Myanmar is one of the fastest growing economies in South East Asia. However, the agricultural sector still represents 40% of the country’s GDP and the target of the Government is to raise the industrial contribution to the GDP from 20% to 25% or 30%. Last year you were elected as president of the UMFCCI. What is the role of the Chamber in the economic development of Myanmar and what are your priorities for your term in office?
UMFCCI is a nonprofit National Apex NGO representing and leading the Myanmar private sector. It acts as a bridge between the government and Myanmar private sector through consultation, advocacy and cooperation on policy and strategy of MSMEs subsector and other sectors. There are 76 affiliated associations consisting of 8 regional and state Chambers, 9 border trade associations and Chambers and 53 trade services associations spread all over the country. It had been founded in 1919, hence in honor of its centenary, we are going to celebrate this year. We have signed more than 157 MoU’s of Cooperation agreement with overseas chambers and business organizations and promote bilateral economic cooperation for mutual benefits.
Our main objective is to support not only our members but the Myanmar business community as a whole imparting them with knowledge and expertise to take advantage of the business opportunities available, organize business matching and interaction with visiting overseas business delegations, organize capacity building and human resource development programs, help support public-private partnership cooperation and lead the private sector into the era of globalization.
During my term of presidency of the UMFCCI, focus is placed on enhancing foreign investment, agriculture and industry, MSME development and other areas of business developments. Also, we participate actively with the government and the private sector to support business associations, as well as small and medium enterprises development.
In September this year, a delegation of the UMFCCI visited Malaysia to analyze economic policies potentially valuable for Myanmar. On the ease of doing business rankings 2017, Malaysia is ranked 23 and Myanmar 170 out of 190 countries, the lowest among the ASEAN nations. What are the competitive advantages that Myanmar should exploit to become an economic leader within the ASEAN countries?
Today Myanmar faces several challenges that impede economic growth and development. The main issue for businesspeople today is access to credit, a major constraint to economic growth. Also, the proportion of money laundering enterprises in Myanmar’s economy is high compared to other countries in the region. As many businesspeople can tell you, another big problem is the illegal trade and smuggling of foreign products through our borders without any compliance process, as our long borders are porous for illegal trade, without proper and effective control and having adverse effect on our local industries. Today, China, Thailand, Singapore and India are our leading trading partners, the government endeavors to facilitate and liberalize the trade regulations and procedures to promote commerce ASEAN+6 and also rest of the world.
At present, due to the numerous business associations being founded, it becomes necessary to formalize the organizational and structural relations and to establish protocol, and accord them appropriate status, with a view to unify and strengthen private sector. To this end, drafting process of the Business Chamber Law is underway. We hope to enact it within two years with the support of the government.
Regarding business, the country is undergoing a democratic transition reform period, and there are a lot of positive changes taking place in terms of rules and regulations. Sometimes it makes some business people reluctant to set up new companies, as they are waiting to see the outcome. The new Investment Law, that combines local and foreign investment, is a very positive law that offers just and fair playing field and incentives to all investors, and the Company Law is scheduled to come into force in August 2018, which means that all the necessary regulations will be completely set up.
The NLD Government announced a 12-point economic policy after taking office. Among other ideas, this policy plans to increase competition within the private sector, and provide easier access to credit and inclusive growth. Do you think that the government is working in the right direction?
Of course the policies are set in the right direction; the only thing is that we have to implement measures as fast as possible. The economic policies are there, but they need implementation. We try to convey the messages of the private sector, that needs reforms, to the government, and the government at the same time needs to help us to be in line with the economic policy to move forward. Every month we have a regular meeting with the government leaders, chaired by a Vice President and Union Ministers, in order to be aware of the changes, to air the views of the private sector to resolve the barriers faced in doing business.
One of the objectives of UMFCCI is to enhance the competitiveness of the Small and Medium Enterprises and Industries. What are your guidelines to increase their competitiveness both in the national and regional scope?
We have different sectors that need to be improved: infrastructure, electricity supply, technical and technological skills and public administration in terms of business taxation and others. Minimizing corruption is another area that the government is prioritizing. Once we solve these problems we will be able to enhance our competitiveness, firstly in ASEAN region and then, beyond.
As we have mentioned before, several of the 12 economic points of the government are to promote inclusive growth, food security and increase exports, agriculture, as the largest industry of Myanmar, plays a key role in this sense. How can the UMFCCI contribute to the agriculture and livestock sectors?
We are carrying out several reforms in the agriculture, fisheries and livestock sectors in partnership with four of five associations in Myanmar dedicated to these sectors. We work together to provide updated information to the private companies about the new regulations, to promote inclusive growth, enhance food security and increase exports. The investment in agriculture is currently low, but we have identified interested investors in Japan and China, and we will try to usher in and promote increased investment to develop this industrial sector.
International investment is a key for the development of Myanmar. However, foreign direct investment has decreased from 20 billion USD in 2011 to around 5 billion in 2016. How is it possible to encourage foreign investment and joint ventures between international and national companies?
In this sense, the Investment Law and the Companies Law are very positive measures that will encourage business people to come to Myanmar. On the other hand, we still have to modernize different procedures; transparency is a key for the international investors, they seek clear and easy regulations, and the government is already working seriously on it. Human resources development is another challenge that we face right now, as we have to educate and train people to create a skilled workforce. In addition to that, another priority area requiring action is infrastructure and construction.
HBR readers are the business leaders and top decision makers around the world. If you had a meeting with one of them tomorrow, how would you convince them to come to Myanmar to do business?
The first step will be to disseminate information: I would explain how the government is seriously improving business legislation, improve procedures and liberalize taxation to make business easier. In addition, from the UMFCCI we can provide them relevant services and support throughout all the processes.