The Report: Myanmar 2019
Although Myanmar has been faced with internal conflict, a new long-term economic agenda, alongside rising oil and gas prices and considerable growth in some manufacturing segments, are set to encourage increased foreign direct investment inflows into the country.
Country Profile
Considered to be the last frontier market in South-east Asia, Myanmar remains focused on creating the required conditions to attract and facilitate foreign investment, in turn spurring economic development. Following decades of military rule that maintained a socialist and centrally planned economic model, cutting off access to the world’s financial markets and main trading routes, Myanmar’s ongoing transition towards a market economy and electoral democracy has caught the attention of investors worldwide. The gradual removal of economic sanctions, by both European governments and the US, contributed to putting Myanmar on the map, gaining a reputation as an increasingly attractive investment destination in the early 2010s. Investors have been drawn by the size of its market, abundant natural resources, fertile land and strategic geographic location between the world’s most populous countries, China and India. This chapter contains viewpoints from State Counsellor Daw Aung San Suu and President U Win Myint.
Explore chapterEconomy
Myanmar’s macroeconomic performance improved in 2018 as recovery in the agriculture sector, rising oil and gas prices, and substantial growth in several manufacturing segments helped the country regain positive momentum. Efforts to encourage private sector activity and liberalise the economy have been extensively detailed in a new long-term economic development agenda, and recent legislative reforms should further bolster business engagement. At the same time, the country is facing several notable challenges. The liberalisation of financial services has been slower than anticipated: deficits in the fiscal budget and the external balance of trade remain large and continue to grow, and currency depreciation hampered growth and spurred inflation in 2018. This chapter contains interviews with U Soe Win, Minister of Planning and Finance; U Zaw Min Win, President, Union of Myanmar Federation of Chambers of Commerce and Industry; and Parag Khanna, Founder and Managing Partner, FutureMap.
Explore chapterTrade & Investment
Benefitting from a large population, an ideal geographic position and abundant natural resources, Myanmar’s trade and investment volumes hold enormous potential for future expansion, although the country is facing both domestic and external challenges. Foreign direct investment inflows soared from 2011, upon the country’s economic liberalisation and democratic transition, although they have slumped recently in the wake of ongoing restrictions on foreign business activities, delayed legal reforms and rising international scrutiny of domestic conflicts. Trade volumes have expanded considerably since 2011, supported by strong agricultural output, energy exports and expansion of the labour-intensive garment. However, imports continue to outpace exports and the potential withdrawal of EU trade privileges has darkened the near-term outlook. This chapter contains interviews with U Than Myint, Minister of Commerce; U Zaw Myint Maung, Chief Minister, Regional Government of Mandalay; Patrick Ip, Managing Director, China-ASEAN Investment Cooperation Fund; and Hiroyuki Ishige, Chairman, Japan External Trade Organisation.
Explore chapterFinancial Services
After several years of rapid expansion and double-digit credit growth, Myanmar’s banking sector underwent several necessary reforms in 2017 and 2018, as the Central Bank of Myanmar moved to introduce new prudential regulations and reduce overdraft lending. Although foreign banks remain prohibited from participating in retail activities, a spate of recent directives have made promising strides towards liberalisation, with foreign entities now permitted to provide import and export financing, as well as lend to local businesses – a major step forward for the development of the sector. Financial inclusion has benefitted from rapid mobile adoption and supportive policy-making. This chapter contains interviews with U Kyaw Kyaw Maung, Governor, Central Bank of Myanmar; U Thein Zaw Tun, Managing Director, CB Bank; He Bi Qing, CEO, ICBC Yangon; and U Nyo Myint, Vice-Chairman, Myanmar Insurance Association.
Explore chapterICT
A new wave of digital innovation is reshaping Myanmar’s economy, as a remodelled national strategy and increased competition enhance the performance of the ICT sector. Prior to the liberalisation of Myanmar’s telecommunications industry, SIM cards and mobile phones were a luxury only the wealthy could afford, but they are now becoming much more widespread, though there is still progress to be made in extending the network rollout. On the back of a string of significant investments and major reforms, mobile network coverage has reached the majority of rural, previously underserved, communities. As a result, Myanmar’s cash-dependent society is being exposed to a wide variety of new e-commerce products and an expanding technology start-up scene. This chapter contains interviews with U Khin Maung Soe, Chairman, MyTel; and U Myo Ohn, CEO, Campana Group.
