(Invest
Myanmar Summit 2019 jointly organized by Ministry of Investment and Foreign
Economic Relations (MIFER), Myanmar Investment Commission (MIC) and Union of
Myanmar Federation of Chambers of Commerce and Industry (UMFCCI), was held in
Nay Pyi Taw at MICC-2 on 29-30 January 2019. On the first day of the Summit,
the State Counsellor Daw Aung San Suu Kyi delivered a keynote address on
investment matters in Myanmar at the opening ceremony. Her speech is
republished for increase public awareness.)
Excellencies
and distinguished guests,
It
gives me great pleasure to welcome you to the 2019 Invest Myanmar Summit and to
see so many investors and business people, representing a wide range of
industries, sectors, interest groups, and organisations, here with us today.
I
am confident that this Summit — the first of its kind in Myanmar — will serve
to highlight the immense opportunities available to both local and foreign
investors and provide you with the opportunity to explore Myanmar’s exciting
and ever evolving investment landscape.
I
am happy to note that, throughout our two-day event, Union and State and Region
governments, together with our private sector partners, will be provided with
an invaluable opportunity to showcase their respective investment prospects.
I
would like to express our deep appreciation to the Summit organizers, the
Republic of the Union of Myanmar Federation of Chambers of Commerce and
Industry, who have worked tirelessly, in partnership with the Myanmar
Investment Commission and the Directorate for Investment and Companies
Administration, to make this event a success.
I
hope all of you will find this event both fruitful and enjoyable and that you
will take away happy memories that will serve to bring you back to Myanmar
again and again.
[Historical
Note]
Perhaps
it might be worth noting that today’s event is taking place on the birthday of
King Yazadarit, ruler of the ancient Kingdom of Hanthawaddy Pegu, one of our
most renowned monarchs. His reign, recorded in the classic text “Razadarit
Ayedawbon”, saw a range of ambitious administrative reforms, combined with the
creation of peaceful conditions that helped to transform the ancient kingdom
into a successful trading power. It was also on this day in1945, 74 years ago,
that supplies began to reach the Republic of China over the newly reopened
“Burma Road”.
So
we meet on a truely auspicious date, the birthday of one of our nation’s
foremost reformers, and also the day on which saw the culmination of a highly
strategic infrastructure project which undoubtedly impacted on the course of
World War II in the South-East Asian theatre.
[Why
Myanmar?]
Ladies
and gentlemen,
Why
do we say ‘invest in Myanmar’? Myanmar’s enviable geographical location makes
us both a strategic market, as well as a crossroads between China, India,
Bangladesh, Laos, and Thailand.
China,
India and the ten economies that make up ASEAN, of which Myanmar is a member,
together represent a potential consumer market of more than 3.5 billion people.
These same economies combined account for some US$15 trillion dollars, or 20
percent, of our global GDP.
This
market nexus is expected to evolve into one of the most dynamic and vibrant
markets the modern world has ever seen. The McKinsey Global Institute predicts
that by 2025 over half of the world’s consuming class, that is, those with an
income of more than US$10 a day, will live within a five-hour air journey from
Myanmar.
We
have a sizeable population of 53 million, half of whom are aged 30 or below.
Thus Myanmar also has a sizeable and expanding internal market which will
surely benefit from greater cooperation and integration with external markets.
As
the largest country in mainland Southeast Asia, Myanmar not only possesses
significant potential for agricultural production, we are also richly endowed
with minerals and natural gas.
Myanmar’s
southern seaboard, when connected with Thailand’s thriving Eastern Economic
Corridor, creates one of the world’s most strategic economic corridors,
offering access routes to the Indian and Pacific Oceans via the Bay of Bengal
and the Andaman Sea, as well as to the neighbouring economies of Cambodia,
Laos, Vietnam and, of course, China.
It
is our firm belief that Myanmar has much to contribute by connecting regional
markets to international trade routes, and in so doing, we shall be able to
play a major role in supporting the expansion of trade and investment
throughout the Asia-Pacific region and indeed, throughout the world.
[Global/Regional
Landscape and Scene Setting]
Ladies
and gentlemen,
Just
as Myanmar has undergone rapid social, economic and political transformations
in recent times, our world has also been undergoing multiple, concurrent
transformations.
Throughout
the past forty years, our region has experienced the greatest surge of economic
growth the world has ever seen. This rapid growth, within ASEAN and the rest of
Asia, has spearheaded the creation of new trade relationships, spurred the
invention of new technologies, and facilitated the movement of peoples, ideas,
goods, services and capital in ways which in the past had never been thought
possible.
Indeed,
we live in an era in which Asia is rising, poised to shape the world.
