Manufacturing remains vital for Myanmar’s economic growth

The manufacturing sector in Myanmar expanded to become a contributing force to the country’s economy between 2017 and 2019, a survey conducted by the
Central Statistical Organisation (CSO) and the United Nations World Institute for Development Economics Research showed.
Published on July 27, the report highlighted an increase in productivity in the manufacturing sector during the two-year period, suggesting that the manufacturing
sector remains instrumental for Myanmar’s economic growth and transformation.

The report, which surveyed 2268 small and medium size enterprises, found that the largest companies achieved the highest growth in capital intensity and the largest positive change in full-time employment from 2017 to 2019. Capital intensity is the amount of fixed capital present in relation to labour.
Meanwhile, smaller firms reported highly localised sourcing and selling trends, while medium and larger ones have an increasingly international outlook, with a greate proportion of transactions taking place across country borders.

According to the report, a well-functioning and productive industrial sector has the potential to generate poverty-reducing employment, fuels growth through enhanced productivity and improves the opportunities for trade in the global economy. However, improvements in productivity, investments and employment leads to a need for renewed policies that support economic transformation.

“Myanmar’s transition to a market-based economy will include rapid development of the private manufacturing sector, which has large potential for improving
economic growth. But future advances will greatly depend on the policy and business environment in which manufacturing activities take place,” said John Nielsen,
Danish Ambassador to Myanmar.

The study also showed that employment in the manufacturing sector is characterised by high levels of turnover, indicating that worker instability and job security may be a concern. On the other hand, this can be an indication of a flexible labour market with low search costs. In the sector, some 11pc of employees are domestic migrants.

The report showed average monthly salary increasing from K147,898 in 2017 to K177,518 in 2019. Salaries tended to increase with firm size. The salaries of male
employees are substantially higher than female salaries.
“Since private sector development is dominant for the country, the availability of high-quality data on privately owned businesses is vital. The CSO is determined to generate the necessary data and statistics for evidence-based policy, planning and plan implementation in Myanmar,” said U San Myint, Director General of CSO.

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Source : Myanmar Time

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