Economy
From The Report: Myanmar 2014
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A new foreign investment law, an open telecommunications license tender and the exchange rate float, all in the past two years, have shown the government’s focused interest on developing the necessary legal, financial, and policy measures for attracting foreign investment and boosting the economy. A budding young labour force, abundant natural resources and a strategic geographic position at the heart of high-growth Asia give the country the potential to be a key global player in the coming decades. Official figures report that economic growth for FY2012/13 was 7.6%. In 2012, agriculture made the greatest contribution to GDP at 33% of the total. Thanks in part to the large informal economy, SOEs account for over two-thirds of government revenues, with tax receipts at a modest 3.3% of GDP. Recent years have seen large investment projects developed by Asian investors, but the new Foreign Investment Law of August 2012 has caught the attention of larger Western firms looking for exposure to the next frontier high-growth market. Myanmar has just begun its development process and, although growth will be strong, there are still many legal and regulatory measures that need to be taken before Western firms consider it to be largely risk free.
This chapter contains interviews with U Soe Thane, Minister of the President’s Office and Former Chairman, Myanmar Investment Commission (MIC); Dr Kan Zaw, Minister of National Planning and Economic Development; Serge Pun, Chairman, Serge Pun and Associates (Myanmar); and Le Luong Minh, Secretary-General, ASEAN.

Articles from this Chapter

Overview

Forging a new path: Widespread reforms are set to drastically reshape the economy
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Myanmar was the economic frontier highlight of 2013, and has swept the international press with its bold reformation goals and political transformation. However, given that there are few historical examples of foreign firms operating in the country, international investors are still wary of making large commitments. Changing Times A new foreign investment law, an open telecommunications license tender and the exchange rate float, all in the past two years, have shown the government’s focused…

Analysis

Designated areas: Special economic zones have the potential to boost investment
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However, the Foreign Investment Law passed in 2012 has a similar package of incentives, which apply to any foreign investment in Myanmar, thereby effectively nullifying some of the advantages of locating in an SEZ. Zone By Zone Dawei SEZ, which was originally backed by Italian-Thai Development (ITD) and the Myanmar Port Authority, has an estimated project cost of $8.6bn, is set to cover 196 sq km, and will include a deep-sea port. In March 2013, however, citing a lack of sufficient progress and…

Interview

OBG talks to U Soe Thane, Minister of the President’s Office, and Former Chairman, Myanmar Investment Commission (MIC)
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Interview:U Soe Thane What role does the MIC play in attracting foreign investment? Which sectors will you prioritise? U SOE THANE: The MIC plays the role of regulator and gatekeeper of foreign investment to Myanmar. The MIC stands on four guiding principles: not to violate the interests of the state and the people; not to have any impact on the national dignity; not to breach sovereignty; and not to have any effect on the environment. In the short run, the emphasis will be on labour-intensive…

Interview

OBG talks to Dr Kan Zaw, Minister of National Planning and Economic Development
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Interview:Dr Kan Zaw What steps will be taken to reduce poverty during the modernisation of the country’s economy? DR KAN ZAW: At the moment, 70% of our population lives in rural, often underdeveloped, areas. Within 50 days of the formation of our new government we had a national forum and workshop targeting poverty reduction and rural development. This was organised by the Ministry of National Planning and Economic Development. As a result of the workshop, we were able to draw up a five-year…

Analysis

Transition period: Countries from around the world have been providing support
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Myanmar’s recent democratic reforms have driven many countries to re-assess their stance on the Southeast Asian nation, and some have already fully reversed their position. The powers that helped close Myanmar’s doors to international cooperation are now the ones rushing to get in as they re-open. Where there were once strict sanctions, there now comes development capital, partnerships and political support from some of the previous regime’s harshest critics. Clearing Debt At the beginning…

Analysis

Economic partners: A new law is aimed at stimulating foreign direct investment
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In March 2011, President U Thein Sein shocked the world in his inaugural speech by taking a new tack for Myanmar’s development, speaking of the need to “open doors, make reforms and invite investments as necessary for development of the nation and the people”. He stated clearly that Myanmar aims to “attract foreign investments” as part of a wider set of radical reforms set to affect all areas of the economy. No document better represents that aim than the Foreign Investment Law (FIL) passed…

Interview

OBG talks to Serge Pun, Chairman, Serge Pun & Associates (Myanmar)
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Interview:Serge Pun What were the most noticeable economic developments leading up to the country’s democracy? SERGE PUN: In 1992, when Senior General Than Shwe took power, he opened the doors of the economy. From then until 2003 there was strong economic growth. People say that today we are opening up for the first time, but the first economic spring was in 1992. In 2005 we experienced mismanagement, bad decisions, cronyism and corruption, which destroyed the economy and plunged us into…

Analysis

Strengthening ties: The ASEAN Economic Community aims to boost regional integration
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The year 2014 marks a major milestone in Myanmar’s efforts to position itself internationally and amongst its regional peers, as the country assumes the rotating chair of ASEAN for the first time since it joined the regional economic club 17 years ago. Its chosen slogan, “Moving Forward in Unity to a Peaceful and Prosperous Community,” underscores its strategic intent to focus on economic development priorities whilst defusing tensions at home and in the region. Moving forward with the ASEAN…

Analysis

Key pillar: Increased spending on education to boost socioeconomic development
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Since the opening of the economy to the outside world in 2011, President U Thein Sein’s government has implemented various policies in an attempt to raise standards of education. In order to boost the country’s socioeconomic development and better prepare students for the growing economy, the government increased the education budget from $340m in 2011 to $740m in 2013. Under the military junta, education suffered severely, receiving only 1.3% of the national budget, a miniscule figure in comparison…