Energy, power generation, tourism and infrastructure are among the sectors of Myanmar’s economy ripe for growth. These are critical areas that need long-term investment, and the new regulations should help address a series of risks and questions on how to evaluate shares between public and private players, Paulius Kuncinas, managing editor for Asia at the global research and consultancy firm Oxford Business Group (OBG) highlighted during the group’s annual roundtable today.
The event shone a spotlight on the country’s legislative reforms, notably the new Investment Law and Companies Act, while considering the impact that they are expected to have on Myanmar’s business climate. It gathered views from Charles Schneider (IFC), Kristen F. Bauer (US Embassy), Pedro Jose F. Bernardo (Kelvin Chia), Dr. Aung Thura (Thura Swiss) and Azeem Azimuddin (Aya bank).
U Than Aung Kyaw, deputy director general, Myanmar Investment Commission, mentioned in his opening remarks that the challenge for Myanmar will be to grasp new opportunities by streamlining its business procedures.
“The Directorate of Investment and Company Administration (DICA) will continue to be proactive in attracting further investment to boost the dynamism of the country’s promising sectors.” U Than Aung Kyaw added.
Having worked on the creation of the Investment Law and implementing rules since 2014, IFC’s Charles Schneider highlighted DICA’s efforts to consult widely during the preparation of this legal framework. Schneider pointed out that the idea from the beginning of this process was to start from scratch with a new law, that would combine the existing Foreign Investment Law and Myanmar Citizens Investment Law to create a level playing field for local and international investors, strengthen investor protections, streamline entry and approval procedures and create an environment that would attract high quality and responsible investors to Myanmar.
“This new legal framework will help to differentiate Myanmar from other investment destinations to maximise the country’s already high potential.” Schneider added.
US embassy’s deputy chief of mission Kristen F. Bauer highlighted that the New Investment Law is sending positive signs to the business community because it showcases the government’s continued commitment to the development of Myanmar. According to Bauer, the responses to the new law have been positive and people are now waiting for its full implantation, particularly for the by-laws that will push for the liberalisation of controls on sectors such as insurance, agriculture and banking.
“This comes on top of the steps taken by the US government earlier to reinstate the US-Myanmar partnership” Bauer added.
For Pedro Jose F. Bernardo, Partner at Kelvin Chia, the new law “is an excellent piece of legislation which will make it easier for people to come in and invest in Myanmar.” He further explained that “one of the most important features is that the new law provides clear investment protections.”
“The new laws and transparent implementation of regulation-related measures will help Myanmar gain a top 50 position in the World Bank’s Ease of Doing Business ranking. And that will make a big difference.” Azeem Azimuddin, CFO at Aya Bank added
Even though the changes are seen as a positive stepping stone, many panellists and attendees pointed out that laws and regulations are not enough to promote Myanmar to investors.
“It is but one of a slew of necessary laws and legal structures that must also be considered, including, to name only a few, the passage of the long-awaited updates to the Companies Act, and the institutionalization of a responsible public-private partnership framework to further make Myanmar a truly competitive investment destination” Bernardo added.
“We know from other markets we cover that legal reforms play a crucial role in sending out a powerful message to investors, that they are welcome and the country is open for business” Kuncinas said. “We think the legal reforms will help to address a number of issues related to how risks are shared between the public and private sector.”
The private sector is asking for more actions towards implementation and transparent supervisions to restore confidence within the business community.
“The practice and transparency of implementation are seen as the most important aspects of this legislative change.” Azimuddin added
"We need to build up confidence that Myanmar is a stable investment environment by making processes easier, planning policies and allowing proper transition periods" Dr Aung Thura, CEO at Thura Swiss added.
The event was also the opportunity to announce the recent launch of The Report: Myanmar 2017, OBG’s latest publication on the country’s economy. The report is a vital guide to the many facets of Myanmar, including its macroeconomics, energy, banking and other sectoral developments. It contains contributions from leading personalities, including President U Htin Kyaw and Daw Aung San Suu Kyi, state counsellor, together with a detailed, sector-by-sector guide for investors.