Director General of the Directorate of Investment and Company Administration, U Aung Naing Oo, explains what Myanmar is doing to attract investment, the challenges around land acquisition and why he expects a better business environment from 2019.
Q: In November, you formed a new Ministry for Investment and Foreign Economic Relations. Could you tell us more about that?
A: The aim of this new ministry is to improve cooperation between existing ministries for investment purposes. Once we [Myanmar Investment Commission] issue a permit to an investor, it can still be difficult for the investor to obtain the relevant permissions and licenses from the other ministries concerned. We considered how we could play a coordinating and cooperation role to help investors easily start the projects that receive MIC approval.
This is one of the reasons why the new ministry has been formed. There will be, for example, standard operating procedures under which the new ministry will coordinate with other ministries to streamline and simplify the rules, regulations, and procedures to make it easier for investors and their businesses.
Another function of the ministry will be coordinating with development partners and leading bilateral negotiations. It will also handle the Association of Southeast Asian Nations (ASEAN)-related issues.
Q: What are Myanmar’s priority sectors and how does this differ from priorities in the past?
A: We didn’t have specific priorities until 2012, but since then we have set key ones, according to the businesses and sectors that our country needs most for its development. There are four key areas: manufacturing, agriculture, infrastructure, and services.
Our plan aims to attract more investment into these sectors, so when we revised the investment law in 2016, we included incentives for businesses. Most of our promotion activities have been going well; we have attracted more investment in the manufacturing sector, particularly into labour-intensive manufacturing, and into infrastructure, education, healthcare and telecoms. Agriculture is not yet on the right track and we are still trying hard to attract more investment into this sector.
Q: Can investors expect other incentives such as international tenders, or bilateral agreements?
A: First, as part of the Myanmar Sustainable Development Plan we have the National Project Bank, where all government projects, particularly infrastructure projects, in the project bank will be tendered through a bidding process. The Project Bank is being developed by the Ministry of Planning and Finance, which is currently in discussions with line ministries about the inclusion of projects.
Second, we are negotiating investment promotion agreements with potential investor countries and we have already signed and enforced bilateral investment agreements with Japan and Korea.
Third, we are negotiating bilateral projects, such as the China-Myanmar Economic Corridor. There will be a number of infrastructure and other related projects along the corridor, and bidding will be open to investors from any country, not just those from China and Myanmar.
Q: What in your opinion are the biggest challenges to attracting investment?
A: The number one challenge we are tackling is land acquisition. This is one of the biggest difficulties for investors in Myanmar because our land laws are outdated. There are complex procedures for land acquisition and land management involving different ministries. Also changing the status of land usage from one category to another is challenging, which creates a complex situation both for foreign and local investors.
The National Land Use Policy is being handled by the Ministry of Natural Resources and Environmental Conservation, which foresees a National Land Law that would unify our land laws into a single umbrella law. With that law, the government will consider how we can make land acquisition, the transfer of ownership and changes in land categorisation easier for investors, for society and for all the people in Myanmar.
The second challenge is infrastructure, particularly electric power. We are still not in a position to supply sufficient power to industries in Myanmar. I think these two challenges are key for us to tackle.
Q: How do you see the investment landscape developing in the future?
A: My projection is we will have a better investment environment and more foreign direct investment in 2019 because the Myanmar Investment Law will be fully in place. The Myanmar Companies Law has also now been launched, so we are prepared to some extent to create a better legal framework to do business in Myanmar.
Myanmar will be fully integrated into the ASEAN Economic Community from January 1, 2019, and that will pave the way for our country to be integrated into the regional supply chain and the regional value chain, which is really good for us. From my personal perspective, from 2019 we will see greater investment inflows into the country as well as a better investment environment in Myanmar.
Photo Credit: Thuya Zaw | Frontier