Economy

Should the NLD Look West to Bolster Burma’s Economy?

By Kyaw Hsu Mon 3 December 2015

RANGOON — With the National League for Democracy (NLD) set to take office in March, a critical question remains in Burma’s post-election landscape: Who will be the party’s key international business partners—countries in the neighborhood or further to the West?

Even before her party’s victory in Burma’s historic Nov. 8 election, NLD chairwoman Aung San Suu Kyi met with dozens of ambassadors and other Western diplomats to talk about the future for the former pariah state. But rather than providing clarity for the country’s next business steps, the meeting shone a light on competing interests within Burma’s business community.

Maung Maung Lay, vice chairman of the Union of Myanmar Federation of Chambers and Commerce Industry, suggested that Burma’s attention should remain on its tried and true Asean partnerships.

“There are more than 600 million people in this region—it’s massive—and the people here have stood with us [Burma] and have contributed to good business partnerships for many years,” he said. “Thailand and Singapore have always supported us. Their investment in our country is huge.”

Last year Singapore topped the list of foreign investors in Burma with US$4.2 billion, with Thailand following. China was not far behind.

“Don’t forget that we should also build relationships with China and India,” Maung Maung Lay added. “The new government needs to know how to maintain its existing partnerships while also creating new ones.”

Yet while China and India play important investment roles in Burma, some observers say that the government should turn more toward the West.

“If the next government can deal with the US and countries in the EU well, we [Burma] will see many opportunities opened to us, such as the expansion of the market and the lifting of US sanctions. If we have a good relationship with the US, then other countries will surely follow,” said Soe Tun, chairman of the Automobile Dealers Association.

He pointed out that economic development in Burma remains slow compared to many other countries.

“My view regarding our [Burma’s] major trading partners in the Asean community as well as countries such as China is that we already have good relationships with them. We don’t need to worry about them. We should instead consider building new relationships,” he said.

Observers in both camps believe that Japan will be a key player in Burma’s economic reforms by contributing to official development assistance (ODA) and building up the country’s infrastructure.

The NLD has released its economic policy to the public, highlighting five primary pillars: fiscal prudence, lean and efficient government, revitalizing agriculture, monetary and fiscal stability, and creating a functioning infrastructure. The NLD also maintains that its policy complies with domestic laws and is consistent with international human rights standards for the improvement of foreign direct investment (FDI).

Yet some observers are wary of the extent to which economic reform will protect local businesses as it also looks to international companies to invest in Burma.

“Actually, the new government only needs to look out for our [Burma’s] people, not for other countries that might try to benefit from us,” said Thein Tun, chairman of the Tun Foundation Bank and MGS distribution. “Do you know that at least 60 percent of companies here are owned by foreign citizens? The new government needs to know how to protect local industries here.”

He added that he welcomes more foreign direct investment, but that the percentage of company ownership is critical for local people to compete on a level playing field.

“Nobody will benefit if they [the new government] don’t look out for local industries,” Thein Tun said.

Amendments to Burma’s investment law are still being deliberated by Parliament.

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