State Counselor Pushes for ASEAN Investment in Myanmar
By Nan Lwin 13 November 2018
YANGON—State Counselor Daw Aung San Suu Kyi is inviting ASEAN countries to invest in Myanmar, saying she has confidence they will receive good returns thanks to major economic reforms recently undertaken by the government.
ASEAN member countries play a major role in economic cooperation with Myanmar where, as of September 2018, investments from ASEAN account for about 45 percent ($35.5 billion) of total investment in the country.
On Monday, Daw Aung San Suu Kyi delivered a keynote speech at the ASEAN Business and Investment Summit-2018 in Singapore under the title “Business and Investment in Myanmar and ASEAN.” On the same day, President U Win Myint submitted a proposal to form a new ministry for investment and foreign economic relations at home to boost local and international investment.
“We should not wait for 20 years to catch up with Singapore. I hope you will help us to catch up with Singapore,” said Myanmar State Counselor Daw Aung San Suu Kyi, revealing her hopes to match the country’s economic growth. Her words were a reference to those of Singapore’s late leader Lee Kuan Yew who once said that it would take Singapore 20 years after independence to catch up to Myanmar’s strong economic growth of that period.
The State Counselor invited investment in agriculture and its related services, value-added production of agricultural products, livestock production, breeding and production of fishery products, export promotion industries, import substitution industries, the power sector, logistics industries, education services, the health care industry, construction of affordable housing and the establishment of industrial estates.
According to the government investment body, Directorate of Investment and Company Administration (DICA), as of September 2018 Singapore is the second largest investor in Myanmar while Thailand is third, Vietnam seventh and Malaysia eighth.
Daw Aung San Suu Kyi used Thilawa Special Economic Zone (SEZ) as an example of a success story, saying it highlights the type of positive partnership that can be achieved between our respective public and private sectors.
“I am happy to be able to claim that the Thilawa SEZ has become a crowning success in a very short period of time, receiving a total investment of $1.491 billion—a figure that reflects the dollar value of those investments actually entering the economy,” she said.
Japan, the United States, Germany, France, Sweden, Australia, China, India, Singapore, Thailand and Taiwan all invested in Thilawa SEZ. As of May 2018, Zone A and B of Thilawa SEZ received over $1.37 billion and a third zone is currently under development, according to the SEZ development committee.
The State Counselor said, Myanmar’s re-emergence comes at a time when the world is facing rising protectionist sentiments, a shift away from multilateralism in favor of bilateralism, and in some cases, even isolationism, and amidst currency and trade tensions between some countries.
Despite global challenges, the growth outlook for developing Asia in 2018 was recently upgraded to 6 percent, or 0.1 percentage points higher than the rate envisaged in September 2017 by the Asian Development Bank.
“As part of this developing Asia, Myanmar’s economic trajectory is therefore truly promising,” she said.
“The opening of Myanmar’s markets is now in full swing. As what has been referred to as Southeast Asia’s final frontier market, Myanmar provides innumerable investment opportunities. Some are plain to see, others are waiting to be found by those with foresight and imagination,” she stressed.
Daw Aung San Suu Kyi told the audience, which included members of the ASEAN Business Advisory Council-ABAC, economists and businessmen, that the Myanmar government have imposed the new Myanmar Investment Law in order to create a better environment for investment and to bring our economy in line with international and regional agreements, with the technical assistance of the International Finance Corporation (IFC).
She said, “The new law aims at creating a fair and more level playing field for both foreign and domestic investors,” adding that the law contains a number of important provisions that will encourage responsible business, support investors to do business with ease through transparent, simplified and quick procedures.
Her government also enacted the Myanmar Companies Law which came into effect on Aug. 1 under which companies can be registered within a few hours by using the MyCO (Myanmar Companies Online) system.
“An important recent reform which can be considered revolutionary is the modernization of the more-than-one-hundred-year-old Companies Act to reflect the current business and regulatory environment,” she said.
According to her speech, as of September 2018, over 14,000 companies had re-registered on the online platform as well as over 4,000 newly incorporated companies.
The State Counselor claimed that reforms have been undertaken in every sector which is essential for economic stability. Some reforms are highly visible and some are less obvious. The reforms, which aim to strengthen macroeconomic management, are crucial for economic stability and this is not naturally visible to most people but their impact is substantial and long-lasting.
She said such reforms are “a strong magnet for attracting increased investment.”
With the Rohingya crisis in Rakhine State last year having damaged the country’s image, foreign direct investment in Myanmar declined significantly to $6.6 billion during the fiscal year 2016-17, down from $9.5 billion the previous year.
The government has changed its investment policy to look towards eastern countries in order to revive foreign investment in the country with Myanmar Investment Commission (MIC) planning to hold a summit targeting investors from East Asia before the end of the year, according to DICA. MIC has already engaged numerous East Asian countries in its investment promotion activities, including Japan, Hong Kong and South Korea.
However, the World Bank’s most recent ease of doing business index revealed no improvement in Myanmar’s overall ranking, retaining the No.171 spot it held last year—remaining the least favorable ASEAN member country in which to conduct business.
The State Counselor said the government has set up a working group and ten supporting groups related to Ease of Doing Business indicators have also been established with the aim of raising Myanmar’s ranking on the World Bank’s index.