Border Trade - general
Individual Documents
Sub-title:
Battlefield losses mount as the military junta has dragged the country back into poverty.
Description:
"While the Myanmar military regime’s battlefield losses throughout the country are grabbing headlines, the country’s dire economic crisis is further undercutting the junta’s capacity to wage war.
Myanmar’s military has suffered significant battlefield losses throughout the country since an ethnic rebel army alliance launched Operation 1027 nearly six months ago, raising questions whether the military is able to retake lost territories.
Fighting across eight distinct battle scapes, the military is unable to divide and conquer, and even its emphasis on first retaking the heartland of the ethnic majority Bamars, has faltered. In Sagaing, the junta has suffered significant setbacks and only recaptured one town. in southern Myanmar, two Mon resistance organizations agreed to work together as they prepare to go on the attack against the regime.
The junta offensive to recapture Myawaddy, the largest border crossing with Thailand is another case in point. Despite the city’s strategic importance, the military’s counter-offensive has stalled, with their force being reportedly ambushed and harassed.
While manpower issues have led to forced conscription, no less important is whether the regime is able to financially sustain its military operations.
Myanmar is broke, because the junta has broken the economy since its February 2021 coup.
The junta has eviscerated over a decade’s worth of economic growth. Between 2011 and 2019, Myanmar’s economy grew by an average 6% a year, making it one of the fastest growing economies in the region. Its poverty rate fell from 49% in 2005 to 25% in 2017.
While the economy has recovered from its 2021 nadir, when GDP contracted by 18%, it’s still down 12% since the coup. The World Bank’s cautious scenario for 1% growth in 2024 seems beyond reach.
Back into poverty
The military has dragged the country back into poverty through their own incompetence. Today, over 50 percent of the population of 55 million people has fallen back into poverty.
A recent United Nations Development Program report was more dire, citing field interviews that found 49.7% of respondents living on less than 76 U.S. cents a day. That number has doubled since 2017. The UNDP noted that the urban middle class has collapsed by 50% since the coup.
Inflation remains extremely high, at over 18 percent; though it reached 29% in mid-2023, according to the World Bank. Food prices have gone up threefold since the coup, with rice up from 60,000 kyat per kilogram to 180,000.
Firms, according to a World Bank survey, were operating at 56% capacity in 2023, down by 16% from 2022. That has diminished tax receipts.
Indeed, all sources of revenue, except natural gas rents, are down since the coup, according to the regime’s own data. This has been in part due to the economic conditions as well as the NUG’s active campaign of product boycotts, the establishment of alternate lotteries, and a drive to have corporations put their taxes into escrow.
Once cash cows, the two military-owned conglomerates Myanma Economic Holdings Ltd. and Myanma Economic Corporation are hemorrhaging funds. The former has since the coup failed to pay dividends to service members who are forced to invest a portion of their monthly salary.
Foreign investment, other than that from opportunistic Chinese and Thai businesses, is fleeing the country.
The once-thriving digital payments market is under intense military scrutiny, as they seek to control the flow of funds to the opposition.
Border crossings lost
The regime’s shortage of dollars has led to arbitrary currency controls, impacting importers and exporters. The kyat lost 16% of its value in the first quarter of 2024 alone, while the price of gold increased 22%.
The war has hurt the economy in another way. Myanmar-Now reports that the State Administrative Council (SAC), as the junta is formally known, only controls 11 border crossings, which has led to a sharp loss of customs duties.
The Kachin Independence Army has captured the Lweje crossing in Kachin State, leaving only the modest town of Kanpaiktee under junta control.
The Myanmar National Democratic Alliance Army holds Chinshwehaw in Shan State, where the Chinese brokered an 80-20 revenue sharing agreement between them and the junta.
Although the SAC still holds Muse, the main border crossing with China, the Three Brotherhood Alliance has surrounded the town and controls the roads to Lashio and has begun collecting taxes.
The junta still controls Tachileik in southern Shan State, as well as a number of smaller crossings in Mon and Tanintharyi States.
In western Myanmar, the Arakan Army’s consolidation of power in northern Rakhine and opposition advances in Chin state mean that the junta has lost control of several of the border crossings to India and Bangladesh.
