YANGON—Myanmar’s State Counselor Daw Aung San Suu Kyi offered words of reassurance to the business community regarding the current economic slowdown saying that her government is working to deal with some major complaints, though the progress will take time.
At a meeting with members of the business community in Naypyitaw on Monday, Myanmar’s State Counselor Daw Aung San Suu Kyi said, “We are working on the process of implementing advice from the business community, especially about the dollar exchange rate. Some work can be done during a short period. But some need to be worked on over a long-term period. We are working on it.”
“We have discussed the advice [from the business community] in detail,” she said.
The State Counselor said that the government’s National Economic Coordination Committee (NECC) has been discussing issues such as the dollar exchange rate volatility, export-import policies and banking sector reforms as well as the relaxation of rules in the government tender process.
The meeting comes after the business community complained of chronic losses due to the instability of the exchange rate which made inflation rates rise at the fastest pace in recent years. This affected imports and also raised fuel and transportation costs and overall consumer costs in the country. A government report said that year-on-year inflation accelerated to a record 7.56 percent between May and July this year compared to 5.90 percent for the same period of 2017.
A recent survey by the Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI) said the overall economy has declined since 2016. The survey revealed, this year has been the worst across all sectors and that the most significant reasons are higher taxations and tariffs, restrictive rules in financing and banking, depreciation of the kyat, increasing costs and inflation, unstable rules and regulations and competition from foreign companies.
In 2016, Myanmar’s State Counselor Daw Aung San Suu Kyi met business executives and development partners six months after the NLD government took office in Naypyitaw. She promised transparency and accountability in the country’s economic system.
However, at Monday’s meeting Daw Aung San Suu Kyi made another promise that her government is completing the Myanmar Sustainable Development Plan which involves not only policies but also action plans for future economic reforms in Myanmar.
She said, the biggest deterrent for economic growth is weaknesses in collaborative relationships among the Union, regional governments and the business community. She also called for more unity among them.
In her opening speech, which lasted about 35 minutes, she asked the businesses people repeatedly to assist the government’s reforms for economic growth.
“Some don’t want to see our government achieve—don’t act like that. If you make the government fail, you also make the country fail. Together, help this country to achieve [reform],” she stressed.
She emphasized that the NLD government needs the support of the business community in the ongoing peace and national reconciliation processes.
The government is trying to simplify the tender process which was the subject of many complaints especially over delays in the process, she said. She also added that business people need to report officials who they had to bribe for a speedy tender process.
“It is important to clear corruption in the business sector. If we clear corruption, international [businesses] will respect us, so they will want to invest in our country. For that reason, you all need to collaborate to fight corruption in the business community,” she said.
She asked the attendees to collaborate on NECC activities for long-term economic growth and also to frankly give advice on the reform process.
Economic reforms are a key goal for Aung San Suu Kyi’s government in order to complete Myanmar’s democratic transition after almost six decades of isolation under military dictatorship. NLD lawmakers approved the Myanmar Companies Law in November 2017, which has been one of the major legislative achievements of the government. It took effect on August 1 this year, replacing the outdated Myanmar Companies Act of 1914. The law aims to favor foreign investment and make business regulations more efficient and effective, allowing local companies to accept foreign capital and expertise via joint-ventures.
The government also unveiled a 12-point policy plan in 2016 and enacted the Myanmar Investment Law to create more opportunities for foreign investment and to ensure transparency and a level playing field for all businesses.
However, according to the World Bank’s 2018 report titled “Ease of Doing Business”, Myanmar declined one place compared to 2017, ranking 171st of 190 countries while Cambodia ranked 141st, Laos 125th and Vietnam 68th.
Moreover, Chairman of Myanmar Investment Commission, U Thaung Tun said on Friday that foreign investments in Myanmar dropped by nearly $900 million during the 2017-2018 fiscal year compared to 2016-2017.
At the meeting, three people from the business sector advised the government to rein in the exchange rate instability, to implement some financial rules on trade, to relax taxation and import substitution which, they said, would advocate replacing foreign imports with domestic production.
The state counselor said, she could not promise to implement all the suggestions but that the government would work on the most important and practical reforms for the long-term economic growth of the country.