planning function and to strengthen implementation capacity is a priority for all the agencies concerned. Such reform would greatly facilitate the attraction and justification of the sustained support which will be essential to the long-term exploitation of Burma's very substantial natural resources.
B. Irrigation
Background
4.03 Irrigation has to date played a fairly limited role in Burma's agricultural development. Only about 12.5% of the area under cropping receives irrigation, one of the lowest ratios in Asia, and only about 15% of the irrigated area is double cropped. Probably of greater importance than irrigation has been the provision of flood control and drainage facilities in the Irrawaddy-Sittang delta. These currently protect about 2.7 million acres or about 13.5% of Burma's cropped area. -53-
4.04 Although its past role has been limited, irrigation has received increased priority since the early 1970s and could potentially contribute very substantially to increased agricultural production. The highly seasonal characteristics of Burma's rainfall mean that under rainfed conditions cropping intensities are low. Variable precipitation and poor water control result in water stress on growing crops (especially in Upper Burma) and flooding (especially in Lower Burma), and as much as 10% of the sown area is commonly destroyed. Since only a tiny fraction of the water flowing in Burma's rivers is currently tapped for irrigation, there is clearly major potential for increased cropping during the dry season and for securing a full main season crop.
4.05 Irrigation development has resulted both from Government and from private initiative. Many government schemes date back centuries. They are predominantly diversion schemes on tributaries of the Irrawaddy in the central Dry Zone and are designed primarily to secure the main season paddy crop. Schemes on five major tributaries account for about 775,000 acres of irrigated land or nearly 60% of the total under government schemes, with about thirty further schemes of between 2,500-30,000 acres accounting for perhaps 160,000 acres and schemes under 2,500 acres for about 100,000 acres. Storage schemes have in the past been of lesser significance, commanding in total about 300,000 acres. Flood protection works typically comprise river training and embankments in the Irrawaddy/Sittang delta areas to prevent river flooding during the monsoon season. Small-scale drainage works are spread more widely throughout the country. Annex B summarizes details of the projects maintained by the Irrigation Department, together with information on those under construction or which have been proposed.
4.06 Private irrigation takes both community and individual forms. Village tank schemes cover about 120,000 acres and, like their government counterparts, are concentrated in the upper reaches of Dry Zone catchments. Village diversion schemes, covering about 700,000 acres, are more widely dispersed not only in the Dry Zone but throughout the hill states. Although they are communally owned and run, government support for construction and major repairs can be provided. Individually-owned facilities include wells, pumps, and diversion schemes without canal development. The rapid growth in low lift pumps has been a particularly noticeable recent feature.
4.07 Table IV-1 summarizes trends in irrigated area by type of irrigation. Despite some statistical uncertainties (see footnotes to the table), it shows that the area receiving irrigation only regained pre-war levels in the early 1960s. Thereafter, it has risen rapidly, almost doubling between 1960/61 and 1980/81. Private irrigation, notably represented by the spread of pumps, has expanded more rapidly than that under government schemes. -54-
Table IV-1: TRENDS IN TOTAL IRRIGATED AREA BY TYPE OF IRRIGATION ('000 acres)
1980/81 1940/41 1947/48 1960/61 1970/71 Provisional
Diversion Systems
Government 713 660 a/ 708 a/ 827 902 Private 279 224 237 699 b/ 690
Tanks & Reservoirs
Government 109 89 a/ 94 a/ 98 56 c/ Private 87 81 76 89 106
Other Private
Wells 18 19 16 28 41 Pumps ( ( ( 92 473 Other ( 297 ( 254 ( 191 240 341
GRAND TOTAL 1,503 1,327 1,324 2,073 2,609 a/ Share estimated by extrapolation. b/ The increase between 1960/61 and 1970/71 in private diversion schemes may reflect improved coverage rather than real development. c/ This provisionalestimate appears to be very low.
Note: These estimates are based on crop reports and are inconsistentwith estimates of total commandedarea supplied by the Irrigation Department (ID), especially of those for Government tank schemes. The latter suggest Government diversion and tank schemes covered 1.07 M acres and 0.32 M acres in 1980/81, implying unrealistically low cropping intensitiesof 84% and 17.5% respectively. Possible partial explanationsinclude (i) the inclusion of some private schemes in those operated by the ID (or vice versa), (ii) delays in downstream developmentof new schemes, (iii) low utilization rates due to adverse climatic conditionsand tanks not filling, and (iv) deteriorationand loss of area under old schemes.
Source: Settlementsand Land Records Department: Season and Crop Reports. -55-
Modes of Irrigation Development
4.08 Alternative modes of irrigation and related development that have been constructed or are under consideration include:
a) Multipurpose storage projects (irrigation, power, flood protection) on major rivers and tributaries;
b) Single purpose irrigation storage projects on lesser rivers and streams;
c) Rehabilitation and new construction of run-of-the-river diversion schemes;
d) Major pump schemes;
e) Groundwater development;
f) Land reclamation, flood protection and drainage; and
g) Support for private irrigation programs.
4.09 Information on those projects under construction or proposed is given in Annex B. Multipurpose storage projects have been under consideration since the early 1950s, particularly for the Dry Zone tributaries of the Irrawaddy and in the Sittang Basin. Two projects (Sedawgyi and Kinda [Nyaunggyat]) are under construction on tributaries of the middle Irrawaddy and are larger than any projects previously attempted. Their primary purpose is to bring perennial irrigation to both existing and newly irrigated land, but power, flood control and water supply benefits are also being obtained. The decision to proceed with these, rather than with a significantly larger project on the Mu river, reflected financial availabilities and perceived implementation capacity. Detailed designs for a dam on the Mu do, however, exist and, subject to the experience gained with the on-going projects, might be considered in the longer term. Feasibility studies for dams on the Paunglaung (primarily for power) and Yenwe (primarily for irrigation and flood control), tributaries of the Sittang river, have been completed, although finance for these projects has still to be arranged.
4.10 Several other multipurpose projects have been identified. The scale and complexity of these investments, as well as their high cost and long gestation characteristics argue against assuming too may commitments simultaneously. Furthermore, experience with the on-going projects needs to be evaluated. Nevertheless, feasibility studies and the initiation of hydrological and other data collection are probably justified to establish priorities for the future, and at least one additional major power project will need to be scheduled for the 1990s to follow Paunglaung. Main stream -56-
dams on the Irrawaddy, the Chindwin and the Salween are unlikely to be within Burma's financial resources for some time to come. Possible sites, mainly for power, have, however, been identifiedand in one case (Tamanthi on the Chindwin) taken to pre-feasibilitylevel (see para 4.41).
4.11 Single purpose irrigation storage projects have been identified in a number of areas, including: (i) the Sittang Valley, where several projects have been constructed(e.g. Thitson and Yezin) and others identified (e.g. Sinthe); (ii) the left bank tributariesof the Irrawaddy below its confluencewith the Chindwin (e.g. Kyetmauktaungalready constructedand projects in the Yin Chaung catchment under consideration); (iii) the rivers of the east Pegu Yoma (e.g. North Nawin already constructedand South Nawin 1/ recently initiated);and (iv) the streams of the Tenasserim coast. While some such schemes are substantial (e.g. North Nawin), catchments tend to be fairly small and dry season flows minimal. In the Dry Zone the major benefits come during the monsoon season although in areas of higher rainfall (e.g. the Tenasserim coast) storage is for dry season cropping. In a few cases, catchment yields have proved lower than expected and considerationhas had to be given to providing supplementary supplies from neighboringcatchments. Costs per acre can be relatively high; and, although projects must be reviewed on a case-by-casebasis, they are likely to be justified primarilywhere they can stimulate diversificationinto high value cash crops or where they fulfill regional developmentobjectives.
4.12 New run-of-the-riverdiversion schemes have received reduced emphasis, given the previous exploitationof major Dry Zone opportunities and their lack of justificationin areas of higher rainfall. Projects are, however, being considered,mainly in the hill states, and rehabilitation/ modernizationof existing schemes has been proposed, either in advance of the provision of storage or where storage is not justified. High priority needs to be given to tackling design and management issues (para 4.19). A pump diversion program has been initiated to serve three relatively small areas (totalling 25,000 acres) in the Dry Zone although a larger project in the delta (Henzada)has been postponed until technical problems associated with the pump intake site are resolved. Total dry season flows in the Irrawaddy substantiallyexceed safe rates of extraction and, where topographicalfeatures are favorable, further projects appear justified. Relatively low capital costs are, however, offset by high recurrent costs, and priority needs to be given to managing the water resource efficiently. Managerial problems are also being encounteredin the pilot groundwater development program. Extensive groundwaterresources have been identified (for instance on the left bank of the Chindwin), but public tubewell developmentis new to Burma. Although the prospects are promising,
1/ South Nawin has a very small power component. -57-
development will need to be geared to the resolution of operational and management problems.
4.13 Land reclamation, flood protection, and drainage projects in the delta have proved a relatively low cost approach to promoting paddy production. Two major projects covering about 360,000 acres of agricultural land (of which about 30% is newly reclaimed) are under construction, and smaller embankment and drainage projects are widespread, for instance along the Arakan coast. By fully empoldering areas previously subject to river flooding (in the upper and middle deltas) or tidal inflows (in the lower delta), reclamation of waterlogged and saline land can occur while high yielding practices are promoted throughout the protected area. In the middle and upper delta, unaffected by saline intrusion, these schemes also promote dry season pump irrigation. Recent studies suggest that up to an additional 2 million acres could be protected in this way without adverse effects on the hydrological regime. The impact on fisheries may, however, be adverse and such development will need to be geared to long term strategies for rice production (see also para 4.22).
4.14 Finally, private irrigation has proved a responsive and quick-yielding mode of irrigation development. Pump sales through the Agricultural Mechanization Department rose from about 600 per year in the 1960s to about 4,000 in the 1970s, and private pump ownership is now estimated to be about 40,000 (of which 30% are cooperatively owned). Available evidence suggests pumps provide a flexible, efficient, and high return form of irrigation. Evidence on other forms of communal and private irrigation is less readily available, but programs in support of village diversion and tank schemes probably provide a low cost approach which would have important advantages in terms of regional balance in development.
Issues in Irrigation Development
(i) Strengthening the Irrigation Department
4.15 The operations of the Irrigation Department (ID) in the Ministry of Agriculture and Forests have expanded rapidly over the past decade, primarily in response to new aid-supported projects. This has been reflected in the sanctioned staff positions (up from 6,756 in 1973 to 19,477 in 1981); in the construction equipment fleet (up from 1,311 items to 2,183); in the projects under implementation (up from 8 to 16); and in budgetary allocations. Table IV-2 shows in particular the substantial increases in capital outlays since 1974/75. Table IV-3 demonstrates that the regular establishment has remained virtually unchanged. Skilled and unskilled labor have been recruited under the "Decasualized Work Charged Establishment", essentially permanent employees, but additional engineering staff have been appointed largely on a temporary project basis. -58-
Table IV-2: IRRIGATION DEPARTMENT: BUDGETARY OUTLAYS ('000 kyats)
Expenditure Head 1971/72 1974/75 1977/78 1980/81
Establishment 8,145 11,106 17,974 28,784 Other Recurrent 18,997 29,295 49,431 70,013 Capital 53,720 41,055 269,126 408,058
Total 80,862 81,456 336,531 506,855
Table IV-3: IRRIGATION DEPARTMENT PERSONNEL
Sanctioned Strength Actual Strength
1973 1981 1981
Regular Establishment 2,939 2,951 2,362 "Decasualized Work" 3,817 11,197 6,591 Loan Projects - 5,329 3,731
Total 6,756 19,477 12,684 of which: Engineering Staff n.a. n.a. 1,309
Source: Irrigation Department.
4.16 An ad hoc approach to staff recruitment was probably necessary to facilitate the rapid increase in the ID's activities, but the rapid expansion has created strains within the organization. The ID has, however, put forward a major reorganization proposal to regularize temporary and contract staff; to strengthen the central divisions (notably Planning and Design) which have become relatively weak under the project-induced process of expansion; to establish a comprehensive regional organization for maintenance and minor construction; and to set up four permanent nucleus construction units for major projects. Details of the proposed reorganization are still under review and important issues to be settled include recruitment, training requirements, and the role of technical assistance. Nevertheless these proposals are an important step which, once implemented, should consolidate the Department's capacity to undertake an expanded future role. -59-
4.17 Organizational changes will need to be complemented by improvements to the ID's physical facilities. High priority needs to be given to a central headquarters complex in Rangoon, since the present dispersal in temporary accommodation has obvious disadvantages. Repair and maintenance facilities have been strengthened in the context of specific projects but still suffer from inadequate buildings, lack of spares, etc. A review of how best they can serve the new regional organization should be carried out once the FFYP project schedule has been approved. Similarly, attention needs to be given to making the best use of the ID's holding of construction equipment. Significant savings might be obtained through the rehabilitation of existing equipment and the systematic scheduling of plant requirements to meet the investment program. Anticipation of plant needs should also reduce construction delays.
(ii) Operational issues
4.18 Issues relating to the management of irrigation schemes and the efficient use of water have received only limited attention in Burma. Inadequate budgetary allocations for operation and maintenance have contributed to the deterioration of facilities and increased water losses. Available control mechanisms limit the potential for system management, including diversification into non-paddy crops, although water supplies are rotated during periods of low flow to ensure distribution is as equitable as possible. Tertiary distribution and drainage systems are normally ill-developed and, while this permits field-to-field paddy irrigation, it limits the areas that can be served during the dry season.
4.19 Operational improvements will inevitably be limited by the physical condition of the irrigation facilities. Adequate budgetary allocations for repair and maintenance are a high priority but attention needs also to be given to the modernization of existing systems. The introduction of additional control devices, the extension of the tertiary distribution system and improved drainage are included in on-going projects such as Kinda and Sedawgyi and would need to feature in any rehabilitation program. More fundamental changes might also be considered. A pilot land consolidation program under the Sedawgyi project has exceeded targets prior to the provision of perennial supplies, greatly facilitated by the Government's ownership of land, and could have interesting implications for the future. It is, however, costly and it and pilot programs in such fields as canal lining, local storage and alternative on-farm forms of irrigation need careful evaluation in terms of their relative costs and benefits before they can be widely recommended.
4.20 One interesting development has been the increasingly important role played by the Peoples Councils in irrigated agriculture. Their -60-
representative character, coupled with their role in organizing farmers for operation and maintenance and in determining cropping patterns, provides an unusual opportunity for ensuring popular participation as well as farmer discipline. There are indications that the system works fairly well at the watercourse level although in specific cases, such as the pilot tubewell areas, the involvement of the Village Councils in operational matters may be over-elaborate. Further study is required to evaluate alternative approaches to farmer organization, as well as to investigate related operational matters, at both the watercourse and the irrigation system level, with the aim of scheduling supplies more efficiently and equitably to promote agricultural production.
(iii) Strategies for irrigation and the agricultural sector
4.21 The overall scale of the irrigation development program will need to be essentially justified in terms of its economic returns and its long term impact on agricultural production. Unfortunately, only limited direct evidence is available since yield data are not collected on an irrigated area basis and there have been few, if any, monitoring and evaluation case studies. Feasibility and similar studies based primarily on a priori assumptions suggest economic rates of return in the range of about 10-15% for single purpose storage projects with mainly new irrigation development; perhaps 15-20% for multipurpose projects with a significant power component and serving major existing areas; similar, or slightly higher, returns from Government pump schemes; and returns in excess of 20% for private low lift pumps and land reclamation and drainage projects in the delta areas. While such estimates provide a reasonable basis for supporting continued irrigation and delta development, the assumptions and approach adopted in such a priori studies can vary widely, they frequently understate problems of implementation, and they are no substitute for a systematic approach to project evaluation based on monitored experience. Only if project monitoring and evaluation is adopted will a clear picture of investment priorities be established.
4.22 Furthermore, a priori studies do not normally take into account implications for the overall balance of agricultural output. The success of the Whole Township Paddy Production program has led to substantial additional rice surpluses for export, with the major production increases coming from rainfed areas. Programs for rainfed paddy production are likely to have high economic justification, and Chapter III projects further increases in the rice surplus in the medium term. While high return paddy producing projects (such as land reclamation in the delta) which clearly accord with Burma's comparative advantage, will probably continue to be justified, there are obvious risks attached to over dependence on such a price-volatile commodity as rice. The overall scale of the irrigation development program, especially where it is capital intensive and long gestation in -61-
character, will need to be geared therefore to a long-term strategy for agricultural diversification. The extension of the Whole Township Program to such crops as oilseeds, maize, and wheat and the promotion of industrial crops such as cotton and jute in irrigated areas represent steps in this direction. The success of such a strategy will depend critically on the provision of complementary agricultural services in support of diversification and on the resolution of the operational issues discussed above since, only if the necessary physical facilities are provided to enable the efficient distribution of water to take place, and if improved water management practices are adopted, will it be possible to diversify more widely in irrigated areas.
(iv) Planning and data collection
4.23 Implicit in much of the above is the importance to be attached to the proposed strengthening of the ID's survey, planning and design capacity. The rapid expansion of the ID's development program has placed pressure on its project preparation activities while insufficient resources have been devoted to complementary monitoring, evaluation and operational studies. These functions are in many cases performed by other departments and agencies, including the Central Statistical Office and the Agricultural Corporation, but closer coordination with the planning activities of the ID should contribute importantly to the evolution of a balanced investment program. During a period of consolidation, therefore, emphasis should be put on such coordination with a view to: (a) strengthening basic data collection activities (notably in the areas of hydrology, survey and land resources), (b) initiating and evaluating pilot operational, water management and research projects, (c) launching appropriate monitoring and evaluation studies of on-going projects, and (d) establishing a more systematic review of alternative investment possibilities. The role of other departments and agencies in carrying out such studies will need to be defined, and, where appropriate, the ID's capacity to participate in joint evaluation exercises should be strengthened. While the overall scale of the irrigation program will need to be geared to long-term strategies for the agricultural sector, the ability to implement agreed strategies and to attract financial support will crucially depend on such planning activities and on the continued preparation of well-prepared and well-designed projects.
The Scale and Composition of the Investment Program
4.24 Capital expenditure by the ID in 1980/81 accounted for about 6% of total public investment and for about 55% of that in the agricultural sector. A further large increase (from 400 million kyats in 1980/81 to nearly 700 million kyats in 1982/83) is anticipated by the Department as a result of already committed projects. Thereafter, committed expenditures are projected to decline but, assuming new -62-
projects are initiatedunder the FFYP, the irrigation development program will contribute substantiallyto the projected increase in agriculture'sshare of total public investment. It has nevertheless been suggested above and in Chapter II that emphasis in the medium term should be placed on the consolidationof the investment program and on the completion of committedprojects. If so, then the guiding principles in devising the investmentprogram might be:
a) To avoid becoming committed to too many large multipurpose projects at any one time, to concentrateon the completion of Sedawgyi and Kinda, and to initiate new projects as constructioncapacity becomes available;
b) To proceed on a project-by-projectbasis in the implemen- tation of single purpose storage projects, pump schemes and groundwater to ensure that the right lessons are learned and that technical,managerial and agriculturalissues are fully explored and taken into account;
c) To launch a rehabilitationprogram which would seek to investigateoperational, maintenance and related issues for existing schemes;
d) To schedule operationsin the delta and other land reclamation and drainage programs so that the overall investmenteffort in these areas remains broadly at the present level; and
e) To continue programs for the sale of low lift pumps through the AgriculturalMechanization Department at levels which meet demand, to strengthen complementarycredit and related services, and to explore means of further promoting and supportingother forms of private and communal irrigation.
4.25 Recent analysis of the overall hydrologicalbalance in the delta suggests that dry season extraction rates from the Irrawaddy/Chindwin system could increase substantiallyabove current levels without adversely affecting the delta regime, while there is for the foreseeable future virtually unlimited physical potential for storage of wet season flows. The cautious but steady adoption of new projects suggested above would not, therefore,pre-empt in any significantway the ultimate use of Burma's overall water resources.
4.26 The longer-termprogram for exploiting these resources needs to be determinedboth within a framework set by overall strategies for the agriculturalsector as well as in relation to other investment opportunities,for instance in rainfed agriculture or in sectors such as power and transport. While irrigationdevelopment will continue to play an important role in increasingand diversifyingagricultural -63-
development,the resources required for these other essential infrastructuraldevelopments will be very substantial. Commitments in the irrigation sector, especially for major capital-intensive, long-gestationprograms, should thereforebe judged in the context of overall infrastructuralneeds so as to avoid the dangers of over-commitmentin the investment program as a whole, while continuing support for relatively low-cost communal, private and small-scale irrigationprograms to ensure regional balance and an emphasis on poverty alleviation.
C. Hydroelectricity
Introduction
4.27 Commercial primary energy, consisting of oil, natural gas, coal, and hydropower accounts for about 35% of total energy used in Burma. The balance is derived from non-commercialsources, mainly firewood and charcoal. Of commercial energy, electric power accounts for about 14% of which more than 80% comes from the facilities of the Electric Power Corporation (EPC). Total installed capacity owned and operated by EPC amounts to 501 MW, while other Government corporationsown captive plant with an installed capacity of 135 MW.
4.28 The presentEPC system comprises three main systems: (i) the Hydro Grid System, including the Lawpita hydro-power station (168 MW), two thermal stations near Rangoon (60 MW of oil-fired steam plant, 36 MW of gas turbines,and 5 MW of diesel-firedplant), the Kyanchaung gas power station (54 MW), 402 km of 230 kV line, 506 km of 132 kV line and 39 km of 66 kV line interlinkingthe Lawpita and Kyunchaung power stations with two 230 kV and three 132 kV substations,and the Rangoon thermal stations connected through 33 kV lines; (ii) the Prome-Myanaung-MyangmyaSystem, consisting of the Myanaung gas turbine station (49 MW) linked to ten 66 kV substationsby 537 km of 66 kV line; and (iii) the Mann System, comprising the Mann gas turbine station (36 MW) serving its locality through 33 kV and 11 kV lines. In addition, there are isolated power stations (totalling 93 MW of installed capacity), and six new plants are under construction--three gas turbine stations (64 MW in total), one oil-fired steam station (18 MW) and two hydro stations (81 MW). Seven mini-hydro plants are also being constructed (6.85 MW).
4.29 The total energy generated by EPC in FY80 was 1080 GWh, of which 67% was hydro generation,24% by gas fired gas turbines and 9% by steam thermal and diesel plant. Maximum demand was 185 MW compared to estimated firm capacity of 337 MW. Present generating capacity is therefore sufficient to cover system peak demand although lack of full integrationwithin the hydro grid, and the mutual isolation of the three main systems, has meant that a substantialproportion of the available -64-
lower-costhydroenergy has gone unused. Furthermore,EPC's plant capacity factor has been low due to: (i) the age of the Rangoon oil fired thermal plant (dependablecapacity 32 MW as against an installed 65 MW), (ii) headrace restrictionsat Lawpita which has limited maximum peaking capacity to 130 MW (168 MW installed),and (iii) an inadequate distributionnetwork for the Mann system (maximum demand only 5 MW compared to installed capacity of 36 MW). Proposed improvementsto primary transmissionwould properly integrate the system and allow maximum use of available hydropower. Together with investmentsat Lawpita to rectify the headrace restrictions,and allowing for the completion of plants now under constructionand the retirement of the Rangoon oil-fired thermal stations, installed capacity operated by EPC is expected to rise to 605 MW by FY87. Within the integratedsystem, firm capacity at an expected 451 MW will substantiallyexceed projected maximum demand, creating a fairly comfortableposition until the next major project (expected to be Paunglaung hydro) comes on stream in FY91.
The Power Market
4.30 EPC had a total of 482,000 consumers at end FY80 (92% domestic consumers) together with a waiting list of 150,000. Per capita production at 36 kWh per head per annum is low. EPC's energy sales totalled 763 GWH in FY80, of which industrial consumptionaccounted for 54%, domestic 29%, commercial 13% and other 4%. Priority has been given to meeting industrial demand and, in view of planned investmentsand some replacement of captive generating plant, its predominancecan be expected to continue. Domestic sales should rise steadily as distributionconstraints are reduced and unsatisfied demand is met.
4.31 Table IV-4 summarizesdemand projections,assuming continued steady growth in the economy. Electricity sales are projected to increase at an annual rate of 9.8% during the period FY81-90, compared to 8.5% during the previous five years. However, maximum demand is expected to increase at only 7.9% compared to 9.6% during the period FY76-80, reflecting some improvement in the system load factor. These forecasts also assume a substantialreduction in EPC's high system losses, from 32% in FY81 to 20% in FY86 (see para 4.37).
Issues in Power Development
(i) Planning EPC's activities
4.32 EPC is a statutory corporationunder the Ministry of Industry II (MOI II) and has responsibilityfor the construction,operation and maintenance of electricitysupply facilities throughoutBurma. It has reasonable autonomy in day-to-day operations but in matters of policy and substantivedecisions defers to MOI II and the Union Government. Table IV-4: ELECTRIC POWER CORPORATION: DEMAND FORECAST
Provisional Estimate Forecast Estimate Forecast Actual 1975/76- 1980/81- 1985/86- 1979/80 1980/81 1985/86 1990/91 1980/81 1985/86 1990/91 …------…(GWh)------(% increase p.a.)------Sales (GWh)
Domestic 216.5 241.3 371.2 545.4 8.6 9.0 8.0 Industrial 407.4 450.1 828.9 1,340.7 9.3 13.0 10.1 Bulk & Commercial 109.3 113.2 147.0 210.5 6.9 5.4 7.4 Others 29.4 31.1 34.3 37.9 3.3 2.0 2.0
Total Sales 762.6 835.7 1,381.4 2,134.5 8.5 10.6 9.1
Losses 29.4% 31.8% 22.0% 20.0% n.a. n.a. n.a.
Generation ------… (GWh)…------
Grid System 1,025.0 1,159.7 1,674.6 2,546.3 10.8 7.6 8.7 Isolated Systems 55.3 65.7 96.4 121.8 - 8.0 4.8
Total Generation 1,080.3 1,225.4 1,771.0 2,668.1 10.0 7.6 8.5
Grid System Peak (MW) 184.7 208.4 294.1 447.2 4.5 7.1 8.7
Load Factor 63.4% 63.5% 65.0% 65.0% n.a. n.a. n.a.
Sources: EPC and Bank Staff Estimates. -66-
The Managing Director is assisted by the Board of Management. There are four central operating departments in Rangoon, fourteen regional offices and fourteen other units in charge of power stations, transmissionlines and substations. The present organizationalstructure is generally satisfactoryalthough, since an unusual number of executives report to the Managing Director, some streamliningof functionsmight be possible.
4.33 EPC has a technicallycompetent staff, and training programs have been strengthenedin recent years. However, its operations are hampered by the absence of a definitive planning department to satisfactorilyplan, coordinate and execute projects. The planning that does exist rests with the Ministry and is not sufficientlydetailed or systematic. Furthermore, the location of the planning function outside of EPC's jurisdictionreduces its autonomy and inhibits effective coordinationamong EPC departments. Coordinationwith other SEEs has also been hindered, and the lack of a definite plan designed to accommodate their requirementshas allowed them to press for independent,and unnecessarilyhigh cost, generating plant. It is understood that support for establishingan effective planning group exists, and this should be given high priority to enable EPC to plan and execute its capital and maintenanceprograms properly, including coordinatingmanpower needs and arranging the finance required.
