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TICA Training Programme Training course on Enhancing Entrepreneurship in SME Development and Export Consortia 9 Aug 2010 - 3 Sep 2010, Thailand Country Report Union of Myanmar. Prepared by: Mr. Myint Wai Ms. Khin Pa Pa Myo

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TICATraining Programme

Training course on

Enhancing Entrepreneurship in SME Development and Export Consortia

9 Aug 2010 - 3 Sep 2010, Thailand

Country Report

Union of Myanmar

Prepared by:

Mr. MyintWai

Ms. Khin Pa PaMyo

9 Aug 2010 - 3 Sep 2010, Thailand

general introduction to smes
General Introduction to SMEs

In any countries in the world, even in the well developed countries, SMEs are considered as important elements in the national economies.

They constitute a large number of businesses to the Gross National Product or Gross National Income.

SMEs play main economic role and backbone of the national economies.

general introduction to smes1
General Introduction to SMEs

In East Asia , those SMEs are receiving close attention by respective countries as their development will no doubt lead to the overall economic development of the East Asian countries as a whole.

Encouragement and promotion of competitiveness and innovation of SMEs is necessary.

country profile myanmar
Country Profile : Myanmar

Myanmar is the largest country in South-East Asia with a total land area of 677,000

936 km from east to west

2,051 km from north to south

Total coastline : 2,832 km.

Population : 57.5 million (2008 est.)

Climate : Tropical monsoon

Religion : Buddhism(90%), Islam,Christian, Hindus

National Races : 135



  • Burma 69%
  • Indigenous Races 25%
  • Indians & Pakistanis 1.3%
  • Chinese 0.7%
  • European & Other Race 3.3%
  • Buddhist 89.4%
  • Animist 1.2%
  • Hindu 0.5%
  • Muslim 3.9%
  • Christian 4.9%
  • Other 0.1%

2008-2009 - 57.5 million

Growth rate - 1.75%

Male 28.58 - Female 28.92

SEASON Hotseason, Rainy season, Cold season

indigenous races
Indigenous Races
  • Bamar (69%)
  • Mon (2.4%)
  • Rakhine (4.5%)
  • Shan (8.5%)
  • Kachin (1.4%)
  • Kayah (0.4%)
  • Kayin (6.2%)
  • Chin (2.2%)
myanmar arts
Myanmar Arts

Panpu (sculpture) Panchi (painting)

Pandain (Gold &


Panput (Turning

Design on the lathe)

Panyan (Masonary)

musical instruments in myanmar
Musical Instruments in Myanmar

Flute Conch Shell

Brass Gong Circle


Royal Drum

myanmar famous dance
Myanmar Famous Dance

U ShweYoe and Daw Moe

Modern Style of Stick Drum Dance

Marionette dance duet or puppet style duet dance

Golden Harp Music and Dance Portraiture

myanmar famous festival

Myanmar Famous Festival

Kason Watering Festival

MathoThingan (Yellow Robe) Weaving Festival

Thangyan Water Festival

wonderful place the shwedagon pagoda
Wonderful Place the Shwedagon Pagoda

The Shwedagon Pagoda is one of the wonders of the world, it was believed to have been built over 2500 years ago where the four Buddhas' relics were enshrined.

Successive kings has embellished the pagoda during the 15th century and Queen Shin Saw Pu raised it to its present heigh.

kyaik htee yoe pagoda

The KyaikHteeYoe Pagoda is the highly refreshing and exhilarating climb itself which must be a never to most comes comers.

view over bagan plain
View Over Bagan Plain

Bagan has become our chief tourist attraction. It is also one of the richest archaeological sites in Asia. There so many pagodas in Bagan as it was the capital of the first Myanmar Empire.


