'Huge potential' for boosting US-Myanmar economic ties
As Myanmar continues its reform process, there is huge potential for boosting US-Myanmar economic cooperation, an economist told Myanmar Eleven on Thursday.
"I think the US-Myanmar trade will continue to increase this year as many exporters have prepared to re-enter the US market," said Maung Aung, Senior Adviser to the Ministry of Commerce.
"In the past, we exported a lot of our garment products to the US. After lifting all the sanctions imposed on Myanmar by the US, I believe trading with the US and FDI from US businesses will significantly increase."
In addition to the garment products, Maung Aung sees agricultural products, fishery products, and other labour-intensive products have good potential for re-entry to the United States.
"We are also encouraging the production of value-added products. If the US completely lifts all the sanctions, gem exports and gem-related businesses will definitely have a very huge potential," he said.
In November 2012, the Obama administration issued a general licence to authorise the importation of Myanmar-origin goods into the US for the first time in almost a decade.
But there is an exception that jadeite and rubies mined or extracted from Myanmar cannot be imported to the US. The July 28, 2013 expiration of the Burmese Freedom and Democracy Act’s (BFDA) ban on imports from Burma formalised this treatment.
In July 2012, the US government issued a general licence to authorise the exportation of US financial services to Myanmar, permitting the first new US investment in the country in nearly 15 years.
Maung Aung said that the government should create a proper working environment for investors and exporters/importers, and a lot of vocational training courses should be conducted in all the sectors.
"Even when you look at the FDI, in the past, most of the investments from foreign countries were resource-based. Currently, there are a lot of FDI in the manufacturing sector which needs a lot of labour. That is a good sign because it can help us create a lot of jobs for our citizens," said the adviser.
When asked about new markets for local exporters, Maung Aung said, "We have a lot of opportunities to enter Europe and Middle East markets. But the exporters need to know perfectly well about these markets before they enter. They need to learn the political situation and regulations. They also need to learn which countries have been exporting the products that they plan to export before they enter a proper market."
Senior adviser also called for the speeding up the country’s preparations for the Asean Economic Community from now on, as AEC draws very near.
Maung Aung also welcomed the US trade bank’s enchanced economic engagement.
The Export-Import Bank of the United States (Ex-Im Bank) can now provide export-credit insurance, loan guarantees and direct loans for creditworthy export sales. Short-term insurance is available for sovereign transactions with repayment terms of 180 days or less, and up to 360 days for capital goods. Medium-term insurance, loan guarantees and loans are available for sovereign transactions with terms typically up to five years.
The bank’s working capital guarantees, which help US exporters or their suppliers to obtain funds to produce or buy goods and services, will be available to support exports as well, according to the US Embassy.
Patricia Loui, a member of the Board of Directors of the bank who visited Myanmar in late March, discussed ways to improve trade between the two countries in order to help the country more fully integrate into the global economy, and ensure that US companies exporting to and investing here will do so in a responsible and transparent manner, benefitting local communities.
Last year, the Obama administration issued a general licence to authorise US individuals to conduct most transactions – including opening and maintaining financial accounts and conducting a range of other financial services – with four of Myanmar’s major financial institutions: Asia Green Development Bank, Ayeyarwady Bank, Myanmar Economic Bank, and Myanmar Investment and Commercial Bank.
The US-Myanmar relation marks a new chapter following US President Barack Obama’s visit to the Southeast Asian country in November, 2012, which made him the first sitting US president to visit the country. He will return to Myanmar later this fall, said Deputy Secretary of State Bill Burns, in a speech on April 8 at the launch of the Asia Society Policy Institute in New York.
As for the nearest upcoming visit by a US official, Under Secretary of State for Public Diplomacy and Public Affairs Richard Stengel will visit Myanmar from April 28. In Yangon, he will meet with representatives from civil society, students and entrepreneurs. Stengel will then travel to Nay Pyi Taw, arriving on April 29 to meet with senior Myanmar government officials, and return to Washington on April 30, according to the US Embassy.