(ii) Power pricing policies
4.34 In common with other energy prices, those for electricityhave been kept low to promote the Government'sprime objectives of maintaining general price stability and encouragingindustrialization. Pressure on EPC's finances has also come from increasing system losses (para 4.37) and from rising debt service payments,given the Government'spractice of financingcapital expendituresthrough loans rather than through additional equity. As a result, EPC's operating balances have deterioratedin recent years, and the post-tax financial rate of return on a historical asset value basis declined from 4.9% in 1978 to an estimated 4.2% in 1981. During the same period, the debt/equityratio moved from 26:74 to 56:44. Had assets been revalued at current equivalent values, increased depreciationwould have eliminated income and resulted in a slight loss. Power tariffs will need to be raised to produce a more viable financial position. 1/
1/ An alternativemeans of improvingEPC's financial position, i.e. by reducing the commoditiesand service tax and/or import duties on EPC's imported capital equipment,has been discussed in the past. This alternativewould be undesirable,however, as it would (a) discriminate in favor of one particular economic activity, i.e. electric power; (b) reduce government revenues;and (c) by lowering the cost of capital goods, remove some of the incentive to increase capital productivity through, for example, reductions in system losses. -67-
4.35 In addition to an overall low level, the tariff appears to be ill-structured. Industrial tariffs in particular have been kept low to reduce costs to industrial users and promote industrialization. This and other aspects of the tariff have tended to provide incorrect signals to users with potential inefficient utilization of energy. A recently completed tariff study has recommended a number of measures designed both to strengthen EPC's overall financial position by increasing tariffs and to restructure tariffs to encourage economic use, especially for industrial users. Its recommendations would establish a framework within which EPC's tariffs would take a step towards reflecting the marginal cost of supplying electricity to different categories of consumers.
4.36 The importance of moving in this direction is heightened by the capital intensiveness of power infrastructure and the fact that new facilities have to be provided at current, rather than historic, costs. The efficient use of power is the primary objective, but establishing EPC's finances is also vital to its autonomy and viability. Even with the proposed tariff increases, EPC will necessarily continue to depend in large measure on loans from the Central Government and external sources.
(iii) System losses
4.37 EPC's system losses reached 32% in FY1981 and, by any standards are high. An estimated breakdown of current losses is: station use, 2.2%; transmission, 7.5%; and distribution, 22.3%. The high distribution losses reflect the heavily loaded distribution system and the fact that many meters are in need of calibration. Projects to strengthen the distribution system have been arranged with external financing, and these will be complemented by the proposed program for improving the primary transmission system. A loss reduction unit is to be established in EPC and a target for reducing losses to 20% of total generation including station use has been established for FY1987 (Table IV-4).
The Generation Program
4.38 An efficient broad-based power system is clearly of importance to the continued economic and social development of Burma. Given the current low system efficiencies, an emphasis on transmission, distribution and management to reduce losses and make the best use of existing generating facilities is essential for the near future. Nevertheless, continued rapid growth in demand from the current low base will inevitably also require a major on-going investment program in new generating facilities. The expansion program for the next five years is to all intents and purposes settled, and feasibility studies for the Paunglaung hydro project, to be constructed and come on stream in the late 1980s, are far advanced. Nevertheless, the long gestation nature of major power projects suggests that planning for the 1990s needs to receive early attention. Financing for some projects to be initiated over the next few years, in particular -68-
for Paunglaung,also needs to be arranged to prevent any undesirablehiatus in the investment program.
4.39 Table IV-5 summarizes the facilities that seem likely to be in place to meet expected maximum demand in FY91. It is striking that in the decade following the extension of the Lawpita hydro-station,effective in 1974, no fewer than six gas turbine stations will have been commissioned (installedcapacity of almost 200 MW) but no new hydro plants. The constructionof gas turbine plants reflects several factors, including the need to respond quickly to rapidly rising demand, the availabilityof finance for relatively low capital cost projects, the inadequateprimary transmissionsystem, the lack of advanced planning for new hydro projects, and their relative difficulty of access, and the development of Burma's natural gas fields. The result has been, however, that in FY80 no less than 44% of natural gas consumptionwas for power generation. Furthermore, although efforts have been made to increase the share of associated gas used in electricitygeneration, non-associated gas still accounted for 65% of the total in 1981. Firm estimates of Burma's gas reserves are unavailable but given that they are limited, non-renewableand have potentiallyhigh value alternativeuses, that Burma has abundant hydro-generationpotential and that gas turbines are typically a high cost form of power generation, it seems clear that Burma has not put sufficient emphasis on achieving a least cost generation investment program.
Hydroelectricity Resources and Potential
4.40 Estimated theoretical hydropower potential from Burma's river system is more than 100,000MW on an installedcapacity basis and 370 billion kWh in terms of annual generation. Of this potential, some 5,000 MW and 20 billion kWh of annual generation have been specifically identified as prospectivehydro generation sites by various pre-feasibility studies. This compares with Burma's current hydro-development of only 260 MW of installed capacity, including 81 MW (Sedawgyiand Kinda) under constructionin the context of multipurposeprojects primarily directed at irrigation development.
4.41 Seven principal river systems have been identified as having significanthydro-potential: the Irrawaddy-Chindwin,the Salween, the Sittang, the Bilin, the Pegu, the Lemro and the Kaladan rivers. A power developmentsurvey 1/ undertaken in 1977-78 listed a total of 32 possible projects that had been identified in various planning and pre-feasibility studies carried out during the previous two decades. Of these, 23 were selected for review following a preliminaryexamination, of which two are
1/ NEWJEC: "Report on Power Development Survey," July 1978, carried out under the UNDP/IBRD Burma Umbrella Project BUR/74/024. -69-
now under construction(Sedawgyi and Kinda), and two are reasonably firm commitments(Baluchaung I and Paunglaung I). A fifth scheduled project, planned primarily for water supply to Rangoon (Zaungtu),was not reviewed. Further analysis of alternativeshas been provided by Norconsult as part of an on-going Planning and Operations Review undertaken in the context of the Paunglaung studies. The major projects reviewed can be discussed as follows. It should be emphasized,however, that estimates of power potential are in all cases very tentative, and in many cases are based on no more than map analysis.
a) The Irrawaddy. A main stream site has been tentatively identifiedabove Mandalay at Thabeikhyin (perhaps 1000 MW or more potential) but has not been seriously investigated. Potential projects on its tributariesinclude (i) relatively small power componentsof projects which are primarily developed for irrigation,including the two projects under construction,Kinda (56 MW) and Sedawgyi (28 MW), and the proposed project on the Mu (30 MW), and (ii) substantially larger projects which would be developed primarily for power. Excluding the Chindwin (see below), the largest potential appears to be in the Myitnge basin with the most likely site identifiedat Yeywa (400 MW approximately). Investigatons have, however, only been taken to the pre-feasibilitystage and unsatisfactorygeological conditions appear likely. Limited potential for irrigation is also a drawback. A dam site has also been identified on the Mon (200 MW). While irrigation is relativelymore important than in the Myitnge basin, the potential for expansion is small, a substantial populationwould need to be relocated,and studies of this proposal are also only at pre-feasibilitylevels.
b) The Chindwin. A UNDP reconnaissancestudy 1/ undertaken in 1962 identified nine possible sites for hydro-projects:two on headwaters of the main stream (Tarung Hka (150 MW) and Tawang Hka (50 MW)) three on major tributaries (Manipur (500 MW), Gangaw and Gyobin) and four on the main stream itself (Tamanthi (1,200 MW), Homalin (150 MW), Mawleik (400 MW) and Schwezaye (699 MW)). The main stream proposals are the largest hydro- projects seriously investigatedin Burma and the most promising of these (Tamanthi)was subsequentlytaken to pre-feasibility levels by EPC. 2/ Major flood control, navigation and
1/ UNDP: "Essay on Proposed Scheme of the Integrated Use of the Chindwin Water Resources and Programme of Subsequent Investigations,"1962.
2/ EPC: "Tamanthi Hydro Electric Project," Pre-feasibilityReport, September 1974. -70-
irrigationbenefits are possible in addition to its primary power objective, but its size (1200 MW installed capacity and 5200 GWh of firm energy output) estimated cost ($1.7 billion at 1981 prices for the dam and power facilities)and inaccessibility suggest that implementationis a long-term prospect. A more accessible project on the Manipur river (500 MW) has also been subsequentlyinvestigated by EPC but is also larger than required required in the foreseeablefuture.
c) The Sittang. Investigationsin the Sittang basin date back to the UNDP financed "Sittang Valley Water Resources Development" study prepared in 1964. 1/ Eight possible projects with a significantpower componentwere proposed, three of which have been taken to a fairly advanced stage of preparation. The most important is the proposed Paunglaung I project which is currently the subject of detailed engineeringand design studies financed under Norwegian aid. Preliminarywork suggests that this project would have a significantirrigation component in addition to installed capacity of possibly up to 300 MW. Power output would be of the order of 1000 GWh, of which about 375 GWh would represent firm power, and the project would cost about $300 M. A pre-design study for Thaukyegat (150 MW) was completed in 1977, but accessibility is a problem, and a revised feasibility study for the Yenwe project has recommendeda 16 MW power installationin what is primarily an irrigationproject. A reconnaissancestudy for the Kun project (84 MW) has been undertaken,but investigations for the Bawgata (170 MW), Pyu (65 MW) and Kabaung (30 MW) projects are still at a preliminarystage. These three projects appear, however, relatively high cost in terms of firm power.
d) The Salween. This river basin has enormous hydro-potential but the only tributary to be investigatedin any detail is the Baluchaung on which the existing Lawpita station is located. Detailed design studies for Baluchaung I (24 MW) are under way. This project is of greater importancethan suggested by its relativelysmall installed capacity since it will improve headrace conditions for Lawpita and increase this station's energy output and peaking capacity. A further project on the Baluchaung (48 MW) has also been investigated. A possible main stream Salween site has been identifiedat Ywathit with a possible installed capacity of no less than 3500 MW. As
1/ UNDP: "Report on Sittang Valley Water Resources Development," September 1964. -71-
with the giant projects on the Irrawaddy and Chindwin, the scale of this project is beyond Burma's foreseeableresources or requirementsalthough it is on the border with Thailand and is of interest as a possible joint development in the longer term.
e) Other River Basins. The proposed Zaungtu project (24 MW) on the Pegu river is to be developed primarily for water supply purposes for Rangoon. A project on the Bilin River (240 MW), appears to be a highly promising possibilityfor implementation after Paunglaung. Other possible sites have been identified along the Arakan coast, includingKyaintale (28 MW), Thandwe Sandoway (39 MW), Thade (100 MW), and Lemro (600 MW), although investigationsof these are at a fairly preliminarystage, and location,costs and, in the case of Lemro, size, argue against them.
f) Mini Hydroelectric Schemes. Small towns and villages in many parts of the country will inevitably continue to be independent of the main grid. To serve these, there is considerable potential for mini-hydro schemes both to furnish power in new locations and to provide a more reliable and low-cost operation than from existing diesel plants. An externally assisted project for ten such schemes is being implementedand further projects can be envisaged in the longer term.
4.42 Analysis undertaken in the context of the proposed IDA-supported transmissionproject suggests that the program proposed in Table IV-5 represents the least cost solution when compared with alternative thermal-basedprograms. Furthermore,the preliminaryresults of an on-going power systems planning and operations review, being prepared by the consultants for the Paunglaung project, 1/ suggests that the next major project to follow on from the program given in Table IV-5 should also be a medium-scale(100-300 MW) hydro plant.
4.43 The selection of Paunglaung essentiallyreflects its advanced stage of preparationin comparison with other comparably-sizedprojects. Storage capacity in relation to mean annual inflows is, however, small and the project tends to a run-of-the-riverscheme. The consultantsfor the project recommend therefore that subsequent projects should be selected which have low investment costs relative to reservoir capacity so as to
1/ NorconsultA.S.: "Power Systems Planning and Operation Review," Interim Report, June 1981. Table IV-5: GENERATINGPLANT TO MEET FUTUREDEMAND: EPC
Year of Installed Firm - …------Firm Capacity ------Type _ommissioning Capacity Capacity 1980/81 1982/83 1984/85 1986/87 1988/89 1990/91 1992/93
Existing: Hydrogrid
Ahlone Steam 1950-57 30 12 12 12 12 12 - - - Ywama Diesel/Steam 1955-57 35 20 20 20 20 20 - - - Lawpita Hydro 1960-74 168 130/168 130 130 130 130 168 168 168 Kyunchaung Gas Turbine 1974 54 54 54 54 54 54 54 54 54 Ywama Gas Turbine 1980 36 36 36 36 36 36 36 36 36
Sub-total 323 252/290
New: Hydrogrid
Chauk Gas Turbine 1982/83 14 14 - - 14 14 14 14 14 Sedawgyi Hydro 1984/85 25 8 - - 8 8 8 8 8 Kinda (Nyaunggyat) Hydro 1985/86 56 28 - - - 28 28 28 28 Baluchaung I Hydro 1986/87 28 28 - - - - 28 28 28 Zangtu Hydro 1987/88 22 10 - - - - 10 10 10 Paunglaung Hydro 1989/90 136 a/ 94 a/ - - - - - 94 a/ 94 a/
Sub-total: 281 182 M
Total Hydrogrid 252 252 274 451 467 561 561 Other Grids b/ c/ 85 121 121 - - - -
Excluding Other Systems Including Prome/Irrawaddy & Mann Systems
Total Available Firm Capacity 252 252 274 451 467 561 561 Firm capacity minus 2 largest units 216 216 238 395 411 505 505 Maximum Demand 178 205 232 308 371 447 516 a/ Based on 1977/78 NEWJEC report. The interim evaluation report by Norconsult suggests that installed capacity should be 250-300 MW, with firm capacity also increased. b/ Prome and Irrawaddy System consists of Myanaung Gas Turbine (49 MW) completed in 1975 and Prome Gas Turbine (36 MW) to be commissioned in 1981/82. System expected to be integrated into the Hydro Grid in 1985/86. c/ Mann System includes Mann Gas Turbine (36 MW) installed in 1980. System to be integrated into Hydro Grid in 1986/87.
Sources: EPC and Bank Staff estimates. -73-
achieve high annual firm power production. Thirteen projects 1/ have been reviewed as being the most likely to succeed Paunglaung and, on the basis of a reconnaissance study, Bilin is provisionally identified as the most appropriate for fulfilling power generation requirements in the early 1990s. This project would cost an estimated $285 million at 1981 prices and would generate about 1000 GWh of predominantly firm power with a 240 MW installation. A reconnaissance study of the Kun project has also resulted in promising conclusions, and would cost about $100 million at 1981 prices, generating 350 GWh p.a. from an 84 MW installation. Given the long gestation periods for hydro-development, it is important to undertake the necessary feasibility studies expeditiously to ensure that the best project is identified and to avoid any hiatus in the investment program comparable to the present when relatively high cost thermal investments have been necessitated in order to meet rapid growth in demand. Financing for one feasibility study is expected to be provided in conjunction with the proposed improvements to primary transmission. It may be desirable, however, to simultaneously undertake other feasibility studies to ensure choice of the best available site and to help prepare projects for implementation in the late 1990s when consideration could also be given to larger main stream projects, in particular if they involve joint ventures with other countries or the export of power. The potential for developing power intensive industries in association with such projects should also be reviewed. At the same time, it will be important to avoid overinvestment, as new generating capacity will absorb a significant share of available foreign and domestic resources.
D. Transport
Transport Demands
4.44 Like hydroelectricity, transport is largely a derived demand, with the rate of development governed by activities in the goods production sectors. The existing transport network provides three alternative modes (river, road, and rail) for bulk traffic in the north-south direction from Mandalay to Rangoon, but relatively few connections in the east-west direction and little access to the mountainous regions around the country's northern periphery. Coastal traffic facilitates transport in the delta and along the Tenasserim Coast. Transport and communications together account for 5% of GDP and slightly more than 3% of total employment.
1/ Yeywa and Mon on tributaries of the Irrawaddy; Manipur, Bawgata Kabaung, Kun, Pyu, Thaukyegat and Yenwe on tributaries of the Sittang; Kyaintale, Schwezaye, and Bilin. -74-
4.45 Sectoral freight demands for transport,as measured by tons loaded, can be roughly classifiedas follows:
Agriculture,including livestock & fisheries 35 Forestry 30 Mining 11 Manufacturing& Processing 24
Source: Ministry of Planning and Finance, Planning Department.
It is, therefore,not surprising that the recent growth in agriculturehas resulted in expanded transportdemands. Table IV-6 compares GDP and traffic growth in recent years with the early and mid-1970s. In the earlier period, both GDP and traffic growth were low. In fact, freight traffic growth was less than GDP, and passenger traffic plummeted, reflecting serious transportbottlenecks. The extent to which constraints in the transport sector impeded GDP growth in general is not known, but high costs and long delays due to poor transport result in low production incentives in agricultureand excessive inventoriesor material shortages in industry. The recent higher GDP growth has placed increasing demands on the transport system; and, although bottlenecksstill exist, the system has shown substantialresilience in responding to these demands. Tons loaded have increased from 49 million in 1976/77 to 63 million in 1980/81, although passenger traffic has made only a partial recovery in recent years.
4.46 Table IV-6 also shows the trends in freight and passenger traffic by mode. The rapid deteriorationin rail service followed by the recent partial recovery is particularlystriking, as is the strong growth in freight traffic carried by road during both periods. Freight traffic carried by water has exhibited only small growth during the 1970s. Passenger traffic by water has neverthelessmaintained an average annual increase of 4%, while passenger traffic by road declined during the earlier period and then stagnated. -75-
Table IV-6: COMPARATIVEGROWTH IN GDP AND FREIGHT/PASSENGER TRAFFIC IN THE 1970s (average annual growth in percentages)
1971/72-1976/77 1976/77-1980/81
GDP (constant 1969/70 prices) 2.9 6.5 of which: Agriculture 1.8 7.4 Transport -0.4 7.3
Freight Traffic (tons loaded) 2.4 6.5 Water 0.1 2.5 Road 11.9 13.0 Rail -9.0 9.0
Passenger Traffic (No. passengers) -9.5 3.3 Water 4.0 4.2 Road -10.0 0.5 Rail -17.0 15.9
Source: Report to the Pyithu Hluttaw.
Organizationof Transport in Burma
4.47 Transport in Burma is undertaken by state transport corporations, of which there are five; other public sector agencies, and the private and cooperativesectors. There is relatively little informationon private and cooperative transport,hence the emphasis on state transport in the sections which follow. The five state transport corporationsare: Burma Five Stars Shipping Corporation (BFSSC), Burma Railways Corporation(BRC), Road Transport Corporation (RTC), Burma Airways Corporation (BAC), and Inland Water Transport Corporation (IWTC). In addition, the Burma Ports Corporationand the Burma Dockyards Corporationhandle the port and dockyard facilities,respectively. Overall responsibilityfor transport, as well as direct supervision of transport corporations,is carried out by the Ministry of Transport and Communications(MOTC).
4.48 Within the MOTC, there are six departments: Administration, Records and Statistics,Training and Research, Budget and Planning, Inspection,and Operations. Of these, the Training and Research Department is responsiblefor the training of all transport personnel,both in Burma and abroad, and runs two permanent training institutions--theInstitute of Marine Technology and the Meiktila Transport and CommunicationsTraining School. The Budget and Planning Department coordinatesthe budget submissionsof the transport corporations,and the OperationsDepartment -76-
acts as a secretariatto the Central Movement CoordinationCommittee (CMCC),which allocates public sector transport demands among available carriers, including, residually,private carriers. Assistance with public sector transportgives private carriers access to domestic and imported spares and tires at official prices from the 19 retail outlets of the Vehicles and Machinery Stores Trade Corporation;they are otherwise obliged to purchase these goods, if at all available, at considerablyhigher prices on the open market. 1/ Both the MOTC and the CMCC have branch offices at the state/divisionlevels.
4.49 The estimated shares of total freight transport by ownership and by major transportmode are given in Table IV-7 for 1980/81. This table shows that 80% of total transport is handled by the private sector, 4% by the cooperativesector, and the remaining 16% by the state sector, split approximatelyevenly between the state transport corporationsand other public sector. Between 1976/77 and 1980/81, tons loaded by private sector transport(including cooperatives)grew by 6% per annum; by state transport corporations,7%; and by other public sector transport, 9%. Transport statistics for the cooperativesector--available only since 1978/79--show an increase of 25% a year, but over a very low base. Although there has been an increasing trend toward long-haul traffic; roughly one-third of total tons loaded continues to be handled by small and slow crafts and carts, all short-haul. About 60% of the remaining traffic is carried by truck, 35% by water, and 5% by rail.
1/ In 1977, open market prices were estimated to be 3-4 times official prices for spare parts, 3 times official prices for tires, and 5-8 times official prices for diesel fuel. (Road Sector Improvement Study Final Report, Vol. 3, by Valentine, Laurie, and Davies (November 1977)). These price relationshipsare, of course, not constant; more recent estimates are not available. -77-
Table IV-7: FREIGHT TRANSPORT BY OWNERSHIP AND MODE, 1980/81 a/ (percentage shares of tons loaded)
Small and Slow Sector Rail Road Water Crafts/Carts TOTAL
State Transport Corporations 4 2 2 8 Other Public - 5 4 8 Cooperative - 3 2 - 4 Private _ 31 16 33 80
TOTAL 4 40 24 33 100
a/ Columns and rows may not add up, due to rounding.
Source: Ministry of Planning and Finance, Planning Department.
Transport Issues
(i) Efficiency of transport
4.50 Table IV-8 presents some indicators of efficiency for the three main state transport corporations handling internal transport. A common pattern can be detected in most of these indicators, i.e., a deterioration from 1970/71 to 1976/77 and a partial or full recovery between 1976/77 and 1980/81. There are a number of reasons why public sector transport service deteriorated, including the shortage of tools and spare parts and insufficient incentive for managers and workers to maintain standards. There are also a variety of reasons why service has improved more recently. BRC, for example, cites improved telecommunications as a major reason for improved wagon turnaround, and RTC cites better scheduling of public sector transport by the CMCC for a major reduction in empty back-hauls. The main exception to the more favorable pattern of performance is the continued decline in locomotive miles per available diesel locomotive, although locomotive availability has improved. 1/
4.51 Similar indicators of efficiency are not available for other public sector transport and private and cooperative transport, although there is undoubtedly room for improvement there also. Solutions to problems in each of the sub-sectors may be different and would require considerably more
1/ Steam locomotives are not referred to here as they are old and scheduled for replacement. -78-
Table IV-8: INDICATORS OF EFFICIENCY IN STATE TRANSPORT CORPORATIONS
1970/71 1976/77 1980/81
BRC
Availabilityof diesel locomotives(x) 54.3 60.4 68.1 a/ Locomotive miles per available locomotive per day (diesel) 233 130 109 a/
Freight wagon turnaround (days) 12.6 17.6 14.0 a/
Avg. freight haul (miles) 178 145 153 Avg. passengerhaul (miles) 28 54 39
IWTC b/
Avg. no. of miles per sailing day for cargo fleet 63 60 62 Cargo fleet load factor (%) 64.8 43.1 64.7
Avg. no. of miles per sailing day for passenger fleet 65 65 70 Passenger fleet load factor (%) 50.9 44.0 51.6
RTC
Avg. ton miles per truck per year ('000) 25.1 35.5 40.3 Avg. freight haul by truck (miles) 44 92 112
Avg. passengermiles per bus ('000) 538 473 517 Avg. passengerhaul by bus (miles) 2.6 4.1 4.5
a/ 1979/80. b/ Statistics on cargo exclude oil fleet and heavy lift.
Sources: Burma Railways Corporation,Inland Waterways Transport Corporation, and Ministry of Planning and Finance, Planning Department.
informationthan presently available. They might range from improvements in maintenanceand repair to changes in regulationsor better loading and unloading procedures. For the state transport corporations,one crucial element in overall efficiency is the traffic allocation function of CMCC. As mentioned above, increased attention by CMCC to scheduling has helped reduce the problem of empty back-hauls,but it is also essential that -79-
traffic allocation practices take into account the relative economic costs of alternativemodes, especiallyas these are not presently reflected in official transport tariffs. It is surprising,for example, that while the national trend is toward longer haul (see Appendix Table 10.3), BRC's average haul is going down. Similarly, IWTC is now carrying only 65% long haul, compared to 100% in 1971/72. By contrast, RTC has experiencedan increase in its average freight haul from 44 to 112 miles over the last ten years. While longer haul has contributed to higher truck utilization,it may not be the most efficient solution to traffic allocation from the national point of view, since vehicle operating costs are higher for road traffic than for rail or water over a certain distance. The tendency to substitute road transport for rail or water also takes place in SEEs, such as the Timber Corporation,with their own truck fleet, since the financial costs of road transport,which is more convenient,do not sufficiently reflect its relativelyhigh economic cost. The only practical way of affecting traffic allocationwould, however, be through adjustments in both fuel prices and transport tariffs so that they more closely reflect economic costs. If these adjustmentswere carried through, it should in fact be possible to allow SEEs to arrange for transport services directly just as they now negotiate directly for procurement of other goods and services and for sales of output.
(ii) Transport tariffs
4.52 Adequate costing of fuel and capital requirementsfor transport services is needed to encourage the most economic use of alternativemodes, thereby influencing the investment program; to give proper signals for industrial location; and to provide for the financial viability of the enterprise. Even with extremely low fuel costs (para 2.18), the current financial position of the state transport corporationssuggests that debt servicingobligations can not be covered with their gross receipts for the year. In some years, for some corporations,operating expenses have not been covered. In 1980/81, operating ratios of three (IWTC, BFSSC, and BAC) of the five state transport corporationswere above one. 1/
4.53 The last change in freight tariffs for domestic transport was in 1974, and the last change in passenger tariffs was in 1976. Deflating by means of the implicit GDP deflator, real freight tariffs had declined by 27% as of mid-1981 and passenger tariffs by 7%. In 1980/81, tariffs for BFSSC coastal and overseas trade were raised, with adjustmentsup to 125%; however, the GOB is reluctant to raise the basic tariffs affecting BRC, IWTC, and RTC because of the effect this may have both on the general price
1/ The operating ratio (OR) is the ratio of operating expenses to operating revenues on an accrual basis. The lower the OR, the greater the profitability. -80-
level and on demand for price increases from other corporations. These concerns are understandable;nevertheless, false signals, which are presently provided under artificiallylow charges, can be very costly to the economy at a time when fuel conservation,for example, is extremely important.
(iii) Role of the private transport sector
4.54 Given the very large share of total freight transporthandled by private carriers (Table IV-7), it will be virtually impossibleto accommodate increasing transport demands without providinggovernment support to the private transport sector. This can be done through the wider provision of official credit and foreign exchange for purchase of vehicles and craft; sufficientdomestic supply of tools, tires, fuel, and spare parts; and possibly technicalassistance. As suggested above (para 4.45), poor transport can adversely affect the behavior of producers in agricultureand industry, resulting in foregone production and income.
