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Given that the election will take place in three years' time, a clear impetus for the economy and employment generation is vital to re-establish trust in the civil service run by the National League for Democracy (NLD). However, policymakers continue to be excited about the outlook for the economy, with Finance Minister Kyaw Win forecasting robust expansion in the coming few month.
Comparing the industry to an aeroplane on the take-off strip. However, experienced economic forecasters such as Maung Maung Lay, VP of the Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI), are concerned that this bullishness needs to be alleviated. "Takeoff and landings are the toughest and most hazardous time for aircraft: headwind, a broken airstrip and so on," he recently said to Asia Focus.
A stagnating and precarious economic system, a precarious peacemaking operation, the escalation of violent events in the West of Rakhine and a bureaucratic system that is seriously inept. "There is no doubt that the administration is doomed to failure and will not be able to find its direction," KK Hlaing, a celebrity Myanmar business man and much-loved policy whiz, said to Asia Focus last months.
There has certainly been a collapse in trust in our businesses and investments. The three binding bulletins released at the end of last year should be a clear call to take actions, say the Myanmarians. Roland Berger's second joint UMFCCI study on the Myanmar climate in the second half of last year shows a marked decline in the short-term climate: from 73% a year ago to 49% this year.
Three out of four surveyed enterprises believe that both domestic and international managers largely blame this on the absence of a clear budget and a clear policy. EuroCham Myanmar's second survey on the climate for doing good resulted in a similar mood among members. Over three-fourths of the 70 Myanmar-based businesses in Europe that answered the survey said the operating climate was bad or in need of improving, up from 67% in 2016.
One-half of the managers questioned by Roland Berger believe that the situation will quickly pick up over the next 12 month, while 88% of the respondents remain positive about the country's longer-term outlook. "I have great hopes for the next three years as the country's leadership has adapted and recognized that commercial achievement can bring wealth and tranquillity to the people," said Martin Pun, a Myanmar based leader and SPA Group leader.
"The outlook looks broader with changes in some important legislation and regulations that give greater investor flex. "This is a nearly universally shared sentiment among businesses, international investment and analyst surveyed by Asia Focus in recentweek. "I' m very hopeful about the opportunity in Myanmar and believe that many of the issues we have seen during this new government are what we would have been expecting at this phase of Myanmar's development," said Ola Nicolai Borge, a legal and management consultancy from Norway who has been in Myanmar for many years.
However, the ongoing violent conflict in Rakhine, which has caused some 630,000 Rohingya Muslims to flee to Bangladesh, is and will continue to be a great damper on the trust of companies, especially those of international investments, until the conflict is over. "Of course, the horrific incidents in Rakhine will affect investments, especially from the West, North America and Europe," said Sean Turnell, an Myanmar administration's Australia based academics and economist.
"Prospective investor from these markets will be concerned about possible penalties, foreclosures and other effects that could affect trademark soundness. "But it is the tourist and clothing industry that is most affected, according to Vicky Bowman, head of the Myanmar Centre for Responsible Business (MCRB).
"Not only Rakhine, but the whole of Rakhine will be affected by the current economic upheaval. There is no doubt that the pictures in the reports about a village on fire have influenced visitors' reservations, especially from Europe and the USA," she said to Asia Focus.
It is also concerned that the clothing market could be affected, as the excitement for the Made in Myanmar brand on temples is lower today, "and this is an area that can quickly move from one country to another". However, despite these adverse drivers influencing the prospects, FDI has grown significantly, according to Aung Naing Oo, General Manager of the Directorate of Investments and Business Administration (DICA) and Executive Secretary of the Myanmar Investments Commission (MIC).
The majority of these investments came from Eastern Asia and ASEAN members, he said to Asia Focus. "For 2018, the MIC still expects FDI to exceed $6 billion, despite Rakhine's problems," he said. "But we must ensure that the Rakhine problem is solved quickly. If not, it is likely that the longer the predicament persists it will have an impact on the attraction of investments.
" However, he is optimistic and points to anticipated trends this year, such as the full Myanmar membership of the ASEAN Business Community (AEC), the Belt and Road initiatives supported by China and the possible beginning of further work on two long blocked SEZs, Dawei and Kyaukphyu. Nevertheless, some traders may already be hesitant, the World Bank said in a recent World Bank survey.
"Rakhine has attracted a great deal of interest around the globe and I have seen several vendors reject any project in Myanmar, with a clear link to the Rakhine situation," Mr Borge said. "Others are clearly interested in the reputational issues involved in entry into Myanmar. Nevertheless, I have the feeling that there are many overseas buyers, as well as West European ones, willing to engage in major investments in Myanmar.
" Clearly around 30% of FDI last year actually went into production, especially in the clothing industry - a tripling which, according to Maung Maung Maung Lay of UMFCCI, is a good sign for further GDP growt. "The new company law, which will enter into force in August and could be a major incentive for FDI in municipal companies; a revised state bank which should be a major donor, in particular by providing much-needed agricultural finance; significant investing in government infrastructures - country streets and in particular power production - as well as some market-integrating infrastructures related to the belt and the road.
Myanmar's other senior management and analyst team share this view. One of them is Keith Rabin, a management consultancy and power engineering expert with a focus on Asia and many years of Indonesia. Citing the new company laws, "and a general understanding that policy, programming and practice need to be reviewed in order to exploit Myanmar's powerful potentials and deliver a sustained recovery in 2018 and beyond".