MICRO, small and medium enterprises (MSMEs) and small & medium enterprise (SMEs) are deemed important as MSMEs and SMEs outnumber large companies by a wide margin and also employ many more people.
Earlier emphasis on industry and manufacturing MSMEs and SMEs are businesses whose personnel number fell below certain limits. The legal boundary of SMEs around the world varies. In Myanmar the Private Industrial Enterprise Law 1990 defines small and medium enterprises as enterprises using power (HP) from a small of 3 to 25 HP to a medium of 26 to 50 HP. Small enterprises had 10 to 50 workers while medium enterprises had 51 to 100 workers. Capital outlays range from Kyat 1 million for small enterprise and over 1 to 5 million Kyat for medium enterprise. Production value per year was set to Kyat 2.5 million for small enterprises. It was over Kyat 2.5 to 10 million for medium enterprise. As the name of the law itself was Private Industrial Enterprises Law, emphasis was placed on industry and manufacturing while more or less overlooking the role of SME in the service sector like transport.
Recognizing the role of service
2015 SME Development Law however recognizes the roles of sectors other than manufacturing by classifying SMEs into manufacturing, labour-intensive manufacturing, whole sale, retail, service and other as the following table shows.
Legal definition of SMEs according to the 2015 SME Development Law
(Source: Myanmar Micro, Small and Medium Enterprise Survey 2017)
This was timely as supporting and promoting SMEs or MSMEs need to be targeted to the specific situation of the country itself.
Specific sector of MSME to support and promote
Back in 2008, data from Ministry of Industry show food and beverages occupying the largest sector of the industrial enterprises accounting for 65.36 per cent. Myanmar MSME Survey 2017 shows the food and beverage sector still occupying 57.7 per cent (food 55.2% and beverage 2.5%).
UNCDF (UN Capital Development Fund) Infographic Country Brief Myanmar 2016 points out that 77% of small enterprises in Myanmar were concentrated in transportation, storage, accommodation and food service activities.
As an agriculture country with the majority of the people in the agriculture sector, it is no wonder that the majority of enterprises, small and medium were agriculture related. As the agriculture products are required to be transported to the markets, it is also no wonder that there was a concentration of small enterprises in the transportation and storage sector.
As agriculture products are perishable with basic values only, enterprises in packaging, canning, preservation as well as value adding need to be promoted for the agriculture sector to develop further. Another set of data would support this even further.
Website of Ministry of Industry, Central Department of Small and Medium Enterprises Development post the top 100 SMEs in Myanmar. 34 were food and food related while only 20 were non food related enterprises producing traditional and indigenous medicine, shoe, slippers, clothing etc. Not much was found in the industry sector as local MSME would not be competitive enough to the industry/manufacture related MSMEs in China, our neighbor country that was becoming the manufacturer for the world.
Development in telecommunication and promotion of travel and tourism sector could see further blossoming of MSMEs in the telecommunication, travel and tour sector. Handicrafts and traditional crafts, a specialty of individuals and small enterprises could not compete to mass produced products but such individuals and small enterprises remain viable in the travel and tourism sector where they produce valued handicrafts and traditional crafts that mass production could not produce.
Financial service provided by Wave Money was the result of development in telecommunication and foreign investment of multi-national corporations but the immediate outcome was 45,000 Wave shops, basically small enterprises, providing money transfer service to 11+ million customers.
Just like individuals, countries have strengths and weaknesses. It is laudable to strengthen our weaknesses but the best is to utilize the strength we had. It would give us better benefit than putting in the same effort toward strengthening our weaknesses.
The strength of our country is its agriculture, its natural beauty and diverse cultures. We can easily strengthen our country by supporting MSMEs related to sectors like food processing, preservation, canning, packaging and transport. We can support MSMEs related to services promoting our natural beauty and diverse cultures.
Services such as transport, accommodation, catering, cultural artifact production etc. promotes our natural beauty and diverse cultures.
These are the industries or sectors in which our MSMEs can thrive and develop. And it is such MSMEs that we should promote and support.
