Myan­mar on bot­tom of il­le­gal trade rank­ings

The Myanmar Times - - Business - STEVE GIL­MORE s.gil­more@mm­times.com

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.

Photo: Aung Myin Ye Zaw

Traders load up a truck at the 105 Mile trad­ing zone in Muse, Shan State.

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