Title Financing Small and Medium Enterprises in Myanmar Author(s ...

The timing of this surge in construction suggests that the government
launched a massive state-owned factories program in 2000 and 2001. The
policy change may accord with the government’s drive toward self-sufficiency.
Data released by respective ministries support this fact. Ministry of Industry (1)
reported that 53 new factory projects were implemented between 2001 and 2005 with
an investment cost of 127,831.98 million kyat and 991.81 million US dollar 36 . The
number of factories under the Ministry of Industry (1) in 2001 totaled 154 (textile, 33;
foodstuff, 43; pharmaceutical, 18; ceramics, 23; general services and maintenance, 28;
and paper, 9). It was projected that their number would reach 230 in 2005.
Since 1995, the Ministry of Industry (1) has also established and extended the
number of distribution outlets (Win Thu Zar shops) to handle distribution of its
products directly to domestic consumers. In 2002, 26 shops opened in the country. Of
which eight were located in Yangon 37 . Similarly, the number of factories and industrial
buildings under the Ministry of Industry (2) increased from 10 in 1988 to 22 in 2002.
The cost of implementation for these factories and buildings dramatically increased
from 17.37 million kyat in 1988 to 5,474.93 million kyat (provisional) in 2002. 38
Despite these expansions, SEEs were being operated with budget deficits
throughout the period. Current cash budget of SEE showed deficits (kyat in million) of
891.7 in 1990-1991, 4439.5 in 1995-1996, 29,718.5 in 1997-1998, 67,431.6 in 1998-1999,
and 50553.5 in 1999/2000. In the industry sector, the combined total of Ministry of
Industry (1) and (2) showed a surplus of 633.2 kyat million in 1990-1991, but a deficit of
216.8 kyat in million in 1995-1996, a small surplus of 137.4 in 1997-1998, deficit of
3037.4 in 1998-1999 and 881.9 in 1999/2000. The capital expenditures of the industry
sector also significantly increased after the second half of 1990s: 340.3 million kyat in
1995-1996, 937.4 in 1997-1998, 1,061.2 in 1998-1999, and 2,969.6 in 1999-2000 39 .
However, the level of industrialization of the country did not change significantly. Table
1 shows the structural changes in contribution of agriculture and manufacturing sectors
to national GDP by CLMV countries during a 10-year period; this highlights the state of
industrialization in a country.
36 52 new factories in six industry branches will be extended within the period: textile-12, foodstuff-9,
pharmaceutical-8, ceramics-7, general services and maintenance-10, and paper-7.
37 Magnificent Myanmar (1988-2003), published by the Ministry of Information, pp. 112-117
38 Ibid pp. 122-123
39 Statistical Year Book (2005), Central Statistical Organization ( Note: The budget data obtained are
only up to 1999-2000; such data for the 2001 onwards were not yet published yet as of press time.)