Interview: Cheah Swee Gim
With the ASEAN Economic Community (AEC) nearing, how would you assess Myanmar’s legal framework in comparison to other ASEAN members?
CHEAH SWEE GIM: Myanmar’s legal framework for foreign investment in terms of principles is more or less comparable to those of other ASEAN member countries. Fundamental features such as safeguarding the investments, investment authority, rules for issuance of investment permits and various incentive schemes are ingrained in Myanmar’s investment laws.
The primary difference between the legal frameworks of Myanmar and other ASEAN member countries is that Myanmar’s laws have only been practiced and tested for a few years.
Consequently, there are very limited precedents available, and the interpretations of the laws are still uncertain. With a more specific look, Myanmar’s incentive schemes for foreign investments are less segmented than those of other ASEAN countries such as Indonesia, Thailand, and the Philippines whereby incentive schemes are sector-specific and/or location-specific and priorities are usually given to selected investments.
As for the framework of peripheral laws for the business environment, Myanmar is catching up on this fast with the recent enactment of the consumer protection law and pending intellectual property laws, competition law, as well as condominium law. However, all of these differences should be examined from the perspective that Myanmar has embarked on political, economic and social reforms simultaneously and only very recently.
In almost four years of government since 2011, Myanmar has come a long way from minimal foreign investment to the approval of approximately $50bn worth of foreign investment.
Learning from experience, Myanmar’s legal infrastructure has only to advance further into a more sophisticated and mature legal system which is ready to reap the opportunities of the forthcoming AEC.
In terms of legal framework, what steps can government take to entice foreign investment and diversify trade activity?
GIM: The government should continue to do what it has been doing earnestly – keeping the legal framework investor-friendly and abreast of the current economic and business landscape. To this effect, the government has been responding to the feedback from foreign investors and the prevailing needs of businesses by undertaking substantive legislative and administrative reforms. In 2014 a multi-stakeholder meeting took place with high-level participation from the union government, both houses of the parliament and the judiciary to discuss the laws to be repealed, revised and drafted anew. Following the meeting, the joint bill committee of Pyidaungsu Hluttaw issued the list of laws to be repealed, revised and drafted anew and the responsible government bodies for each law. Not long after, revisions to the classification of types of economic activities for foreign investors were made, followed by the enactments of the regulations for foreign exchange management and the regulations for pursuing investments in Thilawa Special Economic Zone. In terms of administrative changes, the Myanmar Investment Commission was relocated to Yangon, making it easier for foreign investors to access the authority and facilitating efficient work flow. Further, with accelerated efforts to implement the Thilawa Special Economic Zone, investments therein when fully realised will undoubtedly diversify Myanmar’s exports currently dominated by natural gas and farm products. Looking at the lists of laws to be revised and drafted, one can only be astonished by Myanmar’s efforts for a systematic, holistic and coordinated approach in overhauling the legal infrastructure. Myanmar has charted its way forward to establish a sound and investor-friendly legal system. With determination and the implementation of this roadmap, Myanmar will certainly have no problem meeting the world’s expectations.
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