2007 BURMESE IMPORTS AND EXPORTS RISE DRAMATICALLY

UNCLAS SECTION 01 OF 03 RANGOON 000118

SIPDIS

SENSITIVE
SIPDIS

STATE FOR EAP/MLS, EB/TRA
PACOM FOR FPA
TREASURY FOR OASIA:SCHUN

E.O. 12958:N/A
TAGS: ECON ETRD EINV PREL BM
SUBJECT: 2007 BURMESE IMPORTS AND EXPORTS RISE DRAMATICALLY


RANGOON 00000118 001.2 OF 003



1. (SBU) Summary. The Burmese Government recorded a substantial
increase in both exports and imports in 2007 compared to previous
years. Bolstered by a 71 percent increase in the value of natural
gas exports, Burmese overall exports rose to $5.9 billion in 2007, a
44.1 percent increase over 2006 levels. Burmese imports also
increased by 25 percent, from $2.2 billion in 2006 to $2.7 billion.
While oil and diesel products remain Burma's largest import, imports
of cars increased a dramatic 242 percent during the past year.
These trade figures do not include border trade. Thailand remains
Burma's largest official trading partner, followed by India, Hong
Kong, and China. Most Burmese imports originate in Singapore, as
traders use Singaporean companies to ship products from the U.S.,
Europe, and Australia. End Summary.

Emphasis on Trade and Exports
--------------


2. (SBU) We spoke to researchers from local consulting company
Business Information Group (BIG) about Burma's trade figures. BIG
officials explained that the Burmese Central Statistical Office
compiles trade figures from Customs, as well as incorporates
import/export information listed on trade licenses issued by the
Ministry of Trade. This combination results in overinflated
figures, they told us. Instead, BIG uses only Customs data when
compiling its trade statistics. It does not include border trade,
which often does not go through Customs inspection, in its figures.


-------------- --------------
Burma Import/Export Figures, 2005-2007
Value in USD
-------------- --------------
Year Exports Percent Imports Percent
Change Change
-------------- --------------
2005 3,526,596,300 -- 1,937,053,055 --
2006 4,122,772,276 16.9 2,236,682,990 15.5
2007 5,939,407,654 44.1 2,788,692,103 24.7
-------------- --------------
Source: BIG, 2008


3. (SBU) 2007 was a record year for Burmese trade, totaling more
than $8.7 billion. According to BIG, Burma's exports rose by 44.1
percent in 2007, up from $4.1 billion in 2006 to $5.9 billion in

2007. Exports of natural resources, including natural gas, timber,
and gems, accounted for the majority of overall exports. Natural
gas exports alone were worth $2.8 billion, an increase of 78 percent
over 2006 figures due to higher world prices. Exports of
agricultural products, including rice, onions, garlic, and beans and
pulses, also increased in 2007, up approximately 41 percent from
2006 figures. The regime also earned more revenues from sales and
exports of precious and semi-precious gems; exports increased 38
percent, up from $406 million in 2006 to $561.6 million in 2007.

-------------- --------------
Burma's Exports, 2006-2007
Value in USD
-------------- --------------
Category 2006 Value 2007 Value Percent
Change
-------------- --------------
Natural Gas 1,515,520,847 2,703,165,496 78.4
Ag Products 733,843,272 1,032,896,547 40.8
Timber Prod. 549,743,572 572,913,157 4.2
Gems 406,128,702 561,637,794 38.3
Textile/Appl 272,584,119 286,802,745 5.2

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Marine Prod. 259,597,321 366,308,384 41.1
Minerals 126,573,378 94,084,869 -25.7
Other 258,781,165 321,699,662 24.3
-------------- --------------
Total 4,122,772,376 5,939,407,654 44.1
-------------- --------------
Source: BIG, 2008


4. (SBU) Approximately half of Burma's exports went to Thailand,
which is the main importer of Burmese natural gas. Burmese exports
to Thailand rose 66 percent in 2007. Exports to Burma's top five
export destinations - Thailand, India, Hong Kong, China, and
Singapore - increased overall in 2007, although exports to China
rose a significant 84 percent last year. BIG officials predicted
that China will become one of Burma's top three trading partners by
2010, due primarily to future Burmese exports of natural gas from
the offshore Shwe Gas Fields to China.

