Overall Myanmar remains an economy based on exports. The government has a structure in place that commercial enterprises have export before you can import, allowing Myanmar to establish a positive trade deficit.
While other industries have the potential to become big export revenues, currently the largest generator of foreign income are:
1. Natural gas
You will notice that three of the four exports above are based on the extraction of natural resources. Ultimately, for the economy of Myanmar to grow, you need to diversify mining companies based in pure, service and manufacturing. But the transition to an economy based more on production so far has been limited by the lack of infrastructure. Thanks to its long-term isolation, there are many domestic industries operating in Myanmar, where one would expect to find international companies – for example in soft drinks and fashion.
Since 2010, the government has privatized more than many industries that were previously under state control, and has sold many of the state-owned assets. The privatization process continues today, with the telecommunications sector seen by many as the next on the chopping block.
The source of income of most of the major currencies for the economy of natural gas exports to Myanmar. Natural gas is extracted at sea by international companies (Total, PTT, Daewoo, etc) are in joint venture agreements with oil and gas companies of state Myanmar Oil and Gas Enterprise (MOGE). Most of the extracted natural gas is exported to Thailand, which depends on natural gas from Myanmar on 30% of its energy needs. The Chinese are also building a pipeline that will pump natural gas from the Bay of Bengal to China’s Yunnan Province, and other exploration efforts are underway in other offshore blocks.
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Natural gas is becoming a political issue in Myanmar since many citizens have started to wonder why the Myanmar does not use its resources of natural gas for domestic consumption – especially when you consider the provision of reliable electricity.
Gems and jewelry is another great source of export earnings for Myanmar, including jade sold in China. Myanmar has been a long time famous for its rubies and sapphires, which is mainly produced in the Mogok valley – which is closed to foreigners. There is so much illegal activity in this area is almost impossible to accurately calculate the statistics, but many believe it is the second largest source of export earnings for Myanmar behind natural gas. We hope that in the future the industry will be more regulation, which makes it illegal to reduce black market. The current government is aware of the potential revenue derived from a totally legal trade of gems and has already taken steps to legalize and strengthen the industry. One such measure was the opening of the biennial exhibitions jewel in Naypyidaw, which allow traders to buy international legally Myanmar gems at good prices. As in most industries Myanmar, most of the jewelry sold are raw and uncut – cut and polished in other countries with better technology. Myanmar cut gems are generally only for the local market.
Beans and legumes
The field beans and pulses has recently become big business in Myanmar. Myanmar is currently the second largest exporter of grains and legumes in the world, after Canada. More than 70% of exports go to India bean, which is in great demand on the market that can not be met by domestic production. The remaining soybean exports go to Singapore, Pakistan and other countries. The beans and pulses market can be very volatile, with market prices that depend on world production. Myanmar currently faces competition of the African countries that have seen their market share in recent years.
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The market for beans and legumes usually works with short-term contracts, where traders Myanmar agree to sell at a particular price on a fixed date. The supply chain for beans and legumes in general works like this: farmers grow 1-2 crops of beans per year and sell agricultural prices to local merchants. These operators collect the grains of individual companies and then sell them to big wholesalers stored in large warehouses. These large wholesalers are exporting then negotiate contracts with foreign buyers and export of cereals. Almost all major wholesaler of beans in the country is based on the wholesale market Bayinnaung in Yangon. Foreign investors wishing to enter this market has relatively few options, as currently all beans and legumes Myanmar companies are owned locally.
Myanmar is one of the world’s largest exporters of wood, and Myanmar teak is recognized worldwide for its quality. While most of the other countries in the region have gone to the agricultural sector in teak plantations, Myanmar exports still old teak trees grown in the wild. Obviously there is a limited supply of this library, which makes it useful in the world market. Teak is mainly used in the construction of outdoor furniture is highly resistant to moisture and rot. Historically teak was used in shipbuilding and is still used for this purpose today – although in small amounts – decks of yachts and smaller boats.
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