smes promotion policy(korea).ppt
DESCRIPTION
smeTRANSCRIPT
Country Report – Union of MyanmarCountry Report – Union of Myanmar
Prepared by:Prepared by:
MYO AUNG THANMYO AUNG THAN
13-28 August 2009,Korea 13-28 August 2009,Korea
Small and Medium Enterprise promotion policy in Myanmar
Part-1Part-1Country Profile
Located in south-eastern Asia, bordering the Located in south-eastern Asia, bordering the
Andaman Sea and the Bay of Bengal, between India, Andaman Sea and the Bay of Bengal, between India,
Bangladesh, China, Laos and Thailand. Bangladesh, China, Laos and Thailand.
The economic system has been changed from The economic system has been changed from
centrally-planned economy system into market-centrally-planned economy system into market-
oriented system since 1988.oriented system since 1988.
The economic structure is mainly featured by The economic structure is mainly featured by
agricultural produces, especially rice, cereals crops agricultural produces, especially rice, cereals crops
and beans, with supplements of natural resources like and beans, with supplements of natural resources like
petroleum, natural gas and forest products.petroleum, natural gas and forest products.
Education in Myanmar has been well developed, Education in Myanmar has been well developed,
about 83.1% (in 1995) of population are educated.about 83.1% (in 1995) of population are educated.
Part-1Part-1economic Environment
Total AreaTotal Area : 676,577 km: 676,577 km22
PopulationPopulation : 55 millions : 55 millions (2009 est.)(2009 est.)
Labor ForceLabor Force : 27.8 millions : 27.8 millions (59% of population)(59% of population)
GDPGDP : 12,254.6 billion kyats : 12,254.6 billion kyats (2006 est.)(2006 est.)
GDPGDP growth rategrowth rate : 13.2% : 13.2% (2006 est.)(2006 est.)
Structure of GDPStructure of GDP
AgricultureAgriculture : 40%: 40%
IndustryIndustry : 20%: 20%
ServicesServices : 40%: 40%
Part-1Part-1Organization
The Directorate ofThe Directorate of Industrial Supervision and Inspection Industrial Supervision and Inspection
(DISI) is the service rendering organization under the Ministry of (DISI) is the service rendering organization under the Ministry of
Industry (1). With the head office at Nay Pyi Taw, it has fifteen Industry (1). With the head office at Nay Pyi Taw, it has fifteen
regional offices residing in capital cities of seven states and regional offices residing in capital cities of seven states and
seven divisions .seven divisions .
FunctionFunction
DISI is mainly responsible to promote, encourage and DISI is mainly responsible to promote, encourage and
foster the private industrial enterprises , by identifying and foster the private industrial enterprises , by identifying and
responding to their needs and business requirements and responding to their needs and business requirements and
supervise and inspect private industrial enterprisessupervise and inspect private industrial enterprises
Part-1Part-1Economic Policy
The Government has been formulating and implementing national The Government has been formulating and implementing national development plan to attain all-round development of national economy in development plan to attain all-round development of national economy in accordance with four economic objectives:accordance with four economic objectives:
1.1. Development of Development of Agricultural as the baseAgricultural as the base and all-round development of other and all-round development of other sectors of the economy as well.sectors of the economy as well.
2.2. Proper evolution of the Proper evolution of the market-oriented economic systemmarket-oriented economic system..
3.3. Development of economy inviting participation in terms of Development of economy inviting participation in terms of technical know-technical know-how and investmentshow and investments from sources inside the country and abroad. from sources inside the country and abroad.
4.4. The Initiative to shape the national economy must be kept The Initiative to shape the national economy must be kept in the hands of in the hands of the State and the National People.the State and the National People.
Four Economic ObjectivesFour Economic Objectives
Part-1Part-1Major Industries
Industry Contribution to
GDP (bn. kyats)
% of GDP
(1) Agricultural Sector(1) Agricultural Sector
(2) Manufacturing Sector(2) Manufacturing Sector
(3) Live Stock & Fisheries(3) Live Stock & Fisheries
SectorSector
1,8431,843
532532
445445
40%40%
11%11%
10%10%
Part-1Part-1Industrial Policy
The main aim of Industrial Policy was to develop Myanmar as an The main aim of Industrial Policy was to develop Myanmar as an
industrialized and developed country. Hence, the MIDC was formed in 1995 industrialized and developed country. Hence, the MIDC was formed in 1995
and laid down the following objectives for industrial development.and laid down the following objectives for industrial development.
