You are on page 1of 34


Industrial Development
U Win Khaing, President
Myanmar Engineering Society

Tel. 0095-1-519673; 0095-1-519674; 0095-1-519675; 0095-1-519676

Mobile: 0095-95002596
Fax: 0095-1-519681

1 July 2011
About Myanmar

Nay Pyi Taw

About Myanmar
Name : Republic of the Union of Myanmar
Capital: Naypyitaw
Major cities: Yangon (Pop-7 m) and
Mandalay (Pop-1 m)
Area: 676,578 Sq Km
Population:60 million
Government: President elected by Bicameral
assembly called Pyidaungsu Hluttaw
Administrative States and Divisions: 7 states and
7 Divisions
Main Export: Natural gas, beans, pulses, teak, minerals,
gems and rice
About Myanmar

GDP: MMK 36,146.72 Ban (2010)

Literacy: about 95% in 2010

About Myanmar
Infrastructure: Railway – 5,707 km
Roads – 35,386 km
69 airports
25 ports & jetties (Foreign going)
3 container ports
321 microwave stations
Phones about 1.5 m
electricity – 3,344 MW (installed capacities)
schools – 40,876/about 8.15 m students
154 universities & colleges/ about 0.68 m
898 hospitals

Development of National
Review of present industrial environment
State owned industries
Semi state owned (MEC,UMEHL)
MIC industries (under FDI)
Industrial zones (18)
Medium scale industries (private)
Small scale industries (private)
Cottage industries (private)
Family type (private)
Workshops/machine shops (private)
Statistics on ownership of industrial
establishments (2010)

State owned………………… (791)

Private owned……………… (101,000)

No of persons employed in industrial sector about

4.8 million
Industries by size
Small 25 hp 50 workers
Medium 50 hp 100 workers
Large over 50 hp over 100 workers
Note : State owned enterprises are large scale and
possess extensive technical and human resources.
Future industries
Dawei Special Economic Zone

Kyaukpyu Economic and Technology Zone

Thilawa SEZ

Others in domestic areas (Thargaya, Myingyan, etc)

Ministries and semi-government organizations, NGOs,
private companies involved in industrial sector
Ministry of Industry No.1
Ministry of Industry No.2
Ministry of Myanma Industrial Development (formed April
Ministry of Mines (Iron and steel, copper, nickel, tin, coal
Ministry of Energy (Petrochemical Industries, refining,
fertilizer production)
Ministry of Commerce (Rice Mills)
Ministry of Livestock and Fisheries (Animal and marine
products processing)
Ministry of Forestry (Timber products processing)
Ministry of Agriculture and Irrigation (Sugar and rubber
cultivation & processing. cotton and jute)
Ministry of Cooperatives (Producer CoOps)
Ministry of Information (newspapers, magazines and
printing presses)
Ministry of Defence (Defence Industries)
Myanma Economic Corporation (MEC)-(Steel production)
Union of Myanmar Economic Holdings Ltd. (UMEHL)
RUMFCCI (Agriculture, Trade and Industry)
Myanmar Industries Association (MIA)-Industrial Zones
Private companies (Cement production)
Ministries involved in Infrastructure Sector
Ministry of Electric Power No.1 ( Generation from
Ministry of Electric Power No.2 (Generation from
gas, transmission and distribution)
Ministry of Energy (Natural gas production and
transport, oil production)
Ministry of Construction (Roads and Bridges)
Ministry of Posts and Telecoms (Communications)
Ministry of Transport (Ports and air transport,
Ministry of Rail Transportation (Road and Rail
Ministries and NGOs, private sector involved in
human resources development
Ministry of Education
Ministry of Science and Technology
Ministry of Industry No.2
Ministry of Labour
Ministry of Health
Myanmar Computer Federation
Myanmar Engineering Society
Technical Training Schools (private)
Industrial Development Committee (IDC )
The IDC is headed by the Minister of Industry No.2 and comprise
the following sub-committees headed by Deputy Ministers
Industrial Development Supporting and increasing Productivity
SME Development
Environmental and Renewable Energy
Import Substitution & Export Promotion
Human Resource Development
Automobile Production
Agricultural and Farm Machinery Production Development
Food Industry Development
Chemical Industry Development
Rubber Industry Development
Myanmar Work Force
about 35.5 million (60% of population)