Ngapali Beach

NgweSaung Beach

Chaungtha Beach


Macroeconomic Policy

The Government has been formulating and implementing national development plan to attain all-round development of national economy in accordance with four economic objectives:

Four Economic Objectives

1. Development of Agricultural as the base and all-round development of other sectors of the economy as well.

2. Proper evolution of the market-oriented economic system.

3. Development of economy inviting participation in terms of technical know-how and investments from sources inside the country and abroad.

4. The Initiative to shape the national economy must be kept in the hands of the State and the National People.



Macroeconomic Environment

  • Total Area : 676,577 km2
  • Population : 57.5 millions (2008 cso.)
  • Type of land
  • - reserved forest : 41404 thousand acres
  • - net area sown : 28930 "
  • - occupied area : 29583 "
  • - cultural able waste other : 14304 "
  • than fallows
  • - Other wood land : 40891 "
  • GDP : 18943 billion kyats (2009 – 2010)
  • GDP growth rate : 10.4%
  • Structure of GDP
    • Production : 62.5%
    • Services : 16.1%
    • Trading : 21.4%
volume of export
Volume of Export

US$ (million)

Sr. Category 2008-2009 2009-2010

  • Industrial Product 2679.8 3233.8
  • Agricultural Product 1436.2 1678.4
  • Metals and Minerals 708.1 1017.6
  • Forest Product 483.1 561.6
  • Livestock and Fishery 474.7 491.0
  • Others 997.2 604.5

Total 6779.1 7586.9

volume of import
Volume of Import

US$ (million)

Sr. Category 2008-2009 2009-2010

  • Inter-industry use 1591.6 1636.0
  • Capital goods 1833.7 1530.5
  • Consumer goods 1118.0 1014.9

Total 4543.3 4181.4


Top Export-Import Commodities

(2009 – 2010)

Export Commodities

US$ (million)

Import Goods

US$ (million)

Natural Gas 2926.69

Jade 964.82

Black Gram 464.26

Green Gram 285.76

Fish 285.07

Readymade Cloth 283.32

Rice 279.68

Hard-wood 278.15

Teak Round Log 211.72

Pigeon Pea 142.43

Crude Related Products 726.57

Machineries & spare parts 445.68

Construction materials 254.54

(Iron & Steel)

4. Automobiles & spare parts 242.54

5. Ship and accessories 204.00

6. Edible oil 178.29

7. Pharmaceuticals 152.74

8.Fertilizers 139.21

9. Plastic raw materials 135.24

10. Chemical 98.67

Source: c.s.o



Major Trade Partners

(2009 – 2010)

Export Country

US$ (million)

Import Country

US$ (million)

Thailand 3197.87

China 1582.67

India 1013.14

Singapore 670.41

Japan 177.35

Malaysia 152.61

Korea 75.58

Bangladesh 69.34

Vietnam 54.75

Germany 40.89

China 1268.97

Singapore 1202.19

Thailand 378.68

Japan 259.11

Korea 224.06

India 193.52

Malaysia 159.52

Indonesia 140.07

French 35.88

Germany 33.38

Source: c.s.o


foreign investment of permitted enterprise under the foreign investment law 2009 2010
Foreign Investment of Permitted Enterprise under the Foreign Investment Law (2009 – 2010)

Sr. Country Type of Enterprise No US$ (million)

  • UAE Oil & Gas 1 41.00
  • Hongkong Len manufacturing 1 6.08
  • Thailand Hotel & Tourism 1 15.25
  • China Mining 1 2.50
  • Singapore Brewery industrial - 27.23
  • Malaysia Oil & Gas 3 237.68

Total7 329.58

Source: c.s.o

definition of smes
Definition of SMEs

In the " World Bank Group's SME Strategy"(a) , the following is written about the SME definition :-

" What is an SME ? There is no universal definition. Some analysts use objective standards, classifying firms with fewer than 10 employees as " micro enterprise ", those with 10 to 100 employees as " small " and those with 100 to 500 as " medium " – even listing any company with annual turnover below 10 million as an SME.

