Interview: President U Thein Sein

After decades of isolation Myanmar is now a frontier market for investors. In which sectors do you see the most potential for foreign participation?

PRESIDENT U THEIN SEIN: Myanmar is at a very important stage in its development. The transition from an authoritarian to a democratic regime has led to the lifting of sanctions. At the same time we are moving away from a centralised economy to one based on the free market. We have abolished our old currency exchange regime, restructured our international debt, worked hard to end economic sanctions, changed our investment laws and policies, and focused on rapidly improving key public goods, including the provision of electricity and telecoms. We are keen to become a signatory to the Extractive Industries Transparency Initiative (EITI) to ensure maximum transparency as we attract new investment and develop our natural resources. Our country is now in a position to promote its natural resources and encourage foreign direct investment across all the sectors of the economy. This is a critical moment for Myanmar’s economy, but alongside these new opportunities, there are also many challenges. These must be addressed not only by the public sector but also by new entrants who would like to participate in the evolution of our once-isolated nation. Foreign participation can be seen across a number of sectors. The oil and gas sector has received much global media coverage in recent times because of the tendering of many onshore and offshore blocks by the world’s leading energy companies. However, it is also worth noting that the telecoms industry has for the first time awarded licences to international operators, promoting a rapid increase in both mobile and internet penetration across the country. Major developments are taking place within the transport sector, particularly in the maritime and aviation industries. Without foreign participation these developments would be impossible. Increasing our ports’ handling capabilities and establishing deep-sea ports will result in a boost in shipping activity. This should also have the effect of promoting Myanmar as an important regional trading hub. For example, a tender has been awarded for Hanthawaddy International Airport, which is scheduled to open in 2017, and is required to deal with the country’s capacity needs, and assist in our efforts to increase international trade, investment and tourism. The combined efforts of foreign investors are a vital piece of the puzzle that will make up Myanmar’s changing landscape in the years ahead.

Myanmar will assume the ASEAN chair in 2014. What measures should be adopted to ensure your country benefits from regional integration?

THEIN SEIN: Hosting the ASEAN summit is an honour for Myanmar and is a testament to how far we have come in recent years. There is still a long road ahead and it is vital that each member state contributes to the common goal of economic prosperity and stability. As Myanmar assumes the role of chairman for the first time in its history, it is critical that the country pursues the goals of the community as a whole, while simultaneously strengthening its position within the region. It is only through our collective efforts, including increased dialogue and greater economic cooperation, that each member state will benefit from regional integration.

Myanmar shares borders with some of the fastest-growing markets in the world, encompassing more than 2bn people. Our country, which was once isolated not just by politics but also physical barriers, is now poised to break those barriers. Over the past few decades we have witnessed great economic advances in Asia. I would like nothing more than for the young people of Myanmar to share in the peace and prosperity of this region. Myanmar’s transition to democracy will provide the necessary foundation to meet the two fundamental aspirations of our citizens: a peaceful life under the rule of law, and the promotion of socio-economic development. Assuming the chairmanship will be a significant responsibility, and signals the depth of Myanmar’s eagerness to fully enter the family of nations. We look forward not only to managing our own transition but also to becoming responsible members of the international community, and in doing so, making a contribution to regional and global peace and security.

Lawmakers are taking steps to encourage foreign direct investment. How do you intend to balance domestic interests and foreign incentives?

THEIN SEIN: My office has worked closely with the legislative branch to promulgate the Foreign Investment Law, ensuring that it meets international standards and brings benefits to our citizens as well as investors. The law was enacted in November 2012 and is just one dimension in an integrated framework of political, economic, social and legal priorities that will determine the contours of Myanmar’s investment regime in the years ahead. The government is also reforming Myanmar’s arbitration system to bring it into line with internationally accepted standards.

While encouraging investment is critical to our economic development, it comes second to promoting the welfare of our people and the protection of the environment upon which their livelihoods depend. In line with the people’s wishes for responsible investment, my government is serious about establishing a framework for dialogue about the governance of Myanmar’s natural resources. The EITI has been put in place to ensure responsible investment in and the conservation of our natural resources. Myanmar’s tremendous natural resources are the pride of the entire nation, and must be well protected.

We occupy an enviable location at the crossroads of Asia, between China, India and the other countries of South-east Asia. Furthermore, opening the doors to foreign trade and investment must be done in a way that ensures that poverty is reduced, so that revenue from our natural wealth is used to reduce poverty rather than to fuel corruption. It is also imperative that we continue to implement reforms in the education and health care sectors, as these are important not only to meet today’s needs but also to meet our nation’s future economic requirements.

To what extent would you welcome stronger economic ties with European countries and the US, and in which fields should this take place?

THEIN SEIN: As we pursue economic stability, it is also important that we meet three prerequisites in the fields of financial capital, technology and human resource development. In these areas in particular I believe the West can contribute a great deal. Myanmar has a large and eager population that has much to learn from developed nations. We have put in place solid foundations for a market economy to thrive and we welcome foreign investment.

The country’s strategic location in the region should also provide our international partners with ample business opportunities. As a bridge between South Asia and South-east Asia, Myanmar has the potential to become a thriving market. Europe and the US can leverage their industrial and technological expertise to work on many mutually beneficial projects within Myanmar. For example, we have established the Myanmar Investment Committee with the intention of facilitating foreign investment. The committee is made up of government ministers, experts on the economy and representatives from civil society.

In order to increase bilateral trade and investment with US firms in all sectors, we have also established a Trade Investment Framework Agreement and an Investment Incentive Agreement. These will aim to encourage small and medium-sized enterprises from the US to invest in Myanmar. With time our ties with the outside world will strengthen on various fronts, not only in terms of economic and political cooperation, but also on various social and cultural issues.