INTRODUCTION

The wide-ranging economic and institutional reforms undertaken by the government of Myanmar over the past four years has made the resource-rich country a major new investment frontier in Asia. However, the policy challenges that the country faces remain formidable, in particular, in view of the weak capacity of key policy-making institutions and the low level of human resources development. Infrastructure including transport and power is underdeveloped after decades of neglect. Myanmar's economic and institutional challenges today are similar to those faced by Vietnam after Doi Moi in the late 1980s and early 1990s. Myanmar can thus learn not only from the experience of Vietnam, but also from that of many other ASEAN countries such as resource-rich Malaysia and Indonesia, as well as the experience of Cambodia in the 1990s and even Thailand in the 1980s (Lim and Yamada 2013).

Compared to earlier development experiences in Asia, the big difference working to Myanmar's advantage today is the much more advanced stage of integration in Asia in general, and in ASEAN in particular — the latter with the ASEAN Economic Community (AEC) becoming effective at the end of 2015. A more integrated Asia has become the economic power-house of the world. The reason for this is succinctly expressed in ADB (2014): “Regional cooperation and integration provides a great opportunity to secure access to regional and global markets, technology, as well as finance and management expertise.” The development of regional production networks and intra-industry trade in parts and components offers great opportunities for Myanmar to jumpstart its economic development. Geographical location, low labour cost, abundant natural resources and the growing size of its domestic market all work to the advantage of Myanmar in an integrated ASEAN. For ASEAN investors, the political and economic reforms ongoing in the country offer vast and unique opportunities to enhance competitiveness and expand the scale of their operations. There is no doubt that Myanmar will become a major destination for outward foreign direct investment (FDI) from ASEAN countries over the next decades.