CNI News
11 June 2024
The Barter system (any exchange of goods and services for other goods and services without exchanging any form of money) of the State Administration Council (SAC) could reduce trade, said traders.
The SAC has instructed to start practicing the barter system between the trading partner countries in order to reduce the need for foreign currency, according to traders.
Barter system is the one that was used in ancient times and no country uses it anymore. However, because of the demand for foreign currency in Myanmar at present, the SAC reanimate the system, reviewed some people.
If that system was practiced again, trade would be reduced; because there was a gap between the goods that the trading partner countries wanted to import and those they wanted to export, it could be difficult for traders; and in the end it would affect the public, said an economic analyst to CNI News.
" The trade would be reduced because we want to import medical products after exporting rice, for example, but we have to import medical products from India, but India is exporting rice. So, how can we buy medical products from India? In fact, we'll have sell our rice to China and we'll have to buy medical products from India with the money we get from China. We sell rice to Bangladesh, but we don't have to import a lot of goods from Bangladesh. But we have to import a lot of products from China. It won't affect the public directly, but traders. At any rate, in the end it will affect the public." he said.
While seeing container boxes
Not only can high qualified products not be manufactured in Myanmar, the country's inflation rate is also higher at present. So, the barter system wouldn't be convenient, said traders. 65 percent of the export earnings (dollars) can be sold at the market price and 35 percent must be sold at 2,100 kyats per dollar designated by the Central Bank of Myanmar.
Due to the need for foreign currency and difficulty getting import license, import and export companies and private entrepreneurs possibly proposed to use the barter system, estimated economic analysts.
" If you are asked to do it like this in this country, you must do it like this. After doing it, report the difficulty. And then, maybe another change will happen. When we import, can we import the products that we want to? We need to know that. The products you import may be fuel or edible oil or construction materials or medical products. And then, you have to sell them within the country." said U Thant Zin Tun, vice chairman of the Myanmar Corn Industrial Association.
The barter system that will be currently used was similar to the one in which fuel and edible oil were allowed to be imported only if agricultural products were exported.
However, it was unclear what products would be allowed to be imported from the country that Myanmar export its goods and what goods would be exported to that country, according to exporters.
