Interview: U Thaung Tun
How are regulatory improvements encouraging foreign direct investment (FDI)?
U THAUNG TUN: In accordance with liberal economic principles, the liberalisation of the retail, wholesale, education, insurance and banking sectors shows that we are working hard to open up to foreign investment. This change is rapid, but we want to ensure that the investment environment is favourable, friendly and predictable. The Myanmar Sustainable Development Plan 2018-30 is the country’s overarching sustainable development agenda that prioritises national reconciliation, economic development and investment. However, we do not just need more investment, we need the right type of investment. We want to assure our partners that we have prioritised FDI and improved the ease of doing business.
We have already seen strong investment in the automotive sector from Singapore and Japan. What begins as basic manufacturing or special knock-down assembly develops into a deeper supply chain infrastructure, allowing Myanmar to climb the value chain and even export products.
The first action we took to enhance FDI was to implement the Myanmar Investment Law of 2016. Subsequently, the most effective step was the introduction of an online company registration system. It is simplified, meaning that anyone worldwide can set up a business online, without human interaction.
Having a smooth first step to start a business in Myanmar sends a strong message and should dispel some misconceptions about the business environment. In addition, we are nearing completion of a land bank to provide clarity regarding land ownership and simplify investor access to land for commercial use. In addition, the Project Bank, a platform consisting of transformative projects that have been screened and prioritised will be able to be implemented in a transparent manner. There is still much to do but we are working to achieve our targets, often through the Public-Private Partnership Centre. We will focus increased efforts on research and development, with a technology-first policy, meaning knowledge sharing and skills promotion must take precedence.
What potential is there for Myanmar to become a preferred investment destination in Asia?
THAUNG TUN: Liberalism and the global economy in general are facing headwinds. As a result, globalisation is being challenged and multilateral efforts are becoming less effective. In this environment, even the best-laid plans can go awry. That said, our region’s GDP will double over the coming decade, driven by rising urbanisation and purchasing power. This will lead to the emergence of 1bn middle-class consumers. There is global uncertainty; however, Asia and Myanmar will continue to flourish.
Tensions regarding China-US trade relations mean that firms will continue exiting China – perhaps at an accelerated pace. A look-south policy enacted by Japan and South Korea has resulted in a focus on South-east Asia, and so it is our job to make Myanmar the best solution for long-term growth plans of these firms. The advantage is we are entering an era where a refocus has taken place. History shows developments proceed quickly – evidenced by the radical evolving of the telecoms sector since 2014.
With regard to upgrading in-country infrastructure, the situation is improving but much is yet to be achieved. People are impatient and expectations are high, which will help us achieve our goals. Electricity remains an acute issue, and we trust that the emergency power tenders will help assuage shortages during the dry season. Human resource development requires a greater injection of capital and thus remains a consideration for investors. Most workers in Myanmar are underemployed, and thus we will catch up with our neighbours by creating better-quality employment that is technology based.
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