New reports suggest that Myanmar’s Ministry of Commerce recently decided to lift import restrictions on over 200 key items. Htet Tayza comments.
Revising import requirements
In order to aid economic activity, Myanmar’s last government implemented measures to liberalise the country’s import restrictions. This was designed, Thai newspaper The Bangkok Post explains, “to encourage trade by allowing some products to be imported [into Myanmar] without a license.”
However last August, the South-East Asian country’s Ministry of Commerce released a list of 4405 products which businesses still need licenses to import into Myanmar. Building on the work of the last government, Myanmar’s current Ministry of Commerce has now said that that 267 of these items will be removed from the list.
So what does this mean for companies that conduct business in Myanmar? At present, business’ will still require permits to import these goods into Myanmar. However from 1st September 2016 onwards, firms will be able to import these 267 products into the South-East Asian country without licenses.
The products that can now be imported into Myanmar include goods made from iron, steel, stainless steel, aluminium, brass and copper as well as cotton, train and vehicle parts and electrical appliances. However for the time being, alcohol, beer and cigarettes will remain on the list of banned items.
These changes were announced by the Ministry of Commerce’s Assistant Secretary, U Khin Maung Lwin. He said that the Ministry wishes to remove a further 500 products from the list. It will continue to make revisions going forward, so another round of liberalisation should occur later in 2016.
With this move, Myanmar’s government has opened up new revenue streams for companies operating within the South-East Asian nation. This could increase foreign direct investment (FDI), which Myanmar’s government hopes will hit US$140bn by 2030, as more global firms conduct business within the country. With greater FDI flows, the nation could receive the extra monetary support, as well as technology and employee training, needed to boost economic growth.
According to Nation Multimedia, another Thai news source, Myanmar is hungry for imports, due to increasing demand for consumer and capital products. Throughout the 2015/2016 financial year, Myanmar’s imports expanded by over 10%. However exports only grew by a small margin within the same frame of time, widening Myanmar’s already considerable current account deficit to 8.3% of gross domestic product (GDP).
This broad current account deficit, which is expected to decrease slightly to 7.7% of GDP during the 2016/2017 fiscal year, contributed to the depreciation of Myanmar’s kyat currency in 2015/2016. Therefore, Myanmar’s government would be advised to take a measured approach to liberalising import restrictions going forward. It needs to boost import-based trade while closing the deficit, in order to promote steady, sustained economic growth in Myanmar.