Abstract for: Using System Dynamics to Analyze Social and Economic Challenges for Myanmar

Three years ago Myanmar, also known as Burma, experienced a historical transition from a dictatorial military-led government to a civilian one. The newly established government has repeatedly expressed its intentions of opening up to the world after decades of seclusion resulting from long-term economic sanctions imposed mostly by western countries. Within this context, this study describes the results of a system dynamics model commissioned for democracy leader Aung San Suu Kyi by the CEO of one of Myanmar’s biggest importers of heavy machinery to investigate the implications of an agricultural vs. an industrialized economic model. Overall, model results suggest (1) demographic dividends from the working-age population segment should be sized immediately before this segment gets old, (2) even aggressive investments in education will not be enough to build the large stock of high-skilled labor the country demands, (3) investments favoring big mechanized farms will result in low wages both in the agricultural and industrial sector, and (4) investment in manufacturing does not by default connect to high wages as expected. Although this study was conducted throughout a 2-week period, it produced insights that raise questions about the way Myanmar is laying out its new economic model for the future.