WITH liberalisation stalled, investor interest falling, and criticisms from the private sector increasingly vocal, the National League for Democracy-led (NLD-led) government has gone on the charm offensive to reboot its economic agenda. The formation of the Ministry for Investment and Foreign Economic Relations, taking over two existing departments – the Directorate of Investment and Company Administration (DICA) and Foreign Economic Relations Department – and headed by career diplomat U Thaung Tun, is the latest endeavour.

For such measures to succeed or, in the least, not to backfire, Nay Pyi Taw should ensure this is about substance and not spin. The ministerial appointment is already a missed opportunity to bring the younger generation on board for the cabinet and inject new life into the political leadership.

That said, establishing an umbrella ministry for overseeing and boosting domestic and international investments could potentially spell positive changes. Having a “single-window system” should also be welcomed. The risk is that this new body just becomes an added bureaucracy, which is the last thing the private sector wants. 

There are several ways to ensure the new ministry delivers on the promise of – in the words of U Thaung Tun – “reducing red tape” for investors and hence “drawing more investments” for Myanmar.

Firstly, a “single-window system” which enables businesses to apply for and complete all the necessary investment and licencing procedures through a single point of contact can effectively cut down bureaucracy. While it can be argued that formation of a ministry for this purpose may not have been necessary, the way forward is to look at how authorities of the Thilawa Special Economic Zone (SEZ) succeeded in operating such a system. The One Stop Service Centre in Thilawa has representatives from all relevant ministries and the process is very much streamlined and efficient, without the need for SEZ investors to approach individual departments. Hence, the new ministry should build on this model, and regional investment commissions or sub-national executives across the country should each house a one-stop centre as well as develop the capacity to process online applications. 

Secondly, the investment ministry needs to ensure long-awaited liberalisation measures made possible by the new Companies Law and the Myanmar Investment Commission (MIC) are not withheld or stalled by line ministries. It took, for instance, over a year for the commerce ministry to follow up on the MIC’s notification which opened up the retail and wholesale market. This meant more than a year was lost. With less than 2.5 years in office, the NLD-led administration cannot afford to waste any more time.

Thirdly, U Thaung Tun should be given the authority to access other governmental organisations and improve intra-ministerial management. Telling an investor that a licence is being held up by another ministry without a legitimate reason or clear timeline is not acceptable. The new body presents an opportunity to get this right. There is also an argument in favour of absorbing the MIC, which the minister also chairs.

Fourthly, the ministry should make sure that all proposed regulations and draft laws related to businesses should be properly consulted on. DICA has been doing an excellent job, for example, in arranging the public consultation on the draft Insolvency Law and inviting input from the public and stakeholders before the proposal was approved by the cabinet or sent to the legislature. The episode concerning the draft foreigner laws in 2017 serves a good reminder why consultation early on is vital if Myanmar wants to improve business confidence. 

In the end, businesses could differentiate substance from spin. Could the new ministry speed up actual policy implementation? Could the single-window system deliver on its promises? We will soon know the answers.

Source: https://www.mmtimes.com/news/new-investment-ministry-should-be-substance-over-spin.html