This chapter addresses the issues on inward foreign direct investment (FDI),
industrial upgrading, and economic-corridor development in Myanmar. We first present
the economic profile of Myanmar by comparing with other economies in Mekong
region as well as its brief history. Second, we discuss the role of inward FDI in
Myanmar. From a short-term perspective, Myanmar needs to accept inward FDI to
participate in international production networks and thus to develop a manufacturing
sector. This section represents empirical evidence on the linkage between FDI and the
growth of GDP and exports, and investigates a specific issue to be addressed for
accepting inward FDI in Myanmar manufacturing sector. Third, from a long-term
perspective, we discuss the issues on industrial upgrading and geographical linkage in
Myanmar economy. Myanmar now depends heavily on natural resource production in
its economy, and also on labor-intensive production in its manufacturing sector. Thus,
the industrial reformation should address how to diversify its industries towards a
variety of manufacturing sectors and how to upgrade its industries towards upstream
and high-valued manufacturing sectors. From the geographical viewpoint, Myanmar
also now depends on spot-area development through its SEZ framework. For extending
the economic impacts of the SEZ development to nation-wide level, the SEZ
development should contribute to an economic corridor approach linked with
neighboring countries