Exporters wait to go through official channels at Myawaddy, on the Thai border.

MYANMAR could easily reach its target of US$5 billion of exports each year if primary products had value added through further refinement and were sold in end-user markets, according to the economists and leaders of the Myanmar business commu-nity.

There should also be efforts to stamp out illegal border trade, they added.

U Myo Oo, deputy director general of the Directorate of Trade, said Myanmar’s exports were expected to reach $3 billion in the 2005-2006 financial year, up from $2.9 billion the previous year.

Myanmar Industrial Association president U Myat Thin Aung said primary products should be upgraded to finished goods.

“In order to do so, technology, capital, technical skill and state-of-the-art machinery must be acquired by our national entrepreneurs,” he said.
“Sales taxes on imported machinery that are intended for use in manufacturing value-added products should be dropped,” he said.

Dr Maung Aung, an economist and researcher at the Economic Studies and Research Institute in Yangon, said in his opinion the dual exchange rate system currently in operation ought to move to a more internationally accepted model.

Brigadier General Maung Maung Thein, the Livestock and Fisheries Minister and a member of the Export-Import Supervisory Committee, said the government was striving to achieve the $5 billion export target through a more comprehensive accounting system that ensured exporters declared the true value of goods when applying for export licences.

It has been a concern for the government that those involved in international trade were undervaluing goods on their invoices to avoid paying taxes.

“Another major factor that will help increase export figures is the implementation of normal trade procedures in (overland) border trade,” Dr Maung Aung said.

“Exports via border trade accounted for 14 per cent of total Myanmar exports in the 2004-2005 financial year,” he said, adding that illegal border trade was much higher than that which was officially declared.

There are three types of border trade, Dr Maung Aung explained: illegal trade of prohibited goods such as timber and gems, legal trade conducted with a Letter of Credit from government-recognised banks, and informal trade wherein normal trading goods are not declared in an effort to avoid taxes.

“Now, exports in this financial year are expected to reach US$3 billion; it would be possible to reach $4 billion without penetrating end-user markets and manufacturing value-added products if the transition from current border trading practices to normal trading was effectively implemented,” Dr Maung Aung said.

U Win Myint, president of the Union of Myanmar Federation of Chamber of Commerce and Industries (UMFCCI) said Myanmar exporters found it difficult to manufacture finished products and gain a footing in end-user markets, both due to a lack of experience in trading in advanced economies and technological challenges here.

Myanmar’s exports rely heavily upon primary products, with 25 per cent belonging to forest products, 24 per cent to natural gas, 13 per cent to beans and pulses, and 7 per cent to marine products.

However, Myanmar exports have grown substantially over the past five years, almost doubling to this year’s $3 billion from $1.595 billion in 2000-2001.