By April Son
As Myanmar is an agro-based country, it is necessary to enhance the production and trade sectors in order to boost the national economy. To achieve this development, it is essential to support economic activities that are primarily based on agriculture and livestock farming measures. Moreover, all relevant ministries assigned by the government are responsible for fulfilling the basic needs of agricultural and livestock economic activities so as to fully accomplish their assigned objectives.
Necessary items such as fertilizers, pesticides, seeds, agricultural inputs and livestock feed, as well as necessary vaccines and agricultural drugs, must be delivered to farmers in a timely manner according to the seasonal schedule. It is also essential for relevant organizations, governmental departments and regional authorities to prioritize and systematically prevent the mixing of unwanted goods and ensure that permits for repeated shipments are not issued.
Emphasizing trade sector
The government has been implementing political, economic and social objectives since its establishment. In line with the national economic objectives adopted by the State, while utmost efforts are being made to develop the trade sector, illegal trade poses a significant barrier to the country’s economic growth and has a detrimental impact on the socioeconomic sector of the people and the State.
The importation of goods without tax payments, along with the introduction of non-compliant goods that do not meet standards and quality, has strengthened the foreign currency black market. On one hand, this has created an opportunity for traders from other countries to manipulate prices as they wish due to the illegal trading of goods. Moreover, the strengthening of illegal business activities has negatively impacted the stability of commodity prices inat the domestic market.
Practically, due to the illegal import activities, legal businesses in the country are facing difficulties in competing with prices with loss of market shares to the illegally imported commodities, leading to challenges in maintaining their operations in the long term. This situation is causing legitimate business owners to experience a decline in their economic power, diminishing their willingness to expand their businesses. Ultimately, local manufacturing industries may cease to operate, and if businesses within the country cannot thrive, it will negatively impact the nation’s economic objectives. Furthermore, this lack of success in projects will hinder productivity, manufacturing capacity, trade, and exchange capabilities.
Needs to combat illegal trade activities
In addition, due to the need of the country, there is a significant increase in illegal imports of goods that are necessary domestically, as a means to take advantage of the strict scrutiny on foreign currency expenditure and imports. It is crucial to effectively monitor, prevent, and capture these activities; if not addressed, measures of illegal trade could grow, leading to a loss of tax revenue for the nation and potentially prolonging the influence of various armed terrorist groups. As such, it is necessary to effectively combat and prevent illegal trade as a national responsibility.
At present, the World Trade Organization (WTO) constantly monitors the risks of illegal trade and works to mitigate them by utilizing agreements that include trade facilitation agreements, customs-related agreements, agreements on technical barriers, and agreements related to intellectual property rights in order to promote cooperation among member countries. According to findings from the World Economic Forum, illegal trade can account for 5-15 per cent of global Gross Domestic Product-GDP, which can have severe repercussions on the global economy.
The Illegal Trade Eradication Steering Committee has set up regional and state trade eradication task forces as its subordinates as part of efforts to eradicate illegal trade. The responsibilities of various task forces and the Steering Committee primarily include addressing issues related to illegal trade that hinder national economic development and create barriers. It is because these illegal trade issues not only diminish the production and market competitiveness of local entrepreneurs engaged in domestic manufacturing but also undermine their capacity and ability to compete effectively. Therefore, it is crucial to prevent and combat illegal trading activities firmly.
Functions of relevant task forces
Regional and state-level task forces for combatting illegal trade activities should implement measures to avoid unnecessary costs and delays at inspection checkpoints while carrying out their operations against illegal trade. This includes conducting thorough inspections on alternative routes for illicit activities, as well as systematically inspecting places where illegal passage is unavoidable. Additionally, it is vital to prevent the unlawful extraction of natural resources in the country and to more effectively counteract the illicit trade, taking action against the offenders in accordance with the law.
Due to the impact of illegal trade on the country’s economy, there is still a need to prioritize actions related to trade. It is important to ensure that activities concerning cross-border trade are conducted correctly and transparently. Additionally, due to unwanted expenses on routes, the prices of goods may increase. Local authorities must take responsible measures to prevent any actions that could hinder cross-border trade.
