The history of Burma, like that of many Southeast Asian countries, can be viewed in terms of the interaction between coastal regions and kingdoms, on the one hand, and more densely populated inland agrarian states on the other. In the case of Burma this division also largely coincides with ethnic differences between the Mon and the Arakanese in the former category and the Burmans and the Shans in the latter. External influences have typically been transmitted through overseas contact, with India and Ceylon as in the case of the pervasive cultural force of Buddhism, and later with the impact of firearms introduced by the Portuguese during the 16th century, that formed the background to the protracted conflicts between the Burmese Toungoo, Ava and Konbaung kingdoms and the Thai kingdom of Ayuthia. The beginning of the 19th century saw the start of the three wars between the Konbaung Dynasty and India‐based British imperialism in which the major role was played by disputes over trade and the Bengal‐Arakan frontier. British rule in Lower Burma after 1826 and 1854 transformed the economic system of the country even before the complete occupation after 1885 by integrating it with the expanding world economy through rice and teak exports. Between 1885 and the Japanese invasion of 1942 the impact of international trade, foreign direct investment and immigration was the major force of both expansion and contraction of the economic system, as well as of social and political change and instability, eventually culminating after 1945 in the achievement of independence. The economic policy of independent Burma, during both the civilian and subsequent military regimes, was largely shaped by the fraught legacy of overseas contact in Burmese history as noted above. The recent change of the capital from the commercial port of Rangoon to the new inland ‘city’ of Naypyidaw is thus of more than merely symbolic significance since it may reflect a desire to return to the apparently safe isolation of the interior ‘heartland’ over the vicissitudes of international trade and overseas contacts. But is that a wise choice in the increasingly globalized world of the 21st century?