assessing myanmar’s reform and doing business in myanmar prof.dr.aung tun thet...
TRANSCRIPT
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?