Myanmar Govt Urges Foreign Investors to ‘Take the Plunge’
BUSINESS

Burmese Govt Urges Foreign Investors to ‘Take the Plunge’

Investment

Aung Tun Thet, an economic advisor to Burmese President Thein Sein, speaks at a manufacturing conference in Rangoon on Monday. (Photo: Simon Roughneen / The Irrawaddy)

RANGOON — Despite lingering infrastructure problems such as the country’s poor roads and patchy power supply, Burma’s government wants foreign businesses to be less cagey about investing in the much-touted frontier economy.

Aung Tun Thet, an economics advisor to President Thein Sein, implored would-be investors on Monday to “please take a risk, please take the plunge,” when weighing-up whether or not to establish operations in Burma.

Lamenting the bet-hedging disposition of some business representatives who visit Burma, Aung Tun Thet said, “Sometimes you come, you look, you see, you go away.”

Some producers of well-known branded products, such as Coca-Cola, Heineken, Nestle and Unilever, have recently set up operations in Burma, however, and cumulative foreign investment since 1988 reached US$46.4 billion at the end of April, according to data compiled by the Ministry for National Planning and Economic Development.

Some 70 percent of that investment was in the power and oil and gas sectors, with manufacturing next on just under 9 percent of the total. Half of the total investment came from China and Thailand—investment sources that are now declining relative to other countries, as Burma attracts increased investment outside the energy sectors

Since a nominally civilian government took office in early 2011, business laws have been reformed and new codes introduced, while the elimination or suspension of Western sanctions has facilitated renewed European, Japanese and North American commercial interest in Burma.

Burmese Minister of Industry Maung Myint said legislative changes had contributed to increased investment in recent years, citing the passing in late 2012 of a new Foreign Investment Law to replace a 1988 code.

“The foreign investment law has brought significant changes to the investment environment in Myanmar,” said the minister, who was speaking at the Myanmar Manufacturing Summit 2014 in Rangoon. The event was organized by Singapore’s CMT Events and was endorsed by the Ministry of Industry.

More than 700 foreign firms are now operating in Burma, but the government wants more investment in manufacturing, he said, citing garments as a likely growth sector.

Minn Naing Oo, managing director of Singaporean law firm Allen & Gledhill’s Burma office, said that the country remains a risky investment prospect, for now.

“A lot of things are unpredictable and there remain a lot of holes in the legal framework,” he said.

To nudge timid foreign companies wary about investing in Burma, Aung Tun Thet, a member of the Myanmar Investment Commission (MIC)—the government agency that assesses large foreign investment applications—said the government is writing “a new generation of investment polices” and wants to cut red tape for foreign companies.

“We now have a one stop service at the MIC,” Aung Tun Thet told an audience of current and prospective investors from countries such as Japan, Singapore, Thailand and the United States.

Since the opening of the new MIC “one-stop” office in Rangoon in April, “you no longer have to go from one ministry to the other when preparing an investment,” Aung Tun Thet said.

The opening of the office came after the Organization for Economic Co-operation and Development (OECD) published a Myanmar Investment Policy Review in early 2014.

The report described Burma’s investment regulations as intricate, saying that “the current regulatory framework is complex, with half a dozen laws regulating the entry of investors.”

“The approval process is equally complex and sometimes opaque,” the report said.

The OECD recommended changes to the MIC’s role, restricting its discretionary powers when assessing possible investment and advocating that the government “remove overlaps in terms of multiple approvals involving different ministries and bodies”—which is what the new one-stop office aims to achieve.

“We welcome advice from the OECD,” Aung Tun Thet said, when asked by The Irrawaddy if he agreed with the organization’s recommendation that the MIC’s discretionary powers be curbed.

“But it is done on our own terms.”


WSJ LIVE VIDEO:

5 Responses to Burmese Govt Urges Foreign Investors to ‘Take the Plunge’

  1. “Sometimes you come, you look, you see, you go away” Aung Tun Thet said. They come to Myanmar. They look around. They see what is happening. And they go away. Because they find out that Myanmar is still ruled by military regime. They find out the truth that Myanmar lacks of rule of law. Nargis constitution will not be able to produce real rule of law. As long as regime is above the law and regime is using to suppress the people with that bogus law, intelligent people will stay away from investing in Myanmar. Crooks like China and Singapore may come and stay, the West may not stay but go away. Lip’s service comes mostly from cheaters. USDP regime is just a cheater.

  2. I go to look around and see with my own eyes and find out that that thing is not worthy of falling in love with, I go away and leaving it with beaver. Why should we waste our precious time and resources for the things which are not promising? Regime thought that every eye was on Myanmar. It was the regime’s total ignorance. Myanmar had been emptied by the regime and not much is left for the next generations to come. There are many people of the world who have never heard the name “MYANMAR”, we do not even need to say where Myanmar is. The whole Myanmar may not be able to trade a piece of Hong Kong.

  3. Wise bankers do not want to commit suicide. Investing chunk of money in a stormy land is very much suicidal. The undemocratic constitution will keep growing endless corruption and investment can be melted down in a day. So, jump and plunge into this stormy and lawless myanmar can be very much suicidal.

  4. As far as I see that,things haven’t worked out the way they had planned.Some sort of gimmicks worked ,though.Plunging in dark years in Burma is their main concern maybe.They are just trying a hot stuff not to be cold.

  5. Corporations that follow strict ethical rules from the West cannot and will not do business in Burma, at least not now. Heard of Siemans? On December 15, 2008, Siemens AG, Europe’s largest engineering conglomerate and the largest electronics company in the world, settled a wide-ranging Foreign Corrupt Practices Act (FCPA) investigation resulting in combined penalties of $800 million to the United States Department of Justice (DOJ) and Securities and Exchange Commission (SEC).

    In Burma, many rules are based on the lips of the former generals turned parliament members.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>