Myanmar’s business community must tap cluster potential to compete on global scale

Although small-and-medium scale industry clusters have formed in the Mandalay Region, local investors and businessmen are not very interested in harnessing the business potential of these clusters, U Myo Htut Swe, director from Region’s Directorate of Industrial Supervision and Inspection, said.

Garment exports are rising in Myanmar, but the industry must harness the potential of clusters to step up. Photo - EPA

“There are clusters formed by firms in similar sectors. In the Mandalay Region, the Directorate of Industrial Supervision and Inspection formed industrial clusters since 2014 and there are now 111 groups in 15 industrial clusters.”

“But the business community in Myanmar is not very interested in this potential,” he said. “Businessmen here prefer to work individually. They do not like markets to be mixed as they trade only in the local market.”

That has to change for the Myanmar economy to level up and compete on an international scale. In fact, industry clusters can make it easier and more cost effective for investors and businessmen when buying raw materials as well as machines and equipment.

The local business community needs to understand the advantages of tapping the potential of clusters. “By doing so, the business community can discuss and share experience and find solutions to business problems to be more successful,” U Myo Htut Swe said.

“The purpose of forming clusters is to encourage discussions and dialogues within the business community on issues such as how to penetrate the international market. Also, if there is a need to understand developments in the market such as advances in technology, the community can cooperate or invite experts to discuss topics. It should be like that,” he said.

U Myo Htut Swe added that the authorities can help the business community foster the cluster mentality. That will empower local businesses and enable industries in Myanmar to compete internationally.

“Doing business on an individual level will only delay our development. We have to penetrate the international market. If we do business only in the local market, we will not be able to compete internationally,” he added.

The Directorate of Industrial Supervision and Inspection is now providing training to local businessmen with the help of foreign countries and helping to foster an interest in forming clusters among the local business community.

It will all take time though. U Ye Win Aung, associate secretary of Mandalay Industrial Zone Management Committee, said that while clusters can gradually be formed, distinctive changes will not quickly be seen.

Translation by Win Thaw Tar