MYANMAR FAILS TO ADVANCE IN WORLD BANK’S EASE OF DOING BUSINESS LIST 

Source: The Irrawaddy, November 1, 2018

NEWS
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.

 

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RESEARCH VIEW
Colliers believes that sustaining growth through Doing Business policy reforms can boost private investment and support the economy to compete globally. Despite important progress such as the 2016 Investment Law and the 2017 Company Law, and making it less costly to start a business and register property, perceptions are that bureaucratic inefficiency, centralized decision making, and emerging protectionism are bottlenecks to improving the operating environment for the private sector. The Government plans to bring Myanmar within the top 100 countries in the ease of doing business ranking from 171 out of 190 countries. It may accelerate this by: (i) monitoring progress in reforms related to Doing Business. The new “Improvement of the Doing Business Working Group” chaired by the Ministry of Commerce can make clear and transparent the roles of different departments in improving the business environment and using monitoring systems to check implementation progress, which can be discussed at the PSD Committee; (ii) further liberalizing regulations for foreign investment. Myanmar could build on the introduction of the Investment Law and Company Law by further liberalizing sectors, such as insurance and banking services, for foreign investment, along with simultaneous implementation of prudential regulations. According to Organisation for Economic Cooperation and Development (OECD), Myanmar remains to be one of the economies who has highest levels of restriction for FDI on insurance and banking sectors.

MYANMAR PRESENTS PLAN TO ATTRACT OVER $200 BILLION IN FOREIGN INVESTMENT


Source: Investvine, November 2, 2018

NEWS
The Myanmar Investment Commission (MIC) came up with an ambitious business plan that includes a major investment promotion strategy aiming to attract more than $200 billion through “responsible and quality businesses” over the next 20 years. The Myanmar Investment Promotion Plan 2018 (MIPP), jointly formulated by the MIC and the Japan International Cooperation Agency, outlines three strategic periods to attract foreign direct investment at a time when Myanmar is under heavy international scrutiny for its handling of the Rohingya crisis. The plan projects to receive $8.5 billion in the first four-year phase starting from 2021-2025, $12.3 billion in 2026-2030 and $17.6 billion in the 2031-2035 fiscal years.


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RESEARCH VIEW
The new investment law has been well received, especially by foreign investors who account for up to a fifth of exports and of formal employment, but more needs to be done to raise awareness and build capacity for implementation and coordination. The main changes to the investment regime include lower entry barriers, more streamlined procedures, a dedicated mechanism to mediate investor disputes, and more selective investment incentives. The World Bank Enterprise Survey (WBES) conducted in 2016 with an extension in 2017 suggests that foreign firms account for about 20 percent of all exports and 18 percent of formal employment. They are also more productive and more likely to train workers. Most firms aware of the new law think it will positively impact their sector through better access to input/output markets and technology transfers associated with increased FDI. Foreign firms spent significant management time to deal with regulations under the old investment regime and consider the process as favoring those with government connections. To successfully attract and maximize the impact of FDI, the government needs to raise awareness of the new law and regulations, build staff capacity at the regional level, and clarify the setup of the Investor Assistance Committee. Complementary reforms should also be accelerated to improve investors’ access to land, infrastructure, skilled labor, and quality domestic inputs.

ROAD LINKING MYANMAR AND THAILAND TO BE UPGRADED


Source: Asia Times, November 5, 2018

NEWS
A proper highway will soon connect the planned special economic zone at Dawei in southeastern Myanmar with Thailand’s road network, The Irrawaddy, a Myanmar website, reported on November 2. In accordance with an agreement signed on November 1 between the governments of Thailand and Myanmar, the now existing, secondary road will be upgraded and connect with the border crossing at Htee Khee in Myanmar’s Thanintharyi Region and Ban Phu Nam Ron in Thailand’s Kanchanaburi province.


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RESEARCH VIEW
The new highway will link the planned deep-sea port at the Dawei Special Economic Zone in Myanmar with Thailand, speeding up the movement of goods. The upgrade will be mainly on the Myanmar side of the border and the Myanmar authorities will allow Thailand’s Neighboring Countries Economic Development Cooperation Agency (NCEDCA) to carry out design work and build the highway. The Dawei Special Economic Zone is part of a US$10 billion project that includes high-tech industrial zones, export-processing zones and a deep sea port. When finished, this is expected to be Southeast Asia’s largest industrial complex and the port would be a potential boon for firms relying on the transport of goods via the crowded Malacca Strait.