The loss of the Myawaddy, which has a population of 200,000, is an acute financial blow to the regime. With two bridges into Thailand’s Mae Sot, it was the largest border crossing in the country, accounting for $4.4 billion in trade since the February 2021 coup d’etat, roughly 23% of the country’s total trade.
Reuters noted a sharp decline in trade, especially exports, from April 2023 to March 2024. Bilateral trade fell by over 40 percent to $1.15 billion.
Hyperinflation threat
While junta officials are still manning the border gates, the Karen National Union and local border guards forces are in control of much of the city, and have pledged to “implement our plan to establish our administration one step at a time,” including customs.
The loss of border trade is so deleterious to the regime as their shortage of dollars – exacerbated by the U.S.-imposed sanctions on the Myanma Foreign Trade Bank and the Myanma Investment and Commerce Bank, which handled Myanmar’s dollar transactions – has forced them to prioritize trade in local currencies.
The SAC has desperately stepped up economic cooperation with any willing partners. On April 9, the government met with a Russian-led trading bloc to discuss economic cooperation, including trade, investment, direct payments and the opening of direct flights between Moscow and Yangon. Turning to the Eurasian Economic Commission is a sign of how few choices the regime has.
What is not certain right now is the degree to which the illicit economy from areas controlled by pro-junta border guards forces is ebbing. Seeking to distance himself from Naypyitaw, Col. Saw Chit Thu recently rebranded his border forces as the Karen National Army.
There is intense fighting now outside of Shwe Kokko, one of the major scam centers along the Thai border, though opposition forces have not taken the enclave.
While the MNDAA has largely cooperated with the Chinese and helped return hundreds of Chinese fugitives, many of the scam centers along the Thai border – including KK Park I and II, as well as Family Park, Gate 25, Huanya, Xingua and Dongmei – remain open.
The regime has scapegoated a number of senior-level economic officials, including its seventh-highest official, Lt. Gen. Moe Myint Tun, and his aide. But that’s all they were, scapegoats, no different than the other corrupt and incompetent generals who remain.
Thus far, and defying predictions, the junta has not resorted to turning on the printing press at their banknote facility in Wazi. But as they become more cash strapped, they are likely to do just that.
On top of all the human death and misery the generals have caused in the conduct of a war that has largely targeted civilians, the threat of hyperinflation looms..."
Source/publisher:
"Radio Free Asia" (USA)
Date of publication:
2024-04-28
Date of entry/update:
2024-04-28
Grouping:
Individual Documents
Category:
Business and the Military, Sanctions, Border Trade - general
Language:
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Description:
"In the first visit by a Chinese government official to Naypyitaw since last month’s ceasefire between the regime and the Brotherhood Alliance of ethnic armed organizations, Yunnan Province Governor Wang Yubo met junta leader Min Aung Hlaing on Tuesday.
Wang, who is also the Chinese Communist Party’s deputy committee secretary for Yunnan Province, discussed the possibility of restoring border trade and the flow of goods between Myanmar and Yunnan.
The anti-regime offensive known as Operation 1027 has disrupted Myanmar’s vital border trade routes with China. Border trade through Chin Shwe Haw, Muse, Pansai, Monekoe and Jinsanjiao has been halted.
Amid pressure from China, the Brotherhood Alliance held talks with the regime and agreed a ceasefire on Jan. 11.
As part of the truce, the two sides agreed to reopen vital Myanmar-China trade routes over which the joint ethnic armies have taken control. The alliance also agreed not to seize any more regime camps or towns in northern Shan State, while the junta agreed to refrain from conducting air strikes and shelling in the area.
One month and 10 days after the fighting ceased in northern Shan State, the Yunnan governor came to ask Min Aung Hlaing to resume border trade.
The two also discussed direct kyat-yuan payments, which they said would facilitate trade; construction of a railroad to promote bilateral trade; and cooperation in various sectors including agriculture, electricity and energy, according to junta media.
On Sunday, Min Aung Hlaing attended a Chinese New Year celebration in Yangon with Chinese Ambassador to Myanmar Chen Hai.
