Myanmar’s government is currently focusing on facilitating greater foreign involvement with the nation’s economy, to supply small businesses with the funds required to foster growth. Figures show that these efforts are paying dividends, as Myanmar’s foreign trade rose during the latest fiscal year.
Focusing on trade
Myanmar is classed as an emerging frontier market. It has annually recorded economic growth rates of +6% since 2012, and its economy could surpass Singapore’s – one of the richest in South-East Asia, in 20 years’ time, if it attracts investment and trade from foreign partners. The nation’s government, therefore, is now implementing various policies which are designed to increase foreign trade, especially with wealthier regional neighbours such as Singapore and Thailand, and bring this about.
It recently emerged, for example, that Myanmar’s Central Bank has given foreign banks the green light to provide trade financing for domestic importers and exporters. This will allow Myanmar’s small firms to earn money from trade more easily, generating more money for the national economy. Also recently, Myanmar became the newest member of the South Asia Sub-regional Economic Cooperation (SASEC) partnership, giving its firms the ability to leverage cross-border trade more effectively.
Rising trade volumes
It seems as though this drive to boost foreign trade is bearing fruit, an article on Business Standard, a corporate news outlet, writes. It notes that fresh data indicates that during the 2016/2017 fiscal year, the value of Myanmar’s total foreign trade came in at US$28.801 billion. This figure was US$27.714 for the fiscal year before, so foreign trade increased by US$1086 billion in the 2016/2017 period.
The news source further revealed that the value of Myanmar’s exports climbed during the 2016/2017 fiscal year, going from US$11.136 billion the year before, to reach US$11.620 billion. Meanwhile, the country’s trade deficit increased during the same period, rising from US$5.4 billion in the 2015/2016 period, to US$5.5 billion by the end of the 2016.2017 year, indicating that the deficit is still an issue the government needs to tackle, to ensure that Myanmar earns more than it pays for imports.
Building key sectors
The export figures imply that the 2016/2017 period was a good year for Myanmar’s key export sectors. This includes gas, agriculture and manufacturing, which all contribute significantly to the economy. Figures show that agriculture, for example, is vital to Myanmar, as it accounts for a staggering 37.8% of Myanmar’s gross domestic product (GDP), so an increase in foreign trade volumes for the sector, implies that the nation’s farmers are receiving the capital they need to spur greater economic activity.
Furthermore, these numbers suggest that Myanmar is building strong trade relationships with critical regional partners. The nation’s strongest trade relationships are with countries such as China, India, Singapore and Thailand, and these partnerships could hold the potential to significantly boost Myanmar’s economy in future. Myanmar/Thai trade, for example, which across the past five years came in at US$6.8 billion per year on average, is projected to double in the next two years alone, and if this comes to fruition, it could generate a lot of fresh capital for businesses, benefitting everyone.
Moving Myanmar forward
It is clear that Myanmar’s efforts to boost foreign trade in its economy are succeeding, as volumes hit a new high during the 2016/2017 financial year. This could propel its economy forward, as when its small businesses receive more capital, they can invest in their operations, hiring more staff and increasing the quantity and quality of services they provide to consumers. Both of these outcomes could boost consumer spending in Myanmar, which is a critical driver of economic growth, potentially allowing the country to spur national economic progress and increase quality of life for its citizens.