1.1. To develop the industrial sector To develop the industrial sector basing the agriculturebasing the agriculture..
2.2. To enhance the To enhance the quantity and qualityquantity and quality of industrial products. of industrial products.
3.3. To increase the production of To increase the production of new types of machinery and equipmentsnew types of machinery and equipments..
4.4. To produce To produce industrial machineries and equipmentsindustrial machineries and equipments..
5.5. To create To create suitable conditionssuitable conditions for changing over to an industrialized state. for changing over to an industrialized state.
Industrial Development ObjectivesIndustrial Development Objectives
Part-1Part-1Comparative Advantage
Total areaTotal area : 678,500 sq km : 678,500 sq km
Land areaLand area : 657,740 sq km : 657,740 sq km
WaterWater : 20,760 sq km : 20,760 sq km Irrigated land areaIrrigated land area : 18,700 sq km : 18,700 sq km (2003) (2003)
CoastlineCoastline : 1,930 km : 1,930 km Electricity productionElectricity production : 6.31 billion kWh : 6.31 billion kWh (2004) (2004)
Educated populationEducated population : 83.1% of the population : 83.1% of the population (1995) (1995)
Labor forceLabor force : 28.49 million : 28.49 million (2006 est.)(2006 est.)
Rich and diverse Natural Resources:Rich and diverse Natural Resources:
Well-educated Human Resources:Well-educated Human Resources:
Part-1Part-1Major Export-Import Goods
1.1. Natural GasNatural Gas
2.2. GarmentGarment
3.3. TimberTimber
4.4. JadeJade
5.5. Hard-woodHard-wood
6.6. BeansBeans
7.7. Mining and MineralsMining and Minerals
8.8. PrawnPrawn
9.9. FishFish
10.10. Green PeasGreen Peas
1.1. Natural GasNatural Gas
2.2. GarmentGarment
3.3. TimberTimber
4.4. JadeJade
5.5. Hard-woodHard-wood
6.6. BeansBeans
7.7. Mining and MineralsMining and Minerals
8.8. PrawnPrawn
9.9. FishFish
10.10. Green PeasGreen Peas
Export GoodsExport Goods
1.1. Petroleum productsPetroleum products
2.2. Machinery productsMachinery products
3.3. Steel and construction materialsSteel and construction materials
4.4. Plastic raw materialsPlastic raw materials
5.5. Edible oilEdible oil
6.6. Ship and accessoriesShip and accessories
7.7. PharmaceuticalsPharmaceuticals
8.8. Vehicles and accessoriesVehicles and accessories
9.9. Steel and accessoriesSteel and accessories
10.10. Telecommunication equipmentsTelecommunication equipments
Import GoodsImport Goods
Part-1Part-1Political Regime
AdministrationAdministration
Myanmar is divided into 7 administrative Myanmar is divided into 7 administrative
divisions and 7 states. The administrative divisions and 7 states. The administrative
divisionsdivisions, mainly populated by the , mainly populated by the
majority, majority, BamarBamar, include:, include:
1.1. Ayeyarwady, Ayeyarwady,
2.2. Bago, Bago,
3.3. Magway, Magway,
4.4. Mandalay, Mandalay,
5.5. Sagaing, Sagaing,
6.6. Tanintharyi andTanintharyi and
7.7. YangonYangon
Meanwhile, the Meanwhile, the statesstates mostly mostly inhabited by minorities of inhabited by minorities of various ethnic groups are:various ethnic groups are:
1.1. Chin,Chin,
2.2. Kachin,Kachin,
3.3. Kayin @ karen,Kayin @ karen,
4.4. Kayah,Kayah,
5.5. Mon,Mon,
6.6. Rakhine andRakhine and
7.7. Shan.Shan.
Part-2Part-2Current Status of SMEs
Definition of SMEDefinition of SME
Size No. of
Workers
Capital Invested
(kyats)
Power Usage
(HP)
CottageCottage <10<10 -- --
SmallSmall 10-5010-50 1 million1 million 3-253-25
MediumMedium 51-10051-100 1-5 million1-5 million 26-5026-50
LargeLarge >100>100 >5 million>5 million >50>50
Note: Cottage industry means a small scale production, repair, maintenance and service industry by members of a family or by engaging workers or collectively.
