Billion of dollars will be spent in pursuit of the increase in exports envisioned in the National Export Strategy released earlier this year, according to U Win Myint, director of the Ministry of Commerce’s Trade Promotion Department.
The National Export Strategy prioritises 11 different sectors, some of which cannot be adequately funded by the private sector, necessitating increased state expenditures to succeed.
Myanmar is currently experiencing significant trade deficits. The International Monetary Fund on September 18 said the current account deficit widened to over 6 percent of GDP, largely reflecting a rapidly rising trade deficit.
U Win Myint said it will take large expenditures in the short term to grow exports. “For the different sectors, billions will be needed to implement the National Export Strategy,” he said.
U Win Myint said government ministries are still working out how to fund parts of the plan, which is set to last for five years until 2019. He added that if funds are not received through the state budget, officials will look to international donors who understand what the National Export Strategy is trying to achieve.
The government budget deficit will be billions in the 2016-17 financial year, he said.
This continues a trend of large deficits – the 2014-15 budget deficit is estimated to be about 3 percent of GDP, according to the International Monetary Fund, or $1.9 billion compared to a GDP of $63 billion. Myanmar’s state coffers also benefited from one-off revenue coming from telecoms and also energy projects in that fiscal year.
Speaking before the IMF released its Article IV consultation report on September 18, which among other items stressed the importance of containing the fiscal deficit to address the signs of economic overheating, U Win Myint said improvements in key areas are necessary for improved exports in the future.
The National Export Strategy released in March highlighted rubber; rice;beans, pulses and oilseeds; fisheries; textiles and garments; forestry products; tourism; and four “cross-sector functions” – access to finance, quality management, trade facilitation and logistics, and trade information, as crucial to future export growth.
U Win Myint said the budget needed for each area is still being worked on, such as machinery for the agricultural sector. It is difficult to say how much expenditure will be required, but total costs will be in the billions.
Myanmar Rice Federation secretary U Soe Tun said the rice industry does not have all the budget it needs, but does have a portion, adding the federation is working with the Ministry of Commerce to enhance exports.
U Win Myint also said that the National Export Strategy also includes finding markets, linking with customers and working on policy making to improve quality as well as quantity.
From:Myanmar Business Today