Work­ing group formed for in­ter­na­tional trade

The Myanmar Times - - Front Page - HTIN LYNN AUNG htin­lyn­naung@mm­ – Trans­la­tion by Zar Zar Soe

A new work­ing group of gov­ern­ment of­fi­cials and en­trepreneurs has been formed with sup­port from the Asian De­vel­op­ment Bank, to de­velop lo­cal sup­ply chains for in­ter­na­tional trade.

A NEW work­ing group com­pris­ing gov­ern­ment of­fi­cials and en­trepreneurs was formed this week with sup­port from the Asian De­vel­op­ment Bank, to de­velop lo­cal sup­ply chains for in­ter­na­tional trade.

The In­ter­na­tional Trade Sup­ply Chain (ITSC) work­ing group will fo­cus on ar­eas in need of re­form, such as trade fi­nance and re­stric­tive trade poli­cies, en­trepreneurs said at the as­so­ci­a­tion’s launch on Au­gust 9.

While bank­ing ser­vices for in­di­vid­u­als have im­proved over the past few years, there are still weak­nesses in busi­ness ser­vices such as loans, trade fi­nanc­ing and let­ters of credit, they said.

“Myan­mar’s econ­omy was sup­ported by its bank­ing sec­tor from 1989 un­til 1997 [the start of the Asian Fi­nan­cial Cri­sis]. At that time, the process of ap­ply­ing for an ex­port li­cence was easy and could be done within a day,” said U Aye Lwin, gen­eral sec­re­tary of the Union of Myan­mar Fed­er­a­tion of Cham­bers of Com­merce and In­dus­try (UMFCCI).

“But poli­cies were changed af­ter that and the econ­omy started slow­ing. The ITSC group will iden­tify the rea­sons for this slow­down and find out what needs to be changed.”

The ITSC work­ing group in­cludes rep­re­sen­ta­tives from the Min­istry of Com­merce, the Min­istry of Plan­ning and Fi­nance’s Cus­toms De­part­ment, the In­ter­nal Rev­enue De­part­ment, the Cen­tral Bank, Myanma For­eign Trade Bank, Myanma In­vest­ment and Com­mer­cial Bank, de­part­ments in 19 min­istries, UMFCCI mem­bers and rep­re­sen­ta­tives from pri­vate en­ter­prises.

The Asian De­vel­op­ment Bank will meet the group at least once a month, with the aim of en­cour­ag­ing it to work in line with in­ter­na­tional stan­dards. The ADB will also ad­vise the ITSC group on dif­fi­cul­ties in Myan­mar’s sup­ply chain, and help it com­pile de­tailed in­for­ma­tion on im­ports and ex­ports.

Daw Pwint Thit War, a trade fa­cil­i­ta­tion spe­cial­ist at the ADB, told The Myan­mar Times the de­vel­op­ment bank will work to en­sure the ini­tia­tive is ef­fec­tive.

“Its main ob­jec­tive is to fa­cil­i­tate trade. Only if there is trade fa­cil­i­ta­tion will [Myan­mar] at­tract new in­vest­ment. At first, ADB will sup­port the ITSC, but will then trans­fer that re­spon­si­bil­ity to the UMFCCI when [the ITSC] be­comes sta­ble,” she said.

U Win Myint, a di­rec­tor in the De­part­ment of Trade, said the Min­istry of Com­merce has al­ready re­laxed some rules on trade and will con­tinue to co­op­er­ate with pri­vate en­ter­prises.

“The de­part­ment is grad­u­ally adding to the list of goods that can be im­ported with­out a li­cence, and we will con­tinue to re­lax the rules,” he said.

“We have also re­laxed ex­port rules, but in some cases ap­proval is needed from cer­tain min­istries. We have to ask en­trepreneurs to pre­pare for that, and we will find a way to fix it.”

For now, traders must open a for­eign cur­rency bank ac­count to buy in­ter­na­tional goods, and must have enough money in their ac­count to pay for an or­der. Trade fi­nanc­ing is still new in Myan­mar and most im­porters and ex­porters pay for ship­ments on the spot.

State-owned Myanma In­vest­ment and Com­mer­cial Bank will try to make it eas­ier for traders to use let­ters of credit, said the bank’s deputy di­rec­tor U Khin Pe Oo.

A let­ter of credit al­lows a bank to guar­an­tee that the seller will re­ceive a timely pay­ment from the buyer – if they fail to pay, the bank steps in. With such an agree­ment in place, ex­porters are able to ship prod­ucts be­fore re­ceiv­ing pay­ment.

A let­ter of credit from a bank pro­vides a seller with a guar­an­tee that if a buyer is un­able to make timely pay­ment for the goods, the bank will step in.

‘Only if there is trade fa­cil­i­ta­tion will [Myan­mar] at­tract new in­vest­ment.’

Daw Pwint Thit War Asian De­vel­op­ment Bank

“We will try to make the bank­ing sys­tem more suited to the use of let­ter of credit. If anything is unclear, en­trepreneurs can get in touch with us to find out which ser­vices are avail­able,” U Khin Pe Oo said.

Photo: Aung Myin Ye Zaw

A trader walks be­side a truck at the 105 Mile trad­ing zone in Muse.

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