ASSESSIN

G MYA

NMAR’S

REFORM A

ND DOIN

G

BUSINESS IN

MYA

NMAR

PROF.D

R.AUNG T

UN THET

(AUNGTU

NTHET

@GMAIL.

COM)

OVERVIEW

1. Part One: Assessing Myanmar’s Reforms

2. Part Two: Doing Business in Myanmar

2

PART

ONE: A

SSESSING

MYANMAR’S

REFO

RMS

3

• “All of us might wish at times that we lived in a more tranquil world, but we don't.

• And if our times are difficult and perplexing,

• so are they challenging and • filled with opportunities. “

4

TODAY REALITIES

• Very interesting and exciting

• Volatile and Chaotic

GEOGRAPHY• Strategic location

• Between the two economic global powerhouses – China and India

• Bridge between South and South East Asia

DEMOGRAPHY

Population54,584,650Age Structure0-14 years: 27.5%15-64 years: 67.5%)65 years and over: 5%

“Demographic

Window”

NEW WINDOW OF OPPORTUNITY

• Socio-economic progress• Opportunities opening up • Space growing• ‘Latecomer’

8

NATIONAL DEVELOPMENT STRATEGY• Ends – Poverty Reduction and

Rural Development• Means – Good Governance and

Clean Government• Eight-point Agenda

9

NATIONAL DEVELOPMENT STRATEGY• Goals• Reducing poverty from 26.5% to

16% by 2015• Graduate from LDC• Three-fold increase in per capita

GDP

10

‘MYANMAR SPRING’

• Extraordinary, Unprecedented and Unimaginable!

• President U Thein Sein• Rapid speed of recent changes• Peaceful revolution• Top-down

‘MYANMAR SPRING’

• On the brink of a momentous economic flowering

• Most important period of political transition

• Reconciliation and addressing long-neglected needs

• Myit Sone Dam

POLITICAL DEVELOPMENT

• Release of political prisoners• Daw Aung San Suu Kyi and NLD in

Parliament• Continued reconciliation between the

Government and various ethnic groups• Myanmar Human Rights Commission

PEACE DEALS

Nine out of 16 rebel groups signed ceasefire agreements since August 2011

Deal reached with KNU Norwegian Peace Fund, Peace Centre

LEGISLATIVE REFORMS

• Dynamic leadership• New laws enacted • FDI• Taxation• Land Reform• Freedom of Expression• Freedom of Association

LEGISLATIVE REFORMS

• Engagement with 88 Generation• Willingness to Listen to the Voices of the People• ‘Check and Balance’

INTERNATIONAL RELATIONS

• Rapprochement with the West• High-profile visits of senior Government and

National and UN officials• Re-engagement with the international

community• Resumption of ODA• Gradual lifting of Sanctions• ASEAN Chairmanship in 2014• AFTA/AEC in 2015

INTERNATIONAL RELATIONS

• Engagement with UN• UN Country Team Strategic

Framework (2012-15)

UNITED NTIONS ENGAGEMENT

• Four Strategic Priorities

1. Encouraging inclusive growth in both rural and urban areas

2. Increasing equitable access to quality social services

3. Reducing vulnerability to natural disasters and climate change

4. Promoting good governance and strengthening democratic institutions and human rights

19

UNITED NTIONS ENGAGEMENT

• Social Protection• Development Policy Options

(DPOs)• National Census (2013)• UN Global Compact

20

SOCIO-ECONOMIC DEVELOPMENT

• Priority to accelerate socio-economic development

• Job Creation• Linkages between Peace , Democracy and

Development• Guaranteeing Rule of Law• Promoting Civil Society• Media

DEVELOPMENT PRIORITIES

• Foreign exchange rate unification • Agriculture• Natural resources management• Competitive business sector• Financial/Banking Sector

DEVELOPMENT PRIORITIES

• Education and Health• Legal structures• Infrastructure, and • Policy formation and implementation• Millennium Development Goals (MDGs)

CHALLEN

GES

24

• “You can’t cross the sea,• merely by standing and

staring at the water.”