4.55 The recent and planned future growth in agriculturalproduction, for example, imply major increases in transportand storage demands at the local level. With the exception of government procurementactivities, these needs are largely satisfiedby the private sector. Between 1976/77 and 1980/81, productionof paddy increased by 3.9 million tons, oilseeds and pulses by about 150,000 tons each, maize by 90,000 tons, and cotton by 50,000 tons. Further major increases in agriculturalproduction are anticipated for the Fourth Four Year Plan (FFYP), and input supply of improved seeds, fertilizer,and insecticideswill be expanded, straining local-levelstorage and transport facilities. A further burden on the rural distributionsystem can be anticipated from the higher effective demand for consumer goods arising from higher agriculturalincomes. In order to avoid bottlenecksat the local level, which would in turn greatly reduce the farmer's incentive to produce, it will be necessary both (a) to explore the range of options for addressing these bottlenecksby taking into account the complementaryfunctions of transport, storage, and processing and (b) to redefine the expected roles of the public, private, and cooperative sectors with respect to these various functions at the local level in order to provide appropriate incentivesand resources to avoid constraints.
(iv) Transport planning
4.56 At present, none of the departmentswithin the MOTC collects or analyzes economic statistics on the transportsector; makes systematic proposals for changes in policies or regulations;or tries to set priorities among the competing investmentdemands of the transport corporations. Economic statisticson the transport sector are maintained by the Planning Departmentof the Ministry of Planning and Finance, and investment prioritiesare establishedpersonally by the Minister of -81-
Transport in consultationwith the relevant SEE and other members of the Cabinet. An operationallyoriented statistics and planning staff could make an important contributionwithin the Ministry to the developmentof transport in Burma over the medium to long term.
4.57 In addition to reviewing and making recommendationson the total investment program supervised by the Ministry, the staff could maintain economic statistics on the entire transport sector, including services and conditions in the cooperativeand private sectors, and provide relevant summaries and analysis for decision-makers. A multi-modal corridor analysis for the north-south transport along the Irrawaddy Valley would be a useful study, as it would cover a large portion of total transport services. Such a study would calculate economic costs for the three alternativemodes, thereby suggesting appropriate tariffs and/or traffic allocation rules for the CMCC. The formulationof an origin/destination matrix for major goods transportedalong this corridor would provide a basis from which estimates of future transport needs could be made. The staff might also carry out, in conjunctionwith the SEEs, special studies on ways of increasing efficiency,e.g., through auxiliary services of loading, unloading, and repairs.
InvestmentPriorities
4.58 A summary of major investment projects under the Third Four Year Plan (based on revised estimates for 1980/81 and plan targets for 1981/82) shows that approximately25% of transport-relatedinvestment was on account of infrastructureand 75% on account of vehicles/craftand equipment. A similar classificationof projects in the Government'sFive-Year Development Program (1980/81 to 1984/85), presented to the Aid Group in December 1980, shows approximately60% of transport-relatedinvestment for infrastructureand only 40% for vehicles/craftand equipment. The extent to which the FFYP will reflect this change is not yet known, as requests for additional equipment by BRC and new vessels by BFSSC, among others, are still under discussion,and the airport extension project is likely to be delayed.
4.59 Burma's transport network (see Appendix Table 10.1) has remained virtually unchanged for the last ten years, 1/ with about 14,000 miles of main roads, 3,000 miles of district roads, 2,000 miles of mainly single-line railway track, 5,000 miles of navigable river during high water, 4 main ports, and 45 airfields--ofwhich one international. The most urgent requirementis for road rehabilitationand maintenance,which has been only minimal for a number of years. Expenditure on road
1/ Comparable figures on the road network are not available for years prior to 1970. -82-
constructionand improvementin Burma, for example, is only 15% of similar expendituresper network-milein Indonesia and Thailand. Because of poor conditions and low standards, road transport is relatively slow, and vehicle operating costs are high. There is an attempt in the private sector to lower these costs by overloading,which, in turn, causes further deteriorationof the roads.
4.60 An export-orientedinfrastructure--including storage, road and rail lines to Rangoon, and port facilities--wasdeveloped prior to World War II, when the volume of exports far exceeded their present day levels. Up until now, this infrastructurehas continued to meet transport needs relatively well. However, with continued economic growth of 5-6%, rapidly rising volumes of external trade, and some changes in the nature of transport demand, some infrastructuralinvestment needs will emerge. Priority needs would appear to include (a) upgrading of communicationsfacilities at Rangoon's internationalairport (Mingaladon);(b) improved river dredging and improved port capacity through better operations and increased cargo handling facilities (including containers)and storage; and (c) road and bridge rehabilitation. Longer-term needs, which have been identifiedby the GOB, include (a) a major bridge across the Pegu River to Syriam; (b) additional container handling facilities and new berth at Thilawa; (c) extension of the runway and new airport facilitiesat Mingaladon; and (d) extension of the (Irrawaddy)West Bank and other road development projects, especially improvementsin the two existing Rangoon-Mandalayroads through Prome and Toungoo. It will be important,however, to give first priority to the most immediateneeds, to consider carefully the economic viability and budgetary implicationsof the longer-termprojects, and to phase the selected projects to even out the demands on financial,material, and human resources. The need for port capacity, for example, can probably be met up to 1990 by upgrading the facilities and operations at the existing port of Rangoon; and the pressure on available storage facilities could be alleviated by higher charges for warehousing.
4.61 The net availabilityof major vehicles/craftowned by state transport corporationshas increased only marginally in the last ten years, although some replacement investmenthas taken place. There has, nevertheless,been a significant increase in BFSSC ships, a small increase in RTC's truck and bus fleet, and an 11% expansion in IWTC's static capacity for passengers. IWTC's static capacity for freight was the same in 1980/81 as in 1970/71, however; and the number of airplanes and the amount of railway stock are also no greater than ten years ago. Nevertheless,given the substantialroom for improvement in capacity utilizationand operating efficiency of existing stock, investment in new vehicles/craftand equipment for public sector transport should be modest during the FFYP. Out of 219 locomotives,for example, only 138 are running. At a capital cost of almost US$1 million per locomotive,repair and servicing of existing stock becomes extremely important. Total trucks and buses in Burma were estimated in 1979/80 at about 37,000, of which -83-
about 8,000 were under repair and another 3,300 beyond repair but available for rebuilding if several old vehicles were used as a base for one rebuilt vehicle. Focus on better use of the presently available vehicles/craft should, in fact, facilitate decisions on the type, design, and compatibilityof future investments. Meanwhile, priority might be given to the supply of tools, spare parts, and tires to the private and cooperative sectors, as well as the state sector; and improved systems of inventory control to minimize future import needs can be promoted in the SEEs. This might involve standardizationof equipment, improved records and inventory accounting systems, and pooling of inventorieswithin and among SEEs. -84-
CHAPTER V. ROLE OF EXTERNAL ASSISTANCE
Sources and Uses of External Funds
5.01 As pointed out in Chapter I, the rising level of investment during the first three years of the TFYP was financed in large part by an increased inflow of foreign grants and loans. Disbursement of official grants increased more than fourfold between 1977/78 and 1980/81 in current prices, and foreign loan disbursements also grew rapidly (Table V-1). Total gross aid disbursements averaged over US$400 million a year, or 9% of GDP, during 1978/79-1980/81, as compared to 2% of GDP in 1975/76-1976/77. At the same time, foreign loan commitments rose from US$380 million to US$680 million (Table V-2). 1/ Along with the increased foreign borrowing, debt service payments climbed from US$33 million in 1977/78 to US$110 million in 1980/81 (Table 1-5). The bulk of this increase was on account of suppliers' credits and borrowings from financial institutions, which together accounted for 64% of debt service payments in 1980/81. Nevertheless, more than 70% of total foreign debts contracted during this period were on concessionary terms (Table V-2).
5.02 At present, Burma's donors include 11 major bilateral sources, the UN specialized agencies, and 4 other multilateral agencies. The loans contracted in recent years exemplify a wide range of interest on the part of donors and the Government. In 1976, the Burma Aid Group 2/ was formed to provide a forum for responding to Burma's external assistance requirements in line with the Government's development priorities. The Aid Group now accounts for almost 75% of total concessionary assistance.
5.03 The sectoral composition of foreign loan commitments during 1976/77-1980/81 is shown in Table V-3. Despite some year-to-year fluctuations, the share of commitments for-manufacturing and industry has been on the whole larger than the planned investment share during the TFYP, and the share of commitments for agriculture has been
1/ Figures for grants are not available on a commitment basis.
2/ The Aid Group members currently consist of: Australia, Canada, France, Federal Republic of Germany, Japan, United Kingdom, United States, ADB, IDA, IMF, and the UNDP. In addition, the following observers participate: Belgium, Finland, Italy, Norway, Switzerland, EEC, and DAC/OECD. -85-
Table V-1: GROSS DISBURSEMENTS OF FOREIGN GRANTS AND MEDIUM/LONG-TERM LOANS, 1975/76-1980/81 (US$ million)
1975/76 1976/77 1977/78 1978/79 1979/80 1980/81
I.A. Disbursement of Loans (DRS) a/ 48.7 47.6 166.0 362.5 518.7 281.4
Aid Group Loans 30.2 37.7 95.5 249.3 282.4 180.2 Multilateral (21.7) (27.5) (50.1) (109.5) (74.7) (51.4) Bilateral (8.5) (10.2) (45.4) (139.8) (207.7) (128.8)
Non-Aid Group Loans 10.5 2.0 6.8 8.1 99.5 31.3 Multilateral - - (2.2) (0.3) (2.2) - Bilateral 10.5 2.0 (4.6) (7.8) (97.3) (31.3)
Suppliers' Credits 8.0 7.9 63.7 51.7 27.7 21.2
Financial Institutions - - - 49.2 109.1 48.7
I.B. Disbursement of Loans (BOP) b/ 51.2 70.1 240.8 390.6 421.7 353.3
[I. Grants 25.8 24.4 18.2 59.9 65.4 96.3
Aid Group 15.2 17.9 13.6 35.9 47.0 71.8 Non-Aid Group 10.6 6.5 4.6 24.0 18.4 24.5
III. Total Disbursements (IA+II) 74.5 72.0 184.2 422.4 584.1 377.6 (IB+II) 77.0 94.5 259.0 450.5 487.1 449.6
Memorandum Item
Total Aid Disbursements as % of GDP (DRS basis) 2.0 1.8 4.5 9.0 11.3 6.7 (BOP basis) 2.1 2.3 6.3 9.6 9.3 8.0
a/ According to the World Bank Debt Reporting System (DRS). b/ Long-term capital receipts according to GOB data, including receipts from the IMF Trust Fund.
Sources: The World Bank Debt Reporting System and Burmese authorities. -86-
Table V-2: EXTERNAL DEBT COMMITMENTS,al 1975/76-1980/81 (US$ million)
1975/76 1976/77 1977/78 1978/79 1979/80 1980/81
Aid Group Loans 81.6 245.2 150.9 171.5 451.7 368.2
Multilateral 59.9 127.0 31.5 78.5 106.8 140.5 Concessionary (59.9) (127.0) (31.5) (78.5) (106.8) (140.5) Non-concessionary ------Bilateral 21.7 118.2 119.4 93.0 344.9 227.7 Concessionary (21.7) (118.2) (119.4) (93.0) (301.7) (227.7) Non-concessionary - - - - (43.2) -
Non-Aid Group Loans 0.1 2.3 44.6 112.6 146.3 136.3
Multilateral - 2.3 16.7 34.6 32.7 75.7 Concessionary - (2.3) (16.7) (34.6) (32.7) (75.7) Non-concessionary - - - - - Bilateral 0.1 - 27.9 78.0 113.6 60.6 Concessionary (0.1) - (27.9) (77.1) (109.1) (55.1) Non-concessionary - - - (0.9) (4.5) (5.5)
Suppliers' Credits 11.8 66.1 36.5 60.5 20.9 38.4
Financial Institutions - 38.8 51.3 33.8 92.4 133.1
TOTAL COMMITMENTS 93.5 352.4 283.3' 378.4 711.3 676.0
Memorandum Item
Concessionary loans as x of Total Commitments 87.4 70.2 69.0 74.8 77.4 73.8
a/ All external debt is publicly held. This table distinguishes between concessionary and non-concessionary borrowing, where concessionary loans are defined with a grant element of 25% or more at a discount rate of 10%. It is nevertheless difficult to define concessionary assistance rigorously since, generally, a large proportion of foreign loans are tied.
Source: The World Bank Debt Reporting System. Table V-3: FOREIGN MEDIUM/LONG-TERM LOAN COnMITMENTS BY PURPOSE (US$ million)
1976/77 1977/78 1978/79 1979/80 1980/81 Amount % Amount % Amount % Amount % Amount %
Agriculture 30.0 (8.5) 36.5 (12.9) 47.8 (12.6) 37.7 (5.3) 32.8 (4.9) Agriculture 30.0 5.5 39.0 - - Fishery - 31.0 8.8 37.7 - 32.8 Forestry 25.1 (7.1) - - 43.0 (6.0) -
Mining 40.2 (11.4) - 53.2 (14.1) 26.1 (3.7) 69.9 (10.3) Petroleum & Gas 38.8 - 10.0 1.7 66.5 Other 1.4 - 43.2 24.4 3.4
Manufacturing/Processing 136.6 (38.8) 40.9 (14.4) 114.8 (30.3) 249.7 (35.1) 280.1 (41.4)
Transportation & Communication 44.6 (12.7) 72.8 (25.7) 18.0 ( 4.8) 147.2 (20.7) 66.2 (9.8)
Power & Water 61.9 (17.6) 1.3 ( 0.6) 19.9 ( 5.3) 119.5 (16.8) 90.3 (13.4)
Construction - - 3.3 ( 0.9) - 4.5 ( 0.6)
Financial Institution 10.0 ( 1.5)
Public Administration/Defense 6.2 ( 1.8) - 1.5 ( 0.3) - 109.1 (16.1)
Balance of Payments Support - 12.3 ( 4.3) 28.1 ( 7.4) 20.2 (2.8) 13.2 ( 2.0)
Commodity & Other Program Assistance 3.7 ( 1.0) 35.2 (12.4) - 56.7 (8.0) -
Others (unspecified) 4.0 ( 1.1) 84.2 (29.7) 91.9 (24.3) 10.9 (1.5) -
TOTAL 352.4 (100.0) 283.3 (100.0) 378.4 (100.0) 711.2 (100.0) 676.0 (100.0)
Source: The World Bank Debt Reporting System. -88-
considerablysmaller. This pattern is testimonyto the Government's difficultiesin the past in meeting its agriculture investment targets and, as mentioned earlier (para. 2.20), may reflect problems of project identificationand preparation. In general, ministerial planning and project preparationagencies are understaffed;however, the staffing level in the planning units of the Ministries of Industry I and II is more favorable, perhaps partially explaining the concentrationof external aid commitments in industry. A better balancing of staffing strengthsmight assist the Government in carrying out its priorities. The relatively large commitment share for mining in 1980/81 is explained by increased capital expenditurefor on-shore explorationof oil.
Balance of Payments Projectionsand Aid Requirementsin 1982/83 and 1983/84
5.04 The balance of payments projections in Table V-4 are the same as those given in Table II-3 but adjusted to current prices on the basis of the World Bank's forecast of internationalprices, averaging around 7% over the next four years. 1/ As indicatedearlier in Chapter III, Burma's merchandise exports are estimated to increase by 16% per annum in nominal terms between 1981/82 and 1983/84, with volume growth centering on rice, fishery products,hardwood, and non-fuel minerals. Total merchandise imports are projected to increase in nominal terms at about the same rate. If accelerationof private investment can be made, as called for in the TFYP Guidelines, the overall import intensityof investment could perhaps be contained,permitting the composition of imports to shift slightly in favor of intermediateand consumer goods. The shift in favor of intermediategoods would seem desirable in view of the anticipated increases in fertilizer requirements,as well as the continuing demand for spare parts and raw materials. An increase in the share of consumer goods from the present low level of 6% of total imports would also seem warranted. Assuming that the export and import of non-factor services will both rise rather rapidly, and allowing for anticipatedincreases in interest payments on foreign debt, the current account deficit is projected to widen from US$382 million (6.7% of GDP) in 1981/82 to $485 million (7.4% of GDP) in 1982/83, and to US$515 million (6.9% of GDP) in 1983/84. The projected increase relative to GDP in 1982/83 arises largely from the anticipatedweakness in internationalrice prices.
1/ The macroeconomicscenario presented in Table II-3 assumes annual GDP growth of 5.3% and annual investmentgrowth of 7%, both in real terms. The difference between constant price and current price GDP is assumed to be 6% a year, or slightly lower than anticipated internationalinflation. -89-
Table V-4: BALANCE OF PAYMENTS PROJECTIONS (US$ million)
Actual Estimate Projections 1980/81 1981/82 1982/83 1983/84 1985/86
Exports (GNFS) 520 553 600 740 1,050 Merchandise (f.o.b.) 479 516 555 690 975 Non-factor Services 41 37 45 50 75
Imports (GNFS) 835 914 1,055 1,220 1,610 Merchandise (f.o.b.) 775 850 980 1,135 1,490 Non-factor Services 60 64 75 85 120
Resource Balance -315 -361 -455 -480 -560
Net Factor Income -26 -36 -45 -55 -80 Net Current Transfer 17 15 15 20 20
Current Account Balance -325 -382 -485 -515 -620
Official Grants 96 95 110 125 145
Net Medium & Long-Term Loans a/ 289 240 230 145 -55 Disbursements b/ 353 349 315 250 75 Repayments 64 109 85 105 130 Capital, n.e.i. (net) c/ -27 - - - _
Additional Loan Disb. (net) - 30 150 285 530
Overall Balance 33 -17 5 40 0
Memorandum Item
Current Account Deficit as % of GDP 5.8 6.7 7.4 6.9 6.5
a/ Disbursements and repayments on past commitments (as of March 31, 1981); 1981/82 estimate includes prepayment of two commercial loans. b/ Standard disbursement patterns are assumed starting in 1981/82. c/ Includes short-term loans and errors and omission.
Sources: The World Bank Debt Reporting System and Bank staff estimates. -90-
The projectionsallow for the maintenance of net internationalreserves to cover at least 8 weeks of imports. Assuming a moderately fast increase in official grants, required net loan disbursementswould be US$380 million in 1982/83 and US$430 million in 1983/84, implying disbursementsfrom new commitments (subsequentto March 1981) of US$150 million and US$365 million, respectively.
5.05 Table V-5 shows the aid pipeline for 1981/82-1983/84. Due to the steady growth in commitmentsin recent years, disbursementsfrom the pipeline as of March 1981 should meet a substantialportion of the aid requirementsin 1981/82 and 1982/83;however, by 1983/84, on-going projects will be winding down. Based on the current level of disburse- ments and the estimated disbursementpattern, and assuming a blend between project and commodity assistance similar to the historical blend, Burma would require average new commitments of about US$680 million annually for 1981/82-1983/84. This compares with an average of US$590 million for 1978/79-1980/81. Of this amount, it is recommendedthat, if possible, only about US$90 million a year be contracted in the form of suppliers' credits and commercial loans from financial institutions. This would leave a requirementfor new concessionaryloan commitmentsin the amount of US$575 million in 1982/83 and US$640 million in 1983/84, or a small growth in real terms over the estimated 1981/82 level. If this amount of concessionaryborrowing is not obtainable,the GOB may want to consider some additional non-concessionalborrowing in order to carry out its investment program. In doing this, however, the Government must ensure that the economic return from the projects to be financed exceeds the marginal cost of borrowing and that net foreign exchange earnings are positive. An additional means of financingwould be to further increase export earnings, and high priority should be given to this objective.
5.06 Burma's economic performance over the next four years will depend on the availabilityof sufficient resources--bothdomestic and foreign--tocontinue to acquire an adequate supply of imported inputs and to rehabilitateand replace its aging capital stock. To the extent that external assistance is provided largely for these purposes, it is likely to be well used, despite the limitationsof the policy and institutionalenvironment (see below paras 5.09-5.10). As discussed in paras 2.18-2.24 above, priorities should be given to the expansion and diversificationof agriculture;to the rehabilitation,replacement, and in some cases expansion of agriculturaland forestry processing equipment; to the alleviationof bottlenecks in transport,handling, and storage; to efficient development of energy resources, and to some upgrading of health facilities. -91-
Table V-5: AID PIPELINE, 1980/81-1983/84 a/ (US$ million)
Bilateral and Other Total Multilateral Borrowing b/
1981/82 (estimate) Undisbursed Opening Balance 1,223 1,023 200 Fresh Commitments 635 545 90 Disbursements from Existing Commitments 349 247 102 Disbursements from Fresh Commitments 30 16 14
Total Disbursements 379 263 116
1982/83 (projected) Undisbursed Opening Balance 1,479 1,305 174 Fresh Commitments 665 575 90 Disbursements from Existing Commitments 434 352 82 Disbursements from Fresh Commitments 31 17 14
Total Disbursements 465 369 96
1983/84 (projected) Undisbursed Opening Balance 1,679 1,511 168 Fresh Commitments 730 640 90 Disbursements from Existing Commitments 509 421 88 Disbursements from Fresh Commitments 34 20 14
Total Disbursements 543 441 102 a/ Based on existing commitments and projected increases in external borrowing. b/ Suppliers' credits and financial institutions.
Source: Bank staff estimates. -92-
Debt Service Burden and Terms of Borrowing
5.07 Total requirementsfor external funds, as projected in Tables V-4 and V-5, are substantial,and Burma's future debt service burden will depend on a number of factors, including actual export growth and the extent and terms of assistance. The borrowing assumptions reflected in these tables are that (a) commitments of loans from commercial banks and suppliers'credits (average terms of 10% interest, 10 year maturity including 2 years of grace) will remain constant throughoutthis period at US$90 million; (b) commitmentsof IDA (zero interest, 50 years maturity including 10 years grace) and other concessionaryloans (average terms of 3% interest,25 years maturity including5 years of grace) will grow on average at 7.5% per annum, i.e. maintaining their estimated 1981/82 value in real terms; and (c) additional quick disbursing assistance of US$10 million in 1984/85 and US$30 million in 1985/86 will be obtained on relatively favorable terms (6% interest,and 5 year maturity including 2 years grace). As shown in Table V-6, debt servicing over the medium term under these assumptions would amount to about 25% of exports of goods and services. If export growth and the current account deficit remain the same and commercial borrowing continues to be limited to some US$100 million a year, the debt service ratio would remain around 25%.
5.08 A sensitivityanalysis has also been carried out to determine the likely variation in the debt service burden with a substantially higher proportionof non-concessionaryborrowing. In this sensitivity, concessionarycommitments are held constant in nominal terms at the 1981/82 estimated level. Residual borrowing is assumed to be made on the harder terms characteristicof suppliers'credits and financial institutions(see para 5.07(a)). Non-concessionalborrowing in 1985/86 thus increases from 12% of the total in the original projections to 25% of the total in the sensitivity. The impact on the debt service ratio in the medium term is shown as a memorandum item in Table V-6. However, due to the rather slow disbursementrates that are normally assumed for project assistance, the servicing obligationsof debt contracted during the FFYP does not become evident until the early 1990s. At this point, the debt service burden under the harder blend would exceed 30%, the actual amount depending on the specific blend and financing terms of new commitmentsafter 1985/86. This situation could, of course, be avoided by reducing the growth rate of investmentor, what is more difficult, reducing the import content of investmentand/or further increasing export earnings. In any case, it is highly recommendedthat the GOB monitor the medium to long-term implicationsof borrowing over the FFYP. For this purpose, debt service projectionsshould be computed and revised periodically. -93-
Table V-6: DEBT SERVICE PROJECTIONSa/ (US$ million)
Actual Estimate Projections 1980/81 1981/82 1982/83 1983/84 1984/85 1985/86
Total Debt Service 109.5 164 149 193 229 269 Principal 64.3 109 86 115 138 164 Interest 45.2 55 63 78 91 105
Exports of Goods & Services 544.6 578 623 770 913 1,079
Debt Service Ratio 20.1 28.4 b/ 23.9 24.9 25.1 24.9
Memorandum Item Debt Service Ratio with Harder Blend c/ 20.1 28.4 24.1 25.2 26.1 27.5 a/ Excludes Fund repurchases. b/ Includes prepayment of two commercial loans. c/ Concessionaryaid is maintained constant in nominal terms at the 1981/82 level, with residual financingassumed to be contractedat 10% interest and 10 years maturity, including 2 years of grace.
Sources: The World Bank Debt Reporting System and Bank staff estimates.
Implicationsfor the Government and Donors
5.09 If the GOB wants to have a manageable debt service burden that will not unduly interferewith the availabilityof free foreign exchange (footnoteto para 2.05) for intermediateand consumer goods and that will allow some flexibilityfor short to medium-termborrowing when necessary, it should maximize the share of concessionalassistance in total commitmentsof external funds. Moreover, Burma's income level is low, and its prospects for substantiallyraising the domestic savings rate over the next two years are modest; a substantialeffort in public sector resource mobilizationwill be required just to maintain public savings at their 1980/81 level. Under these circumstances,external assistancewill continue to play a crucial role in maintaining the growth momentum. In order to make the most effective use of limited donor resources,however, the GOB will need to improve its policy and -94-
institutionalenvironment, especially in the areas of domestic resource mobilization,official prices, and management and administration.
5.10 In this regard, the Governmentwill need to focus on further improving the effectivenessof aid and the economy's absorptive capacity for aid. In the past, agreement on project concepts has sometimes been protracted;and, although it is preferable to delay agreement if substantialdoubts remain, more analysis and advance planning at the sectoral level could help clarify the issues. As discussed in Chapter II (para 2.14), a greater delegation of authority for routine matters such as selectionof candidates for training abroad and processing of project documentswould facilitate project preparationand help accelerate the rate of disbursement. Successful implementationof the Government'sexport developmentprogram will also be crucial in generating complementary external resources.
5.11 For their part, donors should try to address the Government's needs and priorities,which may be for commodityas well as project assistance. As discussed in Chapter II, the continued emphasis on agriculturalgrowth during the FFYP is expected to generate increasing imported fertilizer requirementsamounting to US$85 million (in current prices) by 1983/84. Moreover, the Government'sfocus on higher capacity utilizationof viable industries and rehabilitationof transport services might necessitateexpanded imports of both intermediateand capital goods, which could be financed through commodity and program-typeassistance. From the standpoint of minimizing the future debt service burden, terms should continue to be as concessionaryas possible. Moreover, it would be helpful if donors continued to finance part of local cost components of projects, since not all of these can be adequatelymet by domestic savings. Finally, and perhaps most importantly,given the scarcity of external resources, the need for domestic resources, and debt servicing implications of any external borrowing, both the Government and the donors should give even greater care than before to the choice of projects to be financed. -95-
ANNEX A Page 1 of 6
Burma Health Profile
Status of Health
1. In terms of indicatorsrelated to demography,fertility and life expectancy,Burma scores fairly well when compared with other South Asian countries. Table A-1 shows that Burma's crude birth rate, crude death rate, life expectancy and child mortality rate are roughly comparable to those of India and Pakistan, two countrieswith higher per capita income.
