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Assessing MYANMAR’s REFORM AND DOING BUSINESS IN MYANMAR

Assessing MYANMAR’s REFORM AND DOING BUSINESS IN MYANMAR. PROF.DR.AUNG TUN THET (aungtunthet@gmail.com). OVERVIEW. Part One: Assessing Myanmar’s Reforms Part Two: Doing Business in Myanmar. PART ONE: ASSESSING MYANMAR’s REFORMS.

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Assessing MYANMAR’s REFORM AND DOING BUSINESS IN MYANMAR

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  1. Assessing MYANMAR’s REFORM AND DOING BUSINESS IN MYANMAR PROF.DR.AUNG TUN THET (aungtunthet@gmail.com)

  2. OVERVIEW • Part One: Assessing Myanmar’s Reforms • Part Two: Doing Business in Myanmar

  3. PART ONE: ASSESSING MYANMAR’s REFORMS

  4. “All of us might wish at times that we lived in a more tranquil world, but we don't. • And if our times are difficult and perplexing, • so are they challenging and • filled with opportunities. “

  5. Today Realities • Very interesting and exciting • Volatile and Chaotic

  6. Geography • Strategic location • Between the two economic global powerhouses – China and India • Bridge between South and South East Asia

  7. Demography • Population • 54,584,650 • Age Structure • 0-14 years: 27.5% • 15-64 years: 67.5%) • 65 years and over: 5% “Demographic Window”

  8. New Window of Opportunity • Socio-economic progress • Opportunities opening up • Space growing • ‘Latecomer’

  9. National Development Strategy • Ends – Poverty Reduction and Rural Development • Means – Good Governance and Clean Government • Eight-point Agenda

  10. National Development Strategy • Goals • Reducing poverty from 26.5% to 16% by 2015 • Graduate from LDC • Three-fold increase in per capita GDP

  11. ‘MYANMAR SPRING’ • Extraordinary, Unprecedented and Unimaginable! • President U Thein Sein • Rapid speed of recent changes • Peaceful revolution • Top-down

  12. ‘MYANMAR SPRING’ • On the brink of a momentous economic flowering • Most important period of political transition • Reconciliation and addressing long-neglected needs • Myit Sone Dam

  13. Political Development • Release of political prisoners • Daw Aung San Suu Kyi and NLD in Parliament • Continued reconciliation between the Government and various ethnic groups • Myanmar Human Rights Commission

  14. Peace Deals • Nine out of 16 rebel groups signed ceasefire agreements since August 2011 • Deal reached with KNU • Norwegian Peace Fund, Peace Centre

  15. Legislative Reforms • Dynamic leadership • New laws enacted • FDI • Taxation • Land Reform • Freedom of Expression • Freedom of Association

  16. Legislative Reforms • Engagement with 88 Generation • Willingness to Listen to the Voices of the People • ‘Check and Balance’

  17. International Relations • Rapprochement with the West • High-profile visits of senior Government and National and UN officials • Re-engagement with the international community • Resumption of ODA • Gradual lifting of Sanctions • ASEAN Chairmanship in 2014 • AFTA/AEC in 2015

  18. International Relations • Engagement with UN • UN Country Team Strategic Framework (2012-15)

  19. UNITED NTIONS ENGAGEMENT • Four Strategic Priorities • Encouraging inclusive growth in both rural and urban areas • Increasing equitable access to quality social services • Reducing vulnerability to natural disasters and climate change • Promoting good governance and strengthening democratic institutions and human rights

  20. UNITED NTIONS ENGAGEMENT • Social Protection • Development Policy Options (DPOs) • National Census (2013) • UN Global Compact

  21. Socio-Economic Development • Priority to accelerate socio-economic development • Job Creation • Linkages between Peace , Democracy and Development • Guaranteeing Rule of Law • Promoting Civil Society • Media

  22. Development Priorities • Foreign exchange rate unification • Agriculture • Natural resources management • Competitive business sector • Financial/Banking Sector

  23. Development Priorities • Education and Health • Legal structures • Infrastructure, and • Policy formation and implementation • Millennium Development Goals (MDGs)

  24. Challenges

  25. “You can’t cross the sea, • merely by standing and staring at the water.”

  26. Challenges • Socio-economic and humanitarian challenges • Weak capacity for implementing reforms • Beginning not the end • Much still depends on individuals not policy

  27. Challenges • Sanctions • Official Development Assistance (ODA) • Lowest recipient of ODA among all LDC’s, with 7.2 US$ per capita in 2010 • FDIs

  28. Challenges • Kick-Starting/Jump Start Growth – SEZs, Deep Sea Ports • Equality of opportunities not outcomes • “Pulled Along” by China, India + ASEAN • Poor Infrastructure • Corruption

  29. From Change to Transformation

  30. PART TWO:DOING BUSINESS IN MYANMAR MYANMAR IS OPEN FOR BUSINESS

  31. “Faith is the bird that feels the light and sings, • when the dawn is still dark.”

  32. ‘New’ Myanmar • One of Asia's final economic frontiers • Comparative advantages • Geographical location • 60-million untapped market • Bountiful natural resources

  33. Investment Climate • New Foreign Investment Law • Western countries to become highest investing countries • Europe, Australia, Canada and USA cancelled the economic sanctions

  34. New Myanmar Investment Summit June 2012 • Representative from USA, Germany, France, Canada, British, Italy, Norway, Australia , United Arab Emirates (UAE), China, Japan, Singapore, Thailand, Korea, Malaysia, Indonesia, Philippines, Vietnam, Cambodia, Mongolia, Lao, Sri Lanka and Bangladesh attended

  35. New Foreign Investment Law (FIL) • Company which joint venture with foreign company 5 years free of tax and 70 years permission to do business

  36. Investment Situation: Top 7 Countries

  37. FOREIGN INVESTMENT • Priorities • Resource-based investment • Resource-based export-oriented value added projects • Labourintensive export-oriented projects

  38. WHY INVEST IN MYANMAR?

  39. REASONS • Population approximately 60 million (approx. 5 million in Yangon) • Vast and virtually untapped natural resources • Relatively educated labour force and low wages

  40. REASONS • Strategic location • Sea and air links within the Asia region and beyond • Generalized System of Preferences (GSP) • 100% foreign-owned enterprises permitted

  41. REASONS • Familiar business structures and commercial laws (based on the British law codes of the pre independence India Statutes ) • English widely spoken and used • Significant incentives under the Foreign Investment Law for larger investments • Membership of ASEAN, BIMST-EC

  42. MARKET CHALLENGES

  43. EXISTING CHALLENGES • International sanctions not fully removed yet • Opaque and arbitrary policymaking, including frequent, unannounced and unwritten policy changes

  44. EXISTING CHALLENGES • Investments approved on a case-by-case basis • Weak rule of law and property rights • No independent judiciary and lack of legal transparency • Arbitrary tax policies

  45. EXISTING CHALLENGES • Tiny financial sector and shallow domestic capital market • Continued unpredictability in electricity supply, especially areas outside Yangon and other major cities • Privatization

  46. EXISTING CHALLENGES • Weak educational system and unskilled work force • Poor infrastructure including communications and transportation networks • Evolving system of exchange rates and foreign exchange controls

  47. CORPORATESOCIAL RESPONSIBILITY

  48. MYanMAR • Joined the UN Global Compact • Promoting Corporate Social Responsibility (CSR) • Encouraging Socially Responsible FDIs • Rotary International

  49. REVIEW • Part One: Assessing Myanmar’s Reforms • Part Two: Doing Business in Myanmar

  50. "Together we want to help the world see and believe, • in a better future."

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