The advantages of Myanmar’s textile industry are gradually attracting attention
Recently, as expectations that the United States will relax its import policy on Myanmar products have increased, the development prospects of Myanmar’s textile and garment industry have attracted attention from the industry. The relevant measures introduced by the Myanmar government in recent days have also made the country a new hotspot for attracting overseas investment.
After the Myanmar parliamentary by-election was successfully completed on April 1, Western countries responded positively. The United States took the lead in expressing its readiness to relax some sanctions on Myanmar and allow American companies to invest or provide financial services in Myanmar. In Europe, the EU decided on April 23 to suspend some non-military sanctions on Myanmar and will lift sanctions on Myanmar as soon as possible if conditions permit.
It is understood that before the United States imposed trade sanctions on Myanmar in 2003, Myanmar’s main export markets for textiles and garments were the United States and the European Union. In the export market in 2000, the United States and the European Union accounted for 54.1% and 34.6% respectively, accounting for nearly 90% of Myanmar’s garment exports. Since the United States imposed sanctions, Myanmar’s garment exports to the United States have dropped sharply, and the EU market has also been affected. Replaced by the Japanese and Korean markets. It is expected that after the United States relaxes its import policy on Myanmar products, Myanmar’s textile and garment exports to Europe and the United States will rebound significantly.
In order to further promote foreign investment, the Myanmar government has recently introduced a number of measures. On March 16, the Myanmar Parliament passed an amendment to the Foreign Investment Law, relaxing a number of restrictions on foreign investors, including: they can hold 100% of the company’s equity, or they can form a joint venture with the Myanmar government or private individuals, but they must hold equity More than 35%; enjoy 5 years of tax exemption; allowed to lease land from the Myanmar government or private individuals for up to 30 years, which can be extended twice, each time up to 15 years; cancel the restriction that all products must be exported; and are not allowed to hire Foreign unskilled labor; the Myanmar government guarantees that foreign companies will not be nationalized. If the government wants to acquire them, they will be at market prices.
In terms of exchange rate, Myanmar has implemented a dual-track system in the past, and the official exchange rate has been linked to the Special Drawing Rights of the International Monetary Fund (IMF). Since April 2, Myanmar has officially launched a floating exchange rate system. The exchange rate is determined by market supply and demand. The exchange rate on the first day was set at 818 kyats per US dollar. In addition, Myanmar promulgated the Special Economic Zone Law early last year, but it has many shortcomings. The Myanmar government is hiring Japanese experts to help redraft it.
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