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National Export Strategy: Potential And Barriers

A common business adage states that even when a strategy is theoretically sound, it may not achieve results if there are flaws in implementation. While Myanmar rushes to prepare for the ASEAN Economic Community (AEC), many worry about the proper implementation of the economic strategy for trade that was developed in Myanmar.

The National Export Strategy (NES), which was announced in late March, intends to deal with the issue of low-quality exports and was the result of two years of cooperation between government officials, business owners and business associations. It is the country’s first comprehensive economic strategy for exports and services and it has been praised by domestic trade societies as a model of legislative competence.

The director of Ministry of Commerce, U Win Myint, who was a major contributor in planning this strategy, has publicly commented, “There could have been some defects if it was developed only by the government side, but now every party from different perspectives participated in this, and we are confident in its readiness.”

He added, “We have already been focusing on agricultural exports, namely rice, legumes and rubber. The garment industry, fisheries, wood-based products, and hotels and tourism have emerged as potential new sectors for the economy. Additionally, many trade goods which are not in the strategy must also be encouraged. We all have to discuss what types of goods should be added and what type of implementation should be done for the selected goods.”

Disagreements

U Myint Soe, director of Trade Development Department’s Policy and Accounting Sub-Department, expressed concerns, saying, “Depending on the market situation, EU countries will collaborate with us, but first we need to find markets for the goods. The strategy is largely theoretical.

“It is essential for the commerce sector and it needs to be flexible. Occasional meetings should be held and the strategy should be readjusted if there are any problems. There has already been some lowering of trade barriers and it is being estimated that the business will be more open as taxes are reduced.”

There is still time to modify this plan, and the authorities will consider the views and comments from those of private sectors as this strategy is intended to run over long term. However, as of yet, there has been no public statement regarding implementation of the plan’s contents, and thus some foreign investors have expressed concerns that it will be not easy to take this plan from theory to reality.

There will be some international organisations such as GIZ, World Bank and ITC which can bring assistance to those sectors in need.  Joint Secretary of the Myanmar Industries Association U Aung Min says, “To be be able to challenge illegal trade, this plan must be executed deliberately and strategically, with control and oversight from both the government and private sector.”

Choosing Sectors

One major challenge to the export strategy is limited statistics and information, making it hard to agree on policies or categorise exports.

U Myint Soe disagreed on the plan’s choice of exports. “It is not appropriate to choose fishery and forestry products for export, as they are not truly value-added products. Since there was a restriction enacted against exporting whole logs, the export value declined, which is good from an environmental protection perspective. Fishery products have been exported through unofficial channels for many years and have become depleted.”

The export value of forestry and fishery products are $90 million and $800 million respectively, but the market value is decreasing over time, according to data from the Ministry of Commerce.

U Aung Soe, assistant director of Trade Development Centre, says, “This strategic planning might have an impact on national GDP by aiming for trade sectors that suit the country’s needs whether there is AEC or not. There were obstacles to overcome starting from production to exporting and planning becomes necessary. It is estimated that this strategic planning could also prosper SME sectors. We haven’t selected any particular countries to market the exports, the more the better.”

In spite of the foreign investors’ remarks that the plan is just theoretical and opinion conflicts between various players, this is the first step toward a more planned trade policy in Myanmar.

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