new economy

　　

Economists pointed out that, at present, Myanmar is experiencing an imbalance between exports and imports and a trade deficit in foreign trade. Although the government planned the Master plan and Action Plan to solve these problems, they failed to implement them effectively.

Regarding the private sector, some economists pointed out that there are currently 70 industrial zones in Myanmar, including 29 in Yangon Province, but the country has not yet promulgated laws on industrial zones. At the same time, the special economic zone is currently only in the pilot stage, and Myanmar's domestic SMEs are only at the micro-enterprise level.

Economists said that among Myanmar's small and medium-sized enterprises, agriculture, industry, and tourism have good prospects, and it is necessary for the government to promote these businesses to flourish. Only when small and medium-sized enterprises achieve rapid development can the national economy achieve development.

According to the Myanmar Economic Survey Report released by Myanmar Insider Business (MI), Myanmar's domestic companies have a lower and lower trust in the country's economy. It is predicted that the country's economic development will be slower in the next three months. In addition, the four economic surveys released by MI in 2018 all showed that the trust and satisfaction of Myanmar's domestic entrepreneurs in the country's economy has dropped significantly.

According to a recent survey conducted by the Union of Chamber of Commerce and Industry of Myanmar (UMFCCI), the increase in foreign exchange rates is one of the main reasons. Despite the series of measures taken by the Central Bank of Myanmar, in comparison, the U.S. dollar has risen by 10% since May. Due to heavy reliance on some imported goods (similar to cosmetics, electronic products, gasoline, food, etc.), businesses and households in Myanmar are all affected.

At the same time, the long-term existence of protectionist policies and the delay in reforms have undermined investor interest. On September 21, Fitch released a macro research report that stated that foreign direct investment was hit after the United Nations detailed human rights violations by Myanmar’s Rakhine State, Kachin State, and Shan State Defense Forces. The liberalization of the insurance market was postponed again, and foreign insurance companies that opened offices in Yangon were organized. A series of problems continue to plague Myanmar's economic development.

However, The Myanmar Times listed five industries that are likely to surpass other economic sectors in 2019:

Banking prospects

Even if there is a lack of financing channels, Myanmar's digital banking infrastructure improvement, e-banking and mobile wallet development are expected to expand the banking industry. U Than Lun, a consultant of KBZ Bank and former deputy governor of the Central Bank of Myanmar, said that the banking industry will improve significantly in 2019 due to the increase in the number of users of Myanmar banks. Among the 24 local banks, the number of ATM services has risen to 11. At the same time, some banks are working hard to provide mobile payments.

According to President Win Myint’s signing of the draft national planning law on September 21, Myanmar’s economy is expected to increase by 7.6 percentage points between 18-19.

Oil and gas prospects

U Dang Tun, chairman of the Myanmar Investment Commission (MIC), said at a meeting of the Union of Myanmar held in August that as the oil and gas in Myanmar's offshore blocks have been approved for commercial activities, foreign direct investment in the sector may increase in 2019.

This year, about 20 oil giants began to conduct seismic exploration on more than 20 land and sea blocks. According to the Ministry of Electricity and Energy of Myanmar, on September 22, the evaluation well in the offshore block A-6 was found to be capable of producing natural gas, and two new potential blocks were also discovered.

The department will invite as many as 31 international bidding teams in the field of oil and gas exploration in early 2019.

Retail prospects

The Ministry of Commerce of Myanmar passed Circular No. 25/2018 in May, approving all foreign investments in the retail industry. Wholesalers and retailers from Japan, Thailand, and South Korea have been actively looking for opportunities here. Among them are Japanese retailer AEON Co., Ltd., which has established a joint venture with a local company to operate a supermarket.

The growth of the retail industry is not limited to Yangon, investors are also looking for opportunities to expand to other regions. In addition, the fast-growing e-commerce market has enabled local government companies to actively develop infrastructure and formulate relevant systems.

U Mya Min Aung, vice chairman of the Myanmar Retailers Association, said that Myanmar is a latecomer to the retail market and therefore will continue to develop in the next few years, with greater room for growth. According to data from the Myanmar Yangon Real Estate Information Company, Myanmar's demand for shopping malls of more than 50,000 square meters is rising.

Educational prospects

Since the liberalization of the education sector in Myanmar in April, education service providers in Singapore, Australia, New Zealand and other countries have shown great interest in the country. U Dan Aung Kyaw, deputy director of the Investment and Company Administration Bureau, said that foreign direct investment in education is expected to increase in the next few years.

Vocational and technical education and training is the 2016-21 national education strategic plan of the Ministry of Education of Myanmar, and it has become a key modern department that promotes 85% of Myanmar's economic growth.

In March, the Myanmar Chamber of Commerce and Industry, the British Embassy in Yangon and the British Department of International Trade organized a technical and vocational education training conference to reduce the mismatch between the country’s graduate skills and market demand.

Young professionals are eager for knowledge, and with the entry of multinational companies, many young people need to possess relevant higher education and disciplinary capabilities to maintain their competitiveness. Recently, Kaplan, an American education service company, opened an education service park in Sunshine, and plans to enroll 1,000 students within a year. In addition, ILBC, Myanmar’s largest educational service organization, plans to invest more than US$50 million in Yangon to open schools.

The education industry is also supported by Aung San Suu Kyi, who stated at the World Economic Forum on September 12 that with each industrial revolution, skills requirements have changed, including education.

Apparel industry prospects

From 2017-18, the apparel manufacturing industry created US$3 billion in exports for Myanmar. With this perspective, about 4 to 5 factories are opened every month. Wu Mingsuo, chairman of the Myanmar Garment Manufacturers Association, revealed that the garment manufacturing industry, as a promising export sector, is included in the national export strategy, with export revenue growing at a rate of 35% each year.

If the political and economic conditions throughout 2019 remain unchanged, it is expected that clothing exports will continue to grow.