The views expressed in this paper are the views of the author and do not necessarily reflect the

views or
policies of the Asian Development Bank Institute (ADBI), the Asian Development Bank (ADB), its Board of
Directors, or the governments they represent. ADBI does not guarantee the accuracy of the data included in
this paper and accepts no responsibility for any consequences of their use. Terminology used may not
necessarily be consistent with ADB official terms.

Khin Mar Yi
Moe Lwin
Myanmar

Country Report
For
Regional Workshop on Eco-industrial Clusters
Myanmar Participants
Date: 15.11.2013
Place: Nay Pyi Taw, the Republic of the Union of Myanmar

I. Introduction
Myanmar is situated in South East Asia and bordered on the north and northeast by
China, on the east and southeast by Laos and Thailand, on the south by the Andaman Sea and the
Bay of Bengal and on the west by Bangladesh and India. It is located between latitudes 09 32' N
and 28 31' N and longitudes 92 10' E and 10 11' E. The population of Myanmar is estimated
as 59.78 million with the growth rate of 1.1 percent. The country covers an area of 677,000
square kilometers (261,228 square miles). It is a land of hills and valleys and is rimmed in the
north, east and west by mountain ranges. Enclosed within the mountains are the flat lands of
Ayeyarwaddy, Chindwin and Sittaung River valleys where most of the country's agricultural
land and population are concentrated.
Myanmar's economy is largely depends on agriculture and energy. Agricultural exports
can be counted 25% to 30% of exports by value in 2012. Export of natural gas reserves total 7.8
trillion cubic feet. Current Myanmar's GDP is projected to 6 percent in FY2012/13 driven by
commodity exports and higher investment.
II. Industrial Development
Myanmar's economic development is affected by political and administrative systems.
Current Myanmar is changing rapidly in many sectors including industrial sector under the new
constitution like an era of reforms. When the new government responsibility in 2011, first
modified economic objective is building of a modern industrialized nation through agricultural
development and all round development of other sectors of the economy. It announced
implementation of a comprehensive development plan, including an industrial development plan.
On the other hand, as sectarian ratios in Myanmar's Gross Domestic Product (GDP),
agriculture sector is 37%, industrial sector is 26% and service is 37%. Therefore, Myanmar is
targeting as short term (5 years plan) (2011-2016); to increase GDP to 7.7%, to reduce
agricultural sector ratio from 36.4 to 29.2%, increase industrial sector ratio to 32.1% and service
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Moe Lwin
Myanmar

ratio to 38.7% each and per capita GDP to 1.7 increase. In current Myanmar's Gross Domestic
Product (GDP), private sector ratio is 91.7 %, cooperative ratio is 1.2 % and public ratio is 7.1%
including. Therefore, development of the private sector is the major role for economic growth of
the country.
For the development of industrialization, Ministry of Industry produced automobiles,
earthmoving equipments, agricultural machinery, diesel engines, tire & rubber, machine tools,
electrical appliances, generator, solar & LED, pharmaceutical and foodstuffs, cotton & textile
products, paper and home utilities intended mainly for creating job opportunities and to meet the
needs of the country.
Nowadays, in line with a changing global business and dynamic environment, it needs to
boost production for countrys economic development and to give encouragements to those who
have capitals for establishment of small and medium industries in their regions. It also needed to
help them in the forms of individuals, groups and cooperative societies and to give tax
exemptions to small industries. For doing so, industrial policies were changed with the new
objectives to promote investment ratio in industrial sector and small and medium enterprise
development as follows:
Eight Industrial Policies
1. To utilize modernized and advanced techniques of agriculture as the base to set up an
industrialized nation; to expand and develop Agro-base industries, Agri-business, Agriproducts and Value-added Business. To simultaneously continue the task for the
establishment of Heavy Industries while making unremitting efforts for the
implementation of small and medium enterprises.
2. Drive to implement small and medium enterprises and sustain efforts for establishment of
heavy industry to stimulate substitution of imports with domestic products and also
strengthen increased exports.
3. Foster improved cooperation among private sectors and between the public and private
sectors to boost industrial development.
4. Call for capital investments and investments in technology and technical know-how to
achieve industrial development.
5. To utilize effectively the natural resources and raw materials of the country and increase
the production of value-added commodities.
6. To successfully develop human resources and provide necessary training and schooling
of personnel for a continuous supply of technologically qualified and capable human
resources.
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Moe Lwin
Myanmar