At the event, Min Aung Hlaing called China a “good neighbor” and a “good friend” that had stood by Myanmar through successive periods. Min Aung Hlaing said he was deeply grateful to China and the Chinese people for taking the “correct position” on the international stage regarding the internal affairs of Myanmar.
Wang also met junta Commerce Minister Htun Ohn and called for cooperation to ensure smooth trade between the two neighbors.
With the exception of Muse, the Brotherhood Alliance has taken control of all border towns in northern Shan State crucial for border trade with China.
Meanwhile, some towns along the Mandalay-Muse highway including Kutkai and Hsenwi are also now controlled by ethnic armed organizations, which levy taxes on cargo trucks in parallel to the junta’s taxation system—a problem that observers say is difficult to resolve..."
Source/publisher:
"The Irrawaddy" (Thailand)
Date of publication:
2024-02-21
Date of entry/update:
2024-02-21
Grouping:
Individual Documents
Language:
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Description:
"YANGON, Aug. 11 (Xinhua) -- Myanmar's agricultural export earnings decreased 1.25 percent to about 1.27 billion U.S. dollars year on year in the first four months of the present fiscal year (FY) 2022-2023, according to the Ministry of Commerce.
The Southeast Asian country changed its fiscal year from the original October-September to April-March beginning this year.
Despite the slight decline in agricultural export earnings, the country's total export value grew 26.71 percent to over 5.49 billion U.S. dollars year on year between April 1 and July 29 this year, official data showed.
All the agricultural export during the period was done by the private sector alone, the commerce ministry's figures showed.
Among Myanmar's agricultural products, rice is the most cultivated crop and also one of the top major agricultural products exported to foreign markets.
According to the Myanmar Rice Federation, the country exported over 733,096 tons of rice and broken rice between April and July this year.
Kyaw San Oo, a rice exporter from Mandalay, told Xinhua that the export of agricultural products including rice and broken rice this year declined because of many factors including changing financial rules and low rice yield.
"This year's rice market is not as good as last year's because rice prices are rising in domestic market and the costs of exporting rice to other countries are high," he said.
The Central Bank of Myanmar (CBM) in April ordered anyone in the country to compulsorily convert foreign currencies into kyats, but then gradually relaxed the conversion order.
The latest relaxation of the conversion order was made on Aug. 5, allowing exporters to compulsorily convert only 65 percent of their export earnings into kyats, and the CBM also changed the reference exchange rate from 1,850 kyats to 2,100 kyats per U.S. dollar.
Aung Kyaw Oo, a rice exporter from Yangon, told Xinhua that the latest moves of the central bank are better for the export market which was sluggish in recent months.
"Currently, even the demand for rice is high in the market," he said, adding that the latest easing of currency conversion orders would help both exporters and importers smoothen their business activities.
Low yield was one of the major factors that decreased Myanmar's agricultural export earnings during the period, and the country's authorities are working on producing high yields of crops.
"The priority must be given to paddy cultivation so as to increase per-acre yield. It is necessary to encourage the manufacturing of products based on agriculture and livestock farms," Senior General Min Aung Hlaing, chairman of Myanmar's State Administration Council (SAC), said Tuesday.
From April 1 to July 29 this year, Myanmar's total foreign trade was valued at over 11.02 billion U.S. dollars including the import value of over 5.52 billion U.S. dollars.
Myanmar mainly exports agricultural, animal and marine products, minerals, forest products, manufacturing goods and others to its foreign trade partners including China, Thailand, Bangladesh and India, according to the commerce ministry..."
Source/publisher:
"Xinhua News Agency" (Beijing)
Date of publication:
2022-08-11
Date of entry/update:
2022-08-11
Grouping:
Individual Documents
Category:
Agriculture in Burma/Myanmar: general and research, Border Trade - general, Business and the Military
Language:
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Description:
"Myanmar's trade with foreign countries through border gates reached over 7.8 billion U.S. dollars as of June 12 in present fiscal year (FY) 2019-2020 which started in October, according to figures released by the Commerce Ministry on Wednesday.
During the period, the country's export via border gates amounted to 5.42 billion U.S. dollars while its import shared 2.44 billion U.S. dollars.