(a) SME Facts – World Bank

definition of smes1
Definition of SMEs

Other prefers to rank companies by their relative size within the local economy. Since a large company in Macedonia would be considered small in Brazil. Whatever the case, SMEs are vital to the emergence of healthy private sectors, especially in poorer countries. Overall SMEs must be considered the only realistic employment opportunity for million of poor people through the world ".

(a) SME Facts – World Bank


Definition of SMEs in Myanmar

The Private Industrial Enterprises Law of 1990, classified the industries as in the following table :-

Source : Ministry of Industry 1

Major driving force for the development of economy

Provide opportunities for entrepreneurs, workforce and utilization of natural resources

Agricultural product, forestry product, garment and food & beverages product are major output

Overview of SMEs Development in Myanmar

Private sector significantly contribute the industrial production

Establishment of SMEs in Mining, manufacturing, construction, trade and services was estimated 99%.

Critical factors limiting the growth: Financing, Human resource capacity building, Technology, Market access, ICT, energy, infrastructure etc…

Overview of SMEs Development in Myanmar


Overview of SMEs Development in Myanmar

Share by Employment, Output and Investment (2004)

Source : Ministry of Industry 1


Overview of SMEs Development in Myanmar

Share by Employment absorption, Output and Investment (2004)

Source : Ministry of Industry 1


Key SME Support Agencies and Services in Myanmar

(a) State Level

Although there is no agency nor organization specifically assigned on SMIs development, agencies or organizations currently involve in SMIs business such as;

- Industrial Development Committee (IDC)

- Myanma Industrial Development Committee (MIDC)

- Myanma Industrial Development Working Committee (MIDWC)


The Objective of MIDC

(a)  To develop agro- based industries

(b) To enhance industrial production both quantitatively and qualitatively.

(c) To encourage production of new type of industrial machinery and equipment

(d) To encourage production of machinery and equipment essential for the manufacturing and processing industries.

(e) To create suitable conditions for change over to an industrialized state.


Function of the MIDWC

Function of the Myanma Industrial Development Working Committee (MIDWC) is to implement the policy and programmes for the development of private industries such as:-

(a) Development of Industrial Zones

(b) Human Resource Development for private industries.

(c) Transfer of technologies to SMI (Small and Medium Industries)

(d) Financial Assistance to specific industry located at Industrial Zones etc..


Under the Working Committee there are 10- Subcommittees and 18 industrial Zones Supervision Committees to assist SMEs, namely:-

(i) Production of Agricultural Machinery & Equipment

(ii) Standardization and Quality Control

(iii) Formulation and drafting of Industrial Law, Regulation and Procedure

(iv) SMEs Promotion

(v) Promotion of industrial R & D and Technology Transfer

(vi) Industrial Information Dissemination and Publication

(vii) Human Resource Development

(viii) Promotion of Automobile and Parts Industry

(ix) Promotion of Iron and Steel Industry

(x) Promotion of Rubber Product Industry



Following laws are to encourage, promote and foster the establishment of private SMEs.

  • Private Industrial Enterprise Law 1990
  • Promotion of Cottage Industries Law 1991
  • Myanmar Citizen Investment Law 1994


business registration
Business Registration

Myanmar Citizen Investment Law, MCIL(1994)

With a view to promote investment of Myanmar citizen and to provide equal treatment as foreign investors by granting them the right to enjoy to tax incentives, the MCIL was promulgated on 31st March 1994 and its procedures were prescribed on 3rd August 1994.

Partnership Act (1932), Myanmar Company Act (1914)

Company limited by shares is required to register. There are two types of companies, privated limited company and public limited company. The number of shareholders must be at least seven. The company, after registeration, must apply for a Certificate of Commencement of Business.