7. To utilize energy efficiently and cost-effectively and for renewability.

8. To increase and expand green industries in accordance with sustainable development
principles in the interest of environmental conservation.
Previously, in Myanmar, 18 industrial zones were established in nine states and regions.
Under new government, Industrial Development Committee is implementing new industrial
zones in potential and strategic location around the nation while it is developing the existing
zones. The industrial zones are supposed to be industrial development and clustering. Even
though industrial zones were well established and some products are economically advantages,
for clustering is yet to be achieved as the zones do not support each other. Therefore, Small and
Medium Enterprises Development Center under Ministry of Industry was set up in 2011 and
assigned to coordinate and execute development programs for SME sector which include
technology transfer & training, distribution of information, helping construction of supply chain,
seeking ways to provide financial assistance and providing communication links between
relevant local and foreign organizations of similar interests. Now it is planned to extend offices
of the SME Development Center to all regions and states of the countries as well as in major
cities all round the country so that its activities reach to enlarged portion of small and medium
enterprises for speedier development. The center and industrial zone working committee are
trying to link between the industrial clusters and encourage them for industrial & economic
development.
New Laws related to the industrial sector such as Small and Medium Enterprises Law,
Industry Law, Industrial zone law and rules and regulation to implement the laws are under
processing. SMEs financing schemes enable the firms to obtain loans from Small and Medium
Industrial Development Bank SMIDB thus contributing the SMEs development to some extent.
III. Eco Industrial Measures and Practices
To bring environmental, social and economic benefits, eco-industrial parks are being
planned to implement in Myanmar onwards. The main criteria of eco-industrial measures are
depending on materials, energy and information exchange between private and government. In
doing so, Myanmar government is trying to establish with the cooperation of international
organization and experts on this to be in line with internationally plan. First Action that has being
carried out for environmental conservation is to act laws and make strong policies.
The Environmental Conservation Law was enacted 30th March 2012 by Pyidaungsu
Hluttaw Notification No.9/2012. The objectives of this Law are mainly to implement the
Myanmar National Environmental Policy, to enable and lay down the basic principal and
guidance for systematic integration the environmental conservation in the sustainable
development process, emerge a healthy and clean environment and to enable to conserve natural
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Moe Lwin
Myanmar

and cultural heritage for the benefit of present and future generations, to reclaim ecosystems by
degenerating and disappearing, to manage and implement for decrease and loss of natural
resources, to promote international, regional and bilateral cooperation, to promote public
awareness and disseminate educational programs, to enable to cooperate with government and
individual in the matter of environmental conservation.
Formation of Environmental Conservation Committee, aware on environmental
emergency case, standardization for environmental quality especially on sustainable surface
water, waste treatment, atmosphere, noise and pollution, emission and solid waste are being
carried out as proceedings under this Law. For the waste of chemicals, Law on the Prohibition
on Chemicals and related substances from being used in harm for environment was enacted on
26th August 2013. Private Industries have being allowed to invest by also inspection for
environmental impact assessment and social impact assessment.
For effective use of energy, the National Energy Management Committee was formed on
9 January 2013. Main tasks are to lay down the energy development policy and plans, to carry
out yearly review over the weak and strong points when implementing objectives, to collect
information for effective use of energy, set plans and projects for effective utilization of energy,
and adopt yearly, short-term and long term objectives, rules and regulations for drafting the
project. As strategy, drafting specific energy efficiency and policy, energy auditing and raising
public awareness plan are being implemented.
th

As the progress of practices in energy efficiency, energy auditing, energy management

trainings, workshops program have being already started since 2001 with the cooperation
between Ministry of Economy, Trade and Industry, Japan- METI, The Energy Conservation
Center Japan- ECCJ, ASEAN Center for Energy ACE and Myanmar government organizations
for Ministry of Industry, Ministry of Energy, local organizations of The Republic of the Union of
Myanmar Federation of Chambers of Commerce & Industry UMFCCI, Myanmar Industrial
Association MIA and Myanmar Engineering Society MES.
For sustainable energy, Ministry of Industry is producing products of generating solar
power such as solar panel, lamps, packages and hydro power such as turbine and generators. The
Ministry is also practicing waste- treatment in producing line.
Industrial Energy Efficiency Project is being implemented with the cooperation of
UNIDO, being started in 2012. Main objective is to promote sustained green house gas - GHG
emission in Myanmar industries. Myanmar is also a signatory country in Cleaner Production
Project of ASEAN on the way forwards to green industry.
IV. Foreign Investment

