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External trade falls by $2.4 bln as of 8 Jan

Myanmar’s external trade between 1 October and 8 January in the current financial year 2020-2021 touched a low of US$8.23 billion, a sharp drop of $2.437 billion compared with the corresponding period of the FY2019-2020, according to the Ministry of Commerce. According to data released by the ministry during the same period in the previous FY, trade stood at $8.2 billion. Over the Q1, Myanmar’s export was worth over $4 billion, which plunged from $5.16 billion registered a year-ago period.

Meanwhile, the country’s import was valued $4.228 billion, showing a decrease of $1.27 billion compared with the last FY. Both sea trade and border trade dropped amid the coronavirus impacts. The neighbouring countries tightened border security and limited the trading time to contain the spread of the virus. Pandemic-induced container shortage pushed up the freight rates to almost triple in Myanmar, causing delays for traders. Myanmar exports agricultural products, animal products, minerals, forest products, and finished industrial goods while importing capital goods, raw industrial materials, and consumer goods.

The country’s export sector relies more on the agricultural and manufacturing sectors. The government is trying to reduce the trade deficit by screening luxury import items and boosting exports. Under the National Planning Law for the financial year 2020-2021, Myanmar intends to reach an export target at US$16 billion and import at $18 billion. The Ministry of Commerce is focusing on reducing the trade deficit, export promotion and market diversification. Since 2011, the Ministry of Commerce has adhered to its reform policy. A series of moves to liberalize and open the economy have been introduced through policy development to improve the trade environment.

Source: The Global New Light of Myanmar

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Discussion of the economic situations and the impact of ongoing COVID-19 on various ASEAN countries, including Myanmar

According to the Myanmar Garment Manufacturers Association (MGMA), various ASEAN countries, including Myanmar, are discussing the economic situation and impact of the garment industry due to the ongoing COVID-19 in their countries. ASEAN Federation of Textile Industries (AFTEX) Indonesia Laos Malaysia Singapore Philippines Thailand The ASEAN Economic Community (AEC) and the ASEAN Economic Community (AEC) have agreed to increase cooperation in various fields. COVID-19 conditions and effects; International investment conditions. They also discussed the export and import conditions of garment industries in various countries and their cooperation with their governments.

Central executives and executives of the Myanmar Garment Manufacturers Association (MGMA) also discussed Myanmar’s export and import situation in 2020. During COVID-19, MGMA provided services for member factories. They also discussed the assistance provided by the Myanmar government to garment factories. According to the Position Paper released by the Myanmar Garment Manufacturers Association, 114 factories were closed or temporarily closed during COVID-19, and currently only 606 are in operation, 90 percent of which are mainly export-oriented. Difficult access to raw materials in the garment industry. Decreased or suspended orders and late or non-receipt of payments. Some companies go bankrupt.

According to a survey conducted by the Myanmar Garment Industry, most of the orders are pending until July, with only 30 per cent of members receiving orders from September. However, the garment sector was affected by the economic situation in the countries with the highest orders. When it comes to export orders, they have become more of a problem than buying from other countries. Currently, Myanmar’s largest exporter is Japan. Germany is second. In terms of blogging, the 28-nation EU has the most. The US is buying now. However, Korea, not as many as Japan, given the domestic situation in Korea, its economy is declining. There is also the fear of COVID. So when those countries have limited access to their offices, they also have limited access to Myanmar. It is also noted that the highest number of cases of corona virus are the countries order from Myanmar, so that the economic impact and challenges of Myanmar were a challenge.

Source: Daily Eleven

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Application of import/export permits more secure with Trade Net 2.0

The application of export and import permits online via Myanmar Trade Net 2.0 is secure and can help curb corruption , said the director general at the Ministry of Commerce can be applied online and security systems are in place to protect the user and applicants mentioned during a press conference on Trade Net 2.0. Trade Net 2.0 assists paperless trade – the digital trade.

