Consequences of illegal trade
Illegal trade is defined by the World Trade Organization as the “production, purchase, shipment, transfer, possession, or distribution of goods that are classified as illegal according to international laws, as well as any activities aimed at encouraging such actions”.
When examining cases of illegal trade, two main methods emerge. The first method involves bypassing checkpoints or crossings at border trade routes, mixing them with legitimate imported goods, hiding them in storage, blending them with goods that are officially allowed to be transported, or hiding goods in passenger vehicles for concealment.
The second method involves transporting more goods than the authorized amount in domestic cargo ships, ports, and airports, mixing taxed and untaxed goods, undervaluing goods, and smuggling them in passenger luggage at international airports. Additionally, illegal goods are smuggled using e-commerce routes, where express delivery services are used to transport prohibited items in small packages.
These various methods of illegal trade lead to the entry of counterfeit medicines, fake branded goods, and substandard food products into the market. If consumers use these products, they could face fatal consequences, health risks, and long-term diseases. Furthermore, the government loses significant tax revenue, which is detrimental to the state. Comparing trade volumes between neighbouring countries (e.g., Myanmar and Thailand), it is clear that illegal trade is prevalent as there is a considerable disparity in the trade statistics.
To prevent the loss of tax revenue due to illegal trade, the government reformed the Anti-Illegal Trade Steering Committee to combat illegal trade in December 2021. Under the committee’s guidance, special task forces to tackle illegal trade have been established in regions and states, opening inspection stations along trade routes and carrying out effective inspections. Additionally, efforts have been made to educate traders, businessmen and transport associations to prevent involvement in illegal trade.
If illegal trade is not effectively controlled, it could harm the nation’s economic development and threaten public health, security, and social stability. To mitigate these harmful effects, it is crucial for the public to be aware of the severe consequences of illegal trade.
Therefore, the author would like to present the following key consequences of illegal trade to the public: –
The first point is the impact on public health. The circulation of counterfeit medicines, substandard food products, and cosmetic items has led to a rising incidence of cancer and skin diseases in Myanmar, as reported in health articles and seen on social media pages. Additionally, the use of poor-quality electrical appliances and other consumer goods can cause significant harm to the public, resulting in widespread injuries and losses.
The second point is the impact on the country’s natural resources. Illegal extraction of natural resources such as minerals, timber, and other raw materials by unscrupulous individuals, along with the smuggling and illegal transport of these resources, results in significant losses not only to the government but also to the people. The unregulated exploitation of natural resources leads to environmental degradation, contributing to climate change and other natural disasters, which ultimately harm the public and cause widespread losses.
The third point is the loss of tax revenue that the government is entitled to. Revenue from taxes on trade is essential for funding the country’s development and infrastructure projects. However, if illegal trade increases, the tax revenue will be significantly reduced, impacting not only the government’s finances but also other sectors that rely on these funds. Additionally, managing foreign currency expenditures becomes more difficult, and this can destabilize the currency market, leading to broader economic instability.
The fourth point is the impact on domestic production caused by illegal trade. While the government has been supporting and promoting the development of micro, small, and medium-sized enterprises (MSMEs) in the country, illegal foreign goods make it difficult for these businesses to compete in the market, threatening their long-term survival. Moreover, some agricultural products that are illegally smuggled in from foreign countries have harmed the interests of domestic farmers, leading to significant losses for the local agricultural sector.
The fifth point is the grave danger posed to the public by drug trafficking and the illegal production and distribution of narcotics. Those involved in such illicit activities, driven by selfish greed, do so without regard for human life. In border regions, where territorial stability is often weak, illegal armed groups are known to collaborate in the production and trafficking of narcotics. Such activities have been frequently reported in national news. The widespread availability of drugs has severely disrupted the potential for young people to pursue education, good health, and personal development, thus hindering their ability to fulfil their full potential. This problem also poses a significant threat to the future growth and development of youth and the nation. If the drug market expands further within Myanmar, it could have disastrous consequences for the entire population, undermining public health, social stability, and economic progress.
The final point is the threat to national security caused by illicit activities. At this moment, the State Administration Council is making significant efforts to ensure the nation’s security and stability. However, the illegal trafficking of weapons, explosives, communication devices, and other dangerous materials to unauthorized armed groups is a severe threat to national security. Reports of these groups damaging public infrastructure — such as bridges, schools, and government buildings are frequent, leading to substantial harm to both the state and its citizens.
The aforementioned harmful effects of illicit trade pose significant barriers to national stability, the rule of law, and the progress of modern development initiatives. Therefore, it is crucial to inform the public about the severe consequences of illegal trade. The Anti-Illegal Trade Steering Committee on Combatting Illicit Trade has provided phone numbers and email addresses through national newspapers, Voice of Myanmar, and FM Radio, enabling citizens to report any illegal trade activities.
These reports can also be made to regional and state-specific anti-illegal trade task forces via phone, mail, email, or in person, with full confidentiality. The public should view the fight against illegal trade as a national responsibility and a patriotic duty. By actively participating and cooperating, citizens can contribute to the protection of the nation’s economic security and the country’s development. Together, we can work towards eliminating illegal trade, fostering the well-being and progress of the nation for future generations.
By Phoe Aung
#TheGlobalNewLightOfMyanmar