China’s restrictions on overland trade and security concerns in Shan State have created challenges for Myanmar’s seafood industry, raising costs and threatening to make business unsustainable.
The seafood industry in Myanmar is facing difficulties due to security concerns in Shan State and China’s imposition of restrictions on overland trade following rising cases of COVID-19 in its southern neighbor.
The principal transport routes for Myanmar’s seafood exports to China are through Shan State, with shipments crossing through border points at both Chin Shwe Haw and Muse.
However, due in part to spiking COVID-19 cases in Chin Shwe Haw and Laukkai, China has restricted trade through that route since October 2020, pushing all of Myanmar’s marine exports through Muse. China placed similar restrictions on trade from Shan State between March and August 2020.
At the same time, active fighting in Shan State between Myanmar’s army and ethnic armed groups poses a security threat to trade.
“Only dry commodity trucks are going through Chin Shwe Ha. Marine products cannot be exported so we are using the Muse-Kyin San Kyawt route instead,” said U Tine Kyaw, the secretary of the Myanmar Eel Entrepreneurs Association, referring to the Kyin San Kyawt border gate in Muse.
U Tine Kyaw said that provincial administrations in China are insisting Myanmar’s seafood industry use only the Muse route.
The Chinese officials’ policy has only added to the woes facing Myanmar’s seafood industry, which is already facing problems from a lack of demand and cancellation of international orders due to COVID-19.
Myanmar’s seafood industry has suffered during the pandemic
The COVID-19 pandemic has hit Myanmar’s economy hard; total exports during the first three months of the fiscal year from October to December totaled around US$7.6 billion, compared to US$10 billion the year before.
The entire fishing industry supply chain in Myanmar has been impacted by a drop in international orders. Around 1 million out of 3.5 million people employed in the marine sector have lost their jobs as producers have struggled to continue business and cold storage facilities have shut down.
The current restrictions on overland exports to China continue to cause problems for the industry, as overland trade accounts for 60% of total marine exports for Myanmar. The principal export destinations for Myanmar’s seafood are China, Europe, Japan and the US.
The requirement that the industry use the Muse-Kyin San Kyawt route has now increased transport costs; traders also pay higher service fees at the Kyin San Kyawt gate than in Chin Shwe Haw.
Myanmar’s seafood traders have been calling on the government to help the marine sector by providing economic assistance, though the government has yet to respond. According to an Asian Development Bank forecast, Myanmar’s economy is expected to grow by 6% in the financial year 2020-2021 and this growth should help the marine sector to recover from its losses.
“The marine industry needs to expand into new export markets. The government should cooperate with other organizations in that move,” U Maung Maung Lay, the vice chair of the Union of Myanmar Federation of Chamber of Commerce and Industries, said.
Conflict in Shan State disrupts Myanmar-China border trade
Border restrictions due to COVID-19 aren’t the only reason Myanmar’s fishing industry is facing problems. Security concerns in Shan State have also affected trade with China, as clashes continue between insurgent groups and Myanmar’s army.
Shan State, along with areas in Chin, Kachin and Kayah states, has witnessed intermittent fighting since 1948 as ethnic armed groups have engaged in conflict with Myanmar’s military. In 2015, a peace deal was signed between the government of Myanmar and eight such armed groups from different states. But some groups from Shan State, including the Ta’ang National Liberation Army (TNLA),the Myanmar National Democratic Alliance Army (MNDAA) and Shan State Army-North (SSA-N), were not a part of this peace deal.
The Myanmar army declared unilateral cease fires that included Shan State in 2018 and 2020. The 2018 ceasefire ended with clashes between three groups—the Arakan Army, the MNDAA and TNLA—and the military in August 2019. In September 2019, trade through Shan State was stopped for 15 days due to fighting.
In May 2020, the Myanmar army declared a ceasefire reportedly in order to focus on containment of COVID-19. However, this ceasefire has also been ineffective in stopping fighting between the military and insurgent groups such as the Kachin Independence Army (KIA), the Restoration Council of Shan State and the TNLA.
Though security concerns have affected Myanmar’s seafood industry in the past, COVID-19 has created an additional challenge for nearly a year. While the seafood industry waits for restrictions to ease, the Myanmar government needs to step in and provide economic assistance to sustain the industry.