RANGOON — Although Burma is moving forward with economic reforms and
opening up to the international community, businesspeople say the
country is not yet ready to join a planned integrated network of
Southeast Asian economies in 2015.
A lack of infrastructure, human resources and technology, along with
an unfinished legal framework for businesses, are a concern for Burma as
the Association of Southeast Asian Nations (Asean) attempts to form a
single market within the next two years.
Burma, which began transitioning from half a century of military
dictatorship in 2011, has a largely agricultural economy that depends on
rice and bean exports. But rice trader Pyae Sone Oo told The Irrawaddy
that he worried the country’s agricultural sector would struggle to meet
requirements for the Asean Economic Community (AEC).
“We’ve been left far behind,” said the member of the Myanmar Rice
Federation. “Even if we want to catch up, we can only do it gradually.
There are some areas—like the rice industry, overall—which we can say
are quite ready. But there are still gaps.”
According to data compiled by Burma’s Ministry of Agriculture and
Irrigation from 2011, 25 percent of the country’s economic output comes
from the farming sector.
The country’s rice exports almost tripled over the past three years
and are expected to reach 1.4 million tons in the current fiscal year,
according to the Myanmar Rice Federation. However, rice traders say they
lack solid financial support and continue to encounter logistical
problems, largely due to poor infrastructure.
Pyae Sone Oo said ports and trading points were not yet sufficient to
upgrade the export sector. The quality of Burma’s rice also makes it
difficult to compete with neighboring countries such as Thailand and
Vietnam, he said.
“If we could delay Myanmar’s full participation in the AEC for about
two years, I think we will be ready,” he said. “But in the meantime,
other countries will pass us and I’m afraid we will remain delayed.
“On the other hand, we need to educate and support farmers to get
quality grains so we can compete with other countries, and capacity
building for farmers is needed as well.”
Dr. Maung Maung Lay, vice president of the Union of Myanmar
Federation of Chambers of Commerce and Industry (UMFCCI), agreed that
Burma was not yet prepared for the Asean single market but said
businesspeople were ready to overcome existing hurdles.
“We Burmese people are smart enough and resilient enough to face the
challenges of joining the 2015 Asean Economic Community,” he told The
Irrawaddy.
Nearly every sector of Burma’s economy lags behind those of
neighboring countries, after decades of isolation, internal conflicts
and economic hardship under military rule.
Since reformist President Thein Sein took power in 2011, the United
States and the European Union have eased restrictions to allow companies
to do more business in the Southeast Asian country.
“The sleeping beauty has awakened, and there are many suitors,” said
Maung Maung Lay. “The challenges are quite enormous. Most of the
smallest enterprises are technically and financially weak—there’s no
capital market yet.”
Apart from infrastructure concerns, a lack of human resources also
hampers growth. The country is already suffering from brain drain to
neighboring countries with higher wages. Once the AEC comes into full
effect, Maung Maung Lay said, even more qualified workers could go
abroad for employment in more lucrative markets.
Still, Khine Khine Nwe, secretary general of the Myanmar Garment
Manufacturers Association, said her industry was ready to take part in
the regional economic community in 2015.
“To look at the bright side, we are quite ready to take orders and we
have skilled laborers,” she said, adding that she runs a garment factor
in the country’s commercial capital, Rangoon.
She said the garment industry had struggled to survive due to
international economic sanctions imposed against Burma under the former
region, but that she was optimistic now that the country has opened its
door to foreign investors.
Her factory, which once received garment orders from the United
States, Canada and Europe, was forced to shift its focus to Asian
markets—especially in Japan and Korea—due to the sanctions. The garment
industry was particularly hard hit by American sanctions, she said.
The United States is gradually lifting sanctions to encourage political and economic reforms.
“Whether or not we are ready [for the AEC] depends on the mindset of
people,” Khin Khine Nwe said. “From experience, those of us in the
garment industry know we can overcome the hardest times. I believe we
are ready to face any challenge, good or bad.”
source: The Irrawaddy
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