Part-2Part-2Current Status of SMEs
Number of SMEs.Number of SMEs.
Size No. of
Industries
No. of Workers
employed
Annual Production
(million kyats)
SmallSmall 33,44233,442 -- --
MediumMedium 6,7446,744 -- --
LargeLarge 3,6013,601 -- --
TotalTotal 43,78743,787 438,523438,523 12600571260057
(March 2009)
Part-2Part-2Current Status of SMEs
Type of SMEs.Type of SMEs.
Business Type Small Medium Large Total
FoodFoodGarmentGarmentLivingLivingConsumer goodsConsumer goodsHouse-hold goodsHouse-hold goodsLiteratureLiteratureRaw materialsRaw materialsMinerals & MiningMinerals & MiningAgricultural machinesAgricultural machinesIndustrial machinesIndustrial machinesMotor vehicle productionMotor vehicle productionElectrical ProductsElectrical ProductsGeneral workshopsGeneral workshops
22883228831,3401,3402,2372,237409409119119188188350350
1,2201,2203838
17917961611111
4,4074,407
3,8343,83436836851251236336365657474
2262263163162828747428281616
840840
1,8611,86125125143543528128110910921219494
15815814143030
1221224040
185185
2,85782,85781,9591,9593,1843,1841,0531,053293293283283670670
1,6941,6948080
2832832112116767
5,4325,432
TotalTotal 33,44233,442 6,7446,744 3,6013,601 43,78743,787
(76.37%)(76.37%) (15.4%)(15.4%) (8.22%)(8.22%) (100%)(100%)
(March 2009)
Part-2Part-2Current Status of SMEs
Growth of SMEGrowth of SME
Size 2004 2005 2006 2007 2008
SmallSmall 33,86333,863 33,45633,456 33,45533,455 33,45533,455 33,44233,442
MediumMedium 6,3596,359 6,4306,430 6,4796,479 6,4946,494 6,7446,744
LargeLarge 3,2133,213 3,4383,438 3,4623,462 3,4723,472 3,6013,601
TotalTotal 43,43543,435 43,32443,324 43,39643,396 43,42143,421 43,78743,787
Part-1Part-1
Part-2Part-2Requirements for SMEs development
The requirements to development are as follows;The requirements to development are as follows; (a)(a) InfrastructureInfrastructure (b)(b) CapitalCapital InvestmentInvestment (c)(c) Industries and MachineriesIndustries and Machineries (d)(d) Human ResourcesHuman Resources (e)(e) Technology and Skill DevelopmentTechnology and Skill Development (f)(f) Fiscal policies and Financial InstitutionsFiscal policies and Financial Institutions (g)(g) Financial SupportingFinancial Supporting (h)(h) Innovation and Quality ControlInnovation and Quality Control (i)(i) MarketingMarketing (j)(j) International and Regional CooperationInternational and Regional Cooperation (k)(k) Hi-tech Electronic Communication and Information TechnologyHi-tech Electronic Communication and Information Technology
Part-3Part-3SME Promotion Policy
Policy Guidelines:Policy Guidelines:
To assist the development of economy with more To assist the development of economy with more suitable suitable
income distributionincome distribution..
To complement and To complement and support large-scale industriessupport large-scale industries through a through a
network of industrial linkages.network of industrial linkages.
To produce To produce high quality and value-added productshigh quality and value-added products..
Part-3Part-3Laws
LawsLaws
Private Industrial Enterprise LawPrivate Industrial Enterprise Law 19901990
Promotion of Cottage Industries LawPromotion of Cottage Industries Law 19911991
Myanmar Citizen Investment LawMyanmar Citizen Investment Law 19941994
Following laws are to encourage, promote and foster the establishment Following laws are to encourage, promote and foster the establishment
of private SMEs.of private SMEs.
