Strengthening capacities in the private sector

Project description

Title: Strengthening capacities in the private sector
Commissioned by: German Federal Ministry for Economic Cooperation and Development (BMZ)
Country: Myanmar
Lead executing agency: Ministry of Planning and Finance
Overall term: 2016 to 2018

Myanmar. A model tea factory opens in Shan State.  © GIZ / Matthias Plewa

Context

The general elections in November 2015 were a milestone in the sweeping process of reform and gradual opening-up that Myanmar embarked on in 2011. The new government prioritises private sector development and trade promotion as a vehicle for poverty reduction. However, it lacks the institutional, political and specialist resources required to establish a more conducive environment for private sector development. In particular, neither micro, small and medium-sized enterprises (MSMEs), nor small-scale producers have access to the key services or sources of support they need to harness the market opportunities that now exist for their business expansion in various sectors.

Objective

Conducive conditions and service offers for the sustainable growth of MSMEs and small producers have improved in selected sectors.

Myanmar. Handelszentrum in Yangon. © GIZ / Andreas Hub

Approach

The project team advises the government on ways of making the economic and political framework conditions more conducive, and on the development of services for MSMEs. Pilot measures for the local and regional promotion of the private sector, especially in the agriculture and tourism sectors, are being rolled out in Shan State, Myanmar's largest federal state. Since early 2015, EU funding has helped to extend the advisory services to address 'reforms in the trade and export promotion sector'. The aim is to make emerging trade opportunities accessible to producers, export-oriented companies and public actors.

Results

Key institutions and organisations engaged in MSME promotion are receiving assistance in their efforts to become more professional and also expand the range of services they deliver at national and regional levels. For example, the SME Development Department of Myanmar’s Ministry of Industry is undertaking intensive efforts to facilitate MSME access to financial support and entrepreneurship training. Meanwhile, the country’s Directorate of Investment and Company Administration is opening two new units, one for PR and one for human resources, in order to provide MSMEs with clearly structured and reliable information and services. Various sources of information, including a continually updated website, make it easier for investors to access knowledge about investment conditions. The Union of Myanmar Federation of Chambers of Trade and Industry and the Myanmar Fruit, Flower and Vegetable Producers and Exporters Association have adapted their internal structures and processes to be able to offer more efficient and effective services to their members.

Activities piloting the promotion of mango and tea value chains and tourism in Shan State build on the successes of the previous project by using technical modernisation, quality enhancements and cooperation projects to generate greater productivity and profits for farmers and for the operators of processing facilities. The partner structures in Shan State, for instance, are working to replicate a tea factory constructed under the previous project, along with a packaging plant for regionally grown fruit. Moreover, a number of actors have made their first appearances at trade fairs, and the organic certification of tea products is set to be introduced in Shan State for the first time.

In the tourism sector, public and private representatives are working together to find solutions that will facilitate the conflict-sensitive and eco-friendly development of destinations at Lake Inle, the main tourist attraction in Shan State. These initiatives go hand in hand with the regional government's efforts to plan long-term economic development in a participatory fashion. Public-private dialogue formats have been introduced to create demand-oriented offers for MSMEs and to feed any adjustment requirements back into national policy.

Thanks to the EU cofinancing, private manufacturers and agency inspectors have received training in good agricultural, fishing and aquaculture practices. They have also learned how to classify goods in accordance with international standards. In addition, a Myanmar-EU information centre has been opened at the Myanmar Trade Promotion Organization in Yangon. This focuses on foreign markets and their requirements, and is tasked with identifying matchmaking opportunities. With project support, the food testing laboratory operated by Myanmar’s Ministry of Livestock, Fisheries and Rural Development (MLFRD), a key driver of quality standards, was able to renew its accreditation through to 2018, and will continue making its vital contribution to the promotion of food exports.

Myanmar. Unternehmensregistrierung bei der Abteilung für Investitionsförderung und Unternehmensverwaltung (DICA). © GIZ / Giuseppe Salerno