The country is one of the poorest nations in Southeast Asia, suffering from decades of stagnation, mismanagement and isolation. The lack of an educated workforce skilled in modern technology contributes to the growing problems of the economy. The country lacks adequate infrastructure. Goods travel primarily across the Thai border and along the Irrawaddy River. Railways are old and rudimentary, with few repairs since their construction in the late 19th century. Highways are normally unpaved, except in the major cities. Energy shortages are common throughout the country including in Yangon and only 25% of the country's population has electricity.
The government has the majority stakeholder position in all of the major industrial corporations of the country (from oil production and consumer goods to transportation and tourism).
The national currency is Kyat. Inflation averaged 30.1% between 2005 and 2007. Inflation is a serious problem for the economy.
In recent years, both China and India have attempted to strengthen ties with the government for economic benefit. Many nations, including the United States and Canada, and the European Union, have imposed investment and trade sanctions on Burma. The United States and European Union eased most of their sanctions in 2012. Foreign investment comes primarily from China, Singapore, the Philippines, South Korea, India, and Thailand.
The major agricultural product is rice, which covers about 60% of the country's total cultivated land area. Rice accounts for 97% of total food grain production by weight. Through collaboration with the International Rice Research Institute 52 modern rice varieties were released in the country between 1966 and 1997, helping increase national rice production to 14 million tons in 1987 and to 19 million tons in 1996. By 1988, modern varieties were planted on half of the country's ricelands, including 98 percent of the irrigated areas. In 2008 rice production was estimated at 50 million tons.
Burma is also the world's second largest producer of opium, accounting for 8% of entire world production and is a major source of illegal drugs, including amphetamines. Opium bans implemented since 2002 after international pressure have left ex-poppy farmers without sustainable sources of income in the Kokang and Wa regions. They depend on casual labor for income.
Burma produces precious stones such as rubies, sapphires, pearls, and jade. Rubies are the biggest earner; 90% of the world's rubies come from the country, whose red stones are prized for their purity and hue. Thailand buys the majority of the country's gems. Burma's "Valley of Rubies", the mountainous Mogok area, 200 km (120 mi) north of Mandalay, is noted for its rare pigeon's blood rubies and blue sapphires.
Many U.S. and European jewelry companies, including Bulgari, Tiffany, and Cartier, refuse to import these stones based on reports of deplorable working conditions in the mines. Human Rights Watch has encouraged a complete ban on the purchase of Burmese gems based on these reports and because nearly all profits go to the ruling junta, as the majority of mining activity in the country is government-run. The government of Burma controls the gem trade by direct ownership or by joint ventures with private owners of mines.
Other industries include agricultural goods, textiles, wood products, construction materials, gems, metals, oil and natural gas.
Since 1992, the government has encouraged tourism in the country; however, fewer than 270,000 tourists entered the country in 2006 according to the Myanmar Tourism Promotion Board. Burma's Minister of Hotels and Tourism Saw Lwin has stated that the government receives a significant percentage of the income of private sector tourism services.
The most popular available tourist destinations in Burma include big cities such as Yangon and Mandalay; religious sites in Mon State, Pindaya, Bago and Hpa-An; nature trails in Inle Lake, Kengtung, Putao, Pyin Oo Lwin; ancient cities such as Bagan and Mrauk-U; as well as beaches in Ngapali, Ngwe-Saung, Mergui. Nevertheless much of the country is off-limits to tourists, and interactions between foreigners and the people of Burma, particularly in the border regions, are subject to police scrutiny. They are not to discuss politics with foreigners, under penalty of imprisonment and, in 2001, the Myanmar Tourism Promotion Board issued an order for local officials to protect tourists and limit "unnecessary contact" between foreigners and ordinary Burmese people.
Flights are available from most countries, though direct flights are limited to mainly Thai and other ASEAN airlines. In the past, there were only 15 international airlines and increasing numbers of airlines have began launching direct flights from Japan, Qatar, Taiwan, South Korea, Germany and Singapore
From May 2012 to February 2013, the United States began to lift its economic sanctions on Burma. In March 2012, a draft foreign investment law emerged, the first in more than 2 decades. Foreigners will no longer require a local partner to start a business in the country, and will be able to legally lease but not own property. The draft law also stipulates that Burmese citizens must constitute at least 25% of the firm's skilled workforce, and with subsequent training, up to 50-75%.
In 2012, the Asian Development Bank formally began re-engaging with the country, to finance infrastructure and development projects in the country. The United States, Japan and the European Union countries have also begun to reduce or eliminate economic sanctions to allow foreign direct investment which will provide the Burmese government with additional tax revenue.