about 5 m in industrial sector

about 7.5 m in services sector

about 23 m in agriculture sector

Foreign Investment by Sector Approved Amount %
1. Energy …………………………………….14,529.742 m 40.91
2. Oil and Gas………………………………13,815.375 m 38.90
3. Minging……………………………………2,395.386 m 6.74
4. Manufacturing…………………………1,668.126 m 4.70
5. Hotel and Tourism……………………1,064.811 m 3.00
6. Real Estate……………………………….1,056.453 m 2.97
7. Livestock and Fisheries…………….324.358 m 0.91
8. Transport and Communication…313.272 m 0.88
9. Industrial Estate……………………….193.113 m 0.54
10. Agriculture……………………………..96.351 m 0.27
11. Construction…………………………..37.767 m 0.11
12. Other Services………………………..23.686 m 0.07
Total……..USD 35,518.440 million 100.00
(USD 35.518 Bn)
Note: FDI of USD 35.518 billion was recorded on 31 January 2011
FDI led export driven economy can be the engine of growth
and will benefit the alleviation of poverty
FDI led industrialization by MNCs can have some impacts due
to supply chain disruptions (natural disaster, unrest, financial
instability, etc)
The MNC global factory concept of geographical locations for
production and value adding and final assembly nearest end
users by integrating local producers into global supply chains
The global factory concept enables MNCs and different
locations of developing countries to specialize in specific parts
of global value chain to service different geographical
Environmental concerns and Kyoto Protocol Annex-II (for
developing countries) is taken as a plus side for FDI investing
in developing countries
Industrial Clusters concept
Clusters are backbone of industrial development in
developing countries
Resource based clusters: processed food, wood,
leather, rubber, gem-stones, etc
Low tech industries clusters: textiles, garments,
footwear, furniture, glassware, toys, etc
Medium tech industries: automobiles, chemicals,
machinery, etc
High tech industries: electronics, pharmaceuticals,
biotechnology, precision instruments, aerospace, etc
Types of industrial clusters
Large national firms and local suppliers.
Micro, small and medium enterprises (MSME)
MNCs and local suppliers,
Myanmar still has comparative advantage in labour
intensive industries and mineral extraction
Labour abundance is linked to “productivity vs.
adjusted cost of labour”.
Vietnam Experience
Vietnam has made remarkable transition since
1989 from a centrally planned industrial sector to an
industrial sector governed by market forces.

Much of the success in industrial development has

been the result of government’s decisions to remove
barriers to entrepreneur efforts in FDI and domestic
private investors.

Macroeconomic stability was achieved within 5-6

Vietnam Experience
Improving Business Climate by:
Political climate and international relations
Basic economic system
Banking system
Legal framework
Taxation system
Intellectual proprietary rights
Vietnam Experience
Improving Foreign Investment Climate by:
Legal framework
Investment guarantees
Establish sectors with FDI encouragement
Taxation and tax incentives
Foreign exchange incentives
Land lease and rent
BOT,BT and BTO projects
Industrial zones
Vietnam Experience
Improving Trade Environment by:
Trade legislation
Trade liberalization
Export and import policy
Foreign trade contracts and Vietnam laws
Export processing contracts and Vietnam laws
International shipping and freight forwarding
Certificate of origin for exports
Resolution of disputes

Development of Small Scale

Rural Industries
Development of Small Scale Rural Industries
The GoM has recently announced the 8 point program for
rural development and poverty alleviation
They are:-
Development of agricultural production sector
Development of rural productivity and cottage industries
Development of microwaving and credit enterprises
Development of rural cooperatives tasks
Development of rural socio-economy
Development of rural energy
Environmental conservation
The main objective is to develop the rural economies and
create jobs
The characteristics of agricultural economy is that it is
Thus under employment situation exists in rural areas
With 23 million working in the agriculture sector and
forming 70% of the population the need arise to create jobs
in the rural area and develop the rural industries
Poverty alleviation can be reduced by introducing and
promoting small scale industries in appropriate rural areas
This will create additional jobs and income for farmers
It will mitigate rural-urban migration
Non-farming income can be generated by developing
small scale rural industries
They are in:
food processing
agro products processing
wood processing
textiles and garments production
construction materials production
These are 80% based on domestic natural resources
* traditional handicrafts to be linked to domestic tourist
sales outlets and for export
Incentives for success
simplify business registration procedures
simplify tax assessments
micro and mini financing
better roads and communications
extended electrification
improved access to social services i.e. education and
This is similar to the concepts in OVOP(One Village One
Product) movement which is being implemented with
considerable success in many neighbouring countries to
improve rural economies and reduce poverty by creating
small scale industries and providing jobs.
The potential OVOP group are in:
Wood carvings, bamboo products
Tourism related souvenirs
Clothes and silk weaving
Embroidery, bags, fine mat
Costume jewelries
The potential OVOP group are in:
Rattan furniture
Pottery and ceramics
Cooking oil (groundnut, sesame, sun flower)
Toddy palm products
Honey, preserved fruits, fruit juices
Preserved meats, sausages and dried fish
Concrete blocks, bricks, lime, late rite
Dairy and milk
OVOP group must be decided on natural resources,
human resources, expertise, traditional, cultural aspects
To identify the best product suitable for each township
and village within region/state.
With tourism on the rise, OVOP for tourism related
products will greatly help rural people living near tourist
The presence of many Myanmars abroad also increase
OVOP market for packaged and preserve traditional
food with quality control
To develop the national industries with own resources
and FDI for import substitution and exports.
The national industries led by heavy industries and
mechanical industry under taken with state support and
the active promotion of SMEs with private participation
and entrepreneurship.
To develop the small scale industries and micro-
industries in rural areas to help develop the rural
economies by creating employment and raising the
income and gradually reduce poverty.