Interview: Serge Pun
What contributed to the slowdown of the economy, and how can the government stimulate growth?
SERGE PUN: Prioritisation of political and social policies affecting national peace, the rule of law, democracy and corruption have coincided with a slowdown of economic growth and foreign direct investment (FDI). By centering the bulk of its attention on these policy areas, the government unintentionally allowed the economy to take a back seat in its agenda.
Another factor that might explain challenges to business relates to the approach of the National League for Democracy (NLD) towards economic development, which is focused on addressing the country’s structural economic and governance woes. For all the progress achieved during U Thein Sein’s presidency, the reality is that many of the foundational weaknesses of our economy remained unaddressed. Unfortunately, the NLD inherited an economy still affected by poor governance, low transparency and corruption, where the benefits generated from growth did not trickle down to the people. In my view, if the NLD succeeds in pressing forward with its agenda, Myanmar will certainly reap the benefits of its policies and the economy will be completely different within the next 15 years.
How can the local private sector support the government to develop Myanmar’s infrastructure?
PUN: It is important to note that local companies have played and will continue to play a fundamental role in supporting the development of national infrastructure. However, it is equally important to recognise that Myanmar needs the support of foreign companies and FDI, because local firms and the government lack the financial capacity to fund key structural projects and the know-how to implement them. We have a strong nationalistic and patriotic sentiment, but that on its own will achieve little. This means that we need to leverage foreign investment in diverse forms, including government grants and private enterprise investment.
The problem with implementing many of these projects is because of the low institutional and bureaucratic capacity of our government. Take the Belt and Road initiative, for example: China is ready and capable of supporting Myanmar, but are we capable of fully leveraging such an initiative? Large projects must be well negotiated to ensure that we can get the best deal, protect our national interests and, most important of all, ensure they are successfully implemented. The government needs to realise that we have a shortage of qualified bureaucrats and recruit new personnel, both foreign and local, with the necessary negotiation skills to bring in FDI and implement the key infrastructure projects required by the country.
What kinds of infrastructure projects could spark sustained growth in Myanmar?
PUN: Myanmar needs some large-scale projects to spark growth and generate more economic opportunities. One of those initiatives will certainly be the Yangon New City Project. It’s an ambitious development founded on a single central objective: to create 2m new jobs. This huge undertaking will be spearheaded by a unique entity set up by the regional government: the New Yangon Development Corporation (NYDC). An unprecedented project, the NYDC will be fully owned by the regional government and run as a private enterprise. It will have five board members, two ministers, the CEO of a local company and two independent international directors. The singular advantage of the NYDC is that it will own all the land earmarked for the development of the new city.
With limited capital, the NYDC will have to present creative solutions to leverage on its land ownership rights to attract investment, namely intensive labour industries to sustain its main purpose of creating 2m new job opportunities. The project is still in its initial stages, but I hope the Yangon New City Project will be the initiative that sparks long-term growth in Myanmar.
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