Consequently, economic integration, coupled with innovation, free trade,
growing people-to-people connections and regional connectivity, presents
Myanmar and our investors with vast opportunities.
With
our advantageous geographical location, relatively low labour costs, and the
enormous potential of our people, it is the best of times for grasping the
opportunities that will arise as the global economic pendulum swings from West
to East.
However,
there are also challenges that must be overcome.
One
key challenge for Myanmar will be to find ways and means of ensuring that we
continue to benefit from this global and regional inter-connectedness, keeping
in mind that less developed countries with weaker links to the global economy
are at greater risk of falling further behind.
We
therefore recognize the urgent need for the public sector and the private
sector, the primary engine of economic growth and job creation in Myanmar and a
main driving force in favour of inclusive and sustainable development, to work
closer together as we seek market-based solutions to many, but not all, of our
development challenges.
Ladies
and gentlemen,
To
understand Myanmar’s contemporary investment landscape we must also seek to
understand the broader forces at work.
The
pursuit of market friendly economic policies, together with rapidly increasing
regional cooperation and integration, have been highly beneficial for the
Asia-Pacific region, allowing many of us to make a successful transition from
low income, low growth to middle-to-high income, high growth. Myanmar seeks to
do the same.
By
our own choosing, today our country is more exposed to external market and
political forces than ever before. On balance, Myanmar stands to gain from this
exposure which brings with it the potential for new investment, new
technologies and knowledge transfer. But that is not to say that we are immune
from the less positive aspects of globalization. In today’s hyper connected
world, when one economy so much as catches a common cold, many more are put at
risk of contagion.
Ladies
and gentlemen,
At
the global level, FDI in flows continued their decline in 2018, following a 23
percent decrease in 2017 from the previous year. The Asia-Pacific region has
not been immune from this downward trend.
According
to the latest available data, FDI inflows to the Asia-Pacific region have
stagnated slightly when compared with previous years. However, our region has
remained a primary destination for FDI, accounting for 39% of global FDI
inflows in 2017, a rise of 9 percentage points compared to 2016. Furthermore,
developing Asia-Pacific economies were collectively the largest recipient
region for FDI inflows worldwide in 2017.
Myanmar
has also been a major beneficiary of intra-regional FDI, experiencing a 45
percent increase in FDI inflows. Evidence of this can be seen throughout the
country; an example is the new manufacturing plant set up by Malaysia-based
Kian Joo Group in the Thilawa Special Economic Zone. There can be no doubt that
Myanmar is benefiting from ouradvantageous geographical position.
[Myanmar
Macroeconomic Forecasts]
Ladies
and gentlemen,
In
Myanmar we often say “collect the water while it is raining”.
The
most recent economic forecast provided by the ASEAN+3 Macroeconomic Research
Office suggests that Myanmar’s economy is expected to grow by some 7.4 percent
in the 2018-2019 Fiscal Year, up from 6.8 percent during the 2017-18 Fiscal
Year, and from 5.9 percent during the 2016-17 Fiscal Year.
We
should also note that inflation is forecast to stabilise at 5 percent during
the 2018-2019 Fiscal Year.
This
is still higher than what we may have hoped for but it is a marked improvement
on previous years. At its peak in 2015, inflation stood at 9.99 percent.
With
these positive forces converging, both regionally and in Myanmar, now is the
time for us to be bold and ambitious, and bold and ambitious we shall be!
[Major
Myanmar Reform Efforts]
Ladies
and gentlemen,
As
a member of the global community of nations, the Government of Myanmar has
confirmed our commitment to the realization of the Sustainable Development
Goals.
To
this end, we have developed a comprehensive social, economic and environmental
policy reform agenda, the Myanmar Sustainable Development Plan or MSDP, which
provides a unifying and coherent roadmap for all future reforms.
Structured
around 3 Pillars, 5 Goals, 28 Strategies and 251 Action Plans, the MSDP can be
seen as the expression of our national development vision.
The
MSDP is founded on a long-term vision: a vision of a peaceful, prosperous and
democratic country. The MSDP also provides a detailed strategic planning matrix
which will assist in the prioritisation, sequencing and implementation of
strategic development and investment initiatives across all sectors, and across
all our States and Regions.
The
first goal focuses on peace and national reconciliation, with a focus on the
achievement of political stability, while the second goal emphasises
macroeconomic management, with a focus on the achievement and maintenance of
economic stability, without which broader, multi-sectoral development cannot
begin to materialise. Hence, the first and second goals are amongst those most
critical for ensuring a strong foundation upon which all future development can
be based.