-------------- --------------
Burma's Export Partners, 2006-2007
Value in USD
-------------- --------------
Country Exports Exports Percent
2006 2007 Change
-------------- --------------
Thailand 1,683,451,981 2,804,260,801 66.6
India 669,632,429 743,517,185 11.0
Hong Kong 422,839,597 575,935,831 36.2
China 257,759,570 475,579,468 84.5
Singapore 189,946,153 347,141,440 82.8
Japan 157,643,070 186,707,607 18.4
Indonesia 90,559,628 88,125,977 - 2.7
Malaysia 82,383,382 113,509,099 37.8
Germany 76,584,272 67,812,545 - 11.5
Other 491,972,295 536,817,701 9.1
-------------- --------------
Total 4,122,772,376 5,939,407,654 44.1
-------------- --------------
Source: BIG, 2008

Rising Imports
--------------


5. (SBU) Burmese imports in 2007 also increased substantially, by
24.7 percent over 2006 levels. Imports of oil and diesel fuel,
primarily from Malaysia and Indonesia, continued to account for the
majority of imports in 2007, again due primarily to higher world
prices. Customs officials also noted a marked increase in the
import of new cars, up 242 percent since 2006. The GOB tightly
restricts the imports of new cars, granting licenses to Embassies,
NGOs, select businesses, and those close to the regime. Many of the
new cars imported in 2007 belong to regime cronies who built the new
capital, Nay Pyi Taw. Instead of paying them in cash, the regime
issued car import licenses, worth an estimated $200,000 each.

-------------- --------------
Burma's Imports, 2006-2007
Value in USD
-------------- --------------
Product 2006 Value 2007 Value Percent
Change
-------------- --------------
Oil/Diesel 498,383,556 471,960,839 - 5.3
Machine Parts 242,304,396 243,894,103 0.7
Textile 220,392,058 275,915,696 25.2
Steel/Iron 137,215,212 177,684,589 29.5

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Food/Beverage 89,204,014 107,582,695 20.6
Medicine 86,712,805 112,013,679 29.2
Plastic 85,992,859 139,991,354 62.8
Car 56,304,268 192,746,223 242.3
Palm Oil 54,304,268 251,242,458 362.3
Chemicals 28,113,850 30,922,209 10.0
Tires 24,308,795 43,484,500 78.8
Computers 22,773,852 12,194,900 -46.5
Other 690,436,772 792,057,859 14.7
-------------- --------------
Total 2,236,682,990 2,788,692,103 24.7
-------------- --------------
Source: BIG, 2008


6. (SBU) Most of Burma's imports came from Singapore ($811
million),as traders used Singaporean companies to bring in products
from the U.S., Europe, and Australia. China was second, with $564
million in exports to Burma, followed by Japan ($238 million) and
Thailand ($227 million).


7. (SBU) According to business contacts, the regime in 2007 pledged
to make it easier for companies to trade by improving the
import/export license process. Since 2005, companies had to travel
to Nay Pyi Taw to apply for individual import and export licenses, a
process that took anywhere from two weeks to a month, depending on
the company and the products for trade. In October 2007, the GOB
introduced a one-stop service in Rangoon and Mandalay for
import/export licenses for marine products and medicines.
Businessmen tell us that for these products, companies may obtain
licenses in as little as two days.

Comment
--------------


8. (SBU) Burma's higher export earnings are due primarily to higher
world prices for its natural resources. Sadly, the Burmese people
do not benefit from the increased revenues. Instead, Than Shwe and
his senior generals pocket most of the revenues, while Burmese
people find it increasingly difficult to feed their families. As
long as world demand for Burma's natural resources remains high,
Than Shwe will enjoy an ample income and will use the country's
resources to gain political support from his neighbors.




VILLAROSA