Myanmar Investment Climate: Clouded By Land Use Rights, Power Failures

Access to finance is the top constraint for private enterprises as Myanmar's economy undergoes market-oriented reforms after emerging from decades of isolation. Addressing this and other challenges will help create a strong private sector to drive the country's future growth and create much-needed jobs, the World Bank Group's first Myanmar Investment Climate Assessment report finds.

Among more than 1,000 foreign and domestic non-agricultural businesses interviewed, merely one per cent of fixed-asset investment costs are financed by bank borrowing, while 92 per cent of firms rely on their own funds – a percentage higher than that of any other comparable country.

Difficulties in getting land-use rights, power outages, and inadequate workforce skills are other main barriers to business operation and growth in Myanmar.

"I want to borrow from a bank for business expansion, but it is not easy at all," said U Myint Lwin, the owner of a small business in Yangon.

John Le Fevre

Removing barriers to business will allow private enterprises to grow and flourish the first Myanmar Investment Climate Assessment report finds

Focusing Myanmar's economic reforms on removing these obstacles will create a better business environment and enhance the productivity and efficiency of private enterprises allowing them to grow and flourish, the report finds.

Kaushik Basu, the World Bank's chief economist and senior vice president said "Myanmar has the potential for enormous growth. To realise this potential it is essential to create space for entrepreneurship. A vibrant private sector can generate jobs, and spur growth. Creating a level-playing field for the private sector will help unleash its potential. Government's role is to provide an efficient regulatory system that encourages and facilitates individual creativity", said Mr Basu.

Equally important to the reform process is the consistent implementation of laws and regulations as well as raising transparency and disclosure.

Tin Naing Thein, Union Minister for the Ministry of President's Office said "The government is fully committed to engaging the business community in shaping business-friendly laws and regulations through regular and coordinated public-private dialogues.

"The Myanmar Investment Climate Assessment report facilitates this dialogue process by helping to identify and prioritise a common set of issues facing the private sector", he added.

The World Bank Group is supporting reforms in Myanmar to strengthen the private sector and create jobs to reduce poverty and boost shared prosperity.

The Myanmar Investment Climate Assessment report is supported by the United Kingdom's Department for International Development (DFID) and has been carried out in close collaboration with the Ministry of National Planning and Economic Development.

Gavin McGillivray, head of DFID Burma office said "Policy makers need an assessment of the investment climate as part of their private sector development strategies. The Myanmar Investment Climate Assessment report is especially significant for Myanmar as it evaluates the competitiveness of the private sector and identifies ways to help firms improve productivity during its transition into a market-driven economy."

This article was first published by the World Bank Group and is reproduced here with it's kind permission.

 

About the Web:

• WB says access to finance top constraint on Myanmar's economy (Mizzima)


• Supporting prosperity, trade and investment in Burma (GOV.UK)

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Established in 1944 and headquartered in Washington, DC, The World Bank is a vital source of financial and technical assistance to developing countries around the world.

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