It partly assists in implementing our e-government system. Data can be securely shared between government agencies and information leakage will not occur. Moreover, it is also mentioned that import and export permits can be applied anywhere at anytime, as long as internet service can be accessed. There is no contact between businesspeople and departments at all. They have also planned to improve security of the the system.

In the banking sector, even if the end user’s account is breached, the culprit will not be able to carry our (transactions) without a One Time Passcode according to the deputy director. The system however does not allow for the application of special permits. These will still have to be applied for in person. There are currently 3,430 people registered with Myanmar Trade Net 2.0. A total of 756 cards related to export and import and 1,617 import permits have been processed with the online system.

Source: Myanmar Times

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Myanmar’s first textile-based industrial zone to be established in Sagaing

Eastern Development International (Myanmar) and Dongzhan Textile Group, a Chinese company, are set to jointly develop a textile industrial cluster worth over US$371 million in Sagaing Region. The two companies will work with the private sector on all stages of construction of the project, making it the first textile-based industrial zone in Myanmar. The project is designed to include two phases: construction of factories and the installation of machinery in those factories. Phase 1 will include the construction of 12 new garment related factories, knitting fabric factories, dyeing and printing factories, and down and feather factories; and residential buildings for employees. Eight of these factories will be located at No.3 Textile Factory Branch (Sagaing) while the remaining four factories, including a waste water treatment system, thermal power plant, will be set up at No. 3 Textile Factory (Sagaing). Phase 2 will include the construction of five garment related factories, embroidery factory, carton factory, and polyester wadding factory.

An international textile supermarket will also be created in Sagaing. The project is proposed to be operational for an initial term of 20 years. Following the expiration of its initial 20-year term, it could be extended twice for a further term of five years for each renewal. The project is scheduled to begin in the financial year 2020-2021 and is expected to be completed in the financial year 2029-2030. It will also benefit stakeholders across the textile value chain (small and medium-sized enterprises, employees, fashion designers) by making available locally produced raw materials for textile and garment sectors, and creating entrepreneurial opportunities. It is anticipated that the imported volume of raw materials across the textile value chain will be reduced, and export earnings using locally-produced raw materials will be increased. Establishment of a textile-based industry cluster will reduce transportation cost; using a common infrastructure, resource and labour pool advantage; and speed up the learning process leading to internationally competitive and commercially sustainable textile industry.

The garment industry in Myanmar has grown significantly over the past five years. Myanmar’s garment exports have been increasing yearly, especially since 2013, when the EU granted goods from the Southeast Asian country preferential access to its market. Myanmar is also implementing the National Export Strategy (NES), under which there will be measures like the transition of cut-make-pack (CMP) garment system into free-on-board (FOB) system, adoption of bonded warehouse system and establishment of special textile and garment zone for boosting export. Myanmar launched a national level textile policy with the help of German global development organization GIZ to promote the country’s textile industry, attract investment by inviting foreign trade partners, build the necessary infrastructure and reduce imports. At present, some garment factories shut down due to lack of raw material, and thousands of workers became unemployed.

Some garment factories in Myanmar have reduced working hours and cut jobs, and some factories have not received orders from abroad amid the ongoing coronavirus pandemic. Myanmar’s CMP garment sector earns about US$300 million, annually and the country will get US$3 billion if it can manage to shift from the CMP system to the free-on-board (FOB) system. Myanmar’s manufacturing sector is largely dependent on the CMP garment and textile exports. The total export earnings from Myanmar’s garment and textile industry are expected to reach US$10 billion by 2024, according to the Myanmar Garment Entrepreneurs Association. The CMP garment sector contributes to over 20 per cent to the country’s exports.
Thousands of Myanmar people are employed in garment, textile, footwear and accessories factories across the country. Additional tens of thousands indirectly work in the industry through logistics and transport services. Myanmar earned some US$850 million from CMP garment exports in the financial year 2015-2016, US$2 billion in FY2016-2017, US$2.5 billion in FY2017-2018, US$4.6 billion in FY 2018-2019 and US$4.28 billion in FY2019-2020.

Source: The Global New Light of Myanmar