Economy

Smuggling Across Borders With China, Thailand Rising: Minister

By Kyaw Hsu Mon 21 January 2015

RANGOON — Minister of Commerce Win Myint has said that the volume of goods being smuggled across Burma’s borders with China and Thailand is on the rise, despite recent efforts by authorities to crackdown on the rampant, unregulated trade.

“Because of an increase in smuggling the normal trade volume is going down,” Win Myint told reporters on the sidelines of a conference on small and medium enterprises (SMEs) in Rangoon on Tuesday.

“The smuggling of goods hurts the SMEs and consumers’ rights,” he said in a speech. “That is why we are taking serious action, cracking down with our mobile [anti-smuggling] teams.”

“We are going to negotiate with China and Thailand to stop cross-border smuggling of goods. I’m going to Thailand next week,” the minister added.

Yan Naing Tun, a commerce and consumer affairs department director general and leader of the ministry’s anti-smuggling mobile teams, told The Irrawaddy, “The amount of smuggled goods this [fiscal] year 2014-2015 is higher than in 2013-2014.”

He said rampant smuggling was not only undermining regular trade and affecting government revenues, but was also threatening consumer health as many of the Chinese food stuffs being smuggled into Burma were often from low-quality and not subject to food quality controls.

Large-scale smuggling across Burma’s remote and porous borders with southern China and Thailand has long thrived. Unregistered gemstone, illegal timber, forest products and wildlife are smuggled out of Burma. Goods smuggled from China include textiles, tobacco, alcohol, electrical appliances such as mobile handsets, and precursor chemicals used in illegal drug production in Shan State.

Recently, the Commerce Ministry announced its mobile anti-smuggling teams had seized more than $27 million worth of smuggled goods within two years from 2012 to 2014 along Shan State’s border with southern China.

Chit Khine, a businessman involved in large-scale import and export of goods, told The Irrawaddy that cracking down on smuggling alone would not be enough to boost regular cross-border trade.

He said the government should simplify rules on taxation and transport to discourage smuggling, while also creating a strategy to promote regulated export of Burmese goods.

“The reason why the amount of smuggled goods is rising is because of taxation of exported and imported goods,” said Chit Khine, who chairs the Myanmar Rice Federation.

“The government doesn’t seriously work for trade promotion. For example, in rice exports and other private sectors are doing promotion for rice exports. But actually, promoting trade involves government-to-government agreements.”

Trade between Burma and its neighbors has been increasing in recent years, but the country is suffering from a growing trade deficit as its import growth continues to outstrip export expansion.

In the nine months from April 1, 2014, to Jan. 2, the total trade volume reached nearly US$21 billion, according to Ministry of Commerce figures, surpassing the total previous fiscal year’s $18.6 billion in trade. Export from April to January accounted for $8.6 billion, while imports reached $12.3 billion

Burma’s main imports are electronics, agriculture-based equipment, automobiles, refined oil products, processed foods and machinery. The country’s biggest exports are commodities like rice, timber, jade and gems, oil and gas, and beans and pulses.

Additional reporting by Thit Nay Moe.

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