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Moe Lwin
Myanmar

New government made significant efforts, resulting in currency appreciation, reduction of

commercial tax, raw material imports and trade facilitation and deregulation in export and import
processes under FDI law and created an environment for attracting foreign direct investment.
Three special economic zones, Thilawa SEZ (Yangon Region), Kyaut Phyu SEZ (Rakhine State)
and Dawei SEZ (Tanintharyi Region), are being established for foreign investment and Law on
Special Economic Zone has been already enacted. As a result, the approved amount of Foreign
Investment until March 2012 by sectors is 40832.622 USD in million. Investment in power
sector was the largest (43%) and oil and gas sector (32%) was the second largest. Industrial
estate was still less in only 0.44%.
Table 1: Foreign Investment of permitted enterprises as of (31/10/2013)
Sr. No. Particulars
sectors
1
2
3
4
5
6
7
8
9
10
11
12

Power
Oil and Gas
Mining
Manufacturing
Hotel and Tourism
Real Estate
Livestock & Fisheries
Transport & Communication
Industrial Estate
Agriculture
Construction
Other Services
Total

Permitted Enterprises
No.
Approved Amount
(US$ in millions)
7
19284.432
115
14372.272
68
2833.734
287
3456.306
50
1599.711
22
1229.150
26
347.474
16
313.906
3
193.113
12
191.961
2
37.767
12
41.892
620
43901.718

%
43.93
32.74
6.45
7.87
3.64
2.80
0.79
0.72
0.44
0.44
0.09
0.10
100.00
Source: DICA

Given the increasing integration of Myanmar into world markets the trend towards
industrialization has been accompanied by efforts to limit public spending and investment, to
encourage private (foreign and domestic) investment to substitute for it, to enhance external
competitiveness by limiting inflation and through exchange rate targeting, and to provide special
incentives for export-oriented production. Cooperation between public and private is being
carried out as follows:
1. Public- Private Partnership
2. Joint Venture
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Moe Lwin
Myanmar

3. Lease (Rent property to private long term or short term)

4. Privatization (100% private)
Table 2: Myanmar Citizens investment by sector as of (31/10/2013)
Sr. No.

1
2
3
4
5
6
7
8
9
10
11

Particulars
sectors

Permitted Enterprises
No.
Approved Amount
(kyats in millions)
60
733314.00
8
290483.76
638
892954.04
30
47379.17
Estate
34
195081.96

Construction
Power
Manufacturing
Others
Real
Development
Transport
Livestock & Fisheries
Mining
Hotel and Tourism
Industrial Estate
Agriculture
Total

22
59
52
32
2
5
942

306728.46
22024.89
13007.92
433298.35
249212.79
547.90
3609733.24

%
20.31
8.05
24.74
13.11
5.40
8.50
0.61
0.36
12.00
6.90
0.02
100.00
Source: DICA

V. Challenges
Although new Laws related to the eco-industrial clusters was enacted and rules and
regulations under these laws are under processing, local government is facing the challenges in
implementation such as lack of many of the policy and structural changes have been made for
manufacturing and processing sector, lack of infrastructure, lack of technology and knowhow,
lack of financial institution. A strategic alignment and technology transfer still need to be
implemented deeply down in operational level where the real positive changes can be made.
VI. Conclusion
In Myanmar, in remarkable democratic transition period, the government is trying to
create better environment inside the country and improve international relations. While
implementing these, on the other hand, to fulfill the needs and develop industrial clusters, the
government is also thriving on establishment of a capacity building with the help of international
organizations and promotion of foreign direct investment. As conclusion, Myanmar is still
needed more efforts with added momentum to implement reform processes of the government
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Moe Lwin
Myanmar

putting emphasis on the attitudes of the people to see a rapid development and also practices to
translate the challenges into a success.

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