Sunday, August 20, 2017

Momentum needed on international trade progress, say officials

Trade and finance officials are looking forward to building on the experience and achievements of the past five years of democratic and financial transition. A great deal was achieved under the previous administration, but much has yet to be done fully to integrate Myanmar into the regional and global marketplace, they said.

Workers load cement onto a truck at a port in Yangon. Photo: Zarni Phyo / The Myanmar TimesWorkers load cement onto a truck at a port in Yangon. Photo: Zarni Phyo / The Myanmar Times

The lifting of some European and United States sanctions, the flood of international investment, and the opening-up of the country to tourism have all helped spur the economy. International trade has risen from about US$18.1 billion in the 2011 fiscal year to $29.2 billion in 2014, according to Ministry of Commerce data.

As of early March, the figure for the current fiscal year was $26.2 billion. The slight slowdown is likely due to the effect of severe nationwide flooding that devastated cropland across Myanmar in 2015.

Myanmar has also benefited from participation in the World Trade Organisation’s Enhanced Integrated Framework, a facility to assist Least Developed Countries to promote economic growth and poverty reduction.

A whole alphabet soup of international and foreign governmental organisations and NGOs have come forward to advise and assist Myanmar in integrating into the international political and commercial community. More than 30 countries have granted Myanmar special trading status.

Admission to the EU Generalised System of Preferences in 2013 allowed Myanmar to increase trade with European countries and connect to new markets, said U Win Myint, director of the commerce ministry’s Trade Promotion Department.

None of this, however, can conceal the fact that Myanmar imports more than it exports, running a perennial trade deficit. The development and implementation of a national export strategy to redress the balance has to be a major focus of the incoming government. That will be the job of the Myanmar Trade Promotion team. Work has already begun, with the opening of representative offices in nine countries including, in 2015, South Korea.

At the same time, the Ministry of Commerce has simplified and speeded up its procedures for granting export and import licenses, said U Win Myint.

“This is a service we offer to everyone,” he said, adding that a licence can now be granted within 24 hours, down from the three weeks it used to take.

“Exports will rise to the hundreds of millions of dollars where before they were in the tens,” he said. Licence applications, formerly accepted only in Nay Pyi Taw, can now be made in Yangon and at border posts.

Trade liberalisation can have its disadvantages, as anyone forced to sit in Yangon’s traffic jams can attest. The flood of affordable vehicles into the country since 2011 has filled the streets of the former capital. And critics say the notoriously rapacious jade industry in Hpakant, Kachin State, is also using machinery imported from the United States and Japan.

“The outgoing government greatly simplified importation procedures, not just for cars, but also for other products,” said U Win Myint. However, many goods are still on the restricted list, including a total of 4405 items, according to U Win Myint, for which licences are required, and the system has yet to go fully online. At the same time, rice exports have boomed, and new products have emerged for export.

U Mg Aung, an adviser with the Ministry of Commerce, said increased trade had brought both successes and failures. “There hasn’t been much difference in our trading relationship with America, sanctions against Myanmar are still in place, and we have not been admitted to the US Generalised System of Preferences,” he said.

The US resumed considering Myanmar for special trade preferences last year.

One unwanted result of trade liberalisation has been the increase in smuggling, particularly around the border trading posts – although accurate and updated figures are hard to come by. A mobile team set up to combat illegal trade was disbanded toward the end of last year after some initial success. Illegal trade has increased sharply since then, and U Mg Aung said smuggling was a major issue.

“Trade and financial policy are related,” he said. “If the incoming government cracks down on smuggling, it will benefit the entire economy.”


Translation by Khant Lin Oo, Emoon and Kyawt Darly Lin