This fiscal year's border trade increased by over 236 million U.S. dollars, compared to the same period of last fiscal year 2018-2019 when it amounted to 7.63 billion U.S. dollars, the ministry's figures said.
Muse topped the list of border checkpoints with the most trade value of 3.44 billion U.S. dollars, followed by Heekhee with 1.43 billion U.S. dollars.
The country conducts border trade with neighboring China through Muse, Lweje, Kanpikete, Chinashwehaw and kengtung with Thailand via Tachilek, Myawady, Kawthoung, Myeik, Hteekhee, Mawtuang and Maese gates, with Bangladesh via Sittwe and Maungtaw and with India through Tamu and Reed border gates, respectively..."
Source/publisher:
"Xinhua" (China)
Date of publication:
2020-06-24
Date of entry/update:
2020-06-24
Grouping:
Individual Documents
Language:
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Description:
"Myanmar's foreign trade reached over 24.5 billion U.S. dollars in the first eight months of the present fiscal year (FY) 2019-2020, according to figures released by the Commerce Ministry on Thursday.
From Oct. 1, 2019 to May 22, 2020, the export value registered over 11.5 billion U.S. dollars while the import value was over 13 billion U.S. dollars.
The country's trade deficit of present FY was over 1.52 billion U.S. dollars, up from over 874 million U.S. dollars compared to the corresponding period of the last FY.
During the eight-month period of the current fiscal year, Myanmar's manufacturing goods were exported with value of over 5.98 billion U.S. dollars while over 5 billion U.S. dollars worth of capital goods were imported to the country, the ministry's figure showed.
Myanmar's agricultural products, animal products, marine products minerals, forest products, manufacturing goods and others are exported while the country imports capital goods, intermediate goods and consumer goods.
About 80 percent of the country's foreign trade is done through sea route and its border trade is conducted with neighboring China, Thailand, Bangladesh and India..."
Source/publisher:
"Xinhua" (China)
Date of publication:
2020-06-04
Date of entry/update:
2020-06-04
Grouping:
Individual Documents
Category:
Border Trade - general, Burma/Myanmar's relationship with the Global Economy, China-Burma-India relations
Language:
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Description:
"MYANMAR will resume rice exports from May at regular volumes of 150,000 tonnes.
The Myanmar Rice Federation (MRF) said 100,000 tonnes will be shipped overseas while the remaining 50,000 tonnes will be traded at the border.
According to reports in the Myanmar Times, government estimates indicate that more than two million tonnes will be allocated for export in the current fiscal year.
About 10 per cent will be retained as food reserves for Myanmar. A total of 112 companies will handle the maritime exports while 200 companies will be involved in the border trade for May.
The MRF said about 60 per cent of the two million tonnes will consist of equal allocations from all the companies.
The remaining volumes will consist of additional allocations from companies involved in contract farming and which made investments in mills or warehouses over the last three years.
MRF is currently in negotiations with some Asean countries and for government-to-government export arrangements.
Executive member of the MRF, U Soe Thun said the country has a rice surplus of between 2.5 million and three million tonnes and these are exported every year.
The country exported about 2.5 million tonnes last year..."
Source/publisher:
"New Straits Times" (Malaysia)
Date of publication:
2020-05-01
Date of entry/update:
2020-05-01
Grouping:
Individual Documents
Category:
Border Trade - general, Rice, COVID-19 (Coronavirus)
Language:
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Topic:
cattle, trade, Ministry of Commerce, exports, livestock, farming, Ministry of Agriculture Livestock and Irrigation, China, taxation, corruption
Sub-title:
Exports of animal products have risen dramatically since the government lifted a ban on the export of live cattle and buffalo in October 2017, but new regulations have taken some of the shine off the trade.
Topic:
cattle, trade, Ministry of Commerce, exports, livestock, farming, Ministry of Agriculture Livestock and Irrigation, China, taxation, corruption
Description:
"CATTLE AND buffalo exporters enjoyed a profitable year in 2018, after the Ministry of Commerce lifted a ban on live exports the previous October, but regulations introduced in 2019 have taken the shine off the trade.