The
third goal relates to job creation and private sector growth, while the fourth
relates to human capacity and social development, including the expansion of
access to quality education and healthcare.
The
fifth goal, natural resources management and environmental protection, is aimed
at protecting not just our country but our planet, through sustainable
environmental and natural resources management.
Directly
relevant to today’s event, Strategy 3.3 clearly notes our commitment to
creating a favourable investment and business enabling environment. Thus we can
say that what we are doing now here, is part of the implementation of our
strategic planning DNA.
Ladies
and gentlemen,
Since
this government came into office, Myanmar has been actively pursuing a range of
FDI liberalisation measures.
In
recent years, we have undertaken a number of reforms, some major and obvious,
some more subtle but, in their own way, equally significant. All are primarily
focused on updating the regulatory and legal environment aimed at developing a
market-based economy which targets inclusive economic growth. Necessary
structural reforms have also been made to boost Myanmar’s development through
greater integration with the global economy.
These
reforms have had a profound impact on Myanmar, fundamentally enhancing our
investment environment.
[Investment
Law]
One
of the first major reforms was the introduction of the Myanmar Investment Law.
Introduced in 2016, the Myanmar Investment Law offers investors a more
transparent, more liberal and more protected investment environment, bringing
our investment enabling environment further in line with international and
regional agreements.
[Companies
Law]
Then,
in December 2017 we launched the new Myanmar Companies Law which came into
effect in August 2018.
Under
the old 1914 Myanmar Companies Act, a locally incorporated entity with any
foreign shareholding was considered a foreign company in Myanmar. With new
legislation in place, foreign investors are now permitted to hold up to 35
percent of shares in a domestic company without the company losing its
categorisation as a local company. Changing this legal definition will allow
foreign investors to undertake business activities that were previously
restricted to companies fully owned by Myanmar citizens.
The
new Companies Law has also been designed to offer greater protection for
minority investors whom we expect will contribute to a considerable improvement
in Myanmar’s ranking in the Ease of Doing Business Index.
Major
reform efforts have been complemented by the recent launch of MyCo, an
electronic registration system through which companies can now be incorporated
online, thus eliminating the need to physically wend your way to the
registrar’s office.
We
are already seeing some results of this. During the 5 month period following
MyCO’s launch (1 August to 31 December 2018) some 8,400 new companies were
registered online. Put in another way, the number of companies registered in
just 5 months constitutes 10% of the total number registered during the last 30
years, from 1988 to 2018.
This
is the type of progress we are determined to replicate and expand.
Further
steps will involve migrating many other manual processes online so that
investors will no longer need to go to a number of places to have their needs
addressed.
[Retail
Sector Liberalisation]
With
the launch of the Companies Law, we have been able to open up new economic
sectors to investment. For example, in 2018 this administration successfully
opened Myanmar to wholly foreign-owned firms operating in the wholesale and
retail sectors, a move which has attracted solid investor interest from Europe,
Japan, South Korea and beyond.
[Education
Sector Liberalisation]
We
have also begun to liberalise the education sector, opening the way for 100
percent foreign-owned educational institutions, as well as locally owned
schools and joint ventures.
[Thilawa
SEZ]
As
noted earlier, we have made tremendous progress with regard to the development
of Special Economic Zones.
I
am very pleased to report that the Thilawa SEZ has become a crowning success in
a very short period of time, receiving a total investment of over US$ 1.491
billion; this reflects the dollar value of those investments actually entering
the economy.
Investors
from Japan, the United States, Germany, France, Sweden, Australia, China,
India, Singapore, Thailand and Taiwan have invested in the Thilawa SEZ, and
there are many more eager to enter Thilawa SEZ Zone B.
I
am happy to be able to say that a single window system is already in use at the
Thilawa SEZ, and that it is providing a strong and positive precedent.
Future
rollouts of similar systems elsewhere, starting with the Myanmar Investment
Commission, are planned.
We
also hope that recent discussions between Thailand and Myanmar, with support
from China and Japan, will see a similar progress made at the Dawei SEZ in
short order.
[CBM-NET
and MACCS]
Other
notable reforms that will be of interest to our investors are the development
of an electronic payments and settlement system, the ‘CBM-NET’, and an
electronic customs and cargo clearance system, ‘MACCS’.
Our
CBM-NET consists of a Real Time Gross Settlement (RTGS) system, a central
securities depository system, and a mechanised cheque clearing system which is
connected to all banks within Myanmar. The CBNNET converts the once-manual
process of clearing and settling payments into an entirely electronic system,
thus constituting an important step toward the modernisation of our banking
system.
