Central Committee for Development of Micro, Small and Medium Enterprises of Republic of Union of Myanmar holds meeting 1/2022, addressed by SAC Chairman Prime Minister Senior General Min Aung Hlaing
NAY PYI TAW September 23
The Central Committee for Development of Micro, Small and Medium Enterprises of the Republic of Union of Myanmar held meeting 1/2022 at the State Administration Council Chairman’s Office here this afternoon addressed by Chairman of the central committee Chairman of SAC Prime Minister Senior General Min Aung Hlaing.
Also present were Vice Chairman of the central committee SAC Vice Chairman Deputy Prime Minister Vice-Senior General Soe Win, central committee member SAC member Lt-Gen Moe Myint Tun, Union ministers, the Nay Pyi Taw Council chairman, the governor of Central Bank of Myanmar and deputy mini sters, the chairman of Myanmar Banks Association, the president of Union of Myanmar Federation of Chambers of Commerce and Industry and the patron of Federation of Myanmar Engineering Societies.
Chief ministers of regions and states took part in the meeting through Video Conferencing.The Senior General said the meeting is important for national economic development. Although such a meeting could not be held for various reasons in the past, there were accomplishments as necessary guidance in connection of MSMEs has been given.
Now the term SME has been replaced with the term MSME to have the greater essence. MSMEs are the main driving force for economic promotion and development of a country.Over 90 percent of industries in developed and developing countries are MSMEs.
The government has adopted three economic objectives in its economic policies. They are -- To enhance production based on agriculture and livestock through modern techniques and strengthen all-round development in other sectors of the economy;
to develop a stable market economy and promote international investment in order to enhance the economic development of the entire National people; and to promote and support local businesses to create employment opportunities and increase domestic production.
According to the third point, the State will encourage domestic businesses.MSMEs ensure quicker response to the needs of changing market than big industries. Seventy percent of countries population is rural people who rely on farming-based business. So, farming-based industries are effective businesses. The main crops in agriculture are rice, wheat, corn, oil crops, beans and industrial crops rubber, cotton, sugarcane, tobacco, jute and herbal plants. In the breeding sector, chicken, pigs, goats, cows and fish are raised. The country is rich in underground and aboveground natural resources.
It also has forests and forest products, and minerals such as limestone, iron, coal, precious gems, tin, and tungsten.It will be much beneficial for the country if these resources can be produced through MSME.
Encouraging MSMEs means encouraging the businesses centred on the private sector. The country is practicing market economy and multi-party democracy.In market economy, the private sector and the individual sectors are the main driving force of a country. Government involvement is required to save burdensome large-scale investments and businesses with less capital from possible losses.
Government involvement in certain sectors of the economy can be seen in every country.Depending on the national situation, the government will take part in the necessary sectors.MSME is of four kinds—productivity, trading, service and others. Of them, manufacturing businesses are practical, and without manufacturing, businesses related to trading and services cannot be operated. The country passed the SME law based on MSME in 2015 in parliament, and adopted its policies and rules. The enactment of laws, rules and policies are aimed at carrying out tasks effectively and operating businesses practically.
With a lack of practicality, there was misunderstanding among the public. Trust is required in doing business, so discussion is focused on MSME. My business policy is to encourage domestic economy and manufacturing.
The strength of the nation lies within. It is best to do business inside the country rather than placing reliance on foreign countries. In this context, effective businesses must be conducted. National economic growth must be achieved with the strength of domestic businesses. This is why it is necessary to achieve further progress by making best use of already-existing sources.
As far as I have learned about manufacturing, there are four main factors—raw materials, inputs, capital and capacity.Goods can be produced only if we have raw materials. Likewise, power and energy is necessary.With capital and investment, businesses can be operated.With skilled workers, businesses can operate. In running MSMEs, it is necessary to produce valued-added goods based on agriculture and livestock which can guarantee raw materials and valued-added goods based on underground and aboveground natural resources. I have often said it is necessary narrow the gap between and rural and urban areas and between one region and another. With such gaps, rural people have to go to urban areas for work.Industrial zones must be established in all regions and states. Some regions have yet to establish them. So, they need to be established to produce the goods suitable to their own regions.
