YANGON—Myanmar showed no improvement in its overall ranking in the World Bank’s latest ease of doing business index, retaining the No. 171 spot it held last year—and remaining the least favorable ASEAN member country in which to conduct business.
Illustrating the ambitious nature of the government’s goal of reaching the top 100 by 2020, Myanmar ranked 171st out of 190 economies (tied with Iraq) on the World Bank’s 2019 index in terms of overall ease of doing business. To compare Myanmar’s performance with its ASEAN neighbors, Laos ranked 154th, the Philippines 124th, Cambodia 138th, Indonesia 73rd, Thailand 27th and Malaysia 15th.
Although its rank was unchanged, Myanmar’s latest score improved to 44.72 points from 44.21 in the 2018 index. The score takes into account 10 indicators—starting a business, dealing with construction permits, accessing electricity, registering property, obtaining credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency.
“Doing Business 2019” is the World Bank’s 16th annual report investigating regulations that enhance business activity and those that constrain it. The report presents quantitative indicators on business regulation and the protection of property rights that can be compared across 190 economies.
For each of the indicators, the World Bank assigns a score measuring the gap between a country’s regulatory performance and the best regulatory performance across all economies.
Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI) vice chairman U Maung Maung Lay said, “If the government cannot improve the ranking, foreign investment will continue to decline, because foreign investors look at the index before making decisions.”
FDI in Myanmar declined significantly from USD9.5 billion in fiscal 2015-2016 to $6.6 billion in 2016-2017.
In early October, the Myanmar government announced its 20-year Myanmar Investment Promotion Plan (MIPP), which targets $200 billion in FDI by 2036. The ruling National League for Democracy sees FDI as a key driver of economic development. One of the MIPP’s priorities is to improve the business environment so that Myanmar’s ranking in the ease of doing business index rises to within the top 100 by 2020, and into the top 40 by 2035.
The government said it would establish simplified, fast and clear investment processes through the Myanmar Investment Commission (MIC) and related governmental organizations. They will also take responsibility for improving the investment environment, ensuring fair treatment of local and foreign investors and ensuring investor protection, according to the MIPP.
In June, Myanmar Vice President U Myint Swe insisted that all government departments have been working on improving their performance in the 10 indicators set out by the World Bank, and voiced confidence that if the government implemented reforms, Myanmar would find itself within the top 100 by 2020.
In July, the MIC promised to speed Myanmar’s climb up the rankings by shortening the time required to approve project proposals and new business permits.
According to the UMFCCI’s business sentiment survey for the second quarter of 2018, Myanmar’s economy has declined significantly across all sectors this year, as overall business confidence is down by 25 percent compared to last year. The survey listed 10 main factors in the country’s economic decline—higher taxation and tariffs; restrictions on financing and banking; depreciation of the kyat; unstable economic rules and regulations; lack of market demand; delays in import and export procedures; increases in local costs and inflation; foreign competition; a lack of skilled human resources; and poor infrastructure.