Part-3Part-3
Committee for Industrial Development(CID)
headed by Prime Minister
Committee for Industrial Development(CID)
headed by Prime Minister
Myanma Industrial Development Committee(MIDC)
headed by Minister for Ministry of Industry (1)
Myanma Industrial Development Committee(MIDC)
headed by Minister for Ministry of Industry (1)
Myanma Industrial Development Working Committee (MIDWC)
headed by Minister for Ministry of Industry (2)
Myanma Industrial Development Working Committee (MIDWC)
headed by Minister for Ministry of Industry (2)
(10) Sub-Committeesheaded by Deputy Ministers for related Ministries
Industrial Zone Supervisory and Management Committees
headed by regional district authorities
Institutions for SME Development
Part-3Part-3SME Promotions
Promotion Activities:Promotion Activities:
Since the formation of Since the formation of MIDCMIDC, it has been actively taking steps , it has been actively taking steps
for private industrial development by:for private industrial development by:
Establishing industrial zones, Establishing industrial zones,
Holding industrial exhibitions, seminars and workshops, andHolding industrial exhibitions, seminars and workshops, and
Setting up the Myanmar Industrial Development Bank for Setting up the Myanmar Industrial Development Bank for
granting industrial loans to private enterprises.granting industrial loans to private enterprises.
Part-3Part-3Business Registration
Myanmar Citizen Investment Law, MCIL Myanmar Citizen Investment Law, MCIL (1994)(1994)
With a view to promote investment of Myanmar citizen and to With a view to promote investment of Myanmar citizen and to provide provide equal treatmentequal treatment as foreign investors by granting them the as foreign investors by granting them the right to enjoy to tax incentives, the MCIL was promulgated on 31right to enjoy to tax incentives, the MCIL was promulgated on 31stst March 1994 and its procedures were prescribed on 3March 1994 and its procedures were prescribed on 3rdrd August 1994. August 1994.
Partnership ActPartnership Act (1932), (1932), Myanmar Company ActMyanmar Company Act (1914) (1914)
Company limited by shares is required to Company limited by shares is required to registerregister. There are two . There are two types of companies, types of companies, private limitedprivate limited company and company and public limitedpublic limited company. The number of shareholders must be at least seven. The company. The number of shareholders must be at least seven. The company, after registration, must apply for a company, after registration, must apply for a Certificate of Certificate of Commencement of Business.Commencement of Business.
Part-3Part-3Trade Regulations
Trade RegulationsTrade Regulations
Since Since 19881988, Myanmar citizens were allowed to register as exporters, , Myanmar citizens were allowed to register as exporters,
importers and business representatives. Registered exporters and importers and business representatives. Registered exporters and
importers are permitted to engage in foreign trade according to the importers are permitted to engage in foreign trade according to the
rules and regulations prescribed by the rules and regulations prescribed by the Ministry of CommerceMinistry of Commerce..
Myanmar was a founder member of the General Agreement of Tariff Myanmar was a founder member of the General Agreement of Tariff
and Trade (GATT) and member of World Trade Organization (WTO). and Trade (GATT) and member of World Trade Organization (WTO).
Hence, Myanmar’s external trade practices are generally governed Hence, Myanmar’s external trade practices are generally governed
by by WTO trading principlesWTO trading principles..
Part-3Part-3Tax
Income TaxIncome Tax
An enterprise operating under Myanmar Companies Act is liable to An enterprise operating under Myanmar Companies Act is liable to 30%30%
income tax.income tax.
Divided and profitsDivided and profits received are not treated as part of the total income and received are not treated as part of the total income and
exempted from tax.exempted from tax.
Commercial TaxCommercial Tax
The commercial tax is levied according to the schedules in the law, which is The commercial tax is levied according to the schedules in the law, which is
ranging from ranging from 5% to 25%5% to 25% depending on the nature of goods. Some specific depending on the nature of goods. Some specific
commodities are charged from commodities are charged from 30% to 200%,30% to 200%, such as cigarette, liquor, etc. such as cigarette, liquor, etc.
Part-3Part-3Trade Regulations
Border TradeBorder Trade
To develop and strengthen the bilateral trade relations with five To develop and strengthen the bilateral trade relations with five
neighboring countries, namely neighboring countries, namely Thai, Laos, China, Bangladesh, Thai, Laos, China, Bangladesh,
IndiaIndia, by using , by using border tradeborder trade as a mechanism for trade expansion. as a mechanism for trade expansion.
The Ministry of Commerce has established the The Ministry of Commerce has established the Department of Department of
Border TradeBorder Trade in August 1996. The department is providing in August 1996. The department is providing one-stop one-stop
servicesservices for border trade matters in collaboration with various for border trade matters in collaboration with various
departments concerned.departments concerned.