Table A-1: STATUS OF HEALTH
Burma Bangladesh India Nepal Pakistan Sri Lanka
Crude Birth Rate (per '000) 37 44 34 42 44 28
Crude Death Rate (per '000) 14 16 14 20 14 7
Life Expectancy at Birth 54 49 52 44 52 66
Child Mortality Rate (1-4 Years) a/ (per '000) 13 19 15 25 15 3
GNP per Capita (1979) 160 90 190 130 260 230 a/ Infant mortality rate is not available for Burma on a national basis.
Source: World Bank; The World DevelopmentReport, 1981.
2. Prevalent diseases, as indicatedby hospital admissions, are malaria, gastro-enteritis,and diarrheal diseases (among young children),and lung diseases such as tuberculosis,bronchitis, emphysema,and asthma. Among the leading causes of death are malaria, lung diseases such as pneumoniaand tuberculosis,and intestinal infections. The three most common nutritionaldeficiencies are (a) protein-energymalnutrition, common among children under five years of age; (b) nutritionalanaemia, prevalent among pregnant women, and (c) goitre, common in the northern hilly areas of Burma, particularlyamong children in the 6-10 age group.
Determinantsof Health Status
3. Table A-2 compares principalhealth-related indicators for six South Asian countries. Burma's adult literacy rate of 67% is second only to Sri Lanka among the six countries compared,and average annual -96- ANNEX A Page 2 of 6
Table A-2: DETERMINANTS OF HEALTH a/
Burma Bangladesh India Nepal Pakistan Sri Lanka
Adult Literacy Rate (%) 67 26 36 19 24 85
Per Capita Supply of Calories (% of requirements) 106 91 91 91 99 96
Access to Safe Water (% of population) - Total 17 53 33 9 29 20 - Urban 30 15 83 81 60 45 - Rural 13 55 20 5 17 13
Access to Sewerage System (% of population) - Total 33 n.a. 20 n.a. n.a. 59 - Urban 38 40 87 14 21 68 - Rural 32 n.a. 2 n.a. n.a. 55
Population per physician 4,550 b/ 8,775 3,617 35,253 3,758 c/ 6,751
Population per nursing person 7,506 b/ 56,877 6,429 53,538 9,985 c/ 2,055
Population per hospital bed 1,407 b/ 4,402 1,311 6,294 1,895 342
GNP per capita (1979) 160 90 190 130 260 230 a/ Data refer to any year between 1976 and 1979. b/ Provided by GOB (data refer to 1980). c/ Registered, not all practicing in the country. These figures are likely to change after the finalization of 1981 census figures.
Note: Data presented are World Bank estimates except where noted.
Sources: Government of Burma and The World Bank. -97- ANNEX A Page 3 of 6
calorie availabilitiesof 106% of requirementsare substantiallyhigher than those of the comparators. On the other hand, with only 17% of total populationhaving access to safe drinking water and a sewerage system serving no more than 38% of the urban population,Burma fares less satisfactorilyin terms of sanitation.As indicated above, sanitation related diseases such as typhoid and cholera are common causes of morbidity and mortality.
Delivery of Health Services
4. Health services in Burma are provided by the Government and also by private and cooperativepractitioners. Government health services are organized and administeredby the Ministry of Health. As shown in Chart 1, Director Generals for Health, Medical Education,Medical Research, and Sports and Physical Education report directly to the Minister and Deputy Minister. The Director General for Health Services is responsiblefor the overall administrationand planning of the Health Department, which oversees a network of public health facilities at the regional and township levels. At the regional level, divisional and state health directors are responsiblefor the administrationof health services in the fourteen divisions and states of the country. The township is the third and lowest level of organization. The township medical and health officers are responsiblefor curative and preventive services in the townships. They supervise the township and station hospitals and also the health centers and sub-centers.
5. There are 514 government hospitals in Burma providing about 23,500 beds, or an average of about one bed for every 1,400 persons. In addition, the Government provides outpatient treatment through its 61 urban health centers, 1,227 rural health centers, I/ and 326 maternity and child health centers. Outpatient treatment is also available at private clinics (which account for about half of the doctors in Burma) and at cooperativeclinics numbering 403 in all. The various health facilities are extremely well utilized. The country's overall occupancy rate 2/ for hospitals, for example, was 97.3% in 1980. The supply of doctors trained by the country's three medical schools far exceeds the number of jobs available in the country's public health services. In 1980, there were 6,816 doctors in Burma, of which 47% were serving the public health sector. Currently, 200 Burmese doctors are serving in Sri Lanka and Malaysia on a two-year government contract.
1/ There are usually 3 to 5 sub-centersunder each rural health center.
2/ Occupancy rate is obtained by dividing the average daily number of inpatients by the number of authorized beds. -98- ANNEX A Page 4 of 6
Chart 1: ORGANIZATION OF HEALTH SERVICES IN THE MINISTRY OF HEALTH
Minister I Deputy Minister
I I ~ ~I I__-
Director Director Director Director General, General, General, General, Department Department Department Department of Health of Medical of Medical of Sports Education Research and Physical Education
State/Divisional Health Directors
I Township Medical Officers
I
Rural Health Maternity Station School Disease Centers and Child Medical Health Control I Care Officer Teams Programs Sub Centers Centers I Rural Health Centers I Sub-Centers
Primary Health Care Program
6. In order to reach that portion of the rural population with poor access to rural health centers, the Government in 1976 initiated the Primary Health Care Program which runs largely on the strength of community volunteer service. The core of the program consists of about 5,000 community health workers who, under the supervision of Rural Health Center staff and armed with a first aid kit and a chest of basic drugs, take care of minor injuries and illnesses, carry out rehydration of diarrhea cases, provide instruction in basic hygiene, and identify more serious cases for referral. The community health workers operate in the village from which they are chosen, and the bulk of the expenses for training, equipping and sustaining these volunteers is borne by the -99- ANNEX A Page 5 of 6 community. The program also trains auxiliary mid-wives who assist in home child delivery, teach child care basics, and are responsible for identifying complications for referral. It is estimated that the program currently covers approximately one-half of the rural population. Complementary to this program has been the establishment of cooperative dispensaries which have helped to increase outreach at a minimal cost to the Government. The Primary Health Care Program, though new, appears to have won the acceptance of local communities and is filling a large vacuum previously left by the available network of formal health facilities.
Shortage of Pharmaceutical Products
7. There is an acute shortage of drugs in Burma, particularly in the public health services. Local production of pharmaceutical products is carried out by the Burma Pharmaceutical Industry (BPI), but its output does not meet the country's demand. The quantity of imported products depends on the availability of foreign exchange. BPI products currently produces 100 million kyats worth of drugs, while the real demand in the country is estimated at around 500 million kyats. Moreover, only 32% of BPI products is allocated to the Ministry of Health. (The remainder goes to Trade, 50%; Cooperatives, 6%; the Social Security Board, 2%; and the Army, 10%.) The supplies provided to health facilities last for only part of the year. During the remainder of the year, patients are advised to purchase drugs on the unofficial market, which offers a wide range of illegally imported pharmaceutical products.
Financing of Health Services
8. Free medical care for all citizens is espoused by the Constitution. Nevertheless, individuals incur substantial medical costs, because the Government is unable to fully fund all the necessary buildings, equipment, and supplies--including drugs. Public expenditure on health declined in real terms between 1970 and 1976 but partially recovered thereafter, increasing at an annual rate of 11% during 1978/79-1980/81 in constant prices (see Appendix Table 1.5). Nevertheless, per capita health expenditures are still below their former level, and government funds alone are not sufficient to meet the growing needs of the population. The primary health care program is almost wholly financed by the local community. The Government provides staff and limited equipment for rural health centers and peripheral hospitals, but the local population donates funds and other materials. Inpatients at all levels of the public health system are encouraged to provide their own food and procure drugs on the outside market at their own expense. In sum, the public health system in Burma functions despite limited government funding, thanks to strong and effective self-help organizations at the local community level and the shouldering of a large portion of the recurrent costs of the public health service by individual patients. This cost-sharing relationship is the result of a deliberate government policy, and appears entirely appropriate at this stage, in view of the GOB's resource constraints. In any case, -100- ANNEX A Page 6 of 6 government officials are concerned about the health status of the population;and, while domestic resource allocations for health have continued to be modest, increasing amounts of concessionaryforeign loans and foreign grants have been channeled into the health sector in recent years.
Externally Assisted Programs and Priorities for the Future
9. Total external assistance to the health sector is estimated to have exceeded US$35 million over the TFYP. During this period, the Government attached particular importance to community health care programs such as primary health care and basic health services which have accounted for nearly one-third of external aid to the sector. Over the FFYP, the focus on communityhealth is expected to continue,but the Governmentwill also give high priority to constructionand upgrading of hospitals. Safe water, and other aspects of environmentalhealth, is also expected to be high on the Government'slist of priorities,as are disease control and traditionalmedicine. -101-
ANNEXB Page I of 7
Irrigation Projects by Type
Table B-I: DIVERSION PROJECTS OPERATEDOR PROPOSEDBY IRRIGATION DEPARTMENT
Division/ Irrigable Year of Location State Area (ac) Completion References and Notes
COMPLETEDPROJECTS
Schwebo and Ye U Schwebo Sagaing 358,715 1918/19 Kabo Weir systems inaugurated in 1906 and later extended. (Mu River) Schwebo system on left bank (227,000 acres approx.), Ye-U system on right bank (131,000 acres approx.). Would be provided with storage under major Mu River multipurpose development project (Table B-2). Possible candidate for Rehabilitation Program (?Phase II) prior to provision of perennial storage.
Mandalay Mandalay Mandalay 105,869 1903 To be rehabilitated and provided with perennial supplies in context (Chaungmagyi River) of Sedawgyi MultipurposeProject (Table B-2). ADB SAR gives an area of 94,850 acres. 105,869 acres possibly includes Yenatha scheme (see below).
Mezali Weir Minbu Magwe 96,787 1912 Right Bank - 55,907 acres, Left Bank - 40,690 acres. Proposed for (Mon River) Rehabilitation Program (?Phase II). Possible site for multipurpose storage project.
Zawgyi (4 Weirs) Kyaukae Mandalay 96,331 1925/26 Ancient system modernized in 1925/26. First project to be included in proposed Rehabilitation Program (Phase I) scheduled for FY1984.
Panlaung (3 Weirs) Kyaukae Mandalay 86,913 1925/26 Ancient system modernized in 1925/26. To be rehabilitated in context of Xinda (Nyaunggyat) Multipurpose Project and provided with storage. IDA SAR gives 88,000 acres.
Salin Minbu Magwe 28,431 1926 Proposed for Rehabilitation Program (?Phase II).
Aigma Weir (Man River) Minbu Magwe 25,500 1912 Left Bank of Man River. Proposed for Rehabilitation Program (?Phase II). Possibility of storage (see Table B-2).
Hopong Valley (5 Weirs) Taunggyi Shan 25,000 1977/78 Recently constructed cascade of weirs in Shan State. ID Report 150% cropping intensity.
Yenatha Madaya Mandalay 18,000 1975/76 Recently constructed scheme on right bank of Chaungmagyi River. To (Chaungmagyi River) - be provided with storage under Sedawgyi Multipurpose Project (Table B-2).
Washawng Myitkyina Kachin 17,450 1966/67 On tributary of Upper Irrawaddy. ID report 200Y cropping intensity.
Bepenaung Yamethin Mandalay 12,780 1959 Upper Sittang Valley.
South Man Minbu Magwe 11,958 1969/70 Recent system on right bank of Man river, also served from Aigma weir (see above). Possibility of storage (see Table B-2).
Old Mu Canal Schwebo Sagaing 10,131 Ancient Catchwater drain feeding existing tank. Remnant of ancient system (Mile 26/1 - 15/7) based on Mu river. Would be integrated into multipurpose Mu river development project.
Kinmundaung Taungdwingyi Magwe 10,000 1959/60 To be provided with storage under IDA Tanks I Project (Table B-2). Peasibility study by ID gives present irrigated area at 1,000 acres to be increased to 5,500 acres under tank project.
No. of Schemes
7,500 - 10,000 acres I Mandalay 7,636 - Inyin Weir, Meiktila
5,000 - 7,500 acres 2 __ 12,200 - Yeain (6,121 acres) now served by dam and excluded. Yinmale (6,200 acres) proposed for tank project (Table B-2).
2,500 - 5,000 acres 17 -- 55,889 - --
Less than 2,500 acres 70 -- 89,200 - __
Minor Irrigation -- Mandalay 10,824 - Minor irrigation in Meiktila and Yamethin undefined in terms of individual projects.
Total: Completed Projects -- -- 1,068,790 -
UNDER CONSIDERATION(Incomplete)
Kentung Valley Kentung Shan 17,100 - Included in 20-Year Plan. Still to be investigated.
Loiknampha Name'kan Demawsoe Kayah 10,100 - Included in 20-Year Plan. Still to be investigated.
Momeik Valley Momeik Shan 6,770 - Included in 20-Year Plan. Included in 5-Year Development Program, 1981-85. Feasibility study completed.
Nsenwi Hsenwi Shan 3,110 - Included in 20-Year Plan. Peasibility study completed.
20-Year Plan: Small 7 Projects -- 32,500 - Included in 20-Year Plan. Kokant/Wa, Monglin Valley, Tachileik, Diversion Projects Pongphakyin, MongBat and ityawywa. Still to be investigated.
Total: Under Consideration -- -- 69,580 - Almost certainly excludes many other projects that have been (incomplete) proposed. -102-
ANNEXB Page 2 of 7
Table B-2: DAM AND RESERVOIRPROJECTS OPERATEDOR PROPOSEDBY IRRIGATION DEPARTMENT
Division/ Irrigable Year of Location State Area (ac) Completion References and Notes
COMPLETEDPROJECTS
Meiktila Lake Meiktila Mandalay 46,052 1891/92 Ancient system rehabilitated in 1891/92 and 1924/25. Land co-mission in 1956 reported serious siltation problem.
Kyetmauktaung (Pin River) Myingyan " 29,786 1967/68 To be provided with supplementary water under project included in 20-Year Plan (see below).
Nyaungyan Minhla Meiktila " 27,650 1891/92 Ancient system rehabilitated in 1936/37. Also has siltation problem.
Thitson Yamethin " 21,457 1960161 Project on tributary of Upper Sittang.
Yeain Pyimana " 16,000 1975/76 Project on tributary of Upper Sittang, serving the Agricultural Research Institute. Supplementary supplies possibly to be provided from Paunglaung reservoir (see below).
Alaungsithu Meiktila " 11,576 1957/58 Project on tributary of Samon River.
Mondaing " " 10,000 1966/67 Project on tributary of Samon River.
No. of Schemes
7,500 - 10,000 acres 3 - 25,348 -
5,000 - 7,500 acres 6 - 39,793 -
2,500 - 5,000 acres 5 - 16,814 -
Less than 2,500 acres 18 - 20,153 -
Minor Irrigation Meiktila/ Mandalay 25,862 - Minor irrigation in Meiktila and Yamethin undefined in terms of Yazethin individual projects.
Total: Completed Projects 290,491 Excludes small storage tanks which are integrated into essentially diversion systems.
UNDERCONSTRUCTION
Kinda (Nyaunggyat) Myittha Mandalay 113,500 1/ 1986/87 Various Planning and Feasibility Studies. Multipurpose. (Panlaung River) Rehabilitation of existing Panlaung System (88,000 acres) (Table B-i). Additional irrigation for 113,500 acres and 56 MWof power. Storage for dry season cropping. IDA-assisted project.
North Nawin Prone Pegu 96,769 1980/81 Major construction works completed in 1980/81. Additional works to be carried out include access road and brick lining of canals to reduce seepage losses.
South Nawin Paukkaung Pegu 62,500 n.a. Feasibility study by Japan ICA, 1980. A pilot irrigation project is under construction with grant assistance provided by Japan. Japanese loan provided for detailed design. Loan for construction under discussion. Small hydropower component proposed (2.1 MW).
Ngaleik Pyinmana Mandalay 20,200 1984/85 To provide irrigation supplies to the Pyinmana Integrated Sugar Project financed by ADB. On tributary of Sittang River.
Mobye Loikaw Xayah 19,942 1982/83 Developnent below existing hydro-electric dam on tributary of (Baluchaung River) Salween (Lawpita - 168 MW). 8,500 acres completed by end-1980/81. Dam operated by Electric Power Corporation. Irrigation works being constructed with grant finance fro. Australia.
Sedawgyi Madayg Mandalay 14,850 1/ 1982/83 Various Planning and Feasibility Studies. Multipurpose. 20 MW. (Chaungsagyi River) Rehabilitation of existing Mandalay System (94,850 acres). Also serves existing Yenatha scheme (18,000 acres). New irrigated area includes 14,080 acre pump scheme. Storage for dry season cropping. ADB-assisted project. Although 1982/83 still given as completion date, delays have occurred and the project is unlikely to be completed until perhaps 1984/85.
Chaungmagyi Pyawbwe Mandalay 9,276 1981/82 Right bank tributary of Irrawaddy - no connection with Sedawgyi project. No problem envisaged in completing project in 1981/82.
Shwele Paukkaung Pegu 3,600 1982/83 Project financed locally
Total: Under Construction - 340,637 1/
1/ Excluding existing areas (totalling 200,850 acres) which will receive perennial supplies (Panlaung, Mandalay and Yenatha schemes - see Table B-i). -103- ANNEXB Page 3 of 7
Table B-2 Cont'd.
Division/ Irrigable Year of Location State Area (ac) Completion References and Notes
UNDERCONSIDERATION (Incosplete)
Dry Zones Tributaries of Irrawaddy
Chindwin -- Sagaing na - Preliminary investigations of a number of dan sites undertaken for power. Prefeasibility study of Tamanthi project (1,200 NW). Possibility also on Manipur river tributary of Chindwin (500 MW). No specific irrigation development proposed bht estimated that construction of Tamanthi would allow up to 1.5 M acres of down- stream pump and related development. Manipur basin has up to 500,000 acres irrigable land. Other projects on tributaries of Chindwin possible but not seriously investigated.
Mu Schwebo Sagaing 501,260 - Planning and feasibility studies from 1953. Included in 20-Year (368,846 existing) Plan for a total irrigated area of 501,260 acres of which 368,846 acres accounted for by existing Schwebo, Ye U and Old MN canal systems (see Table B-l). Multipurpose project, 20 MW. Primary purpose to bring perennial supplies to existing and new irrigated land. Alternative phasings of project under consideration. Detailed designs for Thapanzeik Dam available since 1972.
Indaw Rasauk Sagaing 98,800 - Still to be investigated. Included in 20-Year Plan. Proposed dam (10,131 existing) on river crossing Old Mu canal. Similar projects have in past been suggested for Linbangya and Teingyein rivers. Area to be served includes existing Old Mn system (see Table B-1) and may duplicate areas included under Mn river project (see above).
Mon Pywintbya Magwe 108,100 - Still to be investigated. Included in 20-Year Plan. Would provide (96,787 existing) storage to existing Mezali weir system. Potential for increasing irrigated area limited but hydroelectric potential considerable (200 MW).
Man Sagu Magwe 37,458 - Still to be investigated. Included in 20-Year Plan. Would provide (37,458 existing) storage to existing Aigma weir systems (Table B-1). Limited poten- tial for expanding area. Not being considered for hydro power.
Myitinge (Yeywa) Maymo Mandalay 30,000 - Not included as irrigation project in 20-Year Plan. Main identified ? existing) purpose for power (400 MW). Limited potential for irrigation. Not yet investigated in detail and thought to have difficult geological conditions.
Kyetmauktaung Myingyan Mandalay 29,786 - Project to provide water to existing storage project on Pin (29,786 existing) river from neighboring catchment. Peasibility study under way. Included in 20-Year Plan.
Samon Valley Wundwin Mandalay 15,000 - Still to be investigated. Included in 20-Year Plan. Uncertain ? existing) whether duplicates existing development which is extensive (Alaungsithu, Meiktila tank, Mondaing, etc. see Table B-2).
20-Year Plan: Small Dams 6 Projects -- 19,077 - Indaingtha, Letpan Chaung, Paungnet, Mosatung, Modulating ? existing) Reservoirs for Ranna and Taungpulu (esisting schemes). Some of these projects may be outside Dry Zone area. All still to be investigated.
Yin Chaung Basin
Yin Natmauk Magwe 42,000 - Series of small dams in Yin Chaung basin, a left bank tributary of Rinmundaung Taundwingyi " 5,000 the Irrawaddy in the Dry Zone. Included in 20-Year Plan. Detailed Ngarin " " 19,300 designs for Kinmundaung under preparation, and to be included in Bagone ' 2,500 Tanks I Project to be financed by IDA. Feasibility studies for Yinmale " 1,100 Ngamin, Bagone, Yinmale, Sun and Sadon projects being prepared by Sun 8,000 Irrigation Department. Yin, Bayon and Taungyo still to be investi- Sadon " 12,500 gated. Possibility of groundwater in Yin Chaung basin being inves- Bayon " " 5,500 tigated in connection with possible ADB project. Taungyo "1,800
Sub-Total 97,700
West Pegu Yoma
Wegyi } Phase II Thegon Pegu 81,500 - Series of single purpose dams subject to preliminary investigations Taunyo } Natalin ' 46,700 on Irrawaddy Basin by Japan ICA, 1980. Would follow North Nawin, South Nawin and Schele Projects in same area. Phase I project Okkan } Taikkyi 76,600 suggested to comprise Okkau, Thonze, Thegaw and Kadinbilin dams. Thonee } Phase I Tharawaddy " 97,600 All but Thonee discussed by Irrigation Department in 1978 paper Thegaw } Letpadan " 31,900 "Medium Size Reservoir Project". Wegyi and Taunyo projects only Xadinbilin } Minhla " 46,900 ones included in 20-Year Plan but still to be investigated and would comprise proposed Phase II. Gawon, Miohla and Bawdin - Bawdin GyobinyaukG " 32,100 Phase III. Ngamoyeik treated separately - would flood substantial Gawon } Phase III Gyobingauk " 11,100 settled area. Miohla } Minhla " 19,800
Ngamoyeik Hlegu "84,000
Sub-Total 528,200 -104-
ANNEXB Page 4 of 7
Table B-2 Cont'd.
Division/ Irrigable Year of Location State Area (ac) Completion References and Notes
East Arakan Yoma
Nyaungging } Padaung Pegu 3,500 - Series of single purpose dama suggested in preliminary study Buyo } Phase IV " ' 12,100 Irrawaddy Basin by Japan ICA, 1980. Not included in 20-Year Plan. Thaledan ) Nyaungchidauk " 6,200 Development proposed in four phases as shown. As far ns is known, no detailed investigations carried out, and less likely Alonmoyak ) Kyangin " 19,800 to be implemented in foreseeable future than West Pegu Yoma dams. North Kun } Phase II " " 13,100 Phatashin } " " 7,400
Mamya } Myanaung Irrawaddy 21,000 Kyanyin } Phase I Ingabu 40,500 Mankathu } " 41,200 Nankathu } " " 49,400
Gyat } Lenyethna " 49,400 Mezali } Phase III " 46,900 South Kun } Yegyi 47,900 Kyet Paung 4.900
Sub-Total 363,300
Non State
Thayagone -- Mon ? Series of small dams in Mon State on west flank of Tenasserim Dawe " 1,200 Yoma. Azin project being subject to detailed design and to be Azi -- 4,800 included with Kinmundaung (see above) in IDA financed Tanks I Gyongyongya -- 1,500 project. Feasibility study for Winpanon under preparation by Thantadagyi -- 1,700 Irrigation Department and may include small power component. Yetagun -- 1,400 Other projects still to be investigated although included in Kamawet -- 5,400 20-Year Plan. Winpanon -- 19,450 Abit -- 20,600 dnipadaw -- 2,000
Sub-Total 72,950
Sittang Valley
Paunglaung -- Mandalay/Pego 250,000 Included in 20-Year Plan which gives potential of 700,000 acres. Interim Report (November 1981) by Norconsult of irrigation poten- tial below Paunglaung I hydro project (up to 300 MW) suggests (a) maximum area that could be irrigated from Paunglaung river would be 250,000 acres, and (b) reviews alternatives for develop- ment below proposed hydro project of up to about 150,000 acres. Latter includes supplementary supplies for irrigated area served by Yeain and Ngaleik dams. Paunglaung II hydro also possible which could lead to additional irrigation development. Original proposal of Sittang Valley Water Resources master plan (1964) to divert water north to Samon Valley no longer being considered.
Yenwe-Pyuntaza Daik U Pegu 120,000 - Included in 20-Year Plan which gives potential of 450,000 acres. Feasibility study by Selkkozpromexport, USSR, in 1977. Updated by Nippon loei in 1981 which recommends a single dam to serve 120,000 acres, and provide 16.2 MW and important flood protection benefits.
Sinthe Tatkon Mandalay 32,400 - Single purpose project recommended by UNDP consultants. Feasibi- lity Study completed. In same area as Yezin and Thitson dams, in northern Sittang Valley. Not included in 20-Year Plan.
Other Sittang Basin Projects
Swa Swa Pegu 69,000 - Other projects identified in context of UNDPWater Resources Kabaung Toungoo 135,000 Planning Study for Sittang Valley Development. Potential areas Thaukgegat Tantabin 110,000 derived from "UNDP: Water Resources Management and Project Pyu Pyu 225,000 Development, 1979. Report BUR/74/039. Working Document 5". Kun Pyu 246,000 May overstate potential areas. Many of these projects primarily Bawgata Kyaukkyi " 170,000 to be considered for power, notably Thaukyegat (255 MW), Schwegyin Schwegyin Kun (84 MW), Bawgata (168 MW), and Pyu (65 MW). Baingda ? 46,700 Kawliya Daik U " 24,500 Pegu ? "180000
Sub-Total 1,206,200
Total: Under Consideration 3,510,231 (Incomplete - Including Existing Areas) -105-
ANNEXB Page 5 of 7
Table 3-3: PUMPAND GROUNDWATERPROJECTS OPERATED-/ OR PROPOSEDBY IRRIGATION DEPARTMENT
------~~~~~-- ~~Division/Jirrigable-- Year of Location State Area (ac) Completion_ __ References and NEten
COMPLETEDPROJECTS
Letpanchibaw Pump Myingyan Mandalay 1,000 1964 --
Sameikkon Pomp ' 1,500 1965/66 ___ --
Total: Completed Projects 2,500 Possibly excludes other s.all pomp schemes.
UNDERCONSTRUCTION
Minor Pumps Project 3 Schemes Magwo/ 23,845 1985/86 The 5-Year Development Program 1981-85 gIves 44,000 acres (AD8)(Phase 1) Peg. but probably includes projects not taken up by ADS in Phase I (see below). The 1980/81 Report to the Pyitho Slottuw states 400 acres completed by end 1980/81.
Pump Irrigation Project Minbo Magwe 1,500 n.a. Local pomp project with pumping from Irrawaddy.
