Traders Call for Changes to Import, Export System
By May Lay 16 October 2012
A volatile trade in earnings papers—certificates of export income that importers need in order to get permission to bring goods into Burma—is hobbling the country’s economy, say businessmen who want the state-owned Myanmar Economic Bank to step in and regulate the trade.
“After we export the goods to foreign countries, we only receive earnings papers, which we then have to sell to importers,” said Min Soe, an exporter of rice and pulses at the Bayintnaung commodities market in Rangoon.
“It’s the only way to change the paper into cash, but it’s very difficult, because it’s all done unofficially.”
Making matters worse for exporters is the fact that they are only paid for the transactions—usually carried out through brokers—after the importers have sold their goods domestically.
“It’s very risky for us,” said Min Soe. “That’s why we want the government to arrange an official exchange between exporters and importers. There’s no reason why the Myanmar Economic Bank can’t do this.”
He added that the problem would only get worse as Burma seeks to increase its exports as part of its efforts to rebuild its economy after decades of neglect.
“Many foreign investors are very keen on exporting agricultural products, especially now that the US has opened its markets to goods from Burma. Local business people are also preparing to increase exports to the US. Without an official market for export earnings, how can we achieve economic development?”
Meanwhile, the government announced recently that the state-owned Myanmar Agricultural and Development Bank will cooperate with the Myanmar Agribusiness Public Cooperative, backed by the Myanmar Rice Federation, to provide farmers with loans and other financial support.
Burma has undertaken a number of financial reforms over the past year, including plans to abolish Foreign Exchange Certificates ahead of the 2013 SEA Games, which Burma will host next December.