Employment Regulations

  • Labor Act and Social Security Act (1954)
  • Working hours for employees are 8 hours per day,48 hours per week.
  • Private enterprises employing at least five persons are covered by the Social Security Act 1954. The contribution to the scheme is approx. 4% of the insured wage and the ratio of contribution is 2.5% by employer and 1.5% by employee.
  • The selection of the worker should be made only those who registered at the Myanmar Labor Department.



Basic Principles of Private Industrial Enterprise Law (1990)

  • To enhance the higher proportion of the manufacturing value added in the gross of domestic product, and to increase the production of the respective economic enterprises which are related to the industrial enterprise;
  • To acquire modern technical know-how for raising the efficiency of industrial enterprises and to establish the sale of finished goods produced by the industrial enterprise not only in the local market, but also in the market abroad.



Basic Principles of Private Industrial Enterprise Law (1990)

  • To cause utilization by relying mainly on local natural resources;
  • To cause narrowing down of the gap between rural development and urban development by causing the development and improvement of industrial enterprises;
  • (5) To cause opening up of more employment opportunities;



Basic Principles of Private Industrial Enterprise Law (1990)

(6) To cause avoidance of or reduction of the use of technical know-how which cause environmental pollution;

(7) To cause the use of energy in the most economical manner.



Key SME Support Agencies and Services in Myanmar

(b) Ministry / Institutional Level

  • - Directorate of Industrial Supervision and Inspection
  • (Ministry of Industry 1)
    • Science and Technological Research Department (MSTRD)
    • Sub-Committee related to the ASEAN SMEs Agencies Working Group (Ministry of Industry 2)
    • - Cottage Industries Department (Ministry of Cooperative)
    • Directorate of Labour
    • Myanma Agricultural Produce Trading (Ministry of Commerce)
Union of Myanmar Federation of Chambers of Commerce & Industry (UMFCCI)

Myanmar Industries Association (MIA)

Myanmar Agro-based Food Processors & Exporters Associations (MAFPEA)

Myanmar Women Entrepreneurs Association (MWEA)

Myanmar Computer Industry Association (MCIA)

Myanmar Construction Entrepreneurs Association

Myanmar Engineers Society (MES)

Myanmar Forest Products & Timber Merchants Association

Myanmar Garment Manufacturers Association

Myanmar Pulses, and Beans & Sesame Seed Merchants Association

Myanmar Pharmaceutical & Medical Association


Key SMEs Support Agencies and Services in Myanmar

(c) Non Government Organizations


Role of MIDB : Financial assistant to SMEs

Myanmar's financial structure includes state and private banks and state insurance institution. To assist the SMEs in finance, Myanma Industrial Development Bank (MIDB) had been formed in 1997 under MIDC. Loans are provided mostly on the recommendation of the Industrial Zones Supervision Committees. Up to September 2009, Loans amount Kyat 21,715.379 Million were granted to 265 no. of SMEs (in which 166 Nos are SMEs and loan amount is Kyat 10,203.786 million). The interest rate is 15% for SMEs established at Industrial Zones. MIDB has 5 branches, they are : - Yangon, Head Office and BayinNaung Branch

- Mandalay Branch

- Monywa Branch

- Meikhtila Branch

- Nay Pyi Taw Branch


Activities and Services

  • Activities and services of Myanmar Industries Association (MIA) are:
    • Consultancy services in project formulation and implementation.
    • Conducting seminars, workshops and trainings on topics of commercial. industrial and managerial interests.
    • Publication and distribution of industrial information bulletins and newsletters.
    • Organizing member’s company to participate in local and overseas trade fairs and exhibition.
    • Organizing and making arrangement for the exchange of information and views among local and foreign industralists.



Activities and Services of (MIA)

    • Organizing and arranging business opportunities networking between local and foreign enterprises.
    • Organizing and making arrangements for factory visists, study tours and sending business mission overseas.
    • Acting as representative of the member’s companies in advising governmentin matters affecting businesses and the economy.
    • Facilitating networking through a variety of Chambers/Associations activities.