Total: Under Construction 25,345
UNDERCONSIDERATION
Heneada Pomp Heneada Irrawaddy 68,200 - Project for large-scale irrigation development of the Natnaw Plains (up to 65,000 acres) proposed by ULG Consultants in December 197S. Further processing suspended until doubts concerning the technical viability of pump intake site are resolved, Sir William Halcrow and Partners (January 1982) recommend pilot project (up to 16,000 acres) to help obtain technical solution.
Minor Pumps (Phase II) - Mag-e 45,000 - ADB SAR. Proposed lnestigations for seven schemes (81,500 ac) leading to project of 40-50,000 acres. Follow-up to Phase I Development Program (see above).
Croundwater Phase I Mosywa Sagaing 139,000(?) - Fea.ibility Studies by Groond-ater Developmest Consultants (GDC) under way. rDC currently investigating three areas. Monywa-Chaung PIProject given as 205,000 acres gross. Appears to be priortty area in 5-Year Development Program 1981-85, and taken to comprise Groundwater Project Phase 1. Other possible area. for Phase II, Wuodwin Takton in Mandalay Division (415,000 acres gross), and Yinmabin Pale in Sagaing Division (252,000 acres gross).
Total: Under Consideration 252,200 Fxcludes pump scheme (14,850 acres) under Sed-wgyi project (incomplete) (Table 2), Groundwater Phase II, and all private pump irrigation. Probably also excludes other pump schemes under consideration.
1/ The promotion of private/cooperattve and other small scale pump and groundwater schemes is the responsibility of other departments and ageSncies, including Agricultural Corporatiao, Agricultural Mechanization Department, Working People's Settlement Department and Ministry of Cooperatives. The Agricultural Mechanization Department was the e-ecuting agency for the small pumps sub-component of the IDA-supported Irrigation I Project (Cr. 483-BA). -106-
ANNEXB Page 6 of 7
Table B-4: FLOOD PROTECTIONAND DRAINAGEPROJECTS OPERATEDOR PROPOSEDBY IRRIGATION DEPARTMENT
Division/ Protected Year of Location State Area (ac) Completion References and Notes
CCMPLETEDPROJECTS
SJItong Valley & Delta (East of Pegu River)
Pego Sittang Canal Pego Pego 44,998 1878
Pagaing Etbankaeot " " 97,158 1878 --
Pyuntaza Plain: River " " 116,072 1928 -- Training
Sittang Embankment " 52,434 1883/84
Minor Embankment Work 50 Schemes Pego/ - B69,Baw Chaung scheme in Rangoon Division included in IDA's Paddy- Rangoon lands II Project see below. Sob-total 479,760
Irrawaddy Delta
Irrawaddy Embankment Hentada Irrawaddy 782,451 1881/82
lerawaddy East Emb. " 114,266 1960/61 --
Kwingauk Kwethaung Emb. ' " 61,205 ? --
Payagyigon Kha-aangbin ERb. " 61,312 1963/64
Thongwa Island Etb. Maubin 32,275 1898/99 Also included in IDA's Paddylands II Project - see below.
Maobin Island Emb. " ' 142,809 1880/81 --
Yandom Island Emb. " " 57,616 1922/23 --
Pa=awaddy Flood Prot. tinme " 19,900 1975/76 Scheme completed in 1975/76.
Tamatakaw Embankment Pyapon " 13,253 1926 --
Mokkyun Flood Prot. Hanthawaddy Rangoon 70,000 1972/73 --
Minor Flood Prot. Works 4 Schemes - 23,100 1977/78 4 Minor Embankment Works 68 Schemes - 291,22 - Some of these schemes included in IDA's Paddylands I and II projects - see below. Sob-total 1,669,441
Arakan, Upper Borma and Other Locations
Nagatwin Paokpin Etb. Monywa Sagaing 25,446 1964/65 --
Arakan Flood Pret. Works - Arakan 11,928 1974/75 Phase II currently under construction (see below). Phase I
Minor Embank. Works 52 Schemes - 82,202 - --
Sub-total 119,576
Drainage Works
Letpaubin Ngwedaung Loikaw Kayah 14,000 ? Reclamation Area
Minor Drainage Works 122 Schemes - 441,599- --
Sob-total 455,599
Totlt: Completed Projects - - 2,724,346 -107- ANNEX B Page 7 of 7
Table B-4 Cost'd
Location Division/ Protected Year of __c___Stace _ _Area (ac) RReferences rmpletion and Notes
UNDER CONSTRUCTION
Paddylasds I Pojc
Shwelaung Wakema Irrawaddy 38,000 1983/84 Approximately 66% of civil works completed by end-1981. Original Kyet-Pha-'drwe-Zaung Pyapon " 23,500 " completion date 1981t82 bolt now scheduled for 1983184. Some of Other Pyapon " " 43,800 these areas also include schemes already included nder completed Betut Laputta " 40,700 schemes (see above). Marginal adjustments to the protected areao Alegyun Ngapudaw " 15,200 " are expected. Dasoggyi I. Bogale _23,800
Sob-total 185,000
Paddylands II Project
Thongwa Island Maubia Irrawaddy 59,000 1985/86 Approximately 16% of civil works completed by end-1981. Thosgwa Daunggyi II Bogale 51,000 island scheme includes e-istisg project (see above), and other Labutta Lubutta " 30,000 schemes also include minor existing schemes to be rehabilitated. Bawchaung Syriam Rangoon 35,000 Marginal adjustments to the protected areas are expected.
Sub-total 175,000
Pyingyi Island Laung Lon -- 4,500 1982/83 Locally financed.
Chaung U Flood Prot. Chaung-U -- 10,000 Locally financed.
Arakan Flood Prot. Phase II - Arakan 22,793 Small projects in Arakan. Follows Phase I completed in 1974/75. Locally financed.
Total: Under Construction 397,293 Includes some areas included under completed projects.
UNDER CONSIDERATION (Incomplete)
Paddylands III Project - Irrawaddy 240,000 - Included in 5-Year Plan Development Program 1981-85. Feasibility Studies and overall delta hydrology investigated by Sir William Halcrow and Partners who conclude that op to 1.75 - 2.00 M acres of land could be protected by empoldering in the lower and middle delta without adverse effects on the hydrological regime. Further Drainage and Land Protection Projects in the Delta can therefore be envisaged.
Hanthawaddy Flood Pro. Hanthawaddy Rangoon 278,877 -
Peg. District Flood Pro. - Pegu 180,000 -
Dazinkyun Daunggi Ngaputaw - 12,000 - Projects included in 20-Year Plan. Still to be investigated. Ma Mya Chaung Flood Pro. 'denzada Irrawaddy 26,660 -
Bawdi and Danoke Drainage Pantanaw - 56,000 -
Kunseik Embakment Schwegyin Pegu 3,277 - ( ______
Total: Under Consideration 796,814 Excludes other areas under consideration, in particular further (incomplete) projects in the 'paddy lands' series and projects in the lower Sittang Valley. Many proposed storage projects (Table 2) have flood protection components. -108-
STATISTICAL APPENDIX
Table No.
I. POPULATION AND HUMAN RESOURCES
1.1 Total Population 1.2 Percentage Distribution of Employed Persons, by Activity 1.3 Total Number of Students and Teachers in Selected Years 1.4 Expenditure on Education 1.5 Expenditure on Public Health
II. NATIONAL ACCOUNTS
2.1 Gross Domestic Product by Industrial Origin, 1971-81 (current prices) 2.2 Gross Domestic Product by Industrial Origin, 1971-81 (constant prices) 2.3 Shares of Gross Domestic Product by Industrial Origin 2.4 Contributions to Gross Domestic Product by Type of Ownership 2.5 Total Expenditure and Gross National Product (current prices) 2.6 Total Expenditure and Gross National Product (constant prices) 2.7 Savings and Investment 2.8 Allocation of Public Capital Expenditures
III. THE EXTERNAL SECTOR
3.1 Balance of Payments 3.2 Volume and Value of Major Exports, by Commodity 3.3 Composition of Imports 3.4 Pattern of Trade 3.5 Unit Value and Quantum Indices and Terms of Trade 3.6 Foreign Loans Contracted 3.7 Foreign Exchange Reserves
IV. PUBLIC DEBT
4.1 External Public Debt Outstanding as of March 31, 1981 4.2 External Public Debt Transactions as of March 31, 1981
V. PUBLIC FINANCE
5.1 Consolidated Public Sector Budget 5.2 Union Government Revenue 5.3 Union Government Current Expenditure 5.4 Union Government Capital Expenditure and Net Lending 5.5 Budget of the Boards and Corporations -109-
Table No.
VI. MONEY AND CREDIT
6.1 Monetary Survey 6.2 Myanma Economic Bank: Rates of Interest
VII. AGRICULTURE
7.1 Value Added in Agriculture 7.2 Production of Selected Crops 7.3 Sown Area of Selected Crops 7.4 Harvested Area Under Selected Crops 7.5 Selected Crop Yields 7.6 Farm Prices of Cereal and Selected Crops 7.7 Farm Prices of Pulses 7.8 Controlled Farm Prices of Fiber Crops 7.9 Government Procurementof Selected AgriculturalCrops 7.10 Comparison of Export Unit Prices and GovernmentDomestic ProcurementPrices of Selected AgriculturalCommodities 7.11 Teak and Hardwood Production
VIII. INDUSTRY,MINING, AND ENERGY
8.1 IndustrialValue Added 8.2 Gross Production of Processing and Manufacturing Sector by Commodity Group 8.3 Gross Production of Processing and ManufacturingSector by Ownership and Industry 8.4 Sub-Sector Shares in Gross Output of State IndustrialSector 8.5 Distributionof Factories by Employment Size 8.6 Capacity UtilizationRatio in Selected Industries 8.7 Production and Export of Selected Minerals 8.8 Production, Import and Export of Crude Oil
IX. PRICES
9.1 Consumer Price Index at Rangoon 9.2 Wholesale Prices of Selected AgriculturalProducts 9.3 Retail Prices of Selected DecontrolledCommodities at Rangoon 9.4 Ratios Between Free Market and Official Prices
X. TRANSPORT
10.1 TransportationNetwork 10.2 Total Transport Work Undertaken by State-ownedTransport Agencies, 1962-81 10.3 Freight Traffic Allocation to Various Modes of Transportation -110-
Table 1.1: TOTAL POPULATION
Total Population
Population ('000) Annual Rate Year Mid-Fiscal Year Mid-Fiscal Year of Growth (Past) (Current) (%)
1965 24,218 2.2
1970 27,034 2.2
1971 27,637 2.2
1972 28,262 2.3
1973 28,886 2.2
1974 29,521 2.2
1975 30,170 29,846 2.2
1976 30,502 2.2
1977 31,173 2.2
1978 31,859 2.2
1979 32,573 2.2
1980 33,313 2.3
1981 34,083 2.3
1982 34,882 2.3
Note: Past fiscal year - October to September. Current fiscal year - April to March.
Source: Immigration and Manpower Department. Table 1.2: PERCENTAGE DISTRIBUTION OF EMPLOYED PERSONS, BY ACTIVITY
1970 1975 1976 1977 1978 1979 1980 1981
Agriculture 66.74 65.76 65.54 65.31 64.97 64.64 64.50 64.24
Livestock & Fishery 1.57 1.29 1.30 1.30 1.32 1.32 1.33 1.34
Forestry 1.56 1.22 1.22 1.23 1.20 1.28 1.28 1.27
Mining 0.26 0.51 0.54 0.53 0.53 0.53 0.52 0.51
Manufacturing 6.86 7.01 7.08 7.09 7.35 7.48 7.64 7.83
Construction 1.39 1.46 1.44 1.29 1.46 1.46 1.48 1.49
Power 0.10 0.12 0.12 0.11 0.12 0.12 0.12 0.12
Transport & Communications 3.19 3.14 3.43 3.43 3.32 3.32 3.35 3.32
Social Services ) 1.28 2.00 2.01 2.08 1.95 2.02 2.02 2.03
Administration ) 2.99 3.54 3.81 3.84 3.82 3.85 3.82 3.97
Trade 8.86 9.13 9.03 9.36 9.54 9.58 9.56 9.52
Workers n.e.s. 5.20 4.55 4.48 4.43 4.42 4.40 4.38 4.36
TOTAL 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Note: Years specified are fiscal years.
Source: Ministry of Planning and Finance, Planning Department. Table 1.3: TOTAL NUMBER OF STUDENTS AND TEACHERS IN SELECTED YEARS
1970 1975 1976 1977 1978 1979 1980 1981
Primary Classes
Total Enrollment ('000) 3,015 3,404 3,476 3,565 3,711 3,692 3,968 4,103 Total No. of Teachers ('000) 65 74 76 76 76 80 80 80 Student/Teacher Ratio 46:1 47:1 46:1 47:1 49:1 46:1 50:1 51:1 Enrollment Ratio (%) 84 86 86 87 88 86 90 92
Secondary Classes
Total Enrollment ('000) 709 890 890 883 880 876 954 1,010 Total No. of Teachers ('000) a/ 21 25 25 27 27 30 30 30 Student/Teacher Ratio 34:1 36:1 36:1 33:1 33:1 29:1 32:1 34:1 Enrollment Ratio (%) 12 14 14 13 15 12 13 14
Technical Schools b/
Total Enrollment 9,639 13,530 10,719 c/ 13,680 13,157 14,562 16,488 17,778 Total No. of Teachers 836 1,035 1,087 1,040 1,043 1,050 1,063 1,084 Student/Teacher Ratio 12:1 13:1 10:1 13:1 13:1 14:1 15:1 16:1
Universities and Colleges d/
Total Enrollment 41,907 53,761 n.a. 83,799 95,156 112,313 138,903 148,424 Total No. of Teachers e/ 2,868 2,844 n.a. 2,513 3,293 3,854 4,650 4,823 Student/Teacher Ratio 15:1 19:1 n.a. 33:1 29:1 29:1 30:1 31:1
a/ Excludes principals. b/ Technical schools include students in the degree level engineering, other technical institutes include diploma level engineering classes, technical high schools, technical institutes, vocational and industrial schools, agricultural high schools and agricultural institutes all of which were started in 1964 under the educational reform. c/ Excludes engineering students as the Rangoon Institute of Technology remained closed during the year. d/ Excludes degree level engineering. Includes University Correspondence course and Regional Colleges since 1977. e/ Includes part-time staff except University Correspondence course.
Note: Years specified are fiscal years.
Source: Ministry of Education. Table 1.4: EXPENDITURE ON EDUCATION (kyats million)
1970 1975 1976 1977 1978 1979 1980 1981 a/
Total Expenditures (Current Prices) 287 385 405 439 464 516 516 627
Capital Expenditures 15 20 19 17 15 30 23 69
Current Expenditures 272 365 386 422 449 486 493 558
Total Expenditures (Constant 1970 Prices) b/ 287 174 156 149 153 160 158 188
Capital Expenditures 15 9 7 6 5 9 7 21
Current Expenditures 272 165 148 143 148 151 151 167
a/ Provisional. b/ Deflated by implicit GDP deflator and import price series in equal proportions.
Note: Years specified are fiscal years.
Source: Report to the Pyithu Hluttaw. Table 1.5: EXPENDITURE ON PUBLIC HEALTH (kyats million)
1970 1975 1976 1977 1978 1979 1980 1981 a/
Total Expenditures (Current Prices) 118 188 195 230 241 319 329 360
Capital Expenditures 8 12 11 29 40 76 75 55
Current Expenditures 110 176 184 201 201 243 254 305
Total Expenditures (Constant 1970 Prices) b/ 118 85 75 78 79 99 100 108
Capital Expenditures 8 5 4 10 13 24 23 17
Current Expenditures 110 80 71 68 66 75 77 91
a/ Provisional. b/ Deflated by implicit GDP deflator and import price series in equal proportions.
Note: Years specified are fiscal years.
Source: Report to the Pyithu Hluttaw. Table 2.1: GROSS DOMESTIC PRODUCT BY INDUSTRIAL ORIGIN, 1971-81 (kyats million at current prices)
1971 1973 1975 1976 1977 1978 1979 1980 1981 a/
Agriculture 2,905 3,414 7,320 9,307 10,639 10,714 11,519 12,477 14,038
Livestock & Fishery 803 804 1,204 1,420 1,791 2,209 2,262 2,420 2,545
Forestry 289 313 306 324 358 387 509 551 595
Mining 145 196 164 136 193 283 316 416 445
Manufacturing 1,083 1,049 1,564 2,106 2,656 3,084 3,172 3,325 3,749
Power 67 72 60 66 70 94 98 110 113
Construction 203 208 198 221 237 314 419 508 641
Transportation 593 586 650 698 741 825 901 984 1,067
Communication 38 35 41 42 55 59 60 69 80
Financial Institutions 129 204 242 123 235 359 564 645 687
Social & Administrative Services 838 1,087 1,229 1,324 1,436 1,596 1,676 1,775 1,931
Rental & Other Services 750 795 840 864 900 929 958 995 1,020
Trade 2,595 2,972 5,530 6,847 8,115 8,766 9,261 9,809 10,195
TOTAL GDP 10,437 11,735 19,348 23,477 27,427 29,618 31,716 34,084 37,107
a/ Revised estimates.
Note: Years specified are fiscal years.
Source: Report to the Pyithu Hluttaw. Table 2.2: GROSS DOMESTIC PRODUCT BY INDUSTRIAL ORIGIN, 1971-81 (kyats million at constant 1970 prices)
1971 1973 1975 1976 1977 1978 1979 1980 1981 a/
Agriculture 2,896 2,765 2,963 3,122 3,306 3,481 3,748 3,944 4,520
Livestock & Fishery 804 715 794 834 862 896 950 1,008 1,022
Forestry 282 272 272 263 278 293 335 358 367
Mining 149 139 117 120 134 157 169 190 196
Manufacturing 1,107 1,081 1,098 1,200 1,295 1,385 1,419 1,476 1,643
Power 67 72 89 97 109 131 137 152 169
Construction 203 204 191 200 206 237 313 372 447
Transportation 586 587 573 585 595 626 665 725 789
Communication 38 35 40 40 50 53 53 61 62
Financial Institutions 129 204 217 146 240 325 436 482 503
Social & Administrative Services 838 1,031 1,147 1,233 1,305 1,395 1,444 1,509 1,638
Rental & Other Services 750 795 840 859 874 898 924 954 976
Trade 2,539 2,637 2,760 2,863 3,011 3,119 3,250 3,360 3,475
TOTAL GDP 10,388 10,538 11,101 11,562 12,265 12,996 13,843 14,590 15,805
Implicit GDP Deflator 100.5 111.4 174.3 203.1 223.6 227.9 229.1 233.6 234.8
a/ Revised estimates.
Note: Years specified are fiscal years.
Source: Report to the Pyithu Hluttaw. Table 2.3: SHARES OF GROSS DOMESTIC PRODUCT BY INDUSTRIAL ORIGIN (percentages at constant 1970 prices)
1971 1973 1975 1976 1977 1978 1979 1980 1981 a/
Agriculture 27.9 26.2 26.7 27.0 27.0 26.8 27.0 27.0 28.6
Livestock & Fishery 7.7 6.9 7.1 7.2 7.0 6.9 6.9 6.9 6.5
Forestry 2.7 2.6 2.5 2.3 2.3 2.3 2.4 2.5 2.3
Mining 1.4 1.3 1.1 1.0 1.1 1.2 1.2 1.3 1.2
Manufacturing 10.7 10.3 9.9 10.4 10.5 10.6 10.3 10.1 10.4
Power 0.6 0.7 0.8 0.8 0.9 1.0 1.0 1.0 1.1
Construction 2.0 1.9 1.7 1.7 1.7 1.8 2.3 2.6 2.8
Transportation 5.6 5.6 5.2 5.1 4.8 4.8 4.8 5.0 5.0
Communication 0.4 0.3 0.4 0.3 0.4 0.4 0.4 0.4 0.4
Financial Institutions 1.2 1.9 1.9 1.3 2.0 2.5 3.1 3.3 3.2
Social & Administrative Services 8.1 9.8 10.3 10.7 10.7 10.8 10.4 10.3 10.4
Rental & Other Services 7.2 7.5 7.6 7.4 7.1 6.9 6.7 6.5 6.2
Trade 24.5 25.0 24.8 24.8 24.5 24.0 23.5 23.1 21.9
TOTAL GDP 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
a/ Revised estimate.
Note: Years specified are fiscal years.
Source: Ministry of Planning and Finance, Planning Department. Table 2.4: CONTRIBUTIONS TO GROSS DOMESTIC PRODUCT BY TYPE OF OWNERSHIP (kyats million at constant 1970 prices)
1980 State Cooperative Private Total Kyats Million Percentage Kyats Million Percentage Kyats Million Percentage Kyats Million Percentage
Agriculture 8 0.2 42 1.1 894 98.7 3,944 100.0
Livestock & Fishery 15 1.5 13 1.3 980 97.2 1,008 100.0
Forestry 130 36.4 12 3.4 216 60.2 358 100.0
Mining 163 86.0 5 2.6 22 11.4 190 100.0
Manufacturing 830 56.2 45 3.1 601 40.7 1,476 100.0
Power 152 100.0 - - - - 152 100.0
Construction 280 75.3 1 0.3 91 24.4 372 100.0
Transportation 296 40.8 38 5.2 391 54.0 725 100.0
Communication 61 100.0 - - - - 61 100.0
Financial Institutions 477 99.0 5 1.0 - _ 482 100.0
Social & Administrative Services 1,509 100.0 - - - - 1,509 100.0
Rental & Other Services 113 11.9 42 4.4 798 83.7 954 100.0
Trade 1,432 42.6 302 9.0 1,626 48.4 3,360 100.0
TOTAL GDP 5,468 37.5 504 3.4 8,618 59.1 14,590 100.0
a/ Revised estimates.
Note: Years specified are fiscal years.
Source: Report to the Pyithu Hluttaw. Table 2.5: TOTAL EXPENDITURE AND GROSS NATIONAL PRODUCT (kyats million at current prices)
1971 1973 1975 1976 1977 1978 1979 1980 1981 a/
Consumption 9,474 10,493 17,452 21,389 24,805 26,132 27,318 27,439 30,370
Gross Fixed Investment 1,056 1,111 1,525 1,680 2,321 3,753 5,364 7,226 8,448
Changes in Stocks 175 155 475 659 515 92 414 288 286
Exports, GNFS 584 680 912 1,192 1,414 1,728 1,842 2,679 3,123
Imports, GNFS 852 704 1,016 1,443 1,628 2,087 3,222 3,548 5,120
Gross Domestic Product 10,437 11,735 19,348 23,477 27,427 29,618 31,716 34,084 37,107
Net Factor Income -10 16 -41 -77 -73 -105 -95 -128 -234
Gross National Product 10,427 11,719 19,307 23,400 27,354 29,513 31,621 33,956 36,873
Population (millions) 27.6 28.9 29.8 30.5 31.2 31.9 32.6 33.3 34.1
GNP per Capita 378 406 648 767 877 925 970 1,020 1,081
a/ Revised estimates.
Note: Years specified are fiscal years.
Source: Ministry of Planning and Finance, Planning Department. Table 2.6: TOTAL EXPENDITURE AND GROSS NATIONAL PRODUCT (kyats million at constant 1970 prices)
1971 1973 1975 1976 1977 1978 1979 1980 1981 a/
Consumption 9,308 9,548 9,868 10,409 11,020 11,521 12,038 12,402 13,507
Gross Fixed Investment 1,019 895 779 808 965 1,430 1,852 2,160 2,461
Changes in Stocks 201 32 321 351 243 40 180 123 121
Exports 650 557 511 448 491 573 555 747 910
Imports 790 494 378 454 454 568 782 842 1,194
Gross Domestic Product 10,388 10,538 11,101 11,562 12,265 12,996 13,843 14,590 15,805 C
Net Factor Payments -10 -14 -31 -59 -56 -62 -63 -86 -133
Gross National Product 10,378 10,524 11,070 11,503 12,209 12,934 13,780 14,504 15,672
Population (millions) 27.6 28.9 29.8 30.5 31.2 31.9 32.6 33.3 34.1
GNP in Kyats per Capita 376 364 371 377 391 405 423 436 460 a/ Revised estimates.
Note: Years specified are fiscal years.
Source: Ministry of Planning and Finance, Planning Department. Table 2.7: SAVINGS AND INVESTMENT (kyats million at current prices)
1971 1973 1975 1976 1977 1978 1979 1980 1981 a/
1. Total Investment 1,231 1,266 2,000 2,339 2,836 3,845 5,778 7,514 8,734 of which: Fixed Investment 1,056 1,111 1,525 1,680 2,321 3,753 5,364 7,226 8,448
2. Foreign Savings b/ 373 287 438 289 359 1,333 2,332 1,753 2,148
3. National Savings (1 - 2) 858 979 1,562 2,050 2,477 2,512 3,446 5,761 6,586
4. Net Factor Income -10 -16 -41 -77 -73 -105 -95 -128 -234
5. Net Current Transfers - 3 - - 6 -8 - 7 - 85 101 109
6. Domestic Savings (3 - 4 - 5) 871 995 1,609 2,135 2,543 2,617 3,456 5,788 6,711
Memorandum Items
As % of GDP at Current Prices Total Investment 11.8 10.8 10.3 10.0 10.3 13.0 18.2 22.0 23.5 Fixed Investment 10.1 9.5 7.9 7.2 8.5 12.7 16.9 21.2 22.8 Domestic Savings 8.3 8.5 8.3 9.0 9.3 8.8 10.9 17.0 18.1 Foreign Savings 3.6 2.4 2.3 1.2 1.3 4.5 7.4 5.1 5.8
National Savings as % of GNP at Current Prices 8.2 8.4 8.1 8.8 9.1 8.5 10.9 17.0 17.9
Foreign Savings as % of Total Investment 30.3 22.7 21.9 12.4 12.7 34.7 40.4 23.3 24.6
Domestic Savings as % of Total Investment 70.8 78.6 80.5 91.3 89.7 68.1 59.8 77.0 76.8
a/ Revised estimates. b/ Defined as external current account balance excluding grants.
Note: Years specified are fiscal years.
Source: Ministry of Planning and Finance, Planning Department. Table 2.8: ALLOCATION OF PUBLIC CAPITAL EXPENDITURES (kyats million)
1970 1975 1979 1980 1981 Amount % Amount % Amount % Amount % Amount %
Agriculture 48.4 6.2 55.2 8.1 286.6 7.2 548.2 8.4 720.9 10.6 Livestock & Fishery 2.4 0.3 8.6 1.3 209.6 5.3 615.8 9.5 510.5 7.5 Forestry 9.6 1.2 18.5 2.7 300.1 7.6 170.5 2.6 234.2 3.5 Mining 36.5 4.7 43.6 6.4 513.0 13.0 640.4 9.9 1,068.6 15.8 Processing & Manufacturing 352.0 45.0 202.4 29.8 1,324.1 33.5 2,300.5 35.4 2,164.1 31.9 Power 24.3 3.1 21.3 3.1 220.7 5.6 423.1 6.5 487.8 7.2 Construction 45.9 5.9 34.9 5.1 109.2 2.8 142.0 2.2 219.9 3.2 Transportation & Communications 103.2 13.2 107.1 15.8 574.0 14.5 1,040.0 16.0 697.3 10.3 Trade 7.7 1.0 11.0 1.6 46.4 1.2 70.2 1.1 121.9 1.8 Social Services 31.9 4.1 35.6 5.2 118.0 3.0 152.0 2.3 152.5 2.2 Financial Institutions 0.6 0.1 0.9 0.1 6.0 0.2 7.1 0.1 10.5 0.2 Others 120.8 15.4 139.4 20.5 246.2 6.2 383.9 5.9 395.2 5.8
TOTAL 783.3 100.0 678.5 100.0 3,953.9 100.0 6,493.7 100.0 6,783.4 100.0
Note: Years specified are fiscal years.