Only through enhancing the competitiveness of the manufacturing sector and the market can we elevate the export and trade sectors. This, in turn, will strengthen domestic consumption and improve the flow of money within the economy, including the ability to export goods abroad. Moreover, the influx of foreign currency will stimulate growth and activity at home, leading to the simultaneous development of the country’s manufacturing, trade, and service sectors. As such, the duties and functions of these task forces and duty-assigned combined squads must be heavy, and they have to prevent illegal trade without fail.
Seizures of illegal commodities
During a period of two years and eight months from January 2022 to August 2024, a total of 14,659 cases related to illegal trade measures were recorded, with an estimated value of K300.028 billion seized. This amount is relatively small when viewed in terms of the country’s trade sector. Therefore, it is necessary to focus on enhancing efforts to increase the seizure of illegal trade.
According to reports received in July and August 2024, a total of 117 cases resulted in seizures of illegal and smuggled commodities across the nation, with the total value of the seized items amounting to K2,140.951 million. The confiscated items included various types of timber, industrial materials, food products, and illegal motor vehicles, according to the coordination meeting of the recently-held Steering Committee.
With regard to seizures of smuggled commodities illegally imported abroad, the majority involve unlicensed vehicles and illegal goods transport vehicles, with the second highest being industrial raw materials and the third highest being investment goods.
Furthermore, relevant task forces have to notice that the illegal importation of goods across the border could lead to the introduction of infectious disease pathogens from foreign countries, resulting in disease transmission and significant losses in domestic agricultural production. In addition, the presence of illegal pharmaceuticals and cosmetics may cause health hazards, while counterfeit household electrical appliances lacking proper quality standards could pose fire risks, necessitating caution.
Challenges in combatting illegal trade
There are many reasons for the occurrence of illegal trade, with the main challenges being the limitations in monitoring and security at certain border areas of the country, weaknesses in some legislative measures, insufficient workforce involved in anti-illegal trade operations, and existing misconduct. These factors present significant challenges in combating illegal trade, highlighting the need for the utmost protection and prevention of such issues.
While non-tariff measures (NTMs), which are necessary for the importation of quality goods from abroad, are being implemented by countries around the world, it has been observed that the application of these measures is weak in some countries, including Myanmar. Myanmar has already established 26 technical committees for the development of national standards, which have been approved by the National Standards Council of Myanmar, and 819 Myanmar national standards have been issued. However, since these standards have not been issued as mandatory requirements, there is still no effective enforcement on the imported goods.
As such, in fighting against illegal trade, it is emphasized that regional and state-level task forces and relevant departments should strengthen their collaborative efforts to prevent the illegal production of domestic resources effectively. Moreover, it is necessary for those in responsible positions in the fight against illegal trade to be free from corruption and to perform their duties with security awareness and vigilance. It is urged that they carry out their responsibilities effectively in combating illegal trade.
At the coordination meeting 3/2024 held on 1 August 2024, the Steering Committee underlined that as the Ministry of Commerce has established a “Task Force” to implement Non-Tariff Measures (NTMs) since June 2024, this task force has to coordinate meetings with relevant departments to issue notifications for the standards and specifications for goods imported from abroad, encouraging continued efforts to carry out these measures effectively.
Furthermore, to reduce illegal trading activities and ensure the long-term sustainability of domestic manufacturing industries, it will be necessary to implement measures to increase tax rates on imported goods and complete the processes within the specified timeframe. Additionally, there is a request to continuously carry out the E-Lock Phase II processes that will assist in controlling illegal trading. As efforts are being made to reduce illicit trade, it is essential to recognize and reward government officials who are actively engaged in preventing the smuggling of illegal goods, as well as citizens who responsibly provide information. These rewards and recognition should be executed promptly and consistently.
As such, everybody needs to understand the duties and functions of regional and state-level task forces and the steering committee, which strive to combat illegal trade so as to boost legal trade activities and to decrease commodity prices in the domestic market. Service personnel from the relevant squads under the task forces and local authorities need to raise public awareness for anti-illegal activities. On the other hand, people need to inform local authorities as well as relevant task forces about illegal trade measures committed by unscrupulous businesspersons on a timely manner. If so, their conscientious contributions will be valuable in combatting illegal trade measures and serving the national responsibilities.
Ref: Speeches from meetings 3/2024 and 4/2024 of the Illegal Trade Eradication Steering Committee on 1 August and 9 October 2024.