Since more districts have been formed in our country, industrial zones and communities Central Committee for Development of Micro, Small and Medium Enterprises of Republic of Union of Myanmar holds meeting 1/2022, addressed by SAC Chairman Prime Minister Senior General Min Aung Hlaing See Page – 19 must be established in important districts. That will facilitate the production of goods suitable to the respective regions and improve sales of products. Industries based on MSME must be established in every region.
With that, regional job opportunities can be created and the number of those going abroad for work will decrease.More small, medium and large scale hydropower and solar power products must be implemented to generate electricity necessary for MSMEs.Efforts are also being made to produce electrical goods locally.It is necessary to do such tasks successfully for the future economy of Myanmar.
Basically, we can operate MSMEs in our country. For capital purposes, the government can give necessary loans. Funds were raised for agricultural development and the remaining funds are earmarked for the improvement of MSME sector.
If MSMEs can be operated in a correct way, rules and disciplines will be adopted to keep loans ready. Regarding the need of human resources, about 19 million of people aged 25 and above are still weak in their education, according to the national census.On-job training courses should be conducted for them to join worksites. For those whose education level is KG+10 and beyond, efforts must be exerted to produce human resources for the country through education promotion. Those training courses must be extensively in the regions and states. The successive Tatmadaw governments tried to produce human resources by establishing 24 special development zones where universities, colleges and hospitals were built. The reason was to turn out human resources for management. All union and region/state levels should emphasize and achieve this aim.
As most of the products manufactured in Myanmar are of low quality and fail to fetch good prices. The quality of our products is low because of the weaknesses of machines, technology and human resources. Therefore, it is necessary to take measures that help our products meet quality standards. In the manufacturing sector, production of foodstuffs, beverages, textile and clothes, leather products, finished wood products, medicines and botanical products, rubber and plastic
products, non-metal minerals, basic metal products, furniture and agricultural, livestock and forest products are ones our country can manufacture practically and measures must be taken to give the first priority to them. The second priority must be given to production of tobacco and cigarettes, paper, crude oil and coal, chemicals and chemical products, refined metal products, computers and electronic devices, electric equipment, machines, cars and trucks and other transportation vehicles and other goods according to their order of importance.
Our country has enough raw materials for the products in the first priority but still needs investment and technology for production of chemical and other products.There are more than 40,000 MSMEs in our country and it is necessary to acquire markets to achieve success for them and to provide services and conduct trade. Therefore, it is important to take cooperation with the international community and the speedy flow of information and commodities into considerations.
As such measures cannot be implemented immediately at the same time and must be carried out phase by phase, I would like to urge all committee members to make concerted efforts. When MSMEs in our country were assessed according to ASEAN Index, it was found that some were low in the index and others were in the intermediate levels.Nevertheless, our MSMEs are required to be pragmatically operational and it was found that trade and service based on the manufacturing sector stood at 25 percent and 16 percent respectively. The manufacturing sector makes up 39 percent.
When the manufacturing sector makes progress, trading will improve. The service sector is overwhelmed by traders. Our country has more traders than manufacturers. It will be more beneficial if more manufacturing activities can be carried out in the country.
According to research by relevant ministry, it was found that lack of favourable environment and infrastructures for their operations, the need to ease the worries of entrepreneurs, capital investment, high costs of production, relying on traditional methods of production, low support for research and innovation are limiting their efforts to produce marketable quality products. It is necessary to produce marketable quality products. Therefore, if committee members take the findings into account and find out ways and means to implement them pragmatically, it is believed that MSMEs can effectively contribute to the economy of the country. Emphasis is placed on efforts to help MSMEs as they are the main driving force of the country.