Myanmar Agro-based Food Processors and Exporters Association

The government of Myanmar realizes that due to the geographic location, demand potential, availability of raw materials and human resources, the food sector is seen as one of the most promising sectors for not only domestic industrial development but also export growth. Therefore, under the auspices of the Industrial Development Committee headed by the Prime Minister and the support of the Ministry of Commerce, the Myanmar Agro-based Food Processors & Exporters Association was founded on 21st August 2006 with the aim of developing the food industry of the country.


Achieve all round productivity increase through systematic development of production capabilities of local agro-based food processors.

Work towards the improvement of local quality standard in line with international levels leading to the development of wide spread value added quality products which can effectively compete in the local and international markets.


6. Increase the contribution of agro-based processed foods sector in export promotion and import substitution through development of international level high quality value added products.

5. Aid local-based food industries in penetration, sales, marketing and expansion of international markets.

6. Aid local-based food processors in new product development through knowledge, technology, quality and market competencies.

7. Improve supply chain management of raw material suppliers, finished goods manufacturers and buyers for faster and easier linkages.

8. Undertake human resource development and information dissemination activities to improve the information and knowledge based of agro-based food processors.

9. To work towards the growth of new enterprise in the agro-based food industry for increased business opportunities an skilled work force.

10. To establish market linkages with local and foreign business organizations and associations for cooperation in the areas of knowledge and market access development.

regional co operation
Regional Co-operation

ASEAN Countries

- Indonesia (8-8-67)

- Malaysia (8-8-67)

- Philippines (8-8-67)

- Singapore (8-8-67)

- Thailand (8-8-67)

- Brue nine (8-1-84)

- Vietnam (28-7-95)

- Myanmar (23-7-97)

- Laos (23-7-97)

- Cambodia (30-4-99)


regional co operation1
Regional Co-operation

ASEAN Free Trade Area (AFTA)

- ASEAN Free Trade Area (AFTA)

- Working Group on Industrial Co-operation (WGIC)

- ASEAN Industrial Co-operation Scheme (AICO Scheme)

- ASEAN Regional Efforts (Hanoi Plan of Action)

- GMS (Greater Mekong Sub-Region)


- ASEAN+3+1 (China, Japan, Korea and India)

- ACMECS (AyewarwadyChaophya Economic Cooperation Strategy)

- GMS – BF (Greater Mekong Sub-Region Business Forum

- Working Group on Industrial Co-operation (WGIC)

- ASEAN Industrial Co-operation Scheme (AICO Scheme)

regional co operation2
Regional Co-operation


- Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Co-operation

- Myanmar joined the organization as a full member at a Special Ministerial Meeting held in Bangkok on 22 December 1997.

Member States of BIMST-EC

People's Republic of Bangladesh, the Republic of India, the Union of Myanmar, the Democratic Socialist Republic of Sri Lanka, the Kingdom of Thailand, the Kingdom of Bhutan and the Kingdom of Nepal.

I.E.A.T (Industrial Estate Authority of Thailand (IEAT)


Overview of SMEs Development in Myanmar

Growth of SMEs (Table type)

Since the adoption of market economy in 2000 private industries have grown progressively that can be seen in table shown below:-

Source : Ministry of Industry 1 ( September, 2009)


Overview of SMEs Development in Myanmar

Growth of Registered Private Industries (Column Type)

Source : Ministry of Industry 1 (September 2009)


Sectoral Distribution of SMEs

(Registered as of September, 2009) (Table Type)


Sector Distribution of SMEs(As of September, 2009)

(Pie chart)

