Num­ber of SMES halves as com­pe­ti­tion from across the bor­der bites

The Myanmar Times - Weekend - - Business - THAN NAING SOE thannaing­soe@mm­ Busi­ness 8

THE num­ber of small and medium en­ter­prises (SMES) in Man­dalay in­dus­try zone has halved, ac­cord­ing to U Nay Win, vice chair of Man­dalay in­dus­try zone man­age­ment com­mit­tee U Nay Win.

“Ac­cord­ing to our data, there were over 1,000 SME busi­nesses in 2010 but now in 2017 there re­mains only over 500.” he said.

The num­ber of SMES has halved be­cause lo­cal SMES can no longer com­pete with the prod­ucts en­ter­ing from China and other ASEAN coun­tries.

“Myan­mar SMES can­not com­pete with in­ter­na­tional in­dus­trial goods, food prod­ucts and con­sumer goods,” he said.

This is due to scarcity of skilled work­ers, in­ad­e­quate cap­i­tal, in­suf­fi­cient elec­tric­ity sup­ply, weak govern­ment sup­port to the SME sec­tor and weak­ness in co­or­di­na­tion and col­lab­o­ra­tion prac­tice among busi­ness­men.

“Prices of our prod­ucts are high be­cause we can’t go mass pro­duc­tion due to the lack of modern ma­chin­ery. When our neigh­bor China is pro­duc­ing an item in hun­dreds of thou­sands, we are pro­duc­ing just in tens of thou­sands. So, we are not able to re­duce pro­duc­tion cost and gain from economies of scale,” he con­tin­ued.

There­fore, the govern­ment should im­pose more levies and tar­iffs on the goods en­ter­ing Myan­mar via the bor­ders and from ASEAN coun­tries if those goods can be pro­duced by lo­cal busi­ness­men, he added.

“As lo­cal SME pro­duc­ers have to pay tax while for­eign goods are not taxed upon en­ter­ing Myan­mar, the lo­cal busi­nesses are not able to com­pete with them in terms of cost. There­fore, the very first thing to do for the govern­ment is to strictly im­pose levies on im­ported goods,” he said.

Mean­while, for­mer SME own­ers who were put out of busi­ness have switched to more prof­itable bro­ker­ing jobs. “They have be­come gem bro­kers, real es­tate bro­kers and car bro­kers. They left their busi­nesses be­hind and moved to more eas­ily prof­itable lines of busi­ness,” U Nay Win said.

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