After years of military rule, Myanmar (also known as Burma) went through major reforms under President Thein Sein’s government, and opened itself to the rest of the world in 2011. Since then, Thein Sein’s government has introduced dramatic reforms for the nation’s transition from an isolated country to an open democracy. Back in November 2015, Myanmar held its general elections successfully, and the new government is set to take office during the first quarter of 2016.
All these positive changes in politics have been accompanied by rapid economic achievements. Comprehensive Western sanctions imposed on the country since the mid-1990s have been lifted, and Myanmar, often dubbed as Asia’s Last Frontier, has quickly become the center of attention for investors worldwide. However, the country has fallen behind the rest of Asia over the past half-century. If Myanmar wants to attract more foreign investment, the country needs to work on its infrastructure and skilled labor force, in addition to providing a clear set of rules and regulations for conducting business in the country.
With that in mind, the ASEAN-Korea Centre carried out an investment and market research mission in the infrastructure and energy sectors in Yangon from 13 to 15 January 2016 to understand more about the country’s investment environment, and to explore new business opportunities for Korean entrepreneurs. This mission was organized in collaboration with the Directorate of Investment and Company Administration (DICA). Twenty mission delegates which consist of Korean businessmen in the relevant sectors as well as officials from Ministry of Land, Infrastructure and Transport of Korea and Korea Land and Housing Corporation seeking new investment opportunities in Myanmar took part in this.
The ASEAN-Korea Centre is mandated to promote cooperation between ten ASEAN countries and Korea and this mission is part of its efforts for Korea-Myanmar bilateral relation. As of today, Korea is Myanmar’s 6th biggest investor and 7th largest trading partner. U Tun Tun Naing, Permanent Secretary of the Ministry of National Planning and Economic Development said that, “We would put in every effort to help achieve the goals set for Korea-Myanmar bilateral relations. Foreign investment law and Myanmar citizen investment law are now being merged into one to provide the most favorable conditions for both foreign and local businesses. I believe that this forum will enable mutually beneficial partnership.”
During the forum on 14 January, policies regarding investment and forming a JV company in the country as well as planned infrastructure projects and housing projects were discussed. Mr. Sohn Seung-Ho, Yangon representative office of Korea EXIM Bank was also present to talk about infrastructure and energy projects that they have financed, and have an interest in financing in the future. One-on-one business meetings were also conducted for potential Korean investors to establish business networks with businessmen and government officials in Myanmar.
When asked about recent changes in the country and its potential to attract foreign investments, the Secretary General Kim Young-sun of the ASEAN-Korea Centre noted that “The country has been giving off a very positive signal and impression to the international community including Korea. However, no one can know for sure what the future holds since the transition is still ongoing. But I do have high expectations that Myanmar will successfully manage the situation. That’s why we are here even before the new government takes over the office to get a first-hand view and experience.”
Mr. Kim further mentioned that it is up to the new government and Myanmar people to play the right cards to attract more investments and that it is necessary for both Myanmar and foreign countries to work together to create a success story.
While the government is drawing up an investment law attractive to foreign investors, it is going to take a long time to make the friendliest system that reflects the needs and expectations of both foreign partners and domestic businesses. With the launch of the ASEAN Community at the end of 2015, there will be more opportunities as well as more challenges waiting for Myanmar in the coming years. With a lot of expectations placed on the new government, 2016 is going to be a dynamic year. The new government has to find a balance between getting foreign investments and protecting local small and medium enterprises. While the country needs foreign investment to boost its economy, the government should also take local businesses in consideration to protect its citizens.
A low wage structure may attract foreign investors, but the problem with the labor force in the country is the lack of skilled workers. While it’s important to work on getting more foreign investment, it is equally, if not, more urgent to emphasize training programs. These programs will help the country produce more skilled labor so that the country and its citizens can benefit from partnerships with foreign firms.
Myanmar is definitely in a strong position with its abundance of natural resources, favorable geographical location, and a huge working age population. However, we cannot deny the fact that a lot of obstacles and challenges await ahead on its path of economic and political changes. To overcome all those, it is going to take a lot of cooperation, time and effort. Myanmar still has a long way to go but provided that the government does not backtrack on its reforms, the country can definitely expect the light at the end of the tunnel.
By Zun Pwint Phyu Oo, ASEAN Correspondent from Myanmar