Export surge needed

National export strategy seeks trade boost to strengthen economy


Traders buying jade and precious stones to export. Photo: EPA

Traders buying jade and precious stones to export. Photo: EPA

An export strategy aimed at integrating Myanmar more broadly into the world economy has been launched by the government with the support of an international trade organisation and the German government.

The nation’s first National Export Strategy was launched by Vice President U Nyan Tun, Commerce Minister U Win Myint and International Trade Centre executive director Ms Arancha González at a ceremony in Nay Pyi Taw on March 25.

The five-year strategy was developed by the Commerce Ministry, with technical support from the ITC, a joint agency of the World Trade Organization and the United Nations, financial assistance from the German Ministry for Economic Cooperation and Development and implementation support from the German Agency for International Cooperation (GIZ).

The ITC has been working at three levels – with government and policy makers, trade and investment support institutions and small and medium enterprises – to help develop the strategy.

Discussions during the last 18 months among the ITC and the public and private sectors resulted in the selection of seven priority product categories with strong export trade potential. The NES will focus on increasing production and value-adding in the seven categories: beans, pulses and oilseeds; fisheries; forestry products; textiles and garments; rice; rubber; and tourism.

The process “obviously [is] going to have bumps along the road,” said Ms González, who added that Myanmar’s trade potential was challenged by what she called the three lows: low value adding, low productivity and low quality.

Ms González said low quality was a big issue for a country with high foreign trade potential in processed fisheries and forestry products. Market access was also limited by the lack of a quality verification process.

A further challenge was Myanmar’s need to develop greater diversity in its trading partners. Thailand accounted for 43 percent of exports, while China and India share another 30 percent but there were good opportunities in the wider global market.

As well as the European Union and the United States opening to Myanmar exports, China and India also provided duty free and quota free policies for least-developed nations such as Myanmar. But these opportunities were unknown to most of the small and medium enterprises that account for 98 percent of the economy.

There are 4,300 enterprises registered with the Union of Myanmar Federation of Chamber of Commerce and Industry, of which 90 percent operate in and around Yangon, and the NES is also aiming for a more inclusive national trade network to improve the socio-economic situation throughout the country.

Another challenge was that most exports were unprocessed natural resources such as gas (that accounts for 42 percent of exports) and wood (11 percent), an issue linked to job creation because adding value to products created more employment opportunities.

“This country has relied too long on exports of commodities,” said Ms González said. “If you increase the export of commodity goods by about a third, you don’t increase your labour by the same proportion,” she said. “You increase your labour if you add value.”

One of the projects implemented by ITC has focussed on tourism sector development in Kayah State. The region’s potential for attracting travellers from throughout the world has been demonstrated by the flourishing tourism economy on the Thai side of the border. Yet Kayah State faces fundamental problems to develop tourism, including travel restrictions, a huge military presence and areas with landmines. Ms González said discussion had focussed attention on the problems and they could be addressed.

She said the tourism sector nationally is in desperate need of training programs for hotel and hospitality industry employees to raise their skills to international standards.

“The recipe that the public and private sector thinks is the winning one for Myanmar mixes intelligently university education with technical education,” said Ms González, adding that there would be increased emphasis on technical education and vocational training to overcome shortages.

Ms González said one of the main benefits of an increase in exports would be more opportunities for the poor to acquire jobs and raise their living standards.

“There is no way you can move up the value chain, there is no way you diversify, there is no way you move up your productivity, without increasing levels of salaries and reducing the labour cost differential,” she said.


This Article first appeared in the April 23, 2015 edition of Mizzima Weekly.

Mizzima Weekly is available in print in Yangon through Innwa Bookstore and through online subscription at www.mzineplus.com  

This Article first appeared in the April 23, 2015 edition of Mizzima Weekly.

Mizzima Weekly is available in print in Yangon through Innwa Bookstore and through online subscription at www.mzineplus.com  

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