Likewise,
our MACCS system now enables exporters and importers to apply for customs
declarations and port clearances online. This system connects not only to major
ports but also to several major land border crossings. The result has been
shorter customs clearance times and greater efficiency gains overall.
[MIC
Reform]
Importantly,
the Myanmar Investment Commission (MIC) has been reconstituted and is now under
new management that will take forward the momentum of change and
transformation. The new MIC management team is determined to turn Myanmar into
a major regional trade and investment destination and has been urged to take a
much more proactive approach to investment approvals.
The
new MIC team is reviewing all processes, not only within the MIC itself but
also within other government agencies, with a view to establishing simple,
clear and predictable Standard Operating Procedures (SOPs), together with a
single-window approach to services delivery.
This
single-window approach will go a long way toward addressing impediments faced
by investors, while at the same time providing them with both pre- and
post-investment services.
[MIPP]
We
recently launched the Myanmar Investment Promotion Plan (MIPP) which aims to
attract more than US$ 200 billion through responsible and quality business over
the next 20 years, facilitating Myanmar’s transition to a middle-income
country.
[New
Ministry]
To
help sustain this already substantial reform effort, on 19 November 2018 the
Government established the Ministry of Investment and Foreign Economic
Relations (MoIFER). MoIFER has been mandated to address the needs of the State
and its people, with a focus on facilitating an investment enabling environment,
furthering regional cooperation initiatives, and enhancing the quality and
effectiveness of Myanmar’s cooperation and coordination with development
partners and international organisations.
[The
Project Bank]
Ladies
and gentlemen,
Those
who know Myanmar well will know that this country offers the possibility of
immense returns to investors who are both patient and innovative.
To
assist investors in the process of identifying investment priorities in a more
strategic, transparent and open manner, the Ministry of Planning and Finance
and the Ministry of Investment and Foreign Economic Relations have developed a
Project Bank, a rolling databank consisting of major, transformative projects
that have been screened, appraised and prioritised such that they are ready for
implementation with the most appropriate source of financing, be it government
budget, development assistance or even through private sector financing, by way
of Private-Public-Partnership (PPP) mechanisms.
Our
Project Bank is envisioned as an online one-stop shop, where all information on
projects designed to implement the Myanmar Sustainable Development Plan can be
easily accessed with a single click. In preparing these projects, the
Government is prioritising appropriately balanced risk allocation between the
government and the private sector, as well as the use of blended financing
mechanisms to ensure the success of PPPs that are included within the Project
Bank.
Ladies
and gentlemen,
I
hope that it is now obvious that Myanmar is committed to creating not only a
favourable, but also a predictable, facilitative and friendly, investment
environment.
The
World Bank acknowledged the positive change in Myanmar’s investment climate
brought about by these and many other reforms back in 2017 when we were granted
the 2017 Star Reformer Award. But we cannot and will not rest on our laurels.
The
Star Reformers Award was made on the basis of efforts made by the Government to
usher in transformational investment policy and promotion reforms representing
a significant shift in the development path of the country, improving the ease
of doing business, and maximising the potential benefits of foreign direct
investment and its spillover effects in the domestic economy.
We
will continue to strive to improve the investment climate.
[Challenges
Ahead]
But
of course many challenges remain. For example, our infrastructure gap continues
to constrain Myanmar’s development potential.
Our
energy potential has also yet to be fulfilled. Myanmar remains one of the
world’s least electrified countries, notwithstanding our natural gas and
renewable energy resources.
Myanmar’s
ports must also be upgraded and expanded to meet growing demand.
Despite
these challenges, or one may say because of them, business opportunities are
abundant in proportion to the critical need for foreign direct investment.
Thus, for investors, challenges can be turned into opportunities.
[Closing]
Distinguished
guests, ladies and gentlemen,
It
is said that what is comfortable is rarely profitable. This is certainly the
case when it comes to investment in frontier markets. As Southeast Asia’s final
frontier market, we offer innumerable investment opportunities; investment
opportunities are everywhere in Myanmar. Some are plain to see, others are
waiting to be found.
I
stand here to reaffirm our commitment to continue our reforms and to build an
investment friendly environment.
We
only ask our investors to ensure that their investments are responsible, by incorporating
environmental, social and governance factors into their investment and business
undertakings.
So
please do come to Myanmar, soak in an atmosphere brimming with opportunities,
and witness our newfound economic vibrancy with your own eyes.
I
wish all of you the very best as we go forward in our business-to-business
engagements and also in our people-to-people relationships. We value the deep,
genuine and mutually beneficial friendships that can bring peoples and
businesses together for the benefit of all.
I
wish you and this Summit every success.
Thank
you.
*
* * * *
Ref;
The Global New Light of Myanmar
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