Opportunities available for Myanmar businesses in the next five years

Cars drive past a construction site in downtown Yangon, October 16, 2019. Photo: EPA-EFE

 

After winning the 2020 general elections, the National League for Democracy (NLD) party will once again lead Myanmar’s new government for the next five years. Despite setbacks from the COVID-19 pandemic, 70 percent of the total number of eligible voters showed up at polling stations to demonstrate their support for the NLD and its administration.

But what does the NLD win imply for business and the economy? What progress can investors expect to see in the second term of the government led by the NLD?

The new administration must first understand the impact of the COVID-19 pandemic on the economy to get it back on track, according to a panel discussion of industry experts held by the Myanmar Times on December 18. The panel included U Minn Naing Oo from Allen and Gledhill, Daw Moe Thuzar from ISEAS-Yusof Ishak Institute, Dr Tun Thura Thet from the Myanmar Computer Federation and Vicky Bowman from the Myanmar Center for Responsible Business.

COVID-19 has changed the way businesses and government departments function in Myanmar as it has forced them to move their operations online to remain relevant and viable. “[Myanmar] used to be a paper-based driven economy but COVID-19 has been a game changer when it comes to digital transformation,” said Dr Tun Thura Thet.

 

The transition from holding meetings in the boardroom to having them on Microsoft Teams, Google Meet and Zoom shows that there are huge opportunities for tech-related investments. Although there are risks such as the lack of a cybersecurity framework, many e-commerce ventures have been established during the pandemic and some have managed to secure a strong foothold in the retail market and are well-positioned to grow in a more digitally-led economy.

“COVID-19 has led to economic damage, shocks and aftershocks but there are also opportunities to invest in technology," Dr Tun Thura Thet said.

Investors can also expect more laws to be enforced over the next five years. Under the NLD government's previous term, laws crucial to setting up a “friendly business environment” have been implemented while old and outdated legislation were replaced, said U Minn Naing Oo.

These include legislation on arbitration, insolvency, investment and trademark protection. "Enforcing these laws will be important in setting up a friendly business environment moving forward, as this gives assurance to foreign and local investors that there will be a proper regulatory framework under which they can operate,” he said.

With expectations rising on the new government to address the economic damage caused by COVID-19, the pressure is on Daw Aung San Suu Kyi to assemble a competent team of ministers to execute the needed remedies. These could include younger and more dynamic deputy ministers with fresh contributions.

 

“Overall, cabinet appointments really remain up to the State Counsellor. And in the current situation Myanmar is in, whoever steps into the ministerial shoes for the next five years will really have to hit the ground running,” Daw Moe Thuzar said.

While Myanmar’s signing of the Regional Comprehensive Economic Partnership will boost employment as the nation reconfigures its manufacturing and other supply chains, the new government must also take the lead in building a safe and secure environment to attract international investors, she said.

“The imperative for recovery and building back better also means seizing the opportunities created by the pandemic to initiate even more economic and financial reforms that might not have been passed under usual circumstances,” she said.

Among the top concerns particularly for investors from the West, is Myanmar's spotty human rights record in Rakhine, as well as the government's blocking of internet access in the state. In that light, it could be time for Myanmar to show international interlocutors that it is serious in dealing with the country's deep-rooted socio-political and socio-economic issues.

“We can talk about safe and dignified Rohingya repatriation and resettlement before the security situation in Rakhine State gets settled and for that to happen, a lot depends on socio-economic development for all the communities there,” Daw Moe Thuzar said, adding that improving the civil-military relationship will be crucial for economic security.

Ms Bowman said the government needs to recognise that it is not just about improving the ease of doing business in Myanmar but in doing so responsibly. “A lot of governments are coming from a position in which businesses are likely to be the bad guys and need to be controlled. but the [governments] don’t quite recognise their own role in creating the legislative environment to enable businesses to act responsibly,” she said.

During the panel, some investors also voiced concerns in working with or getting involved in military-owned companies. For example, “for businesses, particularly those coming from the West, doing business in and through ports controlled by the Tatmadaw represents a risk of being accused of complicity with the military and that is why Danish-company Maersk decided that it will stop using military ports," she said.

But Ms Bowman said the Tatmadaw-controlled companies are not significant players in Myanmar’s economy. “If you are trying to avoid those companies, there aren’t that many choices in the port sector," she said.

 

 

News Source : Myanmar Times