Wednesday, September 20, 2017

For Myanmar, peace and economic growth ‘must go hand-in-hand’

Myanmar should pursue peace and economic development simultaneously as the best way forward.

The second Asean-Myanmar forum held in Yangon, June 28. Zarni Phyo / The Myanmar TimesThe second Asean-Myanmar forum held in Yangon, June 28. Zarni Phyo / The Myanmar Times

Other challenges the country is facing include the enactment of myriads of reforms to attract foreign capital and stimulate domestic consumption. Tax-related incentives, streamlined bureaucracy and legal clarity, among other measures, should also get priority.

These were some of the recommendations identified by foreign and local experts who discussed the economic and investment climate under the National League of Democracy-led government since it took power in April 2016.

U Chris Tulane Aung, vice chairman of Myanmar Thilawa SEZ Holding Public Limited, said the NLD should set a clear path of peace-building and economic development at the same time.

He was speaking at the 2nd ASEAN-Myanmar Forum on Wednesday, organised by the Singapore Institute of International Affairs. Other speakers included Ong Chao Choon, managing director of PwC Myanmar and deals advisory leader at PwC Singapore; and Yasuhisa Ojima, resident representative of the International Monetary Fund.

Ong Chao Choon said that a tax amnesty could be one of several ways for the government to bring in more revenue. He said Indonesia has adopted this measure as a means to increase tax collection.

Yasuhisa Ojima agreed, saying that tax incentives and better enforcement of tax collection would let the government pursue developmental projects sustainably.

A survey conducted by the institute and released at Wednesday’s forum found that Myanmar needs to take a more proactive approach to develop its own competitive advantage and maintain its reputation as the region’s last frontier.

Assistant Professor Simon Tay, the institute’s chairman, said that competition for investment from abroad has intensified, and other ASEAN countries, such as Indonesia and Vietnam, have adopted aggressive reform plans to attract foreign investors.

Last year, foreign investment in Myanmar totalled US$9.5 billion, the lowest in four years. At the same time, Myanmar’s GDP growth slowed from 7.3 percent in 2015 to 6.4pc in 2016.

He said that business leaders interviewed in the survey continue to be positive about the country’s investment prospects, and many remain hopeful about the market’s growth potential.

According to the World Bank, Myanmar’s economy is expected to rebound and grow at an average of 7.1pc per year in the next three years – indicating the country’s unrealised potential as one of the region’s fastest-growing economies.

In addition, private and public investment in infrastructure, light manufacturing and hospitality are also expected to rise.

The survey noted that Myanmar must make greater efforts to grow its investment potential. Engagement with the private sector – both foreign and local – is the key and needs urgent attention.

Priority must also be given to address choke points that prevent foreign investor interest from translating into real investment and economic growth, it said.