By FRONTIER
From Mandalay to Mawlamyine, and elsewhere in Myanmar, teams of soldiers, police and municipal officials have been inspecting markets and warehouses for illegal imports.
One such raid in the Mon State capital of Mawlamyine on October 14 resulted in the seizure of illegal imports that were taken away in two trucks, Than Lwin Times reported.
In Mandalay city, an inspection team arrested the owner of a warehouse in Pyigyitagon Township for selling illegal imports on October 19. “If there are seizures at a warehouse, 40 percent of the value of all the goods stored in it must be paid to the Customs Department,” reported MDY-Revolution, a local news outlet.
Raids continued in Mandalay on October 23, when shops and warehouses were inspected at the city’s sprawling Zay Cho market. “The inspection team probably consisted of 10 to 15 people,” a stallholder at the market said. “My store is small, so they didn’t inspect it.”
The searches are part of the junta’s war on illegal imports – a crackdown that has included inspections and seizures from markets, warehouses and transport vehicles, forcing anxious shopkeepers to clear shelves of foreign-made goods and raising costs for consumers.
The campaign, ordered by deputy junta leader Vice Senior General Soe Win at a meeting of the Illegal Trade Eradication Committee in Nay Pyi Taw on October 9, has coincided with China’s closures of border crossings and disruptions to land trade with Thailand that have already restricted imports.
The crackdown, which is counterproductively predicted to contribute to a thriving black market, is mainly targeted at food and consumer goods brought into the country from China and Thailand without import licences.
As well as providing otherwise lost trade and customs revenue for the junta’s depleted coffers, another motivation for the crackdown is cutting funds for armed groups opposed to the regime. Soe Win said illegal trade has prolonged the existence of armed groups, and its expansion must be prevented.
The raids have caused alarm among importers, warehouse owners, shopkeepers and shopping mall owners, as well as the transport sector, including the operators of long-distance buses that carry freight in holds beneath passenger compartments.
“I heard the military council is inspecting warehouses and well-known stores to check for illegal imports,” said the owner of a cosmetics and consumer goods shop in Yangon’s Shwepyithar Township. “Our shop hasn’t been inspected yet, but the ward administrator warned me not to sell any imported products that are illegal or lack an import licence, or I might face legal action.”
“Most of the products in our shop don’t have valid documents, which is why I’m trying to sell them quickly. I heard they are mainly checking products from Thailand and China,” she added.
Perhaps inevitably, reports are emerging that the crackdown is being undermined by corruption. The team that raided Mandalay’s Zay Cho market on October 23 demanded bribes from businesses after seizing illegally imported goods, Khit Thit Media reported, quoting an unnamed businessperson. “They also confiscated goods that were legally imported,” the businessperson added.
Bus companies targeted
Highway bus companies are not immune to the crackdown. Traders say that when they want to transport goods on buses, officials at bus stations demand to see documents showing that customs duty has been paid on the shipments.
“At the bus station, they told me that I can only send products from China and Thailand if I have papers showing that duty was paid when they were imported,” a woman in Mandalay who sells consumer goods told Frontier.
“It’s not a problem for people like me who can prove we paid duty on products imported directly. It’s a problem for those who buy and resell from various sources. Where will they get a duty document?” said the woman, who was apprehensive about what the junta might do next. “We don’t know what challenges we’ll have to face.”
A grocery shop owner at the Thapyay Kon market in Nay Pyi Taw told Frontier on October 29 that inspections for illegal imports had not yet begun in the capital, but consumers there were feeling the effects of the raids and disruptions to border trade.
“There have been frequent shortages of goods from Thailand and China,” she said. “We buy and sell through various companies and we will have nothing to sell if they run out of stock.”
In Ayeyarwady Region, the crackdown has paddy farmers worried. Inspection teams warned farm supply shops in late October against selling illegally imported fertiliser, said a farmer in Maubin Township.
From bad to worse
Traders doubt the crackdown will achieve its objectives and believe it will only make a difficult situation worse.
Ko Kyaw Naing, a merchant in Shan State’s Mongla town who imported solar panels, batteries and other electrical products before China shut border crossings, said the junta had already stopped issuing import licences for many products in the first six months of this year.
“If licences are not being issued, we cannot pay duty, which means we had to import many items through the black market,” he said, asking that a pseudonym be used to protect his identity. “When we imported from China, about half the goods were legal and the other half were illegal. The legal products were put on top of shipments to hide the illegal products underneath.”
A trader in the Kayin State capital of Hpa-an said junta inspections and arrests in markets made it hard for stall-holders to do business.
“The crackdown will lead to shortages. We are living in the age of the black market because the junta doesn’t provide enough import licences,” she said.
Figures released by the junta’s commerce ministry highlight the impact of disruptions on border trade. They show that the value of border trade dropped from more than US$8.5 billion in the fiscal year 2022-2023, to about $7.7 billion in 2023-2024. Ministry data also shows that the total value of imports, including those by sea and air, in 2022-2023 was more than $17 billion, falling to just over $15 billion in 2023-24.
Traders said a black market for imports will thrive as long as there is demand and despite eradication campaigns by the junta, which has reported that smuggled goods worth more than K300 billion ($66.7 million at the current market rate) were seized from 2022 to the end of August this year.
Under the Export and Import Law, anyone who illegally imports or exports goods is liable to a prison term of up to three years, a fine or both.
The public has been hit hard by rising commodity prices since August, when the kyat fell to about K6,000 to the US dollar. The kyat has since recovered to around K4,500 but the crackdown on imports and disruptions to border trade have meant that commodity prices have risen rather than gone down.
“The general public will suffer from rising prices because the cost of smuggled products is two to three times higher than that of legal imports,” said Kay Naing. “Wholesalers will raise prices to maintain profit margins and they’ll be passed on to retailers, affecting the general public.”
A trader in Mandalay who has been selling imported electrical goods for about 10 years lamented the impact of the raids.
“This is the most difficult situation I’ve faced in my business,” he said. “In the past, when enough import licences were issued, there was no difficulty importing electrical products from China legally and it was convenient to do business.”
A resident of Yangon’s South Okkalapa Township said the prices of soap, toothpaste, instant coffee and snacks imported from Thailand have soared.
“Some shops are running out of imported products. Others have stopped displaying goods if they cannot prove they were imported legally … and customers need to ask for them specially,” she added.
“Restricting imports is very inconvenient for the people, especially if not enough high-quality products are made domestically. The junta just does what it wants.”