Source: Ministry of Planning and Finance, Planning Department. -123-
Table 3.1: BALANCE OF PAYMENTS (US$ million) a/
1975 1976 1977 1978 1979 1980 1981 b/
Exports (GNFS) 229.6 195.8 216.2 261.9 260.2 442.3 520.4 Merchandise (f.o.b.) 176.6 180.0 192.8 238.6 240.4 400.8 479.4 Non-factor Services 53.0 15.8 23.4 23.3 19.8 41.5 41.0
Imports (GNFS) 305.5 238.4 267.6 439.0 602.6 702.4 835.2 Merchandise (f.o.b.) 276.5 210.9 240.8 413.2 562.0 649.7 775.0 Non-factor Services 29.0 27.5 26.8 25.8 40.6 52.7 60.2
Resource Balance -75.9 -42.6 -51.4 -177.1 -342.4 -260.1 -314.8
Net Factor Income -7.8 -1.1 -2.7 -8.4 -13.6 -22.1 -26.2 Factor Receipts 7.2 9.9 4.4 3.3 3.4 12.0 24.2 Factor Payments 15.0 11.0 7.1 11.7 17.0 34.1 50.4
Net Current Transfer -1.2 -1.2 1.0 0 12.5 15.4 16.5 Transfer Receipts 1.1 1.4 2.8 3.2 13.4 16.1 16.8 Transfer Payments 2.3 2.6 1.8 3.2 0.9 0.7 0.3
Current Account Balance -84.9 -44.9 -53.3 -185.5 -343.5 -266.8 -324.5
Official Grant Aid 23.4 25.8 26.6 21.6 59.6 65.5 96.2
Net Medium & Long-Term Loans 111.3 22.0 44.0 218.2 362.9 362.1 289.0 Disbursements 149.0 51.2 70.1 240.8 390.6 421.7 353.3 Repayments 37.7 29.2 26.1 22.6 27.7 59.6 64.3
Short Term Capital (net) 32.9 -22.4 -24.0 -17.6 -6.7 -5.9 -0.9
Capital n.e.i. c/ 9.5 -9.2 -13.3 -9.3 -14.2 -43.2 -13.5
Overall Balance 92.2 -28.7 -20.0 27.4 58.1 111.7 46.2
Net Movement in Official Reserves -92.2 28.7 20.0 -27.4 -58.1 -111.7 -46.2 (- = increase)
a/ Converted from source data in kyats at annual average exchange rate. b/ Revised estimates. c/ Includes errors and omissions and SDR allocation.
Note: Years specified are fiscal years.
Source: Union of Burma Bank. Table 3.2: VOLUME AND VALIJEOF MAJOR EXPORTS, BY COMMODITY
1971 1973 1975 1976 1977 1978 1979 1980 a!
Volume ('000 tons)
Rice & Rice Products 760.5 243.7 191.8 425.3 656.5 647.0 189.9 759.4 Pulses & Beans 58.4 92.9 28.0 37.9 32.6 31.1 24.1 63.2 Animal Feedstuff 152.9 136.1 101.8 95.7 74.5 101.0 112.3 87.0 Jute 4.9 44.3 46.6 10.4 4.0 10.9 25.9 21.5 Rubber 9.4 10.2 5.1 5.6 8.6 7.3 10.4 10.0 Teak b/ 124.5 139.2 102.9 101.1 76.9 84.4 182.6 103.0 Hardwood b/ 15.1 49.2 13.1 9.2 7.2 10.5 59.6 31.8 Base Metals & Ores c/ 15.3 17.2 19.0 10.3 9.7 10.0 15.7 11.3
Value (US$ million)
Rice & Rice Products 58.6 22.1 68.3 95.7 108.4 119.3 41.1 182.4 Pulses & Beans 8.6 14.9 8.9 12.1 9.2 10.2 8.7 19.3 Animal Feedstuff 9.5 13.9 10.5 7.0 6.4 9.3 8.0 10.1 Jute 1.1 9.6 9.4 3.4 0.9 3.0 8.4 6.2 Rubber 3.1 4.6 3.3 3.1 6.0 5.8 9.1 11.3 Teak 28.8 38.3 43.4 43.3 56.4 54.2 117.5 73.6 Hardwood 0.6 2.9 1.1 1.0 0.5 1.0 15.7 10.2 Base Metals & Ores c/ 5.5 19.0 15.5 8.4 7.5 11.9 24.4 29.0 Other Exports 6.9 9.6 15.9 11.1 15.0 25.8 38.5 65.5
TOTAL 122.7 134.9 176.4 185.1 210.2 240.5 271.4 407.6
a/ Revised estimates. b/ Measured in cubic tons. c/ Excludes precious metals.
Note: Years specified are fiscal years.
Source: Central Statistical Organization. -125-
Table 3.3: COMPOSITION OF IMPORTS (percentages)
1977 1978 1979 1980 1981 a/
Capital Goods 41.3 47.5 59.7 58.0 60.0
Building Materials 9.3 12.2 8.2 11.7 n.a. Machinery 21.2 23.7 41.9 35.9 n.a. Transport Equipment 9.3 9.6 7.6 8.5 n.a. Others 1.5 2.0 2.0 1.9 n.a.
Raw Materials & Intermediates 49.2 41.5 33.5 36.3 35.0
Raw Materials 35.5 30.5 23.9 23.3 n.a. Fuel 1.2 0.1 - 0.1 n.a. Tools & Spares 12.5 10.9 9.6 12.8 n.a.
Consumer Goods 9.5 11.0 6.8 5.7 5.0
Durables 1.5 1.6 1.9 1.4 n.a. Food 2.8 2.1 2.0 1.6 n.a. Textiles 1.7 3.3 0.5 0.2 n.a. Medicines 2.2 2.2 1.7 1.6 n.a. Others 1.3 1.8 0.7 0.9 n.a.
a/ Revised estimates.
Note: Years specified are fiscal years.
Source: Central Statistical Organization. Table 3.4: PATTERN OF TRADE (percentages)
1971 1973 1975 1976 1977 1978 1979 1980
Destination of Exports
Asia (including Japan & China) 58.9 61.3 66.0 56.0 73.9 71.7 62.2 64.6 Western Europe 24.2 29.7 23.1 31.7 16.0 17.1 20.4 9.6 Eastern Europe 3.9 2.5 1.0 0.8 1.7 1.2 1.1 0.9 Africa 4.9 4.0 6.0 6.3 4.1 7.0 2.2 14.7 Middle East 5.3 2.0 3.1 4.3 2.0 2.0 2.9 1.1 North America 2.4 0.4 0.6 0.3 1.2 0.9 0.8 0.8 Others 0.4 0.1 0.2 0.6 1.1 0.1 10.4 8.3
TOTAL 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Origin of Imports
Asia (including Japan & China) 53.9 53.9 60.1 58.8 60.0 61.8 57.3 48.1 H Western Europe 28.6 23.6 25.1 22.6 26.1 26.9 27.3 33.9 Eastern Europe 7.4 10.5 5.3 5.4 5.2 4.0 2.5 2.9 Africa 0.0 1.1 0.6 0.1 1.3 0.2 0.9 2.6 Middle East 0.5 0.8 - 1.0 0.2 - - - North America 6.5 6.8 3.2 9.6 6.1 5.1 10.6 10.5 Others 3.1 3.3 5.7 2.5 1.1 2.0 1.4 2.0
TOTAL 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Note: Years specified are fiscal years.
Source: Report to the Pyithu Hluttaw. Table 3.5: UNIT VALUE AND QUANTUM INDICES AND TERMS OF TRADE (1970 = 100)
1970 1971 1973 1975 1976 1977 1978 1979 1980 1981
Exports
Value Index 100 120 117 233 283 265 312 286 405 n.a. Unit Value 100 93 119 306 297 308 335 362 340 375 Quantum a/ 100 119 98 76 80 86 93 79 119 n.a.
Imports
Value Index 100 84 64 129 172 232 373 316 375 n.a. Unit Value 100 108 143 269 318 368 381 415 421 433 Quantum a/ 100 78 45 48 54 63 98 76 89 n.a.
Terms of Trade b/ 100 86 84 114 93 84 88 87 81 87
Purchasing Power of Exports c/ 100 111 82 87 89 72 82 69 96 n.a.
a/ Quantum indices: ratio of value index to unit value index. b/ Terms of trade: ratio of export unit value index to import unit value index. c/ Purchasing power of exports: value index of exports deflated by import unit value index.
Note: Years specified are fiscal years.
Source: Report to the Pyithu Hluttaw. -128-
Table 3.6: FOREIGN LOANS CONTRACTED (US$ million)
1977 1978 1979 1980 1981
1. Multilateral Loans 129.3 48.2 113.1 139.5 216.2 Asian Development Bank 71.0 26.0 39.5 36.8 50.5 EEC - - - 10.5 56.2 IDA 56.0 5.5 39.0 70.0 90.0 IMF Trust Fund - 12.3 28.1 20.2 13.2 OPEC Fund 2.3 4.4 6.5 2.0 6.3
2. Bilateral Loans 118.2 147.3 171.1 458.4 288.3 Canada 8.5 - - - - China - - - 65.0 - Czechoslovakia - 22.9 77.1 23.1 46.0 Denmark - 5.0 - 16.8 12.8 France 1.8 4.8 - - 15.1 Federal Republic of Germany 5.5 2.9 25.7 201.7 69.4 Italy - - 1.0 - - Japan 102.5 111.7 67.3 129.7 143.2 Democratic People's Republic of Korea - - - 4.2 - Norway - - - - 1.7 United Kingdom - - - 13.4 - Yugoslovia - - - 4.5 -
3. Suppliers' Credits 66.1 36.5 60.5 20.9 38.4
4. Financial Institutions 38.8 51.3 33.8 92.4 133.1
TOTAL 352.4 283.3 378.5 711.2 676.0
Note: Years specified are fiscal years.
Source: The World Bank (Debt Reporting System). Table 3.7: FOREIGN EXCHANGE RESERVES (US$ million)
1971 1973 1975 1976 1977 1978 1979 1980 1981 a/
Gross Reserves 63.8 93.9 172.5 134.9 109.3 124.1 162.1 258.9 274.8
Union of Burma Bank b/ 63.8 93.9 172.5 134.9 109.3 124.0 162.1 259.9 274.8 Gold 21.5 10.1 8.7 8.2 8.6 9.6 10.7 11.6 10.8 SDR 0.1 6.0 12.1 8.9 8.9 9.9 14.4 13.9 8.4 Reserve Position in IMF ------Foreign Exchange c/ 42.2 77.8 151.7 117.8 91.8 104.6 137.0 233.4 255.6
Short-term Liabilities 60.6 70.7 133.6 95.2 68.5 95.7 99.4 81.6 42.3
Interbank Borrowings d/ 42.6 48.4 90.6 58.3 39.0 24.1 18.6 10.6 8.6 IMF Position 18.0 22.3 43.2 43.0 29.5 71.6 80.8 71.0 33.7
Net Reserves 3.2 23.2 38.9 39.7 40.8 28.4 62.7 177.3 232.5
Memorandum Item
Gross Reserves Expressed in Months of FY Imports 4.3 6.4 7.9 7.9 4.8 3.6 4.3 4.5 3.6
a/ Revised estimates. b/ With the unification of the (state-controlled) banking system in February 1970, the Union of Burma Bank acquired the foreign exchange assets and liabilities of all banks in the country. c/ Includes minor amounts of Union Government foreign exchange holdings. d/ Union of Burma Bank borrowings abroad.
Note: Years specified are fiscal years.
Sources: Union of Burma Bank and IMF International Financial Statistics. -130-
Table 4.1: EXTERNAL PUBLIC DEBT OUTSTANDING INCLUDING UNDISBURSED AS OF MARCH 31, 1981 DEBT REPAYABLE IN FOREIGN CURRENCYAND GOODS (US$ '000)
D E 8 T O U T S T A N O I N G I N A R R E A R S TYPE OF CREDITOR ------: ------CREDITOR COUNTRY DISBURSED :UNDISBURSED: TOTAL PRINCIPAL INTEREST
SUPPLIERS CREDITS AUSTRIA 489 - 489 - - BELGIUM - 2.011 2,011 - - CZFCHOSLOVAKIA 3,778 - 3,778 - - FRANCE 15.615 - 15,615 - - GERMANY. FED.REP. OF 15,022 3,647 18.669 - - ITALY 11,817 640 12,457 - - .,APAN 36.749 5,691 42,440 - - NETHERLANDS 6,812 3.939 10,751 - - POLAND 1,172 - 1,172 - - SWITZERLANO 2,271 - 2.271 - - UNITED KINGDOM - 18,946 18,946 - - YUGOSLAVIA 21.150 35,147 56,297 - - TOTAL SUPPLIERS CREDITS 114,875 70.021 184,896 - -
FINANCIAL INSTITUTIONS AUSTRIA - 45.174 45,174 - FRANCE - 37,249 37,249 - GERMANY, FED.REP. OF 3,204 6,762 9,9G6 - - HONG KONG 33,S75 25 33.900 - - JAPAN 4,082 - 4,082 - - NORWAY 53.048 - 53.04R - SINGAPORE 16.652 5,710 22.362 - SWEDEN 6,83' 13,613 20,446 - - UNITED KINGDOM 44.063 21.483 65.546 - - UNITED STATES 1t,259 241 t1.500 - - TOTAL FINANCIAL INSTITUTIONS 173,016 130,257 303,273 -
MULTILAIERAL LOANS ASIAN DEV. BANK 118,998 170,298 289.29G - - EEC - 64,187 i4.,187 - - IDA 146,223 216,095 362.318 - - IMF TRUST FUND 71,755 - 71.755 - OPEC SPECIAL FUND 4.759 1G.731 21.490 - TOTAL MULTILATERAL LOANS 341,735 467.311 809.046 - -
BILATERAL LOANS CANADA 7,078 - 7,078 - - CHINA 120,991 19,587 140.573 - - CZECHOSLOVAKIA 33,135 135.943 169,078 - DENM.ARK 22.352 7.0'8 29,450 - - FRANCE 20.834 - 20,834 - - GERMAN DEM. REP. 1.228 - 1.228R GERMANY, FED.REP. OF 116.424 149.136 265.560 - - ITALY 595 - 595 JAPAN 556,707 225,981 782.658 - - KOREA, D.P.R. OF - 3,615 3.615 - - NORWAY - 1.638 1.638 - - UNITED KINGDOM 1,750 12,051 13,801 - - UNITED STATES 2.855 - 2.855 - - USSR 1,225 809 2,034 - - YUGOSLAVIA 1,913 - 1.913 - TOTAL BILATERAL LOANS 8°7,087 555.858 1,442,945 - -
TCYAL EXTERNAL PUBLIC DEBT 1,516,713 1,223.447 2,740.1GO - -
NOTES: (1) ONLY DEBTS WITH AN ORIGINAL OR EXTENDEG MATURITY OF OVER ONE YEAR ARE INCLUOrf) IN THIS TABLE. (2) DEBT OJTSTANDING INCLUDES PRINCIPAL IN ARREARS BUT EXCLUDES INTEREST IN ARrFArS.
Source: The World Bank Debt Reporting System. Table 4.2: EXTERNAL PUBLIC DEBT TRANSACTIONS - PROJECTIONS BASED ON DEBT OUTSTANDING INCLUDING UNDISBURSED AS OF MARCH 31, 1981 DEBT REPAYABLE IN FOREIGN CURRENCYAND GOODS (US$ '000)
TOTAL FISCAL OEBT OUTSTANDING AT T R A N S A C T I 0 N S D U R I N 0 P t R I 0 (1 OTHER CHANCSE YEAR BEGINNING OF PBRIOU
DISBURSED INCLUDING COMMIT- DISBURSE- S E R V I C E P A Y M E N T s CANCEL- ADJUST- ONLY UNDISBURSED MENTS MENTS ------:------:------LATIONS MENT a/ PRINCIPAL INTEREST TOTAL (1) (2) (3) (4) (5) (6) (7) (8) (9)
197G/77 281.090 512.402 352.363 47,655 26.148 7.924 34.072 832 12.145 1877/78 307,773 849,920 283.261 165,995 22,587 10,741 33.328 7,383 110.073 1978/79 505.173 1,213.294 378.439 362.523 27.733 19.504 47. 237 3.280 52.445 1979/80 864.369 1.613.165 711.180 518.713 59.570 34.11S 93. ,'99 1.120 -127.104 1080/91 1.241.554 2,136.551 676.038 281.377 64.273 45,367 109q.'10 43 -8.117 1981/82 1.516.713 2.740.156
* * * * * * THE FOLLOWJNG FIGURES ARE PROJECTED * + * + * +
1981/82 1,516.713 2,740,156 - 348.516 89.204 b/ 53.184 142.3PS - ¶0 1982/83 1.776.030 2.650.962 - 313.2(6 100.439 56.736 157.175 - -4 1983/84 1.988.842 2,550.519 - 248.684 108.527 56.5G7 165.0?4 - -2 1984/85 2.128.997 2.441.990 - 144.409 115.467 54,475 169.942 - -2
t985/62 2.157.934 2.326,521 - 74,799 130.142 49.725 179.P57 - -1 A 1R9:,63,/7 2.102.590 2,196.378 - 43.386 119.206 44.419 163.f25 - -1 1i9l7/8S 2.026.769 2.077.171 - 28.171 114.817 40,377 i55,tt4 - -4 199F8,/9 1.940.118 1,962.350 - 18.797 1tO.366 36,750 147,1tG - -6 i9eq/90 1.848,544 1.851.978 - 3,049 109.914 33.167 143.081 - -4 1I90,'91 1.741.G75 1.742.060 - 385 96.764 29.748 12G.512 - -3 1991/92 1.645,293 1.645.293 - - 94.862 26.828 12i.69'0 - 2 1992/93 1.550.433 1.550.433 - - 96.179 24,166 120.7.15 - -13 1993/94 1.454.241 1,454,241 - - 94.289 21.778 116.067 - -4 1994/95 1,359.948 1.359.948 - - 85.116 19.631 104.907 - -2 1995/96 1.274.830 1.274.830 - - 77.986 1¢.071 9(:.Q'7 - -5 19963/97 1.196.839 1.196.839 - - 74.980 16.G00 91.50o - 1 1997/98 1.121.860 1.121.860 - - 73.362 15.212 88.574 - 2- 1998/99 1.048.500 1,048,500 - - 71.835 13.89fi 85.731 - .- 3 1999/00 976.662 976.662 - - 69.498 12.626 82.124 - - 2000/01 907,158 907.158 - - 70.901 11.422 82.123 - a/ This column shows the amount of arithmeticimbalance in the amount outstanding including undisbursed from one year to the next. The most common causes of imbalancesare changes in exchange rates and transfer of debts from one category to another in the Table. b/ Does not include full prepayment on two commercial loans. Note: Includes service on all debt listed in Table 4.1 prepared February 12, 1982.
Source: The World Bank Debt Reporting System. Table 5.1: CONSOLIDATED PUBLIC SECTOR BUDGET (kyats million)
Budget 1975 1976 1977 1978 1979 1980 1981 a/ 1982
Union Government Revenue 1,870 2,043 3,157 4,186 4,715 5,594 5,526 5,610 Current Expenditures 2,293 2,566 2,972 3,322 3,808 4,165 4,945 5,901 Capital Expenditures 257 273 360 557 709 957 1,393 1,213 Net Lending -11 30 35 46 -5 -35 -77 -76 Balance (Deficit -) -669 -826 -210 261 203 507 -735 -1,428
Local Authorities Revenue 84 91 105 135 142 149 160 184 Current Expenditures 68 75 88 93 93 106 121 139 Capital Expenditures 19 21 27 73 72 51 79 88 Balance (Deficit -) -3 -5 -10 -31 -23 -8 -40 -43
Public Enterprises Revenue 7,548 10,103 11,705 13,062 13,613 15,428 18,657 21,581 Current Expenditures 7,809 9,364 10,297 12,193 13,669 14,784 17,365 20,172 Operating Surplus/deficit (-) -261 739 1,408 869 -56 644 1,292 1,409 Capital Expenditures 411 498 981 2,033 3,200 4,506 5,062 5,333 Balance (Deficit -) -672 241 427 -1,164 -3,256 -3,862 -3,770 -3,924
Consolidated Public Sector Revenue b/ 1,954 2,873 4,670 5,190 4,857 6,387 6,969 7,203 Current Expenditures c/ 2,622 2,641 3,060 2,415 3,957 4,271 5,066 6,040 Capital Expenditures 687 792 1,368 2,663 3,981 5,514 6,534 6,634 Net Lending -11 30 35 46 -5 -35 -77 -76 Overall Surplus/Deficit (-) -1,344 -590 207 -934 -3,076 -3,363 -4,554 -5,395
Financing of the Consolidated Deficit
Grants 117 166 179 156 407 430 637 336
Foreign Loans (net) 229 70 221 1,051 1,073 1,795 1,463 1,759 Gross Borrowing 413 256 447 1,297 1,430 2,375 2,095 2,468 Repayment 184 186 226 246 357 580 632 709
Domestic Financing 998 354 -607 -273 1,596 1,138 2,454 3,300
Memorandum Item Overall Balance (Deficit = -) as x of GDP -6.9 -2.5 0.8 -3.2 -9.7 -9.9 -12.3 -13.5
a/ Revised estimates. b/ Consisting of Union Government revenue, local authorities' receipts and the operating surplus of public enterprises. c/ Consisting of expenditure of Union Government and local authorities, and the operating deficit of public enterprises.
Note: Years specified are fiscal years.
Source: Ministry of Planning and Finance. Table 5.2: UNION GOVERNMENT REVENUE (kyats million)
Budget 1975 1976 1977 1978 1979 1980 1981 a/ 1982
Total Revenue b/ 1,870 2,043 3,157 4,186 4,715 5,594 5,526 5,610
I. Tax Revenue 1,385 1,757 2,331 2,978 3,042 3,479 3,416 3,672 1. Taxes on Net Incomes & Profits 472 592 141 224 233 189 175 196 1.1 Income Tax c/ (472) (592) 53) (122) (T21) () (54) () 1.2 Profits Tax ( - ) ( - ) (88) (102) (112) (114) (121) (130) 2. Taxes on Goods & Services 610 692 1,753 2,165 2,105 2,385 2,462 2,667 2.1 Commodities & Service Tax - - 1,653 2,057 1,998 2,277 2,360 2,537 2.2 Selective Excises on Goods & Services 579 661 78 62 62 60 53 53 2.2.1 Excises & Excise Duties (362) (367) (14) ( 11) ( 9) C 8) ( 6) ( 6) 2.2.2 Commercial Taxes (183) (253) (18) ( 4) ( 3) ( 2) ( -) ( -) 2.2.3 State Lottery (34) (41) (46) (47) (50) (50) (47) (47) 2.3 Taxes on Use of Goods 22 28 34 37 36 37 36 64 2.3.1 Motor Vehicle Taxes ( 3) ( 3) (4) ( 6) ( 6) ( 7) ( 6) ( 7) 2.3.2 Taxes on Fisheries ( 9) ( 25) (30) ( 31) C 30) ( 30) ( 30) ( 30) 2.3.3 Water Tax d/ (-) (-) (-) (-) (-) (-) () (27) 2.4 Other 2.4.1 Taxes on Mineral Extraction 9 3 6 9 9 11 13 13 3. Taxes on International Trade & Transactions 303 473 437 589 704 905 779 809 3.1 Import Duties 299 467 430 580 695 894 767 795 3.1.1 Custom Duties (266) (414) (357) (483) (632) (818) (700) (720) 3.1.2 Import License Fees ( 33) ( 53) ( 73) ( 97) ( 63) ( 76) ( 67) ( 75) 3.2 Export Duties 4 6 7 9 9 11 12 14
II. Non-tax Revenue 462 282 823 1,206 2,112 2,108 a 4. Contribution from State Economic Enterprises e/ - - 435 643 1,000 1,401 1,275 1,098 5. Property Income 146 110 140 217 422 374 471 484 5.1 Land Revenue (46) (41) (44) ( 43) (44) ( 47) (46) (39) 5.2 Fees from Extractionof Forest Produce ( 41) ( 62) ( 40) ( 76) (106) ( 93) (120) (121) 5.3 Public Debt Income f/ ( 59) ( 7) (56) ( 98) (272) (234) (305) (324) 6. Administrative Fees, Charges & Non-Industrial Sales 97 89 86 108 98 160 205 214 7. Others 219 83 162 238 152 177 157 136
III. Capital Revenue 23 4 3 2 1 3 2 6 8. Sale of Fixed Assets (23) (4) (3) (2) (1) (3) (2) (6)
Memorandum Items (as % of GDP) g/ Tax Revenue 7.2 7.5 8.5 10.0 9.6 10.2 9.2 9.2 Non-Tax Revenue 2.4 1.2 3.0 4.1 5.3 6.2 5.7 4.8 Total Revenue 9.7 8.7 11.5 14.1 14.9 16.4 14.9 14.0
a/ Revised estimates. b/ Including revenue of representative bodies, capital revenue, and Public Debt SpecialAccount. c/ Net of refunds. _/ Starting 1981/82. e/ Including transfers of surpluses from the Export Price EqualizationFund. fl From Public Debt Special Account. g/ At current producers' prices in kyats.
Note: Years specified are fiscal years.
Source: Ministry of Planning and Finance. Table 5.3: UNION GOVERNMENT CURRENT EXPENDITURE a! (kyats million)
Budget 1975 1976 1977 1978 1979 1980 1981 b/ 1982
General Public Services 458 506 611 680 726 733 843 1,245 Representative Bodies 187 199 238 324 316 323 363 393 Home 214 240 294 270 322 319 372 385 Foreign Affairs 17 23 25 29 30 31 40 42 Planning & Finance 35 39 48 51 51 54 61 414 Information 5 5 6 6 7 6 7 11
Defense 664 783 879 996 1,000 1,053 1,179 1,249
Economic Services 323 368 446 493 563 612 697 776 Agriculture & Forestry 170 207 224 256 297 329 380 423 Industry 2 3 7 7 8 8 10 10 Mining 7 8 15 16 15 16 19 30 Transportation & Communications 28 27 30 36 36 39 45 50 Public Works & Housing 69 75 91 114 136 147 162 177 Trade 1 1 17 7 11 8 9 10 Cooperatives 46 47 62 57 60 65 72 76
Social Services 677 712 811 888 1,003 1,041 1,185 1,262 Education 365 386 419 449 486 493 558 598 Health 177 184 201 202 243 254 305 300 Pensions & Gratuities 111 115 168 213 242 268 294 334 Labor 6 7 7 7 7 7 7 8 Social Welfare 18 20 16 17 25 19 21 22
Unallocable 171 197 225 265 516 726 1,041 1369 Interest Payment c/ 152 177 206 245 472 688 857 1,157 Contribution Account d/ 19 20 19 20 44 38 38 58 Reserve Fund ------146 154
TOTAL 2,293 2,566 2,972 3,322 3,808 4,165 4,945 5,901
a/ Includes representative bodies, interest payments, and the Contribution Account. b/ Revised estimates. c/ From Public Debt Special Account. d/ Comprises contributions to organizations such as charitable institutions, foreign organizations, and rural development fund.
