By Sean Crowley
Asian Development Bank
Walking around
Yangon and Mandalay just before Myanmar’s historic 2015 election last November,
chatting to owners of businesses large and small I was struck by the near
universal support for Aung San Suu Kyi's National League for Democracy. The
party's landslide victory is a clear mandate for change that should usher in a
new era of stability in the country.
And stability is
just what foreign investors like. Many have been hanging back waiting to see
how the country’s first free poll in a quarter of a century played out. Foreign
direct investment that stood at $8 billion in fiscal year 2014/15—more than
five times the flows recorded just two years earlier—should now increase
rapidly as confidence in the country’s fledgling economy grows.
More
multinationals are likely to take the plunge and join the handful that have
already set up in the country.
“The Lady [Suu
Kyi], of course she’s good for business, she has international respect and
Western companies know about her. We hope they will come to our country in
large numbers when she wins,” the owner of a small garment factory in Yangon’s
northern suburbs told me above the clatter of machinery a week before the poll.
The other thing
that was impressed upon me by investors was a realization that there’s no quick
buck to be made in Myanmar, and being around for the long haul means respecting
land rights and labor laws, and accepting corporate accountability to the media
and civil society.
“NGOs are really
active here, particularly in the extractive sectors, so businesses have to be
more open and transparent than before,” one CEO told me.
Despite the
optimism and post-election euphoria, there’s no getting away from the fact that
this land of frontier capitalism is not for the faint-hearted. Virtually
everyone involved in business decries the skills shortage due to decades of
underinvestment in education, and the flip side of lower labor costs is that
the country is hemorrhaging workers in all sectors to neighboring countries.
ADB is working with the government to roll out a comprehensive vocational training
network that will match skills with the needs of the economy, but it will take
decades.
Legal
uncertainty is another area of concern for businesses. Although the previous
government made considerable headway in laying down the building blocks of a
market economy by drafting new commercial laws and establishing regulatory
bodies, there’s a long way to go in implementation and enforcement. This is
another area where ADB has been particularly active, supporting a new company
law, a new business registry, and an enabling framework for public–private
partnerships. The World Bank has played a major role in helping the
telecommunications sector grow by working with the government on the legal
framework for competitive, transparent contracts.
Finally, the
transport and energy infrastructure needs massive investment. Unreliable and
costly electricity eats into profits – most small to medium businesses are
forced to invest in generators to keep running. ADB is supporting
public–private partnerships as well as sovereign loan projects to improve power
generation across Myanmar.
So no easy
pickings to be had here, but look how many countries in Asia have gone from
where Myanmar is right now to relative prosperity in a generation. Archbishop
Desmond Tutu's description of multi-ethnic South Africa as a rainbow nation
after its historic all-race elections in 1994 is equally applicable to Myanmar.
It’s time for the country to take advantage of the growing international
goodwill that the election has spawned.
In a gesture of
support for the incoming government, the United States has just removed a ban
on trade through ports and airports for six months. ADB has been working to
boost trade financing by supporting local banks. These moves are critical for
the jobs, investment, and growth Asia’s new rainbow nation so badly needs.
About The Author:
Senior
Communications Specialist, Department of External Relations
Asian Development Bank
Before joining ADB in 2010, he has worked as
communications specialist and multimedia journalist for UN-WIDER, IRIN, the BBC
and the South African Broadcasting Corporation.
This article was originally published at Asian Development Blog on Jan 8, 2016