Myanmar Rice firms wary of Ministry plans to open up market

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“We can’t compete with foreign companies,” said Myanmar Rice Federation’s central executive committee member U Soe Win.

“This is not the right time to give them permission to enter the wholesale market. We are just starting to do business openly. Why let them in at this moment?”

His comments follow reports that the ministry’s directorate of trade this month began gathering comments and opinions from businesspeople and business-related organisations about opening the wholesale and retail markets to foreign competition.

An official from the directorate confirmed the reports. “As we are moving forward we need to open up [the economy] according to trade rules,” said the official who requested


“In the past our country’s doors were closed, but now we have to open all of them according to international policies and agreements. We have

informed [domestic companies] in advance. We did this a long time ago. Local businesses must prepare to compete with [foreign firms]. This competition will occur in the near future, but I can’t say the exact date now,” he said.

U Soe Win said Myanmar should be preparing for the creation of the ASEAN economic community in 2015 when members of the association are scheduled to form a single market. “All sectors will open automatically in 2015,” he said.

Domestic business people said they are most concerned that Chinese and Thai rice millers and trading companies will drain the profits from the sector because they have better technology and knowhow. Domestic millers say their facilities are inadequate or outdated and that they lack the funds to renovate them or build new ones.

The rice sector will be hardest hit, they said, adding that the country’s main agricultural sector should be placed on a protected list.

Not all businesspeople share this assessment. Myanmar Rice Federation central executive committee member U Nay Lin Zin said domestic businesses were overprotected. “Too many businesspeople are protected [from competition. We should welcome [foreign] firms in Myanmar,” U Nay Lin Zin added.

“We need to take a risk. In the future citizens will earn more profits. The opposition is due to the fact that the rice sector will be affected by the opening of the retail and wholesale markets, but what the sector needs most is more technology and investment,” he said.

“The government is calling for input from the businesspeople and stakeholders. At the very least we need to consider what percentage the local partner should commit [to a joint venture with a foreign firm]. Everyone is talking about the AEC in 2015. That’s not too far away. We can’t rush to prepare for it at the last minute so we should start getting ready now,” U Nay Lin Zin said.

U Sann Linn, joint secretary general of the Union of Myanmar Federation of Chambers of Commerce and Industry, called for a balanced policy. Regulations could both help domestic rice millers and traders compete with foreign firms and open the market at the same time, he said.

“Opening the market will be good for consumers,” he said. “Although local businesspeople think they face a risk, we can use tax policy to protect them. Foreign companies should not get tax-free status,” he added.

U Sann Linn said the wholesale and retail markets will be opened after the foreign investment law is amended and that the amendments will be based on information collected from domestic businesspeople and other stakeholders.

One letter drafted by a rice federation member warns that foreign companies will quickly gain control of the domestic market, and that they will do this one crop at a time. It says that foreign companies are already working in the agriculture sector by registering in the name of Myanmar citizens and that they have manipulated prices of some crops over the past year, putting them out of reach of local consumers.

Foreign companies will have a devastating effect on farmers’ livelihoods, the letter says. It urges the government to restrict foreign firms’ activities in the agriculture industry to prevent destruction of rural economies and the profits of domestic firms.

Source: Myanmar Times

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