Commerce Ministry to Cut Luxury Goods Imports
By Htet Naing Zaw 26 December 2016
NAYPYIDAW — Burma’s Ministry of Commerce plans to restrict import of luxury goods including cosmetics in an effort to cut the country’s substantial trade deficit.
The ministry also plans a tax on liquor and cigarettes sold at duty-free shops in airports, ministry spokesperson U Khin Maung Lwin told The Irrawaddy.
“We will run a trade deficit if we allow duty-free shops to import things as they wish—the price of some cosmetics is in the six-digits. We will not impose a ban on them, we just plan to reduce imports in order to cut the trade deficit,” said U Khin Maung Lwin.
Burma runs a huge trade deficit of billions of dollars every year and restricting import of unnecessary items would effectively tackle this, he added.
Burma imported more than US$16 billion of goods in the 2014-15 fiscal year and exported just over $11 billion, leaving a deficit of more than $4.9 billion, according to the commerce ministry.
In the 2015-16 fiscal year Burma’s trade volume was $27.7 billion and the export volume was $11.1 billion.
In the current 2016-17 fiscal year until Nov. 25 the country’s trade volume reached $16.7 billion but exports accounted for just $7.3 billion.
Advisor to Parami Energy Group of Companies U Tin Cho blamed Burma’s lack of export products for the country’s massive trade deficit.
“We don’t have high-quality items to export while we have to import many items, which leads to this problem,” said U Tin Cho.
He welcomed the move to control the import of luxury goods, but stressed that the ministry must deploy effective methods to deliver results.
“We have to import necessary items such as pharmaceuticals, so if we spend unnecessarily on luxuries, we will be short of US dollars to purchase necessities,” he said.
Burma received more than $3.2 billion in foreign investment from April to October in the current 2016-17 fiscal year, a decline of $500 million from $3.7 billion compared to the same period in the 2015-16 fiscal year, according to the Directorate of Investment and Companies Administration.