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While Myanmar achieved distinct progress in economic growth and poverty reduction over the past decade, extreme natural events; economic, political, and social crises; and the ongoing COVID- 19 shock pose serious challenges. This study complements previous analyses of poverty and vulnerability by providing a dynamic perspective for the period 2015– 2017. Given the lack of longitudinal household data, the analysis relies on the synthetic panels approach to further our understanding of transitions between different states— poverty, vulnerability, non- poverty— and the characteristics of the households associated with these transitions. Among the main results, we find that there was a relatively high probability for people, who were poor in 2015 to exit poverty in 2017,and that the probability of remaining in a vulnerable situation was non- negligible. Moreover, the results point to important differences in the probability of transitioning between different states depending on household and location characteristics. While the COVID- 19 shock has likely increased the proportion of households in the vulnerable and poor groups, these results highlight the need to focus on households with specific characteristics that make them more at risk of remaining or falling into poverty than the rest of the population in a context of diminishing poverty rates and localized vulnerability pockets.

Despite major public finance reform efforts over the last decade, Myanmarese public finances continue to be characterized by relative weakness in revenue collection, budget execution, and long-term sustainability. Myanmar is therefore in need of comprehensive public finance reform. Two top priorities of the Myanmar Sustainable Development Plan are to establish a fair and efficient tax system to increase government revenues, and to ensure effective public financial management. In this paper, we analyse the scope for fiscal tax reform to finance future Myanmar Union budget deficits and lower the need for central bank financing. Specifically, we employ a newly developed dynamically recursive computable general equilibrium model for Myanmar to analyse the economic efficiency and household income distribution impacts of employing four tax instruments, including the expansion of existing commercial taxes, customs duties, and corporate taxes, and the introduction of new secondary and tertiary education payroll taxes, to finance 2022- 40 government budget deficits. Our results demonstrate that eliminating Myanmarese government budget deficits could release savings for future capital accumulation and lead to net present value GDP gains, regardless of tax instrument, but also that real household welfare losses will be substantial and potentially persist throughout our 20-year horizon. While the payroll and enterprise tax instruments are identified as efficient and progressive, they are likely to suffer from weak tax bases, implying that commodity-focused tax instruments, including sales taxes and progressive but less efficient import tariffs, will need to continue to form the core of any comprehensive tax reform in Myanmar.

Myanmar has, in recent years, strengthened its focus on human capital as a development pillar, and introduced legislation and adopted conventions on child labour. But child exploitation continues, including use of forced labour by the military and children performing hazardous work. Moreover, Myanmar faces a rapidly closing window of opportunity within which to train its workforce to meet the future challenges of declining population growth and an ageing society. To address the twin challenges of child exploitation and future labour market needs, we study a comprehensive stylized education reform package for child workers aged 10-14. We employ a newly developed dynamically recursive 2021-40 computable general equilibrium model for Myanmar to analyse the economic and household income distribution impacts of a combined child work elimination and education programme allowing current child workers to achieve the same distribution of educational attainment as wider society over a 15-year transition period. While child work elimination would be costly for disadvantaged rural households, the combined programme may leave them better off, though only after a long transition period. At the societal level, the opportunity costs of child work elimination outweigh the long-term economic benefits of education over our 20-year horizon. In spite of the lack of societal economic benefits, our proposed reforms do seem to be advantageous, dealing with the unethical and appalling continuation of child labour practices while improving income distribution in favour of disadvantaged rural households. This would allow Myanmar to move towards the goal of SDG8, 'Decent Work and (Inclusive) Economic Growth', while training current generations to support an ageing Myanmarese society.

Countering recent rises in many countries of inequality in income and wealth is widely recognized as a major development challenge. This is so from an ethical perspective and because greater inequality is perceived to be detrimental to key development aims. Still, an informed debate on the effects of inequality requires clear evidence. This review contributes to the literature by taking stock and providing an overview of current knowledge of the impact of income inequality on three important outcomes: economic growth, health and education as two dimensions of human development, and governance, with a focus on democracy. Drawing on the insights from different disciplines and considering recent work, it reveals that existing evidence provides somewhat mixed results and argues for a need for further in-depth empirical work. It also points to explanations for the lack of consensus embedded in data quality and availability, measurement issues, and the shortcomings of the different methods employed. Finally, we point to promising future research avenues relying on experimental work for micro level analysis, more region- and country-specific studies, and reiterate the need for improvements in the availability and reliability of data.