Machinery & equipment

Transport vehicles



Agricultural equipment


Personal goods

Mineral & petroleum

Electrical goods




Printing & publishing


Household goods




Industrial raw material


Construction materials


Clothing & wearing



Food & Beverages








Yangon Division


Eastern,Western,Northern and

Southern townships of Yangon


Mandalay Division


Mandalay, Meiktila,Myingyan


Magway Division


Yananchaung, Pakokku


Bago Division




Ayeyawady Division


Hinthada, Myaungmya, Pathein


Sagaing Division


Monywa, Kalay


Mon State




Thaninthayi Division








Shan State


18 Industrial Zones through Myanmar


Industrial Zones

Monywa Ind. Zone

Kalay Ind. Zone

Taunggyi Ind. Zone

Pakokku Ind. Zone

Yenangyaung Ind. Zone

Mandalay Ind. Zone

Myingyan Ind. Zone

Meiktila Ind. Zone

Pyay Ind. Zone

Mawlamyine Ind. Zone

Pathein Ind. Zone

Myaungmya Ind. Zone

Hinthada Ind. Zone

Yangon East District Ind. Zone

Yangon West District Ind. Zone

Yangon North District Ind. Zone

Yangon South District Ind. Zone

Myeik Ind. Zone

18 Industrial Zones


No. of SMEs in industrial zones,

(as of 30.9.2009)

8. Myaungmya (364)

1. Mandalay (1109)

2. Myingyan (330)

9. Hin Tha Da (443)

3. Meiktila (349)

10. Pathein (355)

  • 4. East Yangon (1316)
    • S. Dagon (1) 131
    • S. Dagon (2) 532
    • S. Dagon (3) 133
    • Shwepoukan 122
    • North Okkalapa 65
    • South Okkalapa 114
    • Tharkayta 48
    • Dagon Seikkan 91
    • Dagon East 80
  • 11. Monywa (895)
    • Monywa 598
    • Shwebo 297

12. Kalay (254)

13. Pyay (190)

14. Yanan Chaung (88)

15. Pakokku (273)

5. West Yangon (1034)

16. Mawlamyine (209)

6. South Yangon (899)

17. Taungyi (750)

  • 7. North Yangon (705)
    • Hlaing Thar Yar 388
    • Shwe Pyi Thar 181
    • Mingalardone 136

18. Myeik (26)

TOTAL – 9,589


Problems and Constraints of SMEs

  • Inadequate level of technologies and managerial skill
  • Shortage of Electrical Power Supply
  • The rising costs of inputs and imported materials
  • The shortage in skilled workers
  • Not well developed inter-firm linkages either among

SMEs or SMEs with large businesses in the form of

Supplier and customer relationship

  • Shortage of financing
  • Lack of access to bank financing

Problems and Constraints of SMEs

SMEs Development Policy

There is no specific SMEs' policy or law yet.

The objectives of Industrial Development Committee,

Myanma Industrial Development Committee (MIDC) and Myanma Industrial Development Working Committee (MIDWC) could be referred to as the policy guidelines for development of SMEs.

Laws and regulations that determined standards for environmental protection and consumer safety are still not well established.


Problems and Constraints of SMEs

In order to overcome these problems and constraints, some of the needs are;

  • 1. To adopt a sound SMEs development policy and a basis law which could provide comprehensive and clear guidelines.
  • 2. To draw comprehensive SMEs development master plans or blueprint.
  • 3. To establish financing institution such as SMEs development bank and accessibility.
  • To upgrade the industrial infrastructure.
  • To upgrade technology and managerial skill through technical cooperation and transfer.

Problems and Constraints of SMEs

Needs of Technology for Capacity Building of SME Sector in Myanmar


Currently, most of the technologies and machineries used in SMEs are outdated and which cause poor productivities and products.

To overcome this issue

To replace or upgrade with appropriate technologies and machineries, and it may be by developing regionally or through imported.


SMEs are backbone of national economies in Asia

Creation of necessary business environment, the formation of industrial clusters and the solution of the problems faced by SMEs are essential to the growth of the country's economy

It is difficult to achieve an effective cooperation and exchange between SMEs in East Asia in a short time period.

The greater cooperation between member countries of Asia on SMEs development for technology transfer, marketing network and financing schemes should be initiated