The lifting of the ban saw more than 260 companies apply for export permits by mid-2019, of which more than 90 were approved, and exports of animal products rose from just $10.627 million in the 2016-17 fiscal year to $366.359 million in 2018-19, Ministry of Commerce data shows. China is the largest importer of cattle and buffaloes from Myanmar, followed by Thailand.
But traders grumble about delays in issuing the licences they need to send livestock across borders and say the government could do more to support live exports by simplifying regulations. Other challenges facing the cattle export industry, say livestock specialists, include the need to upgrade the quality of livestock.
Most of the nation’s cattle farms are in Mandalay, Sagaing and Magway regions. Many of the farms are small plots owned by traders, who do not breed livestock but buy on the domestic market and keep the animals until they can be exported at times of high demand. Support more independent journalism like this. Sign up to be a Frontier member.
Frontier met cattle traders at Latpan village, in Mandalay Region’s Kyaukse Township, who said they were unhappy at not being able to get export licences in 2019..."
Source/publisher:
"Frontier Myanmar" (Myanmar)
Date of publication:
2020-02-14
Date of entry/update:
2020-02-14
Grouping:
Individual Documents
Category:
Border Trade with China, Border Trade - general, Agriculture in Burma/Myanmar: general and research, Smallholder farming and farmers in Burma/Myanmar, Illegal Economy - general
Language:
more
Topic:
Rohingya, Ruili, ethnicity, jade trade, borderland, social-symbolic order, human- nonhuman
Topic:
Rohingya, Ruili, ethnicity, jade trade, borderland, social-symbolic order, human- nonhuman
Description:
"This paper addresses two questions pertaining to ethnicity. First, how do ethnic
identifications, alliances, and conflicts play out in social worlds hosting ingrained ethnic
hostilities? Secondly, how can we theorize the role of non-human agents in human conceptions
of ethnicity and constructions of social-symbolic orders? The discussion is based on events
related by Noor; a Rohingya man, who works as a jade trader in the border-town of Ruili in
China’s Yunnan province, opposite Myanmar’s Shan state. The paper describes Noor’s
motivations for fleeing Myanmar, his experience of Buddhist-Muslim conflicts, his work as a
jade trader, and his hobby as a fighting cock breeder. The final section discusses how Noor
conceptualizes his ethnic identity and position in a wider social-symbolic order hosting
antagonistic ethnic Others by making analogies between nonhuman agents and ethnic humans..."
Source/publisher:
"Department of Sociology, Lund University" (Lund)
Date of publication:
2016-07-03
Date of entry/update:
2020-01-04
Grouping:
Individual Documents
Category:
Arakan (Rakhine) State - reports etc. by date (latest first), Racial or ethnic discrimination in Burma: reports of violations against several groups, Border Trade - general
Language:
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579.92 KB
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Description:
"Myanmar earned US$1.2 billion more from border trade within nine months of this fiscal year compared with the same period in last fiscal year despite lowered trade t the Muse border trade center, according to statistics from the Ministry of Commerce.
Myanmar earned over US$8 billion from border trade within nine months from October 1 to June 28 in 2018-19 FY and it earned over US$6.730 billion from border trade in the same period.
The export value was reduced over US$850 million from Muse border trade center within nine month of this fiscal year while the import value rose by over US$68 million from Muse border trade center. Myanmar earned US$3.8 billion from Muse border trade center within nine months of this fiscal year and it is less than over US$780 million compared with the same period in last fiscal year, according to the ministry.
However, Myanmar earned over US$1.824 billion more from exports from Nabule/Htikhi border trade center in the same period in this fiscal year and over US$25 million more from imports in the same period, according to the ministry..."
Source/publisher:
"Eleven Media Group" (Myanmar)
Date of publication:
2019-07-08
Date of entry/update:
2019-11-18
Grouping:
Individual Documents
Category:
Border Trade - general, Burma/Myanmar's relationship with the Global Economy, Burma/Myanmar's Foreign relations, general
Language:
more
Description:
"Myanmar has officially permitted the use of the Chinese and Japanese currencies in cross-border payments, as the Asian giants vie for dominance in one of the region’s last frontier markets.
