Rangoon - Burmese economists firmly believe the country's 'Export first, import second' foreign trade policy has a negative impact on industries and the manufacturing sector as it hinders the flow of modern technology and machineries.
Economists in Rangoon felt that the government's policy while in principle encourages export it has poor trade facilitation and fails to streamline the complex nature of imports, which makes it extremely difficult for manufacturers to get ahead in the field.
The policy, according to economists, prevents the flow of modern technology and machines to the country, which is a severe setback for major industries such as agriculture, mining and those that manufacture value-added products.
The agro-based Burmese economy has so far failed to introduce use of modern hi-tech machineries and is still largely conventional in its mode of production, which according to experts, is a major setback for the economy.
According to statistics at the Ministry of Commerce, Burma enjoyed a trade surplus of nearly US$2.1 billion in the fiscal year 2006-2007, up from $1.58 billion the previous year, and it is the highest surplus level recorded since the country began adopting a market-oriented economy in the late 1980s.
In spite of enjoying trade surplus, a Rangoon-based economist said "export first, import second" will eventually need to change as it heavily hampers the inflow of technologies and machines, which are essential in manufacturing sectors.
According to the policy, imports are needed to obtain foreign income, which result in seeking hard currency by paying more prices from the exporters, a major factor that encourages the practice of black market of currencies in Burma.
"We must prefer export but we shouldn't put import in the second slot," said the economist, who is in touch with local importers' difficulties.
Through imports of technologies and machinery, the manufacturing sector could be strengthened, the economist said, adding that it will in turn enhance production of finished goods that could be exported.
In the absence of high end technologies and heavy machineries, Burma's exports mainly include raw materials.
The economist said prioritising on exports should not lead to negligence of importing crucial items that could boost manufacturing. For sustaining trade surplus, export is largely dependent on the import, particularly for a developing country such as Burma.
The academic also said, by reversing the policy, it will enhance a greater investment on capital assets including high end technology as well as heavy machineries, which in the long-run will benefit the manufacturing sector.
A greater development in the manufacturing sector, that produces finished or value-added products, would garner more prices than exporting of just raw materials, which currently are solely monopolised by the military government's business cronies including Htoo Trading Co, Myanma Economic Holdings Ltd and Myanma Economic Corporation.
Such businesses are irresponsible socially, ethically and environmentally in Burma, the academic added.
However, the ruling junta when it comes to the purchase of military hardware follows import first policy, an unbalanced expenditure on the national budget for a developing economy such as Burma.
"It is widely believed that the majority of the country's foreign earnings - mostly from natural gas exports - have gone to the continued procurement of military hardware and software rather than to projects for long-term benefits such as reforms in the national economic aspect," economic observers said.
Economists said weak structure of imports will fuel worries for domestic businesses and consumers, as small and medium-sized enterprises are already feeling the pressure from discriminated imports, resulting in the loss of confidence by investors. Lack of investor confidence is lack of businesses and job opportunities for a broader base of the populace.
