Interview: Peter Beynon
As Myanmar continues to carry out reforms, what key areas can the country improve upon to promote investment?
PETER BEYNON: Myanmar is currently engaged in a dynamic process of transition to a democratic, market-led economy from one that has spent 50 years isolated from the international business community. This has left the country with the advantage of being a blank canvas for investors. At the same time, it has the disadvantage of infrastructure and a regulatory environment that are ill suited to the modern world. The nascent National League for Democracy (NLD) administration faces a daunting task: to address the multitude of critical issues that have been brought to their attention in reports provided by the various government and independent advisory bodies that have arrived in the country since 2012.
For the business community, the key strategies for promoting investment are to address the top-four factors identified by the World Bank’s “Doing Business” report – namely, access to finance, access to land, access to utilities and access to human capital. On top of this, I would also add the development of the rule of law under a transparent, independent and credible judiciary. All five of these issues need to be embraced by the state to achieve positive traction.
There is little that can be fixed in the short term that will lead to an immediate improvement in these four areas, as each will take some time to resolve. From a business perspective, the liberalisation of the markets would help spur longer-term development. This would mean accepting foreign capital and competition in many markets in Myanmar that currently have either restricted access or no access at all. Equally, appointing an independent, functional judiciary to oversee the legal environment would also be an essential step forward.
In what ways has the easing of US-imposed sanctions affected the appetite of investors looking to enter the Myanmar market?
BEYNON: In October 2016 then-President Barack Obama signed the decree lifting all significant sanctions against Myanmar that had previously inhibited US nationals from undertaking trade and investment in the country. The signing of the decree also resulted in the removal of the blacklist status that had been applied to selected Myanmar nationals and their business interests.
The resultant new environment has substantially eased the way for international trade and investment, and has provided a greater choice of business partners. These are all very positive changes for the future of investment in the country, and the move has been welcomed by the business community at large.
The most immediate positive affect of the removal of the sanctions has been the easing of complex impediments that had previously been applied to international remittances involving Myanmar in the global banking system.
How would you rate the ability of the Central Bank of Myanmar (CBM) to manage currency and fiscal volatility during this period?
BEYNON: The CBM is in its infancy as an institution independent from the government. It is widely acknowledged that the CBM is deficient in the tools and in-house expertise required to manage currency and fiscal volatility. To meet these shortfalls, various international agencies have provided professional guidance and expertise.
The CBM will face a large number of challenges in the years ahead, and the speed at which it can build the infrastructure of human capital expertise and a portfolio of fiscal tools to manage the economy will be essential to ensure success.
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