Author: Hornaday, Robert W.
Source: NACRA, Case Research Journal / Laurier Institute
Number of pages: 8
Aung Sein built a machine that produced inexpensive disposable gloves, an item in short supply in Myanmar. Medical and laboratory workers needed large quantities of disposable gloves, but the government would not buy Aung Sein's gloves. In 1995, these gloves were imported from industrialized nations or smuggled across the border with China. In Myanmar, only the government could buy large quantities of disposable gloves. The overall standard of living was very low, and government employees were underpaid. Most government employees expected gifts or kickbacks from vendors. The official exchange rate for Myanmar's currency was six kyat to the dollar, but the black market or parallel market rate was 110 kyat to the dollar. To take advantage of this difference, government purchasing officers often preferred to purchase goods from foreign sources so that they have access to foreign exchange. The glove business was not Aung Sein's only enterprise. He had to decide whether it was worthwhile to put more time and money into trying to sell gloves or whether he should pursue his other interests.