The directive means that the yuan and yen join the euro, the US Dollar and the Singaporean dollar as designated currencies for settling international trade in Myanmar, where the central bank is desperate for foreign investment after years of economic sanctions and financial mismanagement.
China, which shares a 2,200km (1,360-mile) border with Myanmar, has been keen to draw its southern neighbour into the “Belt and Road Initiative”, Chinese President Xi Jinping’s grand infrastructure plan for Eurasia.
China is Myanmar’s biggest trading partner, with bilateral trade topping US$700 million last year, according to Myanmar’s Ministry of Commerce.
Japan is also a big trade and investment partner, with Japanese companies maintaining a steady presence in the country since the end of British colonial rule in the 1940s, right through its economic isolation due to Western sanctions from 2003..."
Source/publisher:
"South China Morning Post" (Hong Kong)
Date of publication:
2019-01-31
Date of entry/update:
2019-09-22
Grouping:
Individual Documents
Category:
Burma's economic relations with China, Burma's economic relations with Japan, Border Trade - general, China-Burma relations, Japan-Burma relations
Language:
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Description:
''The South Asia Subregional Economic Cooperation (SASEC) Program was established in 2001 by Bangladesh, Bhutan, India, and Nepal. Maldives and Sri Lanka followed in 2014, and Myanmar joined in February 2017. SASEC focuses on resolving various development constraints through regional cooperation among its members, thereby complementing shared national aspirations for inclusive and sustainable growth. The Asian Development Bank (ADB) is the lead financier and supporter of SASEC and serves as its secretariat.
SASEC is project oriented and currently prioritizes transport, trade facilitation, and energy. The SASEC Operational Plan 2016–2025 delineates the program’s priorities, including multisector economic corridor development and a pipeline of projects.1 Since 2001, SASEC has implemented 49 regional investment projects totaling around $11 billion.
In April 2017, the SASEC Vision document—SASEC: Powering Asia in the 21st Century—was launched at the SASEC Finance Ministers Meeting in New Delhi, India.2 This document identifies regional and subregional opportunities to harness natural and human resources, industrial potential, and infrastructure connectivity through regional cooperation.
Because Myanmar joined SASEC only 2 months before the vision document was launched, it was not included in the original version. This chapter, which was prepared in close consultation with the Government of Myanmar and the private sector, updates the SASEC Vision document...''
Source/publisher:
Asian Development Bank (ADB)
Date of publication:
2019-01-10
Date of entry/update:
2019-01-16
Grouping:
Individual Documents
Language:
English
Format :
pdf
Size:
483.37 KB
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Description:
Executive Summary:
"In a country where there are constraints in formal practices, informal activities
normally arise. Informal practices are not necessarily illegal and bad,
however some of them tend to occupy a grey area and/or are illegal in accordance
with local regulations. There are costs and benefits in minimizing
these informal practices in a country. While constraints and restrictions still
exist in the formal economy, any attempt to crush informal practices may
realize more costs than benefits. Reduction of these constraints and restrictions
in the formal economy may gradually erase informal practices in most
cases.
In Myanmar, informal practices in trade have been in existence for quite
some time. The main purpose is not necessarily tax evasion, although the
tax levied on exports (i.e. 10 per cent on the total export value) is considerably
high. There are a number of reasons for involvement in informal practices
and these include, among others:
to avoid the lengthy licensing process
to import products without having earnings from exports
to import/export products that are restricted on a temporary or
permanent basis
to evade tax
Since economic sanctions were first imposed by the West in 1997, and
further stiffened in 2003 and 2007, cross-border trade has become more significant
due to the fact that direct imports from and direct exports to the
West have become much more difficult. As a result, Myanmar has relied
more on its neighboring countries of China, Thailand, and India, to where
most products are exported for consumption and also for re-export to the
West.
It is noted that the value of Myanmar?s exports to China, Thailand, and
India accounts for 66 per cent of its total value of exports in 2007?08. In6
Winston Set Aung
come generated from cross-border trade has also become one of the major
sources of income for Myanmar, while income from other economic sectors
such as foreign direct investment and tourism has diminished due to various
factors that include economic sanctions. Since cross-border trade has
become significant, trade through the border points with neighboring countries,
especially China and Thailand, has become more active.
