1. Chapter 2: Current Performance and Future Potential Shiro Armstrong 29 April workshop

2. Outline How does Myanmar measure up against comparable economies? Trade and investment potential Achievable trade and growth scenarios Challenge for national economic reform

3. Source: UN Comtrade and WDI (Ng, 2013) Trade/GDP ratios at GDP per capita of 830 USD (t=0)

4. Trade performance How to define and measure? What do we expect Myanmar’s exports and imports to be given its size, place in the world, endowments and other characteristics? Estimating a hypothetical frontier (maximum) based on characteristics of global best performers Performance = actual/potential

5. The (more) technical explanation Stochastic frontier analysis applied to the gravity model (normal and non-negative residuals) Achievement of potential is measure of economic distance. Estimates difficult to measure or unexplained resistances and barriers Cannot compare actual to predicted trade from gravity model GDP, distance, endowments to estimate performance Policy variables and barriers help explain performance

6. Average import performance

7. Average export performance