Singapore Association of Myanmar (SAM) this month organised the inaugural SAM Business Summit in Lotte Hotel. Attended by more than 300 people, the event brought together players from the private sector to discuss sector-specific developments, market trends and regulatory changes.

Asian investments are increasingly sought after by the National League for Democracy-led (NLD-led) government, whose disappointing handling of the economy has come under fire at home and abroad. Approved FDI this year has fallen short of the government’s estimates by a wide margin, while Western tourist numbers have seen a significant decline. Crucially, protectionist policies across a wide range of sectors remain a barrier for foreign investors. The government, for example, has yet to open up the insurance sector to international players, despite having committed to do so in the first quarter of last year. Singapore is among the biggest investors in the country, with a total of US$19.3 billion across 286 projects as of September. 

The Myanmar Times spoke to Sims Teo, SAM President, after the summit, who commended Myanmar’s efforts to attract FDI and emphasised responsible business and community participation as the ways forward for the economy.

“It is important for businesses to build accountability and transparency of how decisions about investments are made, to help ensure the local communities have sustainable livelihoods now and into the future. With this in mind, I would encourage the Myanmar government to create [a] policy on post-investment compliance and to provide incentives for companies which meet regulations when it comes to bringing positive impact to local communities,” he commented.

Looking ahead, Myanmar is expected to join the AEC in January 2019, along with the other CMLV countries, which includes Cambodia, Laos and Vietnam.

‘As Myanmar opens up following integration into AEC, we can expect to see improvements in infrastructure, transparency and regulation of industries.’ – Sims Teo, Singapore Association of Myanmar

Integration with the AEC would upgrade the country’s regulatory environment for businesses and hence make it easier to do business.

“The standard of regulation across the AEC is likely to be a major boost for companies, enhancing the overall ease of doing business. As Myanmar opens up following integration into AEC, we can expect to see improvements in infrastructure, transparency and regulation of industries. Many companies in ASEAN not currently involved in overseas markets may be able to take advantage of Myanmar’s greater openness, and to source suppliers within the country,” he continued. The SEZs should also boost the country’s competitiveness as well as business and logistical efficiency. 

As Myanmar products become further integrated in the region’s production networks, Mr Teo is confident that Singapore investments could boost the attractiveness of those products.

Thilawa in the spotlight

U Thaung Tun, Myanmar Investment Commission chair, remarked at the summit that the country “is charting a new course to achieve sustainable and inclusive development” and underlined new legislation, the Myanmar Sustainable Development Plan and the Japan-led Thilawa Special Economic Zone (SEZ).

Investors from many countries “have chosen Thilawa as a destination of trust,” he said. “Myanmar’s economic potential is well-recognised but we will need to take a proactive approach to secure investment.”

Initiated by U Thein Sein’s government in 2013, Thilawa is the only SEZ in operation in the country.

Officials from the NLD-led government have repeatedly resorted to highlighting the former president’s SEZ project to showcase Myanmar’s economic progress. At the 2018 ASEAN Business and Investment Summit in Singapore earlier this month, Daw Aung San Suu Kyi highlighted in her speech about Thilawa SEZ as “another success story which 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 US$1.491 billion, a figure that reflects the dollar value of those investments actually entering the economy,” she told a regional audience in the city-state. 

It’s not all plain-sailing, however. In a Myanmar investment forum in September, a Singapore think tank said that the northern Rakhine crisis and sentencing of Reuters reporters merit attention by the Singapore business community, calling on Nay Pyi Taw to increase transparency and grant access to the international community.

Source: https://www.mmtimes.com/news/integration-expected-upgrade-myanmars-regulatory-environment.html