Myanmar is primarily an agricultural country. Some 63 percent of the working population is engaged in growing or processing crops, while another 12 percent works in industry. Before World War II Myanmar was the world’s major rice exporter. After the war, the area of land devoted to agriculture slowly recovered, but as the population grew the surplus available for export never reached the earlier level. For a while forestry was the major export earner. Today, tourism, though small by international standards (there were 198,000 visitors in 1999), is the major source of foreign exchange. From 1962 to 1988 the government attempted to develop the economy following a “Burmese Way to Socialism,” with nationalization of most industries. The policy was a failure, however, and in the 1990s the government has opened the economy to market forces, particularly inviting foreign investment. Still, many state economic enterprises continue to lose money, the black market flourishes, and the heavy government spending for the growing military budget feeds inflation, running at 38 percent in 1994.

Nearly half of Myanmar's economic output—notably all large industrial enterprises, the banking system, insurance, foreign trade, domestic wholesale trade, and nearly all the retail trade—was nationalized in 1962–63. Small-scale industry (consisting mainly of food and beverage processing, miscellaneous manufacturing, and cottage industries), agriculture, and fishing were left in the private sector. In 1975–76, however, the government placed nationalized corporations on a commercial basis and instituted a bonus system for workers. The overall economic objectives of self-sufficiency and the exclusion of foreign investment also were revised. Foreign investment was permitted to resume in 1973 and was further liberalized in the late 1980s. Enterprises remaining in the private sector after nationalization account for only a small fraction of the nation's tax income. The balance is collected from the public sector. The principal sources of revenue are taxes (income, commercial, and customs) and receipts from state enterprises.

Economic activity traditionally has been based on agriculture and breeding of livestock. Mongolia also has extensive mineral deposits: copper, coal, molybdenum, tin, tungsten, and gold account for a large part of industrial production. Soviet assistance, at its height one-third of GDP, disappeared almost overnight in 1990-91, at the time of the dismantlement of the USSR. Mongolia was driven into deep recession, which was prolonged by the Mongolian People's Revolutionary Party's (MPRP) reluctance to undertake serious economic reform. The Democratic Coalition (DC) government has embraced free-market economics, easing price controls, liberalizing domestic and international trade, and attempting to restructure the banking system and the energy sector. Major domestic privatization programs were undertaken, as well as the fostering of foreign investment through international tender of the oil distribution company, a leading cashmere company, and banks. Reform was held back by the ex-communist MPRP opposition and by the political instability brought about through four successive governments under the DC. Economic growth picked up in 1997-99 after stalling in 1996 due to a series of natural disasters and declines in world prices of copper and cashmere. In August and September 1999, the economy suffered from a temporary Russian ban on exports of oil and oil products, and Mongolia remains vulnerable in this sector. Mongolia joined the World Trade Organization (WTrO) in 1997. The international donor community pledged over $300 million per year at the last Consultative Group Meeting, held in Ulaanbaatar in June 1999. The MPRP government, elected in July 2000, is anxious to improve the investment climate; it must also deal with a heavy burden of external debt.