“Bliss was it
in that dawn to be alive,” wrote William Wordsworth of the
terrors of the French Revolution. The sentiment was not much
different a year ago in Myanmar, where many were anxious about
the transition, which was less tumultuous than one might
anticipate. But the new government has yet to deliver effective
MyanmarTimes, Mar 31, 2017 by: Htin Lynn Aung
“Generally, the pace of economic reform has been slow and below
market expectations … the Myanmar government realises the
importance of accelerating this, although policy changes in this
regard have so far also failed to match or exceed expectations,”
William Greenlee, managing director of DFDL’s Myanmar office,
told the Myanmar Times.
A return to darker days of law-making?
For many international investors, the Law Concerning Foreigners
or the Foreign Workers Law, which are being redrafted at the
moment, illustrate the problems of the government’s approach
towards the private sector.
“An example is provided by section 12 of the Foreigners Act,
which requires that prior approval must be issued for any
foreigner wishing to travel for a period over 24 hours,” Mr
Greenlee said, adding that a passage and implementation of this
law would greatly hinder business travel and the importance of
“I would be surprised if even a redrafted version is passed. It
[the foreign laws] should simply be scrapped,” he said.
The government has shown that there is no consistency in their
approach. There have been open hearings to discuss the new
Investment Laws and related rules. The government has also been
inviting written comments on their draft rules from the private
sector. A similar process is employed for the new Companies Act.
But nothing similar took place before the foreign laws were
rushed to parliament, according to Eric Rose, lead director of
Herzfeld Rubin Meyer & Rose, an American law firm.
“[The laws] were proposed by the Ministry of Labour, Population
and Immigration. The first and only drafts were published in
December, then they were rushed to the President’s Cabinet by
the end of December, and sent to the Hluttaw Joint Bill
Committee in January, with no public hearings, no comment
period, or any effort to seek input from either the foreign or
Myanmar investment community,” he explained.
“The result was a wall of opposition to these retrograde laws
which were out of sync with the progressive steps towards
encouraging investment taken by the rest of the Myanmar
“Nine foreign chambers of commerce objected, [together with]
numerous embassies, UMFCCI members, as well as, surprisingly,
members of DICA and MIC.
“Furthermore, the undemocratic process caught the eye of several
members of the NLD’s central executive committee as a return to
darker days of law-making in Myanmar,” Mr Rose said.
FDI and investor confidence
Figures have not reflected well on investor confidence: foreign
direct investment (FDI) in this fiscal year is less than that in
the previous year.
In the 2015-16 fiscal year, FDI amounted to nearly US$9 million.
But for this year, the new FDI is only slightly above US$5
More than US$6.611 billion of FDI poured into the country from
April 1, 2016 to March 13, 2017. But, in fact, more than US$1.55
billion comes from existing investors who decided to increase
The new Investment Law coming into effect soon will be an
administrative challenge for the government. From determining
tax reliefs and exemptions based on industrial zones and sectors
to coordinating regional investment commissions with the MIC,
all these would require managerial acumen.
A systematic approach in administration is necessary for more
“Regions are given permission to do business as per current
investment law, and it is necessary to stipulate regulations for
work procedures, in addition to giving permission. Based on the
regulations, they can decide what should be allowed, what
decisions they can make, and when to make decisions.
“It is good to have all the regulations specified thoroughly. If
not, it can cause hindrance to the investors, and investments
can be affected due to delays,” U Aung Thura, an investment
market expert, said.
Paying real efforts, not lip service, to support private
The new government has been reassuring investors and businesses
that they are keen to promote businesses and boost the economy.
Many ministers have time and again mentioned how important the
private sector development is for Myanmar’s economic growth.
However, businessmen have pointed out that more changes are
imperative for the private sector. The related ministries,
together with the civil service, needs to be reformed.
In their first year, the administration has only made changes at
the top level, while the professionalism and efficiency of the
civil service have not improved. This administrative
mismanagement is very frustrating for businesses to operate,
according to many businesses.
“The new government has kept insisting that the country will
only develop if the private sector develops ... Changing the
bulk of the employees, including those at a lower level, is
necessary for businesses to work.
“Corruption among lower level staffs, who’re in charge of
operations, as well as the lack of real improvement in
bureaucracy impede private sector development,” said U Ye Min
Aung, who works in banking sector as well as the electricity and
Although the new government chanted the term “change”, little
has gone beyond rhetoric.
“The NLD government hasn’t improved on the performance of its
predecessor, and to some extent has gone backwards when it comes
to consulting systematically on draft laws, something which is
essential if they want to improve the investment climate,” Vicky
Bowman, director of Myanmar Centre for Responsible Business,
told the Myanmar Times.
“With the exception of DICA, other ministries – and the
parliament – still adopt laws opaquely, and consequently those
laws are rarely fit for purpose,” she added.
In the meantime, high inflation, weak exports, lack of access to
banking services, lack of autonomy of the Central Bank and the
capacity of the civil service remain on the to-do list. Apart
from the lifting of US sanctions, there are hardly any
remarkable changes in the first year of office for Myanmar’s new
government, whose economic policies are still unclear.
What is clear, though, is that, if the government wants the
economy to gather steam, their second year can no longer be
business as usual.
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