Then, the central committee secretary Union Minister Dr Charlie Than reported to the Senior General on provisions of the constitution for development of MSMEs and industrial policies, interconnectedness with SME development policies, resources for economic development, SME development policies of Myanmar, the issuance of law, policies and rules for SME development, introduction of the term MSME to replace SME, formation of committees, organizations and departments in accordance with the SME Development Law, ministries participating in the development of SMEs, measures to be taken for development of SMEs and formation and tasks of the central committee, work committees and committees and submitted matters to be decided by the central committee.
Then, central committee members reported on encouraging domestic electronic equipment industries, disbursement of loans by the State and external organization for development of MSME and more plans of disbursement, setting up of an MSME fund, local and foreign investments, investment sector, plans to improve transport infrastructures and communication networks for development of MSME industries, releasing the business information by State-owned media for development of MSME industries, formation of cooperative societies in rural areas so as to establish small-scale industries, conducting of vocational courses, holding special sales and expos, allowing the operation of finished wood products, jewellery, minerals and industrial minerals, value-added products, increased production of domestic products in electrical sector, quality improvement of private sector’s products, human resource development and creation of job opportunities, needs to amend facts in the SME Law, needs of MSME to connect foreign direct investment, insertion of MSME topic in economic subjects of universities, need to set norms and standards for MSME industries, inspection of FDA for MSME products ensuring safe products of consumers, cooperation of relevant departments and organizations in fulfilling the needs of development for MSMEs, legal requirements and monetary necessaries.
In his responses, the Senior General said that the transport and communication system are important for development of businesses in the country.Hence, the government is prioritizing implementation of the public transport system. As rail transport is cost effective, international community is widely operating the rail transportation.It is necessary to be good for communication system in order to develop the MSME industries in regions and states. It is important for timely release of information for the people and it must be correct and safe.
Moreover, mobile phone and internet use must be systematic.State-owned media needs to release business information, prices of commodities and monetary data on time as a separate sector. The State, the Tatmadaw and the private sector need to disseminate information to the people in a correct and quick process. It is necessary to produce finished wood products meeting standards and minerals must be produced as valueadded products.
The Senior General stressed that relevant ministry needs to help MSME industries get sufficient electricity in respective regions, implement smallscale power generation and generate manageable scale electricity in respective areas not consume it from national grid. The vocational courses being conducted by the Labour Ministry must be effective.
Trainees turned out from the courses must be deployed in the workplaces efficiently.
An emphasis must be placed on seeking human resources.Domestic used MSME products must be standardized.Export product quality must meet the international standards.It is necessary to increase manufacturing in order to contribute to the State economy. Priority must be given to manufacturing based on agriculture, livestock and underground and aboveground natural resources.
Efforts must be made for manufacturing the import-substitute products and earning foreign exchange. It is necessary to increase region-wise production to contribute to the local economy. The government is at the level of adopting the policy whereas UMFCCI and associates need to join hands in implementing the MSME projects. MSME industries must mushroom in all regions and these must be a force to development of the local economy.
These industries must be legally protected.The SAC Vice-Chairman Deputy Minister reported on future plans of the work committee.In conclusion, the Senior General said that he saw all actively participated in the discussions at the meeting which focused on enhancement of State economy through MSME. The government plans to strive for development of all regions without vacancies. The government pledged to narrow the development gap among all regions and states as well as in all areas. It is necessary to consider the production based on raw materials produced in regions and states. Efforts must be made for generating human resources and narrow the education gap among the people.
Human resources must be utilized in cooperation with technologies and skills. The government and the private sector need to seek capitals for the projects.The Senior General underscored that transport, communications and road networks must be good. Only when roads, inter-village roads and manufacturing roads are good, can products be transported in a smooth process. The communication systems must be good.
t is necessary to emphasize these facts. The Senior General called for implementation of generating electricity in respective regions to operate factories and machines. The central committee is crucial for the State, and it must cooperate with relevant ministries for securing success in projects.