Business

Observers Urge Govt To Create New Export Markets, Boost Trade Volume

By Kyaw Hsu Mon 28 June 2016

RANGOON — A recent World Bank report says that trade growth in Burma could reduce poverty and boost prosperity, but local observers say in order for that to happen the government must implement economic policies that increase export markets.

The Myanmar Diagnostic Trade Integration Study released last week by the World Bank

said the keys to success are further reforms to encourage more open trade—a shift away from over-dependence on natural resources and the development of soft infrastructure.

The statement continued that Burma’s trade volume is increasing quickly and there is enormous potential for future growth. But, since the new government assumed power in April, clear economic policies have yet to be announced. Many international organizations, including the World Bank, have taken an active interest in working with Burma’s government to develop its economic prospects.

Minister of Commerce Than Myint said the government would use the World Bank’s report as a blueprint to develop Burma’s trade program, and the minister invited both technical and financial partners to collaborate.

“The country has a comparative advantage in its significant natural and agricultural resources, untapped labor and a location that shares borders with markets accounting for 40 percent of the world’s population,” said Abdoulaye Seck, World Bank country manager for Burma.

He added that Burma’s reintegration into the global economy presented the country with a unique opportunity to translate trade growth into more job opportunities, income gains and prosperity, as well as decreased poverty.

Soe Tun, vice chairman of the Myanmar Rice Federation said he was not satisfied with the recent trade volume, as many exporters were waiting to see what policies the new National League for Democracy-led government would enact.

“By the numbers, export volume has declined, especially for rice and agricultural products. We do not have an African market now, and the Chinese market is declining. We need government support for this industry,” he said.

“International organizations have a positive point of view, but in reality, the trade situation here is getting worse,” Soe Tun added.

He explained that rice export expectations for this fiscal year are expected to decline from last year’s 1.8 million tons.

“It may be less than 1.5 million tons this year,” the vice chairman said. “That’s why the government needs to have better strategies.”

Maung Maung Lay, vice chairman of the Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI), said that the World Bank report had a positive tone but he does not expect much as long as the government still needs to help the private sector.

The government needs to provide a one township-one product strategy and support small and medium enterprises in order to boost trade volume, he added.

“One township, one product” projects—in which the government encourages diversification and commercialization by considering each township’s existing local resources as viable exports—have had success in neighboring countries, but fizzled in Burma under previous governments.

Burma imported some US$16 billion in goods in the 2014-15 fiscal year, and exports totaled more than $11 billion, leaving a deficit of $4.9 billion, according to ministry estimates. The World Bank stated that a boom in trade and investment has boosted average economic growth by more than 7 percent per year.

The report also emphasized that trade-related reforms and programs could help reduce poverty and support the peace process. The World Bank recommended that Burma address skills shortages, improve access to finance, develop the tourism sector, and connect lagging regions to markets through better infrastructure.

Loading