Myanmar economy situation confuses local business owners nowadays. After Myanmar Central Bank sold US $ 4 million to private banks, dollar exchange rate falls down to MMK 1480. As Sean Turnell mentioned earlier, increasing exchange rate is not a major problem for Myanmar citizens. He is the one who told “That’s crazy” remark to Kyaukphyu project. Moreover, he also did seminar at Novotel Hotel last week about Myanmar economy situation.
Although advisor Sean Turnell said some positive results regarding Myanmar economy, most local business owners rarely appreciate these results. In this article, we will point out some facts whether Myanmar market is an opportunity or not.
Economy is built on importing
Firstly, one needs to know current situation of the market. Since 2010, Myanmar economy situation is built on importing activities. Since then, the country sees trade deficit more than previous years. Major sectors like telecommunication, construction and mining, use machines and fuel imported. Consumers wear imported fabric, eat snacks and buy imported accessories. That makes trade deficit so much. Moreover, these imported goods are cheaper than local products.
As economies of scale keep the price down, how small scale local SME can compete imported ones. Recently, exchange rates increase and all imported products face less demand from consumers. Except necessary goods like fuel, sales of the rest imported goods fall below average.
Therefore, local owners should aware to reduce imports. Instead of doing importers, they should become manufacturers. However, there are some challenges for them. Lack of technology, low investment and high land price make local SME owners to start successful manufacturing business.
Talents can drive economy, but…
Lack of talented labor is another factor that makes local SME slow growth. Myanmar doesn’t have proper occupational schools. Most young people depend on private classes. Some local professionals operate these classes. Libraries are very rare in the cities. Even universities don’t have enough resources. Online learning is also not so popular among citizens.
Moreover, Myanmar society rarely appreciate the value of other professionals except medical doctors and engineers. Most teenagers aim to attend medical university or technology university with the strict guideline from their parents. Nowadays, there are very few experts in important sectors such as law, economy, politic and agriculture.
Fortunately, private occupational schools support young people by providing short-term courses in management, marketing, computer science and so on. Also, there are some free occupational courses for skills like welding.
In brief, the biggest opportunity for foreign investors is education sector. Manufacturing and agriculture industries follow after education sector. There are some local SME that can help foreign investors to find right partner.
If you want to know current Myanmar economy situation, you can download an infographic below.
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