CHALLENGES

• Socio-economic and humanitarian challenges

• Weak capacity for implementing reforms

• Beginning not the end• Much still depends on individuals not

policy

CHALLENGES

• Sanctions• Official Development Assistance

(ODA)• Lowest recipient of ODA among all

LDC’s, with 7.2 US$ per capita in 2010

• FDIs

CHALLENGES

• Kick-Starting/Jump Start Growth – SEZs, Deep Sea Ports

• Equality of opportunities not outcomes• “Pulled Along” by China, India +

ASEAN• Poor Infrastructure• Corruption

FROM CHANGE TO TRANSFORMATION

PART

TWO:

DOING

BUSINES

S IN

MYA

NMAR

MYANMAR IS OPEN FOR BUSINESS

• “Faith is the bird that feels the light and sings,

• when the dawn is still dark.”

‘NEW’ MYANMAR

• One of Asia's final economic frontiers• Comparative advantages• Geographical location• 60-million untapped market• Bountiful natural resources

INVESTMENT CLIMATE

• New Foreign Investment Law• Western countries to become

highest investing countries • Europe, Australia, Canada and USA

cancelled the economic sanctions

NEW MYANMAR INVESTMENT SUMMIT JUNE 2012

• Representative from USA, Germany, France, Canada, British, Italy, Norway, Australia , United Arab Emirates (UAE), China, Japan, Singapore, Thailand, Korea, Malaysia, Indonesia, Philippines, Vietnam, Cambodia, Mongolia, Lao, Sri Lanka and Bangladesh attended

NEW FOREIGN INVESTMENT LAW (FIL)

• Company which joint venture with foreign company 5 years free of tax and 70 years permission to do business

INVESTMENT SITUATION: TOP 7 COUNTRIES

COUNTRY US$ billion %

China 13.9 45.03

Hong Kong 6.3 20.37

South Korea 2.9 9.36

Thailand 2.5 7.99

UK 2.2 7.29

Singapore 1.5 4.83

France 0.5 1.62

FOREIGN INVESTMENT

Priorities

1.Resource-based investment

2.Resource-based export-oriented value added projects

3.Labour intensive export-oriented projects

WHY

INVES

T IN

MYA

NMAR

?

REASONS

• Population approximately 60 million (approx. 5 million in Yangon)

• Vast and virtually untapped natural resources

• Relatively educated labour force and low wages

REASONS

• Strategic location • Sea and air links within the Asia

region and beyond • Generalized System of Preferences

(GSP)• 100% foreign-owned enterprises

permitted

REASONS

• Familiar business structures and commercial laws (based on the British law codes of the pre independence India Statutes )

• English widely spoken and used• Significant incentives under the

Foreign Investment Law for larger investments

• Membership of ASEAN, BIMST-EC

MARKET

CHALLEN

GES

EXISTING CHALLENGES

• International sanctions not fully removed yet

• Opaque and arbitrary policymaking, including frequent, unannounced and unwritten policy changes

EXISTING CHALLENGES

• Investments approved on a case-by-case basis

• Weak rule of law and property rights

• No independent judiciary and lack of legal transparency

• Arbitrary tax policies

EXISTING CHALLENGES

• Tiny financial sector and shallow domestic capital market

• Continued unpredictability in electricity supply, especially areas outside Yangon and other major cities

• Privatization

EXISTING CHALLENGES

• Weak educational system and unskilled work force

• Poor infrastructure including communications and transportation networks

• Evolving system of exchange rates and foreign exchange controls

CORPO

RATE

SOCIA

L

RESPO

NSIBIL

ITY

MYANMAR

• Joined the UN Global Compact• Promoting Corporate Social

Responsibility (CSR)• Encouraging Socially

Responsible FDIs• Rotary International

REVIEW

1. Part One: Assessing Myanmar’s Reforms

2. Part Two: Doing Business in Myanmar

49

• "Together we want to help the world see and believe,

• in a better future."

• There are those who look at things the way they are,

• and ask why... • I dream of things that never were, • and ask why not?