Currency Fluctuation, Illegal Trade Contributes to Decline of Trade Card Usage
Wai Linn Kyaw/MBT
The Myawaddy-Mae Sot border gate from the Myanmar side of the Thai-Myanmar border in Karen state.
The amount of trade revenue through the Individual Trading Cards (ITC) has been cut in half compared with last fiscal year’s trade figures, according to the Trade Promotion Department.
Any Myanmar citizen can apply for the trade cards. The cards authorise K10 million worth of trade every week through border gate trade and must be renewed annually.
The cards were implemented in November to promote small and medium enterprises to trade legally through the border and to decrease illegal trading.
“We are issuing this individual trading card with one-stop service. However, the problem is the instability in monetary exchange rate. Small traders are losing profits due to the instability, therefore, the trade amount is decreasing,” U Win Myint, director from the Department, which is under the Ministry of Commerce told Myanmar Business Today.
Mainly agricultural products are traded with ITC cards and the profits are largely dependent upon the exchange rate.
“We only traded a few times this year because the exchange rate is unstable. We have to sell with high prices in local market as we purchased the products with a high exchange rate, but it is really hard to sell things with higher price. Therefore, it is better to wait until the exchange rate becomes stable,” Ma Hmwe, trader of Thai products from Myawaddy border trade gate, told Myanmar Business Today.
To complicate matters further, the anti-smuggling mobile team which eliminated illegal trade through border area was abolished per the president’s instruction, therefore, illegal trading is likely to increase and legal trading with ITC cards will likely continue its decline.
A total of 315 ITCs were issued last fiscal year and resulted in trade value of more than K9 billion. However, 124 ITCs were issued through the end of December 2015 and the trade amount drastically declined to roughly K4 billion, according to Ministry of Commerce figures.
