The condition of the Myanmar economy has worsened through 1991. Economic sanctions, including the suspension of Official Development Assistance (ODA), imposed on the State Law and Order Restoration Council (SLORC) by Western countries, led to an economic crisis in Myanmar. In particular, a crippling short age of foreign exchange affected every sector, resulting in stagnant production, energy shortages, and deteriorating living conditions among the people. In 1988, the SLORC initiated economic reforms but they seem to have had little effect. It can be said that the last time Myanmar was in a similar state was during the Ne Win Revolution in 1962. The purchasing power of money has declined, causing an inflationary spiral. To tide over such economic difficulties, the SLORC has to hold down inflation before all else. However, there are many impediments in the way of an effective anti-inflation policy. Myanmar under the SLORC's rule has political and social obstacles to economic progress, and economic policy alone cannot produce the desired results. Normaliza tion of relations with foreign countries is crucial for economic rehabilitation. Unless developed countries remove their sanctions, foreign private investment will not be forthcoming in any significant scale and foreign trade will not be normalized. ODA is indispensable for Myanmars economic recovery and development.