Militarisation, Energy Consumption, CO2 Emissions and Economic Growth in Myanmar

Abstract

The cointegration and causal relationships amongst militarisation, energy consumption, carbon dioxide (CO2) emissions and economic growth in Myanmar are investigated for the period of 1975–2014. Myanmar was governed by a military regime until 2011 with high levels of military expenditure. This study adopted an extended neoclassical production function framework utilising the autoregressive distributed lag approach to investigate the causal relationships. Estimation showed that a 1% increase in military expenditure led to a 0.63% decrease in GDP, whereas a 1% increase in energy consumption increased GDP by 4% in the long run. The bootstrap-corrected causality test located bidirectional causality between energy consumption and CO2 emissions and unidirectional causality running from economic growth to energy consumption. Policy recommendations promoting Myanmar’s economic growth include reducing military spending which would contribute to a reduction in CO2 emissions and encourage efficient energy consumption.
KEYWORDS:

• Bootstrap-corrected causality
• CO2 emissions
• economic growth
• energy consumption
• militarisation
• Myanmar

Description