Myanmar has, in recent years, strengthened its focus on human capital as a development pillar, and introduced legislation and adopted conventions on child labour. But child exploitation continues, including use of forced labour by the military and children performing hazardous work. Moreover, Myanmar faces a rapidly closing window of opportunity within which to train its workforce to meet the future challenges of declining population growth and an ageing society. To address the twin challenges of child exploitation and future labour market needs, we study a comprehensive stylized education reform package for child workers aged 10–14. We employ a newly developed dynamically recursive 2021–40 computable general equilibrium model for Myanmar to analyse the economic and household income distribution impacts of a combined child work elimination and education programme allowing current child workers to achieve the same distribution of educational attainment as wider society over a 15-year transition period. While child work elimination would be costly for disadvantaged rural households, the combined programme may leave them better off, though only after a long transition period. At the societal level, the opportunity costs of child work elimination outweigh the long-term economic benefits of education over our 20-year horizon. In spite of the lack of societal economic benefits, our proposed reforms do seem to be advantageous, dealing with the unethical and appalling continuation of child labour practices while improving income distribution in favour of disadvantaged rural households. This would allow Myanmar to move towards the goal of SDG8, 'Decent Work and (Inclusive) Economic Growth', while training current generations to support an ageing Myanmarese society.

A strand of the political economy literature emphases the negative effect of income inequality on growth and poverty, which materialises through redistribution. The theoretical expectation is that high inequality would lead to higher redistribution via the collective action of the median voter. Most of the empirical literature testing the redistribution hypothesis has been conducted in the context of industrialised economies. This paper examines this hypothesis with specific reference to sub-Saharan Africa, a region characterised by high levels of income inequality and limited redistribution. We adopt an instrumental variable approach to unpack the determinants and plausible mechanisms underpinning this relationship. In the analysis, we account for the effect of omitted top income earners in income inequality estimates, given their weight in the shape of the income distribution and their influence in redistributive policies. Overall, we find a positive relationship between inequality and redistribution, especially among middle-income countries. Further examination reveals that the abundance of natural resource rents seem to be the driving force affecting tax policy choices, which in turn exacerbates income inequity and undermines progressive redistribution. Thus, our results do not provide strong evidence to support the propositions of the median voter theorem but instead, seem to aligned more closely to the predictions of the multiple steady states hypothesis.

Despite major public finance reform efforts over the last decade, Myanmarese public finances continue to be characterized by relative weakness in revenue collection, budget execution, and long-term sustainability. Myanmar is therefore in need of comprehensive public finance reform. Two top priorities of the Myanmar Sustainable Development Plan are to establish a fair and efficient tax system to increase government revenues, and to ensure effective public financial management. In this paper, we analyse the scope for fiscal tax reform to finance future Myanmar Union budget deficits and lower the need for central bank financing. Specifically, we employ a newly developed dynamically recursive computable general equilibrium model for Myanmar to analyse the economic efficiency and household income distribution impacts of employing four tax instruments, including the expansion of existing commercial taxes, customs duties, and corporate taxes, and the introduction of new secondary and tertiary education payroll taxes, to finance 2022– 40 government budget deficits. Our results demonstrate that eliminating Myanmarese government budget deficits could release savings for future capital accumulation and lead to net present value GDP gains, regardless of tax instrument, but also that real household welfare losses will be substantial and potentially persist throughout our 20-year horizon. While the payroll and enterprise tax instruments are identified as efficient and progressive, they are likely to suffer from weak tax bases, implying that commodity-focused tax instruments, including sales taxes and progressive but less efficient import tariffs, will need to continue to form the core of any comprehensive tax reform in Myanmar.