While natural gas, timber, and agricultural products are the major commodities
for cross-border trade with China, Thailand, and India, the most
common commodities flowing both formally and informally through border
points (especially with China and Thailand) are timber, gemstones, fishery
products, electronics, agro-industrial products, and clothing. Some
timber, gemstone, and fossil products are not authorized for export yet still
flow through various unofficial border channels. These products are also
exported through formal channels by sea or by air freight with licenses issued
by the Ministry of Commerce following approval by ministries such as
the Ministry of Forestry and the Ministry of Mines. Hence commodities fall
into both formal and informal categories of cross-border trade.
Although the value of border trade (according to official statistics) accounts
for only 7 per cent of Myanmar?s total trade value, the actual value
of border trade is likely to be much higher due to the value of undocumented
trade that flows through borders, which reached over US$1 billion
in 2006. If this undocumented trade were to be included in official statistics,
the value of border trade would have accounted for around 25 per cent of
Myanmar?s total value of trade in 2006.
Although cross-border trade plays an important role in Myanmar?s
economy, there are still various constraints such as an export-first policy,
licensing system, and high tax related to exports in conducting formal
trade. This has led to a situation where informal practices have expanded
drastically, especially in border areas. Brokers have become more systematic
by incorporating trading companies and specializing in several sets of
products. Licenses for exports and imports are issued by the border trade
authorities under the Ministry of Commerce, whereas broker trading companies
apply for such licenses in advance for imports/exports of their specialized
products. As a result, individuals or companies wanting to imThe
Role of Informal Cross-border Trade in Myanmar 7
port/export can do so by purchasing the license acquired in advance by
broker trading companies, or on their behalf at a fee (that includes a documentation
fee) that varies depending on the market situation and seasonality.
Through these practices, trade turnovers have increased, trade facilitation
has improved tremendously, and job opportunities have opened up for
more locals in border areas.
In addition to broker trading companies, there is another type of informal
player that is normally called a ?carrier.” These carriers are individuals
who carry undocumented products, both legal and illegal, across borders
and bypass all customs check-points within Myanmar until they reach their
destinations. Although this type of activity seems to be a petty trade, the
value and volume of such trade carried out by a considerable number of
carriers could be high. These carriers mostly work under or together with
broker trading companies.
These informal players are local people from around the border areas
(especially in the case of Kawthaung, which borders Ranong, Thailand) although
a majority of them have migrated internally from city areas such as
Yangon or Mandalay (especially in the case of Muse bordering Ruili, China,
and in the case of Myawaddy bordering Maesod, Thailand). In the case of
Muse, some operators of broker trading companies are related to those in
Jiegao across the border, whereas the relationship of a majority of operators
in Ranong (in the case of Kawthaung) is just that of a business partnership
without having a formal contractual relationship.
The increased flow of border trade both through formal and informal
channels tends to have a positive effect on people around the border points.
Interviews conducted in 2007 revealed that income levels amongst young
men (under 21) have increased in line with improved formal and informal
border trading operations. The chances of male respondents in the younger
age category possessing increased incomes due to improved formal and
informal border trade are high. Surveys and focus group discussions also
highlighted that people around the borders have a positive view of increased
border trade both through formal and informal channels and disagree
with constraints, restrictions, and trade related policies that can be
changed abruptly at any time.
8 Winston Set Aung
The facilitating role of informal players is quite important in border
areas, and any attempt to eliminate them could have an adverse effect on
cross-border trade and people living around the borders. Existing trade policies
should be tilted to incorporate measures favorable to the poor, so that
border trade can not only contribute to economic development but also to
poverty alleviation, opening up more opportunities for the ethnic minorities
and disadvantaged in the border areas."
Winston Set Aung
Source/publisher:
Institute for Security and Development Policy (Sweden)
Date of publication:
2009-09-00
Date of entry/update:
2010-02-19
Grouping:
Individual Documents
Category:
Border Trade - general
Language:
English
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