Note: Years specified are fiscal years.
Source: Ministry of Planning and Finance. -135-
Table 5.4: UNION GOVERNMENTCAPITAL EXPENDITUREAND NET LENDINGa/ (kyats million)
Budget 1975 1976 1977 1978 1979 1980 1981 b/ 1982
General Public Services 63 22 44 52 61 110 100 92
RepresentativeBodies 48 8 28 36 35 51 51 52 Others 15 14 16 16 26 59 49 40 General Services c/ (10) (13) (14) (15) (20) (49) (42) (33) Planning & Finance ( 5) ( 1) ( 2) C 1) ( 6) (10) ( 7) ( 7)
Defense 58 70 95 93 110 144 211 182
Economic Services 94 130 160 338 401 597 862 855
Agriculture & Forestry 55 91 93 281 283 412 597 600 Industry & Mines 3 4 6 9 10 32 64 13 Transport & Communications 4 10 19 13 35 47 69 92 Public Works & Housing 32 25 42 35 73 106 132 150
Social Services 31 30 46 55 106 98 123 97
Education 19 19 17 15 30 23 68 51 Health 12 11 29 40 76 75 55 46
Unallocable 11 21 15 19 31 8 97 -13
Investment Special Account d/ 8 20 13 16 27 5 93 -21 Others 3 1 2 3 4 3 4 8
Total Capital Expenditure 257 273 360 557 709 957 1,393 1,213
Net Lending -11 30 35 46 -5 -35 -77 -76
Total Capital Expenditure& Net Lending 246 303 395 603 704 922 1,316 1,137
a/ Including representativebodies, investment special account and loans and advance account. b/ Revised estimates. c/ Including Council of Ministers and Home, Information,Judicial and Foreign Affairs Ministries. d/ Consists mainly of contributionsto internationalorganizations and appropriationsin kyat to maintain the value in foreign exchange of contributionsto internationalorganizations.
Note: Years specified are fiscal years.
Source: Ministry of Planning and Finance, Budget Department. Table 5.5: BUDGET OF THE BOARDS AND CORPORATIONS (kyats million)
Budget 1975 1976 1977 1978 1979 1980 1981 a/ 1982
Revenue 7,548 10,103 11,705 13,062 13,613 15,428 1 21,581 Industrial 1,191 3,352 3,883 4,087 4,278 4,727 6,169 7,362 Agricultural 660 683 730 829 1,121 951 1,172 1,338 Fisheries & Livestock 18 40 77 147 169 208 426 529 Transport 571 660 797 890 925 1,118 1,143 1,172 Construction, Mineral & Power 1,455 706 914 937 1,192 1,213 1,905 2,375 Trade Council 3,106 4,059 4,569 5,247 4,575 5,607 6,263 7,159 Others 547 603 735 925 1,353 1,604 1,579 1,646
Current Expenditure 7,809 9,364 10,297 12,193 13,669 14,784 17,365 20,172 Industrial 1,299 2,906 3,275 3,985 4,224 4,554 5,521 6,502 Agricultural 624 644 754 918 1,214 1,209 1,502 2,005 Fisheries & Livestock 23 30 68 137 157 184 337 400 Transport 481 559 693 741 823 830 1,001 1,027 Construction, Mineral & Power 1,348 673 829 1,032 1,177 1,288 1,833 1,978 Trade Council 3,547 4,023 4,072 4,616 5,055 5,338 5,771 6,829 Others 487 529 606 764 1,019 1,381 1,400 1,431
Current Surplus/Deficit (-) -261 739 1,408 + 869 - 56 + 644 + 1,292 + 1,409
Capital Expenditure 411 498 981 2,033 3,200 4,506 5,062 5,333 Industrial 181 106 309 710 1,297 2,072 1,992 2,112 Agricultural 29 48 120 180 348 151 379 380 Fisheries & Livestock 7 11 68 75 190 444 479 663 Transport 103 128 179 495 530 904 601 622 Construction, Mineral & Power 65 180 228 490 761 820 1,348 1,314 Trade Council 9 15 71 73 56 89 220 216 Others 17 10 6 10 18 26 43 26
Overall Surplus/Deficit (-) -672 241 427 - 1,164 - 3,256 - 3,862 - 3,770 - 3,924
a/ Revised estimates.
Note: Years specified are fiscal years.
Source: Ministry of Planning and Finance. Table 6.1: MONETARY SURVEY (kyats million)
March March March March March March March March 1974 1975 1976 1977 1978 1979 1980 1981
Assets 5,798 7,109 7,598 7,948 8,455 9,337 11,791 14,139
Net Foreign Assets 207 248 197 246 199 415 1,148 1,603
Domestic Credit 5,591 6,861 7,401 7,702 8,256 8,922 10,643 12,536
Net Claims on Government 4,906 6,222 6,445 6,213 6,550 7,194 8,990 10,885
Claims on Private Sector 685 639 956 1,489 1,706 1,728 1,653 1,651
Cooperatives 245 212 424 864 979 981 897 907
Agriculture 245 244 241 250 285 384 494 495
Others 195 183 291 375 442 363 262 249
Liabilities 5,798 7,109 7,598 7,948 8,455 9,337 11,791 14,139
Broad Money 4,056 5,342 6,052 6,337 6,631 8,017 9,619 11,213
Currency & Demand Deposits 3,591 4,847 5,495 5,779 5,903 6,942 7,965 8,946
Quasi-Money 465 495 557 598 728 1,075 1,654 2,267
Net Other Liabilities 1,742 1,767 1,546 1,571 1,824 1,320 2,172 2,926
Source: Union of Burma Bank. -138-
Table 6.2: MYANMA ECONOMIC BANK: RATES OF INTEREST (percentage per annum)
April 1, November 1, 1975 1977
Deposit Rates Fixed Deposits 3 Months 0.5 1.0 6 Months 0.75 1.5 1 Year 1.25 2.5 2 Years 2.25 3.5
Savings Bank Accounts Basic Rate 6 8 Premium on 3-Year Minimum Balance 2 2
Savings Certificates (12-Year Maturity) 7.6 10.9
Lending Rates State Corporations Working Capital Loans 6(10) a/ 8 b/ Financial Loans 6(10) a! 8 Term Loans 3 5
Cooperatives Working Capital Loans c/ 6 8 d/ Term Loans c/ 7 9
Private Sector
Agriculture to: Village Bank e/ 6 8 Farmers f/ 12 12 Car Purchase Loans c/ 7 9 House Repair & Other Loans c/ 8 10 Small Personal Loans 24 24
a/ Penalty rates. b/ Interest rates for State Economic Enterprises to operate advanced paddy procurement scheme effective April 1980: Repayments within 9 months 2-1/2% Repayments between 9 to 12 months 5-1/2% Repayments after 12 months 8% c/ Overdrafts are charged 1/2% above the loan rates. d/ Special rates for cooperatives to operate paddy procurement scheme effective April 1980: Repayments within 6 months 4% Repayments between 6 to 9 months 6% Repayments after 9 months 8% e/ Lending rates of the Myanma Agricultural Bank. f/ Relending rates of Village Banks.
Source: Union of Burma Bank.. -139-
Table 7.1: VALUE ADDED IN AGRICULTURE (kyats million at constant 1970 prices)
Livestock Year Agriculture & Fishery Forestry Total
1970 2,713 736 258 3,707 1975 2,963 794 272 4,029 1976 3,122 834 263 4,219 1977 3,306 862 278 4,446 1978 3,481 896 293 4,670 1979 3,748 950 335 5,033 1980 3,944 1,008 358 5,310 1981 a/ 4,520 1,022 367 5,909
Growth Rates (Annual Percentage)
1970-80 3.8 3.2 3.3 3.7 1975 (-)2.0 (-)1.1 15.3 (-)0.8 1976 5.4 5.0 (-)3.3 4.7 1977 5.9 3.4 5.9 5.4 1978 5.3 3.9 5.2 5.0 1979 7.7 6.0 14.3 7.8 1980 5.2 6.1 6.9 5.5 1981 a/ 14.6 1.4 2.4 11.3
a/ Revised estimates.
Note: Years specifiedare fiscal years.
Source: Report to the Pyithu Hluttaw. -140-
Table 7.2: PRODUCTION OF SELECTED CROPS ('000 tons)
1970 1975 1976 1977 1978 1979 1980 1981 a/
Cereals
Paddy 7,859 8,448 9,062 9,172 9,313 10,362 10,283 13,107 Wheat 33 63 56 75 92 41 89 115 Maize 47 64 60 57 74 76 124 164 Millet 51 42 39 49 59 56 74 78
Oilseeds
Groundnut 437 459 404 416 457 384 337 431 Sesame 100 94 132 91 109 206 108 155
Fibers
Cotton 34 42 37 31 41 51 49 73 Jute 22 39 37 27 55 94 95 97
Pulses
Gram 60 66 67 93 100 94 38 101 Matpe 17 23 15 12 39 44 66 58 Htawbutpe 26 36 34 32 40 40 56 49 Pedisein 10 6 5 6 6 8 8 10 Sultani 5 4 3 5 4 4 4 4 Sultapya 12 16 17 26 30 28 22 29 Sadawpe 16 12 17 17 19 20 21 15 Pesingon 23 28 24 19 13 20 20 26 Soya Bean 33 36 31 45 46 39 45 39 Other Pulses 67 54 43 59 59 62 85 71
Total Pulses 269 281 256 314 356 359 365 402
Horticultural Crops
Onions 112 90 92 119 133 106 150 106 Chillies 33 32 31 46 40 26 38 40 Garlic 17 19 19 21 22 22 26 25
Commercial Crops
Tobacco: 52 54 56 79 78 90 87 76 Virginia (Green) 14 19 12 21 24 46 40 28 Burmese 38 35 44 58 54 44 47 48 Rubber 13 15 14 15 15 15 15 16 Sugarcane 1,291 1,185 1,605 1,600 1,763 1,812 1,438 2,003
a/ Provisional actual.
Note: Years specified are fiscal years.
Source: Report to the Pyithu Hluttaw. -141-
Table 7.3: SOWN AREA OF SELECTED CROPS ('000 acres)
1970 1975 1976 1977 1978 1979 1980 1981 a/
Cereals
Paddy 12,243 12,793 12,858 12,547 12,690 12,957 12,420 12,668 Wheat 166 227 232 233 235 216 206 306 Maize 377 499 486 549 527 543 573 696 Millet 453 411 394 407 459 452 496 487
Oilseeds
Groundnut 1,510 1,666 1,696 1,507 1,481 1,378 1,200 1,271 Sesame 2,258 2,609 2,464 2,630 2,696 3,087 2,563 3,231
Fibers
Cotton 362 542 514 402 405 461 480 546 Jute 104 167 148 136 176 256 261 250
Pulses
Gram 350 373 385 434 442 423 282 408 Matpe 130 164 121 88 164 203 210 210 Htawbutpe 142 180 158 143 158 158 162 118 Pedisein 106 72 60 55 62 72 81 102 Sultani 26 16 15 16 15 16 16 18 Sultapya 84 122 117 126 137 140 143 146 Sadawpe 69 57 67 75 73 68 53 66 Pesingon 156 197 166 119 90 125 135 170 Pegyi 189 203 194 204 209 193 200 217 Other Pulses 379 401 373 406 399 411 439 540
Total Pulses 1,631 1,785 1,656 1,666 1,749 1,809 1,721 1,995
Horticultural Crops
Onions 54 44 42 57 58 51 52 47 Chillies 174 156 179 206 180 143 156 188 Garlic 18 17 17 18 19 19 22 21
Commercial Crops
Tobacco: 132 112 136 175 163 152 147 145 Virginia (Green) 12 13 12 15 18 29 30 22 Burmese 120 99 124 160 145 123 117 123 Rubber 219 211 207 204 204 202 202 200 Sugarcane 201 211 247 251 260 266 236 248
a! Provisional actual.
Note: Years specified are fiscal years.
Source: Report to the Pyithu Hluttaw. -142-
Table 7.4: HARVESTED AREA UNDER SELECTED CROPS ('000 acres)
1970 1975 1976 1977 1978 1979 1980 1981 a/
Cereals
Paddy 11,544 12,069 12,428 12,137 12,019 12,381 10,976 11,863 Wheat 149 211 214 205 226 204 203 260 Maize 352 443 447 503 477 483 561 634 Millet 424 375 349 371 428 415 486 431
Oilseeds
Groundnut 1,472 1,631 1,634 1,410 1,392 1,291 1,126 1,210 Sesame 1,641 1,620 1,641 1,478 1,496 2,367 1,559 1,762
Fibers
Cotton 294 423 385 312 322 407 354 475 Jute 75 115 105 83 143 234 232 225
E'ulses
Gram 312 320 338 385 416 397 173 369 Matpe 108 122 91 56 151 189 205 194 Htawbutpe 127 172 151 132 144 145 161 100 Pedisein 94 57 48 45 54 64 39 75 Sultani 22 15 14 16 14 15 9 14 Sultapya 76 108 104 114 126 131 69 133 Sadawpe 64 53 63 66 68 63 41 55 Pesingon 144 186 158 106 82 121 77 151 Pegyi 178 193 182 193 200 184 197 186 Other Pulses 352 377 340 377 377 375 401 486
Total Pulses 1,477 1,603 1,489 1,490 1,632 1,684 1,372 1,763
HlorticulturalCrops
Onions 54 43 42 57 58 50 50 45 Chillies 165 146 153 187 168 134 152 168 Garlic 18 17 17 18 19 19 21 21
C'ommercialCrops
Tobacco: 129 108 132 169 159 150 143 140 Virginia (Green) 12 12 11 14 17 29 27 21 Burmese 117 96 121 155 142 121 116 119 Rubber 122 121 118 115 115 118 117 115 Sugarcane 98 89 114 110 125 123 103 111
a/ Provisional actual.
Note: Years specified are fiscal years.
Source: Report to the Pyithu Hluttaw. -143-
Table 7.5: SELECTED CROP YIELDS (pounds per acre)
1970 1975 1976 1977 1978 1979 1980 1981 a/
Cereals
Paddy 1,525 1,568 1,633 1,693 1,736 1,875 2,099 2,475 Wheat 495 665 582 783 915 449 987 990 Maize 615 732 712 688 849 823 1,128 1,027 Millet 272 249 249 298 307 302 341 407
Oilseeds
Groundnut 664 631 554 661 736 666 670 797 Sesame 137 130 180 138 164 195 156 197
Fibers
Cotton 70 73 71 75 96 95 105 116 Jute 643 764 789 737 858 902 920 967
Pulses
Gram 431 461 446 542 535 529 484 611 Matpe 358 426 359 478 582 526 720 668 Htawbutpe 466 473 502 544 618 618 787 1,103 Pedisein 246 226 221 274 264 286 461 307 Sultani 495 533 538 655 631 589 698 591 Sultapya 364 335 371 511 533 487 724 490 Sadawpe 555 505 598 579 613 711 713 599 Pesingon 359 335 341 399 354 368 585 389 Pegyi 415 413 377 519 516 483 725 470
Total Pulses 408 418 411 469 520 506 640 552
Horticultural Crops
Onions 4,650 4,692 4,927 4,693 5,204 4,716 6,758 5,231 Chillies 369 417 350 471 443 439 577 417 Garlic 2,070 2,536 2,555 2,557 2,671 2,655 2,683 2,683
Commercial Crops
Tobacco: Virginia (Green) 2,798 3,607 2,438 3,292 3,138 3,614 3,244 3,014 Burmese 735 817 811 840 852 811 902 895 Rubber 233 276 272 286 288 289 295 303 Sugarcane b/ 13.18 13.31 14.11 14.59 14.14 14.71 14.00 17.99
a/ Provisional actual. b/ In tons.
Note: Years specified are fiscal years.
Source: Report to the Pyithu Hluttaw. Table 7.6: FARM PRICES OF CEREAL AND SELECTED CROPS (kyats per ton)
1970 1973 1974 1975 1976 1977 1978 1979 1980 1981
Paddy
Ngasein: Ordinary 174* 207* a/ 292* b/ 438* c/ 438* 438* 438* 438* 438* 438* 1st Grade 184* - 302* b/ 453* c/ 453* 453* 472* d/ 472* d/ 472* d/ 472* d/
Medone: Ordinary 182* 215* a/ 304* b/ 458* c/ 458* 458* 458* 458* 458* 458* 1st Grade 191* - 314* b/ 472* c/ 472* 472* 492* d/ 492* d/ 492* d/ 492* d/
Emata: Ordinary 184* 218* a/ 309* b/ 465* c/ 465* 465* 468* 468* 468* 468* lst Grade 199* - 323* b/ 484* c/ 484* 484* 504* d/ 504* d/ 504* d/ 504* d/
Ngakywe: Ordinary 211* 250* a/ 354* b/ 531* c/ 531* 531* 531* 531* 531* 531 1st Grade 223* - 366* b/ 545* ci 545* 565* d/ 565* d/ 565* d/ 565* d/ 565 d/
Wheat
Red 280* 342* e/ 342 342 n.p. n.p. n.p. n.p. n.p. n.p. White 373* 404* e/ 404 404 n.p. n.p. n.p. n.p. n.p. n.p. Maxipex - 467*e/ 467 467 n.p. n.p. n.p. n.p. n.p. n.p. Maize 163* 244* f/ 326* b/ 407* g/ 407* 814* h/ 814* h/ 814* h/ 814* h/ 814* h/ Millet 184 n.p. n.p. n.p. n.p. n.p. n.p. n.p. n.p. n.p.
*Government monopoly control of marketing. a/ Effective from November 1972. b/ Effective from November 1973. c/ Effective from July 1974. d/ Effective from September 1977. eI Effective from February 1973. f/ Effective from March 1973. gi Effective from September 1974. h/ Effective from December 1976. n.p. No procurement.
Note: Years specified are fiscal years.
Source: Agricultural and Farm Produce Trade Corporation. Table 7.7: FARM PRICES OF PULSES (kyats per ton)
1970 1971 1973 1974 1976 1977 1979 1981
Matpe 373* 404* 498* 684* a/ 684* 1,556* b/ 1,556* 1,556* Pedisein 358* 358* 404* 560* a/ 560* 1,244* b/ 1,244* 1,244* Htawbutpe 325* 390* 487* c/ 812* a/ 812* 974* b/ 974* 974* Bocate 249* 265* 373* 560* a/ 560* 622* b/ 622* 622* Sultani & Sultapya 276* 308* 406* d/ 714* a/ 714* 974* b/ 974* 974* Pesingon 280* 280* 342* d/ 560* a/ 560* 933* b! 1,089* 1,089* Peyin 280* 280* 373* d/ 560* a/ 560* 933* b/ 933* 933* Pebyugale 276* 276* 292* c/ 519* a/ 519* 649* b/ 649* 649* Peboke 774 905 n.p. n.p. n.p. n.p. n.p. n.p. Gram 482 454 n.p. n.p. n.p. n.p. n.p. n.p. Pelun 293 316 n.p. n.p. n.p. n.p. n.p. n.p. Pegyi 644 540 n.p. n.p. n.p. n.p. n.p. n.p. Peyaza 1,214 910 n.p. n.p. n.p. n.p. n.p. n.p. Sadawpe 638 580 n.p. n.p. n.p. n.p. n.p. n.p.
*Governmentmonopoly control of marketing and administeredprices. a/ Effective from January 1974. b/ Effective from December 1976. ci Effective from March 1973. di Effective from February 1973. n.p. No procurement.
Note: Years specified are fiscal years.
Source: Agriculturaland Farm Produce Trade Corporation. Table 7.8: CONTROLLED FARM PRICES OF FIBER CROPS (kyats per ton)
Serial No. Particulars 1970 1974 1975 1976 1977 1979 1980 1981
1 Cotton
Wagyi: Grade I 659 1,711 a/ 1,711 2,799 b/ 2,799 2,799 2,799 2,799 Grade II 622 Grade III 249 311 a/ 311 498 b/ 498 498 498 498
Wagale: Grade I 622 1,400 a/ 1,400 2,488 b/ 2,488 2,488 2,488 2,488 Grade II 249 311 a/ 311 498 b/ 498 498 498 498
Mahlaing 5/6: Grade I 746 1,866 a/ 1,866 3,110/3,732 c/ 3,732 3,732 3,732 3,732 Grade II 249 311 a/ 311 498 b/ 498 498 498 498
Long-Staple: Grade I 964 2,177 2,177 3,421/4,354 c/ 4,354 4,354 4,354 4,354 Grade II 435 467 a/ 467 684 b/ 684 684 684 684
2 Jute: Grade I 1,027 1,337 d/ 1,337 1,679/1,928 c/ 1,928 1,928 1,928 1,928 Grade II 778 1,089 d/ 1,089 1,368/1,648 c/ 1,648 1,648 1,648 1,648 Grade III 311 467 d/ 467 498/498 c/ 498 498 933 e/ 933 e/ Special 1,648 d/ 1,648 2,022/2,208 c/ 2,208 2,208 2,208 2,208
3 Kenaf: Grade I 746 746 746 746 746 746 746 746 Grade II 560 560 560 560 560 560 560 560 Grade III 187 187 187 187 187 187 187 187
a/ Effective January 1974. b/ Effective March 1978. c/ First revised March 1976, then revised again December 1976. d/ Effective June 1974. e/ Effective December 1980.
Note: Years specified are fiscal years.
Source: Ministry of Planning and Finance, Planning Department. Table 7.9: GOVERNMENT PROCUREMENT OF SELECTED AGRICULTURAL CROPS ('000 tons)
1970 1975 1976 1977 1978 1979 1980 1981
Paddy 2,965 2,664 3,185 2,889 2,246 3,798 3,514 4,145 Wheat 9 - - - 3 1 - - Maize 9 5 5 10 12 10 21 22 Pulses: Matpe 8 16 11 2 24 36 49 49 Htawbutpe 13 14 22 14 12 9 8 9 Bocate n.s. n.s. 1 n.s. 2 n.s. n.s. n.s. Gram 10 1 - 1 5 1 - - Pesingon 12 4 7 6 3 11 2 17 Sugarcane 616 298 433 381 494 495 483 605 Jute 17 27 23 18 46 81 87 67 Virginia Tobacco 14 18 9 17 30 36 36 26 Rubber 10 6 7 10 10 13 13 13 Cotton: Long-Staple 14 14 15 14 13 20 22 20 Mahlaing 5/6 3 3 1 2 3 3 6 9 Wagyi 1 6 4 5 4 7 3 5 Wagale 1 n.s. n.s. n.s. n.s. n.s. n.s. n.s.
n.s. Not significant.
Note: Years specified are fiscal years.
Source: Report to the Pyithu Hluttaw. Table 7.10: COMPARISON OF EXPORT UNIT PRICES AND GOVERNMENT DOMESTIC PROCUREMENT PRICES OF SELECTED AGRICIJLTURAL COMMODITIES (kyats per ton)
1970 1971 1975 1976 1977 1978 1979 1980 1981
Export Unit Prices 428 370 1,836 1,408 1,109 1,316 1,392 1,575 1,958 Rice a/ 2,073 1,568 3,385 4,138 4,723 5,586 6,033 7,824 8,169 Rubber 1,306 1,149 1,063 1,671 1,496 2,174 2,227 1,927 1,524 Jute 724 710 1,676 2,093 1,922 2,393 2,456 2,028 2,174 Pulses
Government Procurement Prices
Rice b/ (Converted Paddy) 295 295 742 742 742 742 742 742 742 Rubber c/ 1,904 1,904 2,464 4,189 4,189 4,189 4,189 4,189 4,189 Jute df- 1,027 1,027 1,337 1,803 e/ 1,928 1,928 1,928 1,928 1,928 Pulses f/ 320 357 737 1,016 1,046 1,100 1,100 1,100 1,100
Ratio of Export Unit Price to Government Procurement Price I.
Rice 1.45 1.25 2.47 1.86 1.49 1.77 1.88 2.12 2.64 Rubber 1.09 0.82 1.37 1.00 1.13 1.33 1.44 1.87 1.95 Jute 1.27 1.12 0.80 0.93 0.78 1.13 1.16 1.00 0.79 Pulses 2.26 1.99 2.27 2.06 1.84 2.18 2.23 1.84 1.98
a/ Includes rice products. b/ Ngasein ordinary. c/ Average for graded qualities. d/ First grade. e/ Price revised twice during year: average of prices used. f/ Average of four varieties (Matpe, Htawpute, Bocate, Pesingon) weighted by respective procurement volume.
Note: Years specified are fiscal years.
Source: Ministry of Planning and Finance, Planning Department. Table 7.11: TEAK AND HARDWOOD PRODUCTION (hoppus tons)
Teak Hardwood Log Log Production Processing (ii) as % Production Processing (iv) as % Logs (i) (ii) of (i) Govt. (iii) (iv) of (iii)
1970 300,519 238,565 79 612,243 600,172 98
1975 257,806 188,278 73 501,869 426,587 85
1976 236,834 183,149 77 381,967 347,108 91
1977 280,177 196,879 70 360,617 257,002 71
1978 316,209 215,521 68 368,060 327,540 89
1979 375,584 251,476 67 480,099 355,196 74
1980 394,243 290,538 74 679,310 403,485 59
1981 390,000 301,700 77 800,000 520,319 65
Note: Years specified are fiscal years. Data relate to Timber Corporation only.
Sources: Timber Corporation and Ministry of Planning and Finance, Planning Department. Table 8.1: INDUSTRIAL VALUE ADDED (constant 1970 prices)
Kyats Million Structure in Percentage 1975 1977 1979 1980 1975 1977 1979 1980
Industrial Sector: Total 1,098.3 1,295.3 1,420.1 1,550.9 100.0 100.0 100.0 100.0 Food, Beverages & Tobacco 466.8 524.8 550.3 565.7 42.5 40.5 38.8 36.5 Clothing & Other Wearing Apparel 96.6 168.4 174.5 174.3 8.8 13.0 12.3 11.2 Housing & Household Equipment Industry 135.1 132.2 148.4 171.3 12.3 10.2 10.4 11.0 Personal Goods 58.2 81.5 72.0 72.2 5.3 6.3 5.1 4.7 i{ousehold Products 7.7 7.8 8.5 8.5 0.7 0.6 0.6 0.6 Printing & Publishing 23.1 33.7 40.7 39.1 2.1 2.6 2.8 2.5 Industrial Raw Materials Industry 70.3 86.1 122.8 122.5 6.4 6.7 8.6 7.9 Mineral Processing Products 143.9 134.0 135.7 157.9 13.1 10.3 9.5 10.2 Agriculture Machineries 9.9 18.3 30.9 53.3 0.9 1.4 2.2 3.4 Manufacturing Machinery & Equipment 4.4 1.0 0.8 7.1 0.4 0.1 0.1 0.5 Transport Equipment 37.3 47.6 65.1 96.7 3.4 3.7 4.6 6.2 Electrical Products 8.8 7.0 6.8 14.0 0.8 0.5 0.5 0.9 Miscellaneous 36.2 52.9 63.6 68.3 3.3 4.1 4.5 4.4
Note: Years specified are fiscal years.