Since the initiation of the Doi Moi reforms in 1986, it is widely believed that Vietnam's small and medium enterprises (SMEs) have critical characteristics that contribute to the country's impressive economic and social development over recent decades. Specifically, SMEs represent a source of economic growth, savings, job creation, and increased competition. Despite their vast potential, general knowledge on their characteristics as well as the opportunities and constraints they were facing was lacking, thus making it difficult for evidence-based government policy recommendations to be formulated. This chapter sheds light on the Vietnam SME database covering surveys over 2005–15, and represents the basis for the analytical work in books chapters. The authors outline the purpose behind the data collection—including sample design, firm and owner characteristics, attrition—comparing the data with the characteristics of Vietnam's overall enterprise population.

The purpose of this report is to give a nuanced picture of the SME business environment in Myanmar as a complement to the 2017 MSME quantitative survey conducted within the project 'Towards Inclusive Development in Myanmar'. This project is a collaboration between the Central Statistical Organisation (CSO) of the Ministry of Planning and Finance of Myanmar, the United Nations University World Institute for Development Economics Research (UNU-WIDER), and the University of Copenhagen, supported financially by Denmark. We build on quantitative results and explore in more detail a set of selected topics, as well as specific industries relevant for policy focus. We also identify areas in which our quantitative data leave room for improvement in explaining reality and specify guidelines for future modifications of the MSME survey questionnaire, as well as points of attention in future analysis of quantitative data. The analysis uses qualitative data and responses from 108 in-depth interviews with enterprise owners, managers, employees, and officers from relevant government institutions. We conducted the interviews over the course of six weeks during the period from March to October 2018 in 15 townships from nine regions and states in Myanmar. The respondents were chosen from the quantitative survey data using a combination of purposeful and random sampling aiming to maximize the breadth and relevance of information. The interview team comprised both Myanmar and English language speakers, so the interviews were carried out with interpretation in both languages. We focus on three topics. First, we provide a qualitative in-depth analysis of informality, putting forth the challenges SMEs face when interacting with different government institutions. Second, we analyse the gender wage gap, particularly focusing on occupational segregation. Third, we describe the wood sector and its particularities.

Improvements in agricultural productivity and reductions in marketing costs in Mozambique are analysed using a computable general equilibrium (CGE) model. The model incorporates detailed marketing margins and separates household demand for marketed and home-produced goods. Simulations improving agricultural technology and lowering marketing margins yield gains across the economy, but with differential impacts on factor returns. A combined scenario reveals significant synergy effects, as welfare gains exceed the sum of gains from the individual scenarios. Factor returns increase in roughly equal proportions, an attractive feature when assessing the political feasibility of policy initiatives. ; Non-PR ; IFPRI1 ; TMD

At independence in 1975, the Frelimo government took over public administration from the colonial system and started to transform it. The public financial management (PFM) system was adapted to the central planning and management of the economy in line with nationalist and Marxist-Leninist thinking. Collapse followed in the mid-1980s, amidst the Cold War and the liberalization of the economy. The PFM system was gradually and systematically reformed towards more transparent and efficient mechanisms, and successful reforms did coincide with high rates of economic growth for more than 20 years, after 1993. The reform process was supported by sizeable foreign aid to the extent that Mozambique became highly aid dependent. As the nationalist agenda became more forceful from around 2005-10, when the existence of large natural gas reserves in the Rovuma Basin was confirmed, the extraction of natural resources became the main government focus as a source of public revenue, and severe cracks in the PFM system started to emerge. The 'hidden debt' scandal in 2013-14, the renewed conflict between Frelimo and Renamo from 2013, and the insurgency war in Cabo Delgado from 2017 put the PFM system under pressure and performance suffered accordingly with significant economic and social costs. The paper brings out how difficult it is to make institutional reforms work, within a structure of political and economic power that may not benefit from them, even in the context of a high degree of aid dependence.

