Recent research by CESD, based on a survey among garment and food processing companies, has built a greater understanding of how Myanmar’s small and medium sized enterprises (SMEs) participate in regional economic integration. CESD presented findings from their research at a regional workshop in Indonesia in January 2016, organised by the Economic Research Institute for ASEAN and East Asia (ERIA) and ISEAS –Yusof Ishak Institute, who had also funded CESD’s research on this topic.
Not surprisingly, Myanmar’s SMEs are less integrated into international trade than other ASEAN countries. However, ASEAN and East Asian countries play a comparatively important role as trade partners and investors for Myanmar.
Moreover, CESD’s research shows significant differences in the levels of international integration between the garment and food processing sectors, with 88% of surveyed Myanmar food manufacturers sourcing all of their inputs domestically, while in the garment sector the large majority of firms (95%) source at least some inputs from overseas, with only 5% of firms sourcing all of their inputs locally. Most of these foreign inputs are actually sourced from ASEAN and East Asian countries.
The share of exporters among surveyed firms was also much higher for the garment sector than for the food manufacturing sector (84% compared to 27%). However, ASEAN countries are more important as an export market for food producers than it is for garment manufacturers. The latter ship their products primarily to East Asian and western markets. All this reflects the dominance of the cut-make-pack (CMP) model in place in Myanmar, where the garment sector is dominated by labor-intensive assembly activities.
In presenting the survey findings at the regional workshop, CESD also spoke of the enabling factors and obstacles limiting the participation of SMEs in regional integration. Obstacles included the low use of information and communication technologies (ICT), and little engagement in innovation and technology efforts. Moreover, only a relatively small proportion of surveyed firms reported spending on training for their employees. The availability of skilled labor was also a frequently-cited, “very severe” constraint for firms. Surveyed firms also showed little knowledge, awareness or concern for the expected effects of Free Trade Agreements, or the role of the ASEAN Economic Community, let alone the possible opportunities (e.g. in terms of access to ASEAN markets) that it offers.
Further details are provided in CESD’s presentation, “Myanmar SMEs’ participation in ASEAN and East Asia regional economic integration, with a focus on the food and garment sectors”.
Presentation name: “Myanmar SMEs’ participation in ASEAN and East Asia regional economic integration, with a focus on the food and garment sectors”
Publication date: 23 January 2016
Download the publication from the following link:
- Myanmar SMEs’ participation in ASEAN and East Asia Regional economic integration (PDF; English version; 724Kb; 59 pages)