Mr Suku Bhaskaran, Executive Director of the Australian Food Marketing Centre and Professor Stephanie Fahey, head of the Department of Asian and International Studies, (both of which are at the Victoria University of Technology), studied short, medium and long-term implications in Myanmar for Australian exporters.

Their report – The Agrifood Sector in Myanmar, Market Review and Analysis of Trends – says an essential strategy for Australian companies is to position themselves to develop investment links in the agricultural, livestock and fishery sectors, and in food processing industries. But the researchers warn that world opinion regarding human rights abuses in Myanmar would be a barrier to entry into this market.
 

Research motivation

• the country’s population and land mass;
• its proximity to countries such as Thailand, India, China, Malaysia and Singapore (many of which were until recently among the fastest growing economies in the world);
• its membership of the Association of South East Asian Nations (ASEAN); and
• comments by business people from Southeast and East Asia that Myanmar had great potential to become a major food producer.

Increasing investor interest

These changes have contributed to increasing investor interest from ASEAN and other East Asian countries.

Generally, Myanmar’s economy is complementary to that of other countries in the region. It has the resource endowments to become a major food producer while countries such as Malaysia and Singapore have difficulty in increasing food production. In the next 10 years tariffs on intra-ASEAN trade in manufactured and processed agricultural goods will be reduced to between zero and five per cent, which should increase food exports from Myanmar to other ASEAN countries.
 

Key findings

The researchers suggest that in the medium term, Myanmar’s aggresive development of its food sector could impact on Australian food exports to ASEAN countries, China, India and to new markets such as Sri Lanka. This results from preferential tariff arrangements for members of the ASEAN Free Trade Association (AFTA) and investment-related trade between countries in the region.

However, Myanmar could become an important export destination for Australia in the long term if economic development, political stability and the inflow of tourists lead to demand for high-value food products.
 

Establishing a foothold

• Australian food processors must work with trading companies in Australia and importers in Myanmar to overcome regulatory hurdles and that some Australian exporters may have to resort to indirect exporting;
• Australian companies are well positioned to provide consultancy services in farming and food processing, but Commonwealth and State governments must support and assist companies to establish consortia type arrangements to undertake integrated consultancy, investment and trade projects in the agricultural, livestock and fishery sectors in Myanmar; and
• Australian companies should invest in Myanmar’s agricultural, livestock and fishery sectors which could improve the competitive advantage of Australian food companies because of:
• raw material availability and costs in Myanmar;
• savings in operating expenses including freight costs to ASEAN markets; and
• better market access because of trade arrangements between Myanmar and other countries (eg, AFTA and Cross-border Trade Agreements).

Research Methodology

The experiential survey involved amplifying information from the desktop study through face-to-face and telephone interviews with executives of selected food companies in Australia, ASEAN, Korea and Japan.

In-depth face-to-face interviews were conducted with approximately 80 persons in government, private companies, consultancies and industry associations in the Myanmar field study. In addition, the principal researcher consulted with several small-scale farmers, retailers, food importers and food service companies in Myanmar in order to gain an in-depth appreciation of the practices and changes in the country’s business environment.

The field study clarified the views of various respondents and provided a forum to check the information obtained during the desktop and exploratory studies.
 

Source: Central Statistical Organization (1997)
Central Statistical Organization (1996a)
Ministry of National Planning and Economic Development (1996b)

Table 5. Foreign Investment, Sectoral Share and Trends
 

Sector	Number of Projects		Amount (US$ millions)
	1993	1996	1993	1996
Oil and Gas	20	31	381.1	1,498.22
Manufacturing	25	71	89.27	1,073.78
Real Estate	-	13	-	839.95
Hotels and Tourism	18	38	287.33	731.24
Mining	10	41	155.35	496.97
Fisheries	9	15	87.58	252.04
Industrial Estate	-	3	-	193.11
Transport & Communication	1	10	1.00	169.09
Agriculture	1	2	2.69	8.68
Others	-	2	-	8.29
TOTAL	84	226	1,004.32	5,271.37

 
 Source: Ministry of National Planning and Economic Development (1996b)