This paper explores agricultural performance of Mozambique, its institutional weaknesses, and the underlying factors that underpin an unsatisfactory performance during many decades. We point to the role of systemic political instability and violence combined with challenges to state legitimacy. Regional divides and lack of market integration continue to influence in a critical and all-encompassing manner. Finally, the way in which the interests of the elite and the influence of donors have affected progress in the agriculture sector suggests the need for concerted reorientation in existing strategies, policies, and priorities. This is reinforced by future challenges, including the extractive industry; population growth and internal migration; national and international markets; climate change; and COVID-19. We highlight the need to place the future of agriculture in Mozambique within a long-term perspective, focusing on the adoption and stabilization of an institutional framework aimed at increasing agricultural productivity and preserving the environment.

This paper explores the productivity performance of the manufacturing sector in Vietnam between 2001 and 2007. Total Factor Productivity indices are computed using an index number approach and the productivity performance of manufacturing sub-sectors is analysed. We find that productivity increases in almost all sectors and that for many sectors the dispersion in productivity is declining over time. However, for the most productive sectors the gap is widening suggesting that productivity is being driven by the most productive enterprises getting better, leaving the least productive behind. The empirical analysis reveals investment and technology usage as important determinants of enterprise productivity levels. Specifically, higher levels of productivity are found in foreign- and state-owned enterprises, driven almost entirely by higher levels of investment and technology usage. Our results provide a strong quantitative basis in support of ongoing government initiatives aimed at encouraging investment in technology and innovation. They also point to the clear need for such initiatives to be complemented by measures to provide a more balanced distribution of investment, such that a level playing field is created for the different types of enterprises.

Following Mozambique's economic collapse in 1986, the country began a wide-ranging process of reform, with the support of the international community. The diagnosis was of an economy that failed to maintain monetary control, consumed beyond its means, focused production excessively on nontraded goods, and relied on inefficient and inflexible microeconomic structures. Nevertheless, Mozambique was also at war. The pace of stabilization and structural adjustment quickened after 1992, when, concurrent with the demise of apartheid, civil strife finally came to an end. After more than 10 years of adjustment, the reform program has now been essentially implemented. Yet, this does not imply, as shown in this study, that sufficient conditions for sustained economic development are in place. Mozambique remains very poor, and even under highly optimistic assumptions about the future, the development process is set to last for decades. This report attempts to respond to some of the basic development challenges facing Mozambique and to provide both qualitative and quantitative insights for policymaking in the years to come. Throughout, the issues addressed are approached from an economywide perspective Finally, this study aims to demonstrate that sophisticated analytical tools can be of significant value, even in "data-poor" situations. The need for a clear perspective and in-depth understanding of the socioeconomic complexities of the country in question stands out. However, while the analyses in this report are Mozambique specific, the basic analytical approach is replicable and could be brought to bear on other countries both within and outside Africa. -- From Authors' Introduction. ; PR ; IFPRI1; Research Methodology and Models ; TMD

This working paper documents the construction of the 1994 and 1995 Mozambican social accounting matrices (SAMs). The aggregate macro-SAM is called MACSAM, and the disaggregated version is MOZAM. With 13 agricultural and two agricultural processing activities, the primary sectors are particularly well represented in MOZAM. There are also 40 commodities, and the three factors of production: agricultural and non-agricultural labour, and capital. Two household types (urban and rural) are identified, and government expenditure is divided into two separate accounts, recurrent government and government investment. MOZAM includes a number of innovative features, partly reflected in household demand, where a distinction is made between home consumption of own production and private consumption of marketedcommodities. Home consumption avoids trade and transport margins. Thus, MOZAM captures prevailing incentives for households to avoid markets and function more as autonomous production/consumption units. The disaggregation of household demand brings marketing margins in focus in relation to decisions regarding production. However, transactions costs are also important for exported and imported commodities. Domestic, export and import marketing margins are therefore explicitly broken out for each activity in MOZAM. Procedures used to balance MACSAM and MOZAM are also documented, including the use of maximum entropy methods to estimate the SAMs, which make efficient use of all available data in a framework that incorporates prior information and constraints. ; Non-PR ; IFPRI1 ; TMD