Myanmar’s military regime is threatening desperate measures to halt a runaway trade deficit that neared US$1 billion in the first six months of fiscal 2023-2024 – up around 1,500 percent on the $66 million recorded over the same period last year.
During a meeting with over 100 businesspeople in Yangon last week, junta Commerce Minister Tun Ohn revealed the trade deficit from April to September had reached close to $1 billion.
Meeting attendees said the minister urged them to boost exports while cutting imports since the regime had set an export target of $16.5 billion and an import target of $16 billion with total trade volume of $32.5 billion for the remaining half of this fiscal year.
“As the importers, we are concerned about the regime putting more pressure on our business. They can do anything they like to put us in difficulties,” said 53-year-old U Aye, who runs a business importing car tires.
The businesspeople said that though the regime could place obstacles in their way, it is unable to boost exports by supporting domestic production in agriculture, livestock, or other manufacturing sectors.
The minister revealed that exports were only at 46 percent of normal capacity, while import volume reached just 53 per cent during the first six months of this fiscal year.
He said the drop in exports of rice, broken rice, green gram, sesame, rubber, and garments was caused by falling demand from foreign buyers, muddled exchange rates, and smuggling.
The junta’s Ministry of Commerce only released figures for trade up to the end of August.
However, even the available data shows that this fiscal year’s trade deficit is on course to dwarf the equivalent figures last year.
According to the ministry, the trade deficit in the five months from April to August this year was $677 million.
The figure for the same period last year was only $162 million, with the total trade deficit for fiscal 2022-2023 reaching $732 million.
“It is the public who suffer the effect of these trade deficits since they are the end users. If they [the junta] impose pressures on traders, the traders will just adjust their prices according to the extra difficulties and costs of trading,” said economist U Moe.
The concern over import restrictions comes at a time when people in Myanmar are already suffering widespread hardship from soaring commodity prices.
Meanwhile, tackling the deficit by increasing exports would take time, he added.
“Boosting exports is not a thing they can accomplish in six months or a year. It takes years to gradually improve this sector.”
The regime had targeted a trade surplus of $1.5 billion in fiscal 2022-2023 but that projection proved out of touch with reality when the year ended in March 2023 with the country totting up an annual trade deficit of $732 million.