Source: Ministry of Planning and Finance, Planning Department. Table 8.2: GROSS PRODUCTION OF PROCESSING AND MANUFACTURING SECTOR BY COMMODITY GROUP (kyats million valued at constant 1970 prices)
1975 1976 1977 1978 1979 1980 1981 a!
Commodity Group
Food & Beverages 3,321.2 3,446.5 3,619.8 3,730.0 3,902.3 4,014.8 4,335.8 Clothing & Wearing Apparel 405.1 558.7 707.1 824.3 766.3 691.7 773.9 Construction Materials 339.8 329.8 332.5 371.5 386.0 461.1 532.9 Personal Goods 131.7 152.3 201.1 185.8 178.1 177.1 200.4 Household Goods 18.2 18.4 21.4 24.1 25.8 24.2 42.2 Printing & Publishing 50.0 74.9 83.9 101.4 108.6 114.3 122.0 Industrial Raw Materials 213.9 264.0 281.1 343.3 390.2 398.4 540.8 Minerals 385.6 370.2 416.7 447.9 433.3 463.0 505.0 Agricultural Equipment 12.0 17.7 23.5 43.3 39.6 43.7 54.9 Industrial Equipment 4.9 1.6 0.8 1.1 1.0 1.0 8.7 Transport Vehicles 63.9 64.7 92.1 144.3 148.5 172.2 209.0 Electrical Goods 27.7 28.6 25.5 26.3 25.4 27.7 44.9 Miscellaneous 142.5 173.0 197.6 193.6 240.4 267.7 297.5
TOTAL 5,116.5 5,500.5 6,003.1 6,436.9 6,645.5 6,856.8 7,668.1
a/ Revised estimates.
Note: Years specified are fiscal years.
Source: Ministry of Planning and Finance, Planning Department. Table 8.3: GROSS PRODUCTIONOF PROCESSING AND MANIJFACTURINGSECTOR BY OWNERSHIP AND INDUSTRY (valued at constant 1969/70 prices; kyats '000)
1978 _ _ _ _ 1980 _ _ 1981 Sectors State Cooperatives Private Total State Cooperatives Private Total State Cooperatives Private Total a/
Food & Beverages Industry 1,002,359 87,751 2,639,883 3,729,993 1,114,150 119,362 2,781,281 4,014,793 1,212,781 140,036 2,982,986 4,335,803 Clothing & Wearing Apparel Industry 313,545 148,696 362,023 824,264 238,380 92,068 361,254 691,702 287,912 99,558 386,421 773,891 Construction Materials Industry 197,985 19,528 153,997 371,510 232,651 11,690 166,802 461,143 346,674 12,545 173,710 532,929 Personal Goods Industry 168,519 4,498 12,785 185,802 155,652 6,779 14,627 177,058 178,565 4,344 1,7,483 200,392 Household Goods Industry 14,419 406 9,292 24,117 10,393 1,195 12,633 24,221 29,010 1,091 12,083 42,184 Printing & Publishing Industry 95,527 221 5,683 101,431 107,268 1,578 5,455 114,301 116,503 607 4,926 122,036 Industrial Raw Materials Industry 296,638 257 46,400 343,295 335,950 874 61,551 398,375 418,372 1,225 121,256 540,853 Minerals Industry 410,220 1,143 36,548 447,911 417,494 746 44,753 462,993 458,179 763 46,098 505,040 Agricultural Equipment Industry 43,305 - - 43,305 43,716 - - 43,716 54,862 - - 54,862 Industrial Equipment Industry 1,135 - - 1,135 992 - - 992 8,653 - - 8,653 Transport Vehicles Industry 128,370 1,994 13,878 144,242 153,646 2,399 16,117 172,162 189,670 2,405 16,922 208,997 Electrical Goods Industry 25,969 - 318 26,287 27,685 - 27,685 44,932 - - 44,932 Miscellaneous Industries 83,906 11,032 98,649 193,587 151,440 4,831 111,401 267,672 176,321 6,107 115,112 297,540
TOTAL 2,781,897 275,526 3,379,456 6,436,879 3,039,417 241,522 3,575,874 6,856,813 3,522,434 268,681 3,876,997 7,668,112
Percentage of Total Productioln 43.2 4.3 52.5 100.0 44.3 3.5 52.2 100.0 45.9 3.5 50.6 100.0
a/ Revised estimates.
Note: Years specified are fiscal years.
Source: Report to the Pyithu Hluttaw. Table 8.4: SUB-SECTOR SHARES IN GROSS OUTPUT OF STATE INDUSTRIAL SECTOR (percentages based on 1970 prices)
Commodity Group 1976 1977 1978 1979 1980 1981 a!
Food, Beverages & Tobacco 37.6 37.3 36.0 35.4 36.7 34.4 Clothing & Wearing Apparel 9.9 11.6 11.3 9.8 7.8 8.2 Construction Materials 7.9 6.7 7.1 7.6 9.3 9.8 Personal Goods 6.9 7.3 6.1 5.9 5.1 5.1 Household Goods 0.5 0.5 0.5 0.6 0.3 0.8 Printing & Publishing 3.4 3.1 3.4 3.7 3.5 3.3 Industrial Raw Materials 10.3 9.9 10.7 11.6 11.1 11.9 Minerals 15.7 15.0 14.7 14.0 13.7 13.0 Agricultural Equipment 0.8 0.9 1.6 1.4 1.4 1.6 Industrial Equipment * * 0.1 * * 0.2 Transport Vehicles 2.5 3.1 4.6 4.6 5.1 5.4 Electrical Goods 1.3 1.0 0.9 0.9 0.9 1.3 Miscellaneous 3.2 3.6 3.0 4.5 5.1 5.0 U, TOTAL 100.0 100.0 100.0 100.0 100.0 100.0
*Insignificant, less than one-half of one percent. a/ Revised estimates.
Note: Years specified are fiscal years.
Source: Report to the Pyithu Hluttaw. Table 8.5: DISTRIBUTION OF FACTORIES BY EMPLOYMENT SIZE
State Private Cooperative TOTAL No. of Workers 1975 1981 1975 1981 1975 1981 1975 1981
Below 10 Workers 269 883 23,407 35,282 57 300 23,733 36,465
10-50 Workers 514 220 3,689 856 158 422 4,361 1,498
51-100 Workers 267 138 136 39 28 418 431 595
Above 100 Workers 411 416 26 6 56 32 493 454
TOTAL 1,461 1,657 27,258 36,183 299 1,172 29,018 39,012
Note: Years specified are fiscal years.
Source: Report to the Pyithu Hluttaw. Table 8.6: CAPACITY UTILIZATION RATIO IN SELECTED INDUSTRIES (percentages)
Percentage of Capacity Utilization No. of Shifts 1976 1977 1978 1979 1980 1981 a/
Sugar Mills (3) 41.9 42.3 52.3 56.0 56.3 69.2 Cigarette Factories (1) 66.9 81.9 81.3 84.8 75.8 93.7 Ice Factories (1) 63.3 57.9 68.7 73.8 59.5 55.4 Textile Mills (2) 79.7 88.4 79.0 77.3 70.9 60.6 Cement Mills (3) 48.2 62.1 76.0 68.2 72.5 71.6 Brick Factories (2) 60.3 53.8 82.2 68.9 68.0 67.0 Glass Factories (3) 61.4 90.1 82.6 82.6 86.1 83.2 Steel Mill (2) 65.6 92.5 92.5 53.0 56.0 76.8 Aluminum Hollow-ware (1) 33.3 41.6 43.4 51.0 36.0 76.8 Umbrella Factories (1) 42.5 67.2 83.2 48.9 30.4 54.0 Leather factories (1) 100.0 100.0 100.0 100.0 99.9 81.0 n
a/ Revised estimates.
Note: Years specified are fiscal years.
Sources: Ministry of Industry I and Timber Corporation. -156-
Table 8.7: PRODUICTIONAND EXPORT OF SELECTED)KIMERALS (kyats '000)
1970 1975 1976 1977 1978 1979 1980 1981
Tin Concentrates: Production (tolls) 409 557 598 360 257 726 1,137 1,000 (kvats) 4,659 18,055 16,705 11,650 10,202 32,173 60,845 50,819 Exports (tons) 578 549 835 335 434 819 1,036 434 (kyats) 5,978 10,815 17,272 11,619 20,208 48,194 62,561 28,881
Turgsten Concentrates: FProduction (tonls) 197 575 505 332 421 702 799 888 (kyats) 1,888 17,236 18,880 10,735 20,538 30,346 28,291 44,239 Exports (tons) 318 903 501 313 251 753 564 611 (kyats) 6,311 27,323 17,014 10,776 14,469 41,230 32,637 38,284
Ref'inedLead: P'roduction (tons) 6,708 4,921 2,444 2,721 5,242 5,460 5,863 6,488 (kyats) 11,589 15,092 6,020 13,570 26,142 27,229 37,081 45,001 Exports (tonis) 5,217 7,836 3,3 25 1,992 4,036 5,760 3,300 5,422 (kyats) 7,912 24,787 8,942 5,997 18,827 26,335 27,340 30,850
Zinc Concentrates: IProduction (tonls) 6,978 5,665 4,425 3,860 4,t70 5,255 6,270 6,992 (kyats) 4,026 4,776 2,333 5,226 5,646 7,115 9,964 12,746 Exports (tons) 6,383 7,844 5,306 5,946 3,488 6,713 3,623 8,000O (kyats) 2,923 4,724 4,413 5,593 2,674 4,892 4,164 9,374
Copper Matte: Production (tons) 217 78 40 86 164 119 129 236 (kyats) 516 341 133 679 1,294 939 1,327 2,428 Exports (tons) 217 344 - - 308 - 364 (kyats) 849 959 - - 1,013 - 3,873
NilckelSpeiss: Production (tons) 199 77 30 58 47 48 64 128 (kyats) 556 217 83 302 245 250 430 860 Exports (tons) 163 340 - - 127 - - - (kyats) 1,295 481 - - 314 - - -
Refined Silver: Production (oz. '000) 638 413 173 187 400 422 402 428 (kyats) 8,890 10,073 4,970 8,875 19,009 20,062 23,769 27,845 Exports (oz. '000) 759 439 285 222 341 452 269 502 (kyats) 6,399 10,371 7,837 8,378 11,329 17,409 27,009 64,126
AntirnonialLead: Production (tons) - 173 102 116 169 200 238 275 (kyats) - 552 265 580 546 1,001 1,650 1,906 Exports (tons) - - 559 89 - - -- (kyats) - - 1,257 241 - - - -
Jade: Production (visa) 1,398 4,410 2,419 19,221 4,066 5,550 31,437 28,395
Coal: Production (tons) 11,047 12,947 15,308 19,166 28,346 11,992 13,600 11,036
Source: Ministry of Mines. -157-
Table 8.8: PRODUCTION, IMPORT AND EXPORT OF CRUDE OIL (million barrels)
Production Imports Exports
1970 5.85 1.92
1975 6.77 1.87
1976 7.09 1.70
1977 8.58 0.14
1978 9.56 - 0.41 a/
1979 9.99 - 0.75 a/
1980 11.02 - 1.02 a/
a/ Bank staff estimates.
Source: Myanma Oil Corporation. Table 9.1: CONSUMER PRICE INDEX AT RANGOON (1972 = 100)
1970 1975 1976 1977 1978 1979 1980 1981 a/
Food & Beverage 87.1 221.6 261.1 253.21 234.59 247.72 252.21 238.24 Tobacco 99.0 169.4 274.9 342.08 353.22 351.20 345.53 347.25 Fuel & Light 97.8 192.0 285.8 297.51 292.00 329.04 327.55 472.23 Clothing & Apparel 100.0 157.4 226.8 246.17 203.14 190.32 178.78 182.83 House Rent & Repairs 111.0 172.7 209.4 215.93 199.28 193.48 200.94 210.12 Miscellaneous Services & Goods 98.9 168.2 201.2 190.43 204.85 239.17 232.04 232.93
Total Consumer Price Index 91.0 206.4 252.6 249.67 234.58 247.88 249.40 248.34
_0 a/ January-September average.
Note: Years specified are calendar years.
Source: Central Statistical Organization. Table 9.2: WHOLESALE PRICES OF SELECTED AGRICULTURAL PRODUCTS (kyats)
Unit Quotation 1970 1975 1976 1977 1978 1979 1980 1981 a/
Paddy (Ngasein) 100 bkts. CP 358 900 900 900 900 900 900 900 Paddy (Ngasein) " FM 508 1,673 1,571 1,649 1,659 1,478 1,520 1,605 Millet " FM 490 2,827 2,985 3,278 3,210 3,131 3,035 2,855 Maize " CP 400 1,000 1,400 2,000 2,000 2,000 2,000 2,000 Maize FM 1,022 2,147 2,271 2,381 2,550 2,358 2,231 2,158 Gram " FM 2,067 4,643 5,864 6,325 5,819 6,642 6,366 5,876 Matpe " CP 1,200 2,000 2,400 5,000 5,000 5,000 5,000 5,000 Matpe FM 2,096 3,263 6,450 6,537 5,443 6,135 6,132 5,889 Sadawpe FM 2,200 9,134 9,982 7,013 6,585 7,876 8,871 7,755 Sesamum FM 5,000 12,756 16,355 17,450 11,020 11,103 12,212 10,594 Groundnut FM 1,484 4,256 6,238 5,658 4,548 4,592 5,575 4,578 Chillies (short) 100 viss FM 581 2,622 4,207 1,973 1,743 3,790 2,958 1,638 Onions FM 96 587 473 228 208 309 203 187 Garlic FM 471 1,063 1,457 1,066 872 609 503 527 Tumeric FM 250 500 750 1,134 1,596 1,604 715 501 Ginger FM 263 350 650 695 566 572 796 656 Cotton (sWS) " CP 100 225 400 400 400 400 400 400 Cotton (I/s) " CP 150 350 550 700 700 700 700 700 Jute (2nd Quality) CP 145 195 245 265 265 265 265 265
a/ Average For the 8 months - January-August.
CP = Controlled Price. FM = Free Market Price.
Note: Years specified are calendar years.
Source: Central Statistical Organization. Table 9.3: RETAIIL PRICES OF SELECTED DECONTROLLED COMMODITIES AT RANGOON (kyats per viss)
1970 1975 1976 1977 1978 1979 1980 1981 a!
Chillies 6.7 22.9 32.2 20.2 17.8 43.3 31.3 16.4 Onions 1.7 4.9 6.3 3.3 3.4 4.4 2.4 6.3 10.8 Tumeric 6.0 4.3 6.8 11.6 18.4 23.2 16.8 3.1 Potatoes 1.4 2.6 3.5 3.6 3.9 3.8 3.4 3.8 Cabbages b/ 1.5 2.3 3.6 4.2 3.6 4.5 4.0 3.6 Coconuts a/ 2.4 3.3 3.8 5.0 4.0 4.1 4.0 34.8 Tea 10.4 17.4 23.2 34.3 33.1 33.2 35.2 26.1 Cigars c/ 10.3 14.3 29.7 30.9 25.8 23.2 25.3 24.4 Firewood c/ 4.2 6.6 9.3 16.0 21.4 22.9 23.0 25.9 Charcoal d/ 12.8 13.0 21.1 23.5 20.9 22.5 22.4 9.3 Jaggery 3.3 7.2 9.8 9.5 9.5 7.7 11.4 23.8 Chicken 9.2 15.8 21.5 25.4 24.8 24.2 24.7 19.9 Duck 7.9 14.7 18.5 19.4 22.2 21.8 21.3 33.7 Mutton 9.8 19.2 29.0 31.3 30.3 30.0 31.6 21.6 Beef 8.1 15.0 23.0 23.6 22.7 21.4 20.6 Pork 7.7 13.8 19.2 18.7 16.6 19.2 22.7 21.3 6.4 Eggs e/ 2.5 5.3 7.0 6.2 6.6 7.3 6.4 27.9 Groundnut Oil 9.3 19.0 35.7 38.6 23.5 27.3 38.0 26.5 Sesamum Oil 9.3 18.2 34.4 37.0 25.3 26.0 36.4 6.2 Gram 1.4 4.0 4.5 5.6 5.5 7.3 7.5 39.0 Fresh Fish (Ngamyin) 13.5 21.6 29.9 39.5 38.8 39.6 40.0 Fish Products 79.4 (Ngabokechauk) 25.4 39.6 70.9 82.9 75.3 74.5 85.4
a/ Average price for 9 months - January-September. b/ Price per unit. c/ Price per 100. di/ Price per bag. e/ Price per dozen.
Note: Years specified are calendar years.
Source: Central Statistical Organization. Table 9.4: RATIOS BETWEEN FREE MARKET AND OFFICIAL PRICES (percentage) a/
1974 1975 1976 1977 1978 1979 1980 1981 End of Period: June Dec. June Dec. June Dec. June Dec. June Dec. June Dec. June Dec. June
Rice 224 178 163 140 129 131 133 187 210 201 135 133 174 195 139 Shrimp Paste 209 219 233 284 294 393 235 222 212 219 215 215 327 304 202 Shrimp Sauce 201 199 199 213 240 352 207 169 154 140 166 159 167 168 162 Groundnut Oil 116 145 149 183 ------Salt 278 603 404 654 216 233 ------Sugar 607 636 694 1,000 465 335 366 408 220 258 293 273 290 366 287 Condensed Milk 223 220 262 289 232 274 224 210 268 239 228 245 191 211 144 Milk Powder 218 443 394 589 214 402 175 184 216 177 168 163 206 261 195 Average b/ of Food Items 260 330 312 420 255 304 223 230 213 206 221 181 226 251 188 Men's Longyi 189 209 207 234 246 159 169 149 125 109 101 102 107 114 122 Ladies' Longyi 202 213 211 236 230 275 223 211 176 164 152 141 104 100 98 Vest 242 273 135 219 251 197 179 152 121 129 121 123 121 121 122 Poplin (white) 388 382 160 170 196 251 209 178 99 141 141 142 132 135 135 Sheeting (grey) 372 320 346 385 319 239 212 185 123 120 133 132 131 135 111 Average b/ of textiles 308 279 212 249 248 224 198 175 129 133 128 126 137 143 129 Kerosene 280 314 256 453 567 658 511 511 404 444 324 436 489 833 1,089 Cigarettes (superior) 269 272 209. 295 259 292 249 177 206 188 287 131 159 132 140 Cigarettes (inferior) 155 125 118 122 180 154 135 103 84 105 139 113 78 84 95 Matches 270 208 208 167 167 250 173 267 213 213 220 200 200 200 167 Candles 277 310 362 575 555 549 394 343 305 341 306 301 184 178 285 Dry Cell Battery 164 179 128 193 267 244 171 192 174 201 205 198 234 235 158 Carbolic Soap 523 225 138 155 206 163 137 142 122 131 176 187 204 159 131 Washing Soap 383 277 197 210 184 135 139 171 200 242 452 284 222 171 153 Analgesic Tablets 205 606 606 1,252 951 1,714 928 761 785 999 1,582 568 620 711 Average b/ Miscellaneous 281 280 247 380 385 377 291 315 274 294 345 381 260 290 325 Average b/ All Items 283 296 257 350 296 303 264 237 205 212 225 230 208 223 214
a/ A ratio of 100 indicates equality of free market and official prices. b/ Arithmetic mean of items for which information is available.
Source: Central Statistical Organization. Table 10.1: TRANSPORTATION NETWORK
1971 1975 1976 1977 1978 1979 1980 1981
Railway Track (Miles)
Double Line 177 254 254 254 254 254 254 254 Single Line 1,770 1,695 1,695 1,695 1,695 1,695 1,695 1,707
Total Route (Miles) 1,947 1,949 1,949 1,949 1,949 1,949 1,949 1,961
Road (Miles)
Union Highways 2,452 2,452 2,452 2,452 2,452 2,452 2,452 2,452 Main Roads 6,018 11,429 11,468 11,496 11,515 11,530 11,609 11,676
Sub-total 8,470 13,881 13,920 13,948 13,967 13,982 14,061 14,128
State Roads 5,180 a/ - - - - - District Roads 2,845 2,845 2,845 2,845 3,260 3,260 3,260 3,260
GRAND TOTAL b/ 16,495 16,726 16,765 16,793 17,227 17,242 17,321 17,388
Navigable River (Miles)
High Water 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 Low Water 3,700 3,700 3,700 3,700 3,700 3,700 3,700 3,700 Main Ports 4 4 4 4 4 4 4 4 Coastal Ports
Airfields
International 1 1 1 1 1 1 1 1 Domestic 42 42 43 45 45 45 45 45
a/ Reclassified as Main Roads. b/ In addition, there are estimated to be over 10,000 miles of dry-weather farm roads.
Sources: Ministry of Transport and Communications and Ministry of Planning and Finance, Planning Department. Table 10.2: TOTAL TRANSPORT WORK UNDERTAKEN BY STATE-OWNED TRANSPORT AGENCIES, 1962-81 ('000)
1962 1972 1976 1978 1979 1980 1981 a/
Rail Transport
No. of Passengers 43,078 53,389 49,055 34,469 45,544 49,614 57,897 Passenger Miles 953,132 1,624,688 2,155,430 1,779,294 1,903,051 2,007,523 2,282,141 Freight Ton 2,938 2,925 1,620 1,831 1,884 2,191 2,366 Freight Ton-Miles 457,549 483,705 237,251 276,572 287,735 326,528 362,000 Road Transport
No. of Passengers (bus) - 297,618 145,914 190,457 174,324 158,169 179,000 Passenger Miles (bus) - 728,996 477,031 841,456 785,479 791,283 809,970 No. of Passengers (taxi) - 4,673 5,045 5,076 5,131 5,130 5,136 Passenger Miles (taxi) - 15,194 22,923 23,099 24,064 24,050 24,153 Freight Ton (truck) - 1,844 1,124 1,006 951 996 1,054 Freight Ton-Miles (truck) - 80,784 69,990 107,526 116,707 127,311 117,936 Passenger cum cargo (truck) - 2,832 4,065 4,882 4,685 4,964 4,600 Passenger cum cargo miles (truck) - 16,459 21,714 22,869 27,389 29,931 30,000 Inland Water Transport
No. of Passengers 5,260 9,834 11,153 11,691 13,170 13,467 14,109 Passenger Miles 147,292 230,434 234,063 211,008 222,945 254,206 290,071 Freight Ton 1,283 2,162 1,746 1,037 1,016 1,333 1,361 Freight Ton-Miles 244,196 411,981 340,556 137,770 156,871 176,702 185,571
Overseas & Coastal Transport
No. of Passengers 13 29 22 21 17 21 63 Passenger Miles 9,617 6,688 5,440 8,724 25,110 Freight Ton 527 834 469 519 655 766 903 Freight Ton-Miles 1,868,935 1,896,306 2,583,134 3,111,885 3,860,859 Table 10.2 Page 2 of 2
1962 1972 1976 1978 1979 1980 1981 a/
Air Transport - Internal
No. of Passengers 133 399 399 536 497 543 536 Passenger Miles 25,683 84,205 91,104 109,935 103,845 111,281 106,655 Freight Ton 2.9 6.5 3.9 5.0 4.5 4.9 3.9 Freight Ton-Miles 968 1,612 911 1,113 1,087 1,137 996
Air Transport - External
No. of Passengers 34 50 43 46 43 56 45 Passenger Miles 16,589 29,661 20,060 22,854 22,589 29,866 24,129 Freight Ton 0.3 0.9 0.6 0.4 0.5 0.7 0.8 Freight Ton-Miles 150 677 231 255 303 445 380
TOTAL
No. of Passengers 48,518 374,513 215,696 247,178 243,410 231,964 261,386 Passenger Miles 1,142,696 2,746,925 3,031,942 3,017,203 3,094,800 3,256,864 3,592,229 Freight Ton 4,751.2 7,772.4 4,963.5 4,398.4 4,511.0 5,291.6 5,688.7 Freight Ton-Miles 702,863 978,759 2,517,874 2,419,542 3,145,837 3,744,008 4,527,742
a/ Provisional.
Source: Ministry of Planning and Finance, Planning Department. Table 10.3: FREIGHT TRAFFIC ALLOCATION TO VARIOUS MODES OF TRANSPORTATION ('000 tons)
Short-Haul Medium-Haul 1975 1977 1979 1981 a/ 1975 1977 1979 1981 a/
Public Sectbr (Transport)
Burma Railway Corporation - - - - 201 212 236 245
Inland Water Transport Corporation 214 190 178 270 353 129 192 205
Road Transport Corporation 429 446 406 372 187 193 177 125
Sub-total 643 636 584 642 741 534 605 575
Public Sector (Others) 1,167 1,989 1,327 1,976 294 497 438 592
Private Sector (Including Cooperatives)
Trucks 358 1,564 4,168 8,064 4,836 5,656 6,631 7,500
Inland Water Transport by Powered Craft 6,634 6,234 6,332 6,414 2,829 2,659 2,701 2,735
Coastal Transport by Powered Craft - - - - 522 503 706 699
Small and Slow Crafts & Carts 19,018 19,578 20,687 20,937 -
Sub-total 26,010 27,376 31,187 35,415 8,187 8,818 10,038934
TOTAL 27,820 33,098 38,033 9,222 9,849 11,081 12,101 Table 10.3 Page 2 of 2
Long-Haul TOTAL 1975 1977 1979 1981 a/ 1975 1977 1979 1981 a/
Public Sector (Transport)
Burma Railway Corporation 1,359 1,463 1,648 2,121 1,560 1,675 1,884 2,366
Inland Water Transport Corporation 1,130 593 646 886 1,697 912 1,016 1,361
Road Transport Corporation 472 403 368 557 1,088 1,042 951 1,054
Sub-total 2,961 2,459 2,662 3,564 4,345 3,629851 4,781
Public Sector (Others) 243 1,223 1,987 2,659 1,704 3,709 3,752 5,227
Private Sector (Including I Cooperatives)
Trucks 5,024 4,980 5,325 5,537 10,218 12,200 16,124 21,101
Inland Water Transport by Powered Craft 293 275 279 283 9,756 9,168 9,312 9,432
Coastal Transport by Powered Craft 784 755 1,060 1,048 1,306 1,258 1,766 1,747
Small and Slow Crafts & Carts - - - - 19,018 19,578 20,687 20,937
Sub-total 6,101 6,010 6,664 6,868 40,298 42,204 47,889 53,217
TOTAL 9,305 9,692 11,313 13,091 4 7 9,542 55,492 63,225
a/ Revised estimates.
Source: Ministry of Planning and Finance, Planning Department. =¶2urCex I\Dtrtm. I I 3T
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