Explore chapterEnergy
Home to one of the world’s oldest oil and gas industries, the energy sector has long been a key pillar of Myanmar’s economy. While the sector continues to play an essential role in economic output, its true potential has not yet been realised, partly due to a counterproductive fiscal regime and unfavourable market conditions. Despite a number of setbacks, successive governments have made important steps towards unlocking Myanmar’s energy potential. With natural gas reserves of an estimated 16.6trn standard cu feet and some 139m barrels of crude oil reserves, substantial investments in exploration have led to billions of dollars in annual export revenue. This chapter contains interviews with U Win Khaing, Minister of Electricity and Energy; and Javier Rielo, Vice-president, Total Asia Pacific.
Explore chapterConstruction & Real Estate
Since the beginning of Myanmar’s economic and political reform in 2011, the construction industry has experienced mixed fortunes. Although the government has recognised the economic multiplier effects of infrastructure development, some large-scale projects have been held up by bureaucracy and investor scepticism. However, recent efforts suggest cause for optimism, including the large-scale urban development projects planned for Yangon and Mandalay, and the government’s assertion of its commitment to infrastructure development and public-private partnerships under the Myanmar Sustainable Development Plan 2018-30. Meanwhile, large-scale real estate projects – particularly mixed-use developments – are nearing completion, which should improve investor confidence for current and future projects. Nonetheless, after an initial property boom in the first few years after political and economic reforms began in 2011, Myanmar’s real estate sector has faced some challenges recently. This chapter contains interviews with U Han Zaw, Minister of Construction; and Serge Pun, Chairman, Serge Pun & Associates.
Explore chapterTransport
If Myanmar is to fulfil its economic potential, significant investments are required in transport infrastructure. In all areas – from roads, to railways, to ports – the country has fallen behind its neighbours in the region. Encouragingly, the government recognises the need to prioritise this area, and has begun to make progress on much-needed projects, often with the help – financial and otherwise – of development partners. If government enthusiasm is matched by effective efforts to remove red tape and improve access to capital, then the prospects for the transport sector are bright. This chapter contains an interview with U Aung Nyi Nyi Maw, Managing Director, Yangon Region Transport Authority.
Explore chapterIndustry & Retail
Myanmar’s manufacturing sector reached a turning point in 2018 as liberalisation, tax reforms, infrastructure improvements and the development of special economic zones helped turn the country from a low-cost regional production base to a rising manufacturing destination with capacity on the rise. The sector has an advantage due to the country’s relatively low operating costs, favourable demographics and liberalising government policies. Myanmar’s retail segment has boomed in the years since the economy was liberalised, with foreign goods hitting the market and local sellers making their offer more sophisticated. Legacy retail conglomerates are investing in Western-style upgrades to supermarkets and malls, and foreign investors are entering into joint ventures to bring technical know-how. Foreign loans and investment in the retail sector are also bearing fruit. This chapter contains interviews with U Win Aung, Chairman, Myanmar Thilawa SEZ Holdings; and Daw Win Win Tint, CEO and Founder, City Mart Holding.
Explore chapterAgriculture
On the back of inefficient government policies and limited public expenditure, the agriculture sector dwindled under military rule. However, in the wake of economic liberalisation, increased investment and structural reform, the sector’s potential is ready to be unlocked. In recent years efforts have been made to enhance agricultural output with greater investment in production and post-harvest infrastructure. According to the Directorate of Investment and Company Administration, a total of $134.5m in foreign direct investment was approved for the agriculture sector in FY 2017/18, more than the combined total over the previous six years. With approximately two-thirds of the workforce directly or indirectly engaged in some form of farming, policymakers are eager to rejuvenate the sector. This chapter contains an interview with Thadoe Hein, Group CEO, Awba.