Part-3Part-3Business Development Services (BDS)
Current Situation of BDS (Government)Current Situation of BDS (Government)
Following Sub-committees are formed under MIDC to aid the SMEs in their Following Sub-committees are formed under MIDC to aid the SMEs in their respective industries:respective industries:
1.1. Farm Machinery & Equipment Production Sub-committeeFarm Machinery & Equipment Production Sub-committee
2.2. Standardization Sub-committeeStandardization Sub-committee
3.3. Industrial Law Drafting Sub-committeeIndustrial Law Drafting Sub-committee
4.4. Small & Medium Industry Development Sub-committeeSmall & Medium Industry Development Sub-committee
5.5. Industrial Information & Publication Sub-committeeIndustrial Information & Publication Sub-committee
6.6. Human Resource Development Sub-committeeHuman Resource Development Sub-committee
7.7. Motor Vehicle Production Development Sub-committeeMotor Vehicle Production Development Sub-committee
8.8. Iron & Steel Production Development Sub-committeeIron & Steel Production Development Sub-committee
9.9. Research & Development Sub-committeeResearch & Development Sub-committee
10.10. Rubber Product Development Sub-committeeRubber Product Development Sub-committee
Part-3Part-3Business Development Services (BDS)
Current Situation of BDS (NGO)Current Situation of BDS (NGO)
Industrial Associations are formed and affiliated with Union of Industrial Associations are formed and affiliated with Union of Myanmar Myanmar
Federation of Chamber of Commerce and Industry Federation of Chamber of Commerce and Industry (UMFCCI), such as:(UMFCCI), such as:
1.1. Myanmar Rice Millers Association (MRMA)Myanmar Rice Millers Association (MRMA)
2.2. Myanmar Industries Association (MIA)Myanmar Industries Association (MIA)
3.3. Myanmar Computer Industry Association (MCIA)Myanmar Computer Industry Association (MCIA)
4.4. Myanmar Garment Manufacturers Association (MGMA)Myanmar Garment Manufacturers Association (MGMA)
5.5. Myanmar Plastic Industries Association (MPIA)Myanmar Plastic Industries Association (MPIA)
Part-3Part-3Business Development Services (BDS)
Activities and Services of BDS (NGO)Activities and Services of BDS (NGO)
Activities and services of Myanmar Industries Association (MIA) are:Activities and services of Myanmar Industries Association (MIA) are:
1.1. Consultancy servicesConsultancy services in project formulation and implementation. in project formulation and implementation.
2.2. Conducting Conducting seminars, workshops and trainingsseminars, workshops and trainings on topics of on topics of
commercial. industrial and managerial interests.commercial. industrial and managerial interests.
3.3. PublicationPublication and distribution of industrial information bulletins and and distribution of industrial information bulletins and
newsletters.newsletters.
4.4. Organizing member’s company to participate in local and overseas Organizing member’s company to participate in local and overseas
trade fairs and exhibitiontrade fairs and exhibition..
5.5. Organizing and making arrangement for the Organizing and making arrangement for the exchange of informationexchange of information
and views among local and foreign industrialists.and views among local and foreign industrialists.
Part-3Part-3Business Development Services (BDS) contd.
Activities and Services of BDS (NGO)Activities and Services of BDS (NGO)
6.6. Organizing and arranging business opportunities Organizing and arranging business opportunities networking networking between between
local and foreign enterprises.local and foreign enterprises.
7.7. Organizing and making arrangements for factory visits, Organizing and making arrangements for factory visits, study toursstudy tours and and
sending business mission overseas.sending business mission overseas.
8.8. Acting as representative of the member’s companies in Acting as representative of the member’s companies in advising advising
governmentgovernment in matters affecting businesses and the economy. in matters affecting businesses and the economy.
9.9. Facilitating networkingFacilitating networking through a variety of Chambers/Associations through a variety of Chambers/Associations
activities.activities.
Part-3Part-3Business Development Services (BDS)
SME FinancingSME Financing
The present initiatives in The present initiatives in SME financing SME financing are carried out by private are carried out by private
banks and Government banks, such as:banks and Government banks, such as:
Myanmar Industrial Development Bank (Government)Myanmar Industrial Development Bank (Government)
Myanmar Economic Bank (Government)Myanmar Economic Bank (Government)
Myanmar Live Stock & Fisheries Bank (Government)Myanmar Live Stock & Fisheries Bank (Government)
Myanmar Private Banks (Private)Myanmar Private Banks (Private)