Myanmar on bottom of illegal trade rankings
MYANMAR is bottom of a new Economist Intelligence Unit (EIU) index, which ranks Asia-Pacific countries based on how well they prevent illicit trade. But in many areas the government is taking steps to address its failings.
Rather than attempt to quantify the size of illegal trade flows in different countries, the EIU report, commissioned by the European Chamber of Commerce Singapore, rated 17 regional economies on the extent to which they provide an environment enabling illicit trade.
Countries were reviewed across four categories – intellectual property (IP), transparency and trade, customs environment, and supply and demand. Australia came top with 85.2 out of a possible 100. Myanmar finished last with 10.8 – behind Laos with 12.9 and Cambodia with 23.9.
“Myanmar presents the most challenges,” said Jeremy Douglas, region representative for the UN Office on Drugs and Crime (UNODC).
The country has struggled with illicit trade for years. Much of it goes to China, Myanmar’s biggest trading partner, with jade and timber being two of the most conspicuous examples. A 2015 report from NGO Global Witness estimated the illicit jade trade was worth US$31 billion a year. Research from the UK-based Environmental Investigation Agency that same year said that hundreds of millions of dollars worth of illegal timber was flowing into China.
Perhaps unsurprisingly, Myanmar was ranked last in the supply and demand category, which measured the extent to which the economy supplies or provides a buyer base for illegally traded products.
Both Laos and Myanmar scored zero on intellectual property, which looks at the extent to which a country has IP laws and whether they are enforced. Myanmar has no IP legal framework and, in the words of one National League for Democracy MP, is “the only ASEAN country that cannot prescribe copyright law”.
An intellectual property law has been re-drafted more than 10 times in recent years, but the new education minister has pledged to put fresh effort into putting a legal framework in place.
The EIU report also suggests adopting customs recordal, which can allow someone with a trademark, copyright or patent to register intellectual property with customs agencies. This allows customs authorities to intercept shipments suspected of infringing on IP without waiting for instruction.
On transparency and trade Myanmar ranks slightly above Laos, which languishes in last place. Scoring on that section depends on the availability of track and trade services, cooperative local officials, and monitoring and oversight in the country’s free trade zones.
Myanmar is also well above Laos on customs environment, which looks at the speed, efficiency and corruption of customs authorities. In terms of customs Laos is “basically equivalent to a sub-Saharan country”, Mr Douglas said.
Without outside assistance it could be “years, if not decades” before poor economies like Myanmar or Laos are able to build sufficient customs apparatus, Mr Douglas said.
The previous government formed an Illegal Trade Prevention and Supervision Control Committee in 2012, deploying mobile teams to crack down on smuggling along the route between Yangon and Myawady on the Thai border, and between Mandalay, Lashio and Muse on the Chinese border.
But these were disbanded in December 2015, and by February this year officials reported that without the customs teams illegal trade was rising again.
In an interview with The Myanmar Times in May, Commerce Minister U Than Myint said the government would consider blocking illegal border trading gates and deploying mobile teams to counter smuggling.
The government is also rolling out the Myanmar Automated Cargo Clearance System (MACCS), which aims to automate many of the previously manual procedures that made navigating customs so time-consuming.
Yangon’s ports and airports will be the earliest adopters, and the new system will be extended to border trade centres if operations go well, MACCS director U Win Thant previously told The Myanmar Times.
“There’s a new government and, we hope, a new energy for change that comes with it,” said Mr Douglas. “One of the first priorities needs to be a civilianisation of the police force and, at the same time, substantial capacity-building, since the country as a whole is not equipped to deal with transnational crime.”
Myanmar’s police force is under the military-controlled Ministry of Home Affairs.
Traders load up a truck at the 105 Mile trading zone in Muse, Shan State.