Explore chapterMining
Myanmar is well known for the untapped potential of its extensive mineral portfolio. Home to the world’s largest deposits of jade and some of the most sought-after rubies, it also has substantial deposits of lucrative metals as well as industrial minerals. Despite significant deposits, foreign investment across Myanmar’s mining sector has lagged behind other key industries due to misadministration, legal uncertainty and ongoing conflict. As such, the diverse landscape of Myanmar remains largely underexplored. However, with previous legal uncertainties addressed in recently amended mining laws and rules, a multitude of prospectors are waiting in the wings, ready to extract valuable resources. This chapter contains an interview with Fred Hess, Managing Director, PanAust.
Explore chapterTourism
Myanmar has emerged in recent years as a sought-after tourist destination in a region known for its tourism attractions. Since the country opened its doors through political reform in 2011, many have been attracted to its diverse landscapes, rich culture and heritage. While infrastructure challenges remain, and low hotel occupancy rates affect small businesses, a decline in visitors from Western countries has had the biggest impact on the industry recently. However, damage has been limited by increased tourist numbers from elsewhere in Asia, aided by policy developments offering visas on arrival and visa-free entry to visitors from many Asian countries. Sitting at the crossroads between India, China and South-east Asia, Myanmar is well positioned to capitalise on tourist flows from and through these huge markets. This chapter contains interviews with U Aung Myo Min Din, Chairman, Myanmar Hotelier Association; and U Ohn Maung, Minister of Hotels and Tourism.
Explore chapterEducation & Health
Since Myanmar’s democratic transition began in 2011, the education sector has undergone a significant transformation under successive administrations. Higher government spending and the easing of restrictions on foreign investment in private schools have paved the way for increased enrolment rates and improvements in education infrastructure. Despite these developments, notable demographic and regional disparities remain. Closing these gaps and ensuring equal opportunities is necessary to improve the country’s education system. Myanmar’s health care sector has grown considerably in recent years as a result of higher public expenditure and increasing foreign direct investment. Aside from implementing a range of reforms, the Ministry of Health has been proactive in delivering programmes aimed at fighting both communicable and non-communicable diseases nationwide. However, as the country gears up to achieve universal provision by 2030, significant issues still remain. This chapter includes an interview with Dr Watson Aphiwatanakoon, CEO and Hospital Director, Ar Yu International Hospital.
Explore chapterTax
This chapter offers an overview of Myanmar’s tax system, focusing on the implementation of the second phase of its of Reform Action Plan 2012, which aims to establish an effective and fair tax system with increased tax revenue, as well as the introduction of self-assessment bookkeeping and of capital gains payable on any capital asset exchanged. It also contains an interview with U Win Thin, Chairman, Win Consulting.
Explore chapterLegal Framework
This chapter examines the legal system of Myanmar, focusing on the implementation of the Myanmar Companies Law and its online portal, the new Competition Commission and anti-corruption code, adjusted capital requirements for foreign firms and joint ventures and the increase in minimum wage in March 2018. It also contains a viewpoint from Cheah Swee Gim, Director, Kelvin Chia Yangon.
Explore chapterThe Guide
This chapter contains selected listings of some of the country’s top hotels, contact details for embassies, ministries and organisations, helpful tips for business and leisure travellers, and other useful suggestions for travel to Myanmar.
Explore chapterTable of Contents
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State Counsellor Daw Aung San Suu Kyi: Viewpoint
U Thaung Tun, Chairman, Myanmar Investment Commission; and Minister of Investment and Foreign Economic Relations
Shinichi Kitaoka, President, Japan International Cooperation Agency (JICA)
U Soe Win, Minister of Planning, Finance and Industry
Melvyn Pun, CEO, Yoma Strategic Holdings
Stephen Suen, Chairman, Marga Group
Myanmar Times: Myanmar tourism pins hopes on local travellers
Kumudra: For a growth of Myanmar's Health Care Sector
Myanmar Times: Good prospects in Myanmar for long-term investors Oxford Business Group report
América Economía: El nuevo impulso de Myanmar - Asia
