A report which provides an overview of businesses in Myanmar and sheds light on the constraints they face, was launched today by the Deputy Minister of Planning and Finance, H.E U Maung Maung Win and the UNDP Assistant Administrator and Director of the Regional Bureau for Asia and the Pacific, Haoliang Xu.
The Myanmar Business Survey (MBS) was jointly conducted by the Central Statistics Organisation and the United Nations Development Programme. Almost 15,000 businesses across the country, representative of more than 126,000 businesses of the manufacturing, trade and services sectors were surveyed in 2015, making it the most comprehensive survey of private businesses to date.
The MBS provides the most comprehensive data on private-sector establishments in Myanmar to date. It allows us to analyse general characteristics of businesses, to produce statistics on workers, to calculate the value of businesses’ operations, and to compute composite economic indicators such as value added and labour productivity.
The MBS shows that there is little diversification in Myanmar’s private sector, and rather a strong dominance of particular subsectors, e.g. in the manufacturing sector the vast majority of businesses manufacture food products, beverages and tobacco products. Likewise, in the services sector, more than half are engaged in food and beverage service activities. Moreover, the economy is dominated by small businesses with less than 10 workers. In the services and manufacturing sectors, 85% and 86% have less than 10 workers, 10% and 9% have 10-19 workers, 3% and 4% have 20-49 workers and only 2% have 50 or more workers. In the trade sector, 92% of businesses have less than 10 workers, 6% have 10-19 workers and 2% have 20-49 workers. While in the manufacturing sector more than 71% of businesses are 10 years or older, this is the case for only 60% of the trade sector and 53% of the services sector.
The survey also collected data on workers. The lowest average payments are made in the food and beverage service sectors – which also has the highest average number of hours worked. Likewise, working hours are long and average earnings are particularly low in the retail trade sector. On the opposite side of the spectrum, we find professional/scientific/technical activities, which have the highest average compensation.
When considering total income/turnover per worker, a typical pattern emerges. The highest per worker value is found in the trade sector. This is unsurprising, as the trade sector generally is characterized by a fast turnaround of goods and therefore higher income values (which does not necessary imply a higher profit, once expenses are accounted for). Second is the manufacturing sector, followed by the services sector. Turning from income to expenditure/costs, businesses spend by far the highest amounts on goods (i.e. raw materials, resale goods, or input goods for service provision). Expenditure on labour is the second item, followed by costs of fuel and electricity. Local goods dominate in all three sectors, although trade stands out in using an elevated level of imported goods.
The manufacturing sector accounts by far for the highest percentage of value added and gross operating surplus in the surveyed economy, 56-58%. The trade sector accounts for 22% and 24% of those two indicators, and services account for 20% of both. At the subsector level, manufacturing of food/beverages/tobacco as well as manufacturing of textiles jointly account for almost 40% of the total value added. Retail trade adds another 12%. Labour productivity in Myanmar remains low compared to other Asian countries.
The data from the MBS shows that Myanmar’s private sector is still characterized by relatively low levels of diversification and productivity, and that there is substantial potential for development. It is hoped that the new data provided through the MBS can enhance our knowledge about the sector’s current contribution to economic growth and development, and help design evidence-based policies for improved private sector development.
To download the full PDF report click here