"Myanmar?s economic reforms are constrained by the domestic political situation... This paper explores Myanmar?s political and economic background in the context of stalled reforms. It finds that Myanmar?s economic development is constrained by the domestic political situation, which has in turn been linked to sanctions on trade, investment and aid imposed by Western Europe and the United States. The paper states that further reforms are still required, as the previous round of reforms failed to redress problems such as: * High inflation * Persistent fiscal deficit * Widening trade deficit * Chronic foreign exchange shortage * A drastic fall in foreign investment * Inefficient state economic enterprises (SEEs) * Low value-added production... The paper notes: * The current military government is endeavouring to institute a new political order, while at the same time attempting a smooth transition from a closed to an open market economy. * The fundamental premise is that these broad political and economic reforms should not compromise the three principal main national causes including national sovereignty... The paper concludes: * Conflict between the NLD and the government and the resulting political impasse is the main obstacle for further reforms. * The realization of Myanmars reforms will depend on whether the government and the opposition can be reconciled..."