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Myanmar NLD ministers flock to EU business forum

THOMPSON CHAU  The Myanmar Times June 6, 2019

Officials, comprising six cabinet-level ministers, attend the 2019 Myanmar-EU economic forum in Nay Pyi Taw. Photo: Aung Htay Hlaing/The Myanmar Times

As Daw Aung San Suu Kyi toured central Europe to drum up investments, her government made a point by sending its largest delegation to date to this year’s Myanmar-EU economic forum in Nay Pyi Taw.

Military-appointed Vice President U Myint Swe was the keynote speaker on June 5 for the third consecutive year at the annual forum, organised by the European Chamber of Commerce. He touted Myanmar’s strategic location, new corporate laws and the much-delayed liberalisation of the insurance sector.

Unlike the last two years, this time a bevy of cabinet members attended, including the ministers of commerce, construction, finance, transport and communications and hotels, plus the deputy electricity and energy minister.

Referring to their presence, outgoing EuroCham executive director Filip Lauwerysen said “No European company can deny anymore that the Myanmar authorities are open for dialogue and welcoming more European investment.”

The government has reason to engage: approved FDI in the year to September 2018 fell to its lowest since 2014, official statistics suggest. The EU is the biggest investor in ASEAN but only the fifth largest in Myanmar. Meanwhile, Brussels is reviewing whether to revoke Myanmar’s tariff-free access to European markets under the Everything But Arms (EBA) scheme, owing to the crisis in northern Rakhine.

EU Ambassador Kristian Schmidt said Myanmar had a trade surplus of 1.7 billion euros last year with the bloc, and overtook Thailand and Tunisia in garment and footwear exports, with the sector employing more than 450,000 workers.

But the ambassador added that to attract more investment Myanmar needed to address its “burning human rights issues” and “reputational damage in Rakhine State”.

Philipp Dupuis, EU’s Minister Counsellor to Myanmar, said maintaining this trade surplus depended on footwear and garment exports, as well as power supply, skilled labour availability and general infrastructure.

Members of the audience raise their hands when the panel moderator, Filip Lauwerysen from EuroCham Myanmar, asks for a show of hands for those who believe things are getting better for businesses. Photo: Aung Htay Hlaing/The Myanmar Times

Investment sentiment this year has improved, commented British Chamber of Commerce Myanmar executive director Peter Crowhurst.

“In general, we are seeing a lot more interest and support to consider to invest or work in Myanmar,” he toldThe Myanmar Times, noting the need for more work on improving infrastructure, power supply and labour skills.

The country could also stand to gain from the wider region’s troubles, Mr Lauwerysen said. Trade tensions in neighbouring countries could boost the logistics and manufacturing industries, if the infrastructure is in place.

“If Myanmar can ride it out, the future will look brighter in a year or two. The country is well-positioned to benefit from Asian as well as European manufacturers who will relocate out of China because of the [US-China] trade war and out of Cambodia because of the EU sanction.”

Speakers emphasised the need for the Myanmar government to carry out reforms, with the Netherlands’ deputy ambassador Huub Buise calling on the authorities to focus less on drafting master plans and more on implementation. Priorities should be implementing the Companies Law, banking reform and infrastructure plans, Mr Lauwerysen said.

This resonated with the audience. One executive, who asked not to be named, commented: “It’s a helpful reminder that the problems – added political risks aside – haven’t changed over the past three years: policy implementation and infrastructure, especially power supply.”

Long delays in liberalising the insurance and retail and wholesale sectors had also dented business confidence, he said.

“It [the delays] is disconcerting. In short, ministers and officials should stop chasing rainbows and start addressing business concerns,” the executive went on.

Role of European business towards GE2020

Business leaders also evaluated the risks and trends in the run-up to next year’s parliamentary elections.

Vicky Bowman, director of Myanmar Centre for Responsible Business, highlighted the issues of business donations to political parties and the need for a strong independent media.

Political funding is loosely restricted in Myanmar with no regulations for donations to parties by charitable foundations associated with companies or by business owners.

Businesses need to make sure their employees are aware that it is illegal for foreign organisations to fund political parties in Myanmar, Ms Bowman suggested. European companies could help better governance by sharing established practices with their Myanmar business partners.

 

She said it was in the interest of European investors and Myanmar’s private sector in general to support media freedom.

“We’re seeing a deterioration of relationships between government and media here [in Myanmar], and to some extent businesses, although that was never a strong relationship.

“If there is not a strong, independent, professional media here you will not have a good investment climate. Business, the media, and civil society share the same civic space. And being able to have investigative journalism about corruption is absolutely in businesses’ interest.”

The director urged business to support “professional, ethical media” through advertising with those which are “genuinely professional, not the clickbait, cut-and-paste stealing ‘cele cele’ [celebrity] social media sites.”

Business groups chiefs and decision makers join a panel discussion on Myanmar’s economic development. Photo: Aung Htay Hlaing

Elephant in the room

On the issue of trade tensions, Mr Lauwerysen stressed the need for Myanmar to “find common ground” with the EU: “European businesses want to see a political will from Myanmar to resolve the potential withdrawal of the Generalised Scheme of Preferences [GSP].”

The release of the Reuters journalists has sent a positive signal to the international community, he added, while progress in other areas such as labour reform and human rights in conflict regions is necessary.

“Until the GSP is decided, European enthusiasm in Myanmar, or vice versa, will be limited,” the executive who requested anonymity commented. Even if the withdrawal is going ahead, investors at least will know where to shift their investments and operations.

Daw Suu met Czech Prime Minister Andrej Babiš in Prague and Hungarian Prime Minister Viktor Orbán in Budapest to promote Myanmar’s investment potential this week. It was her first visit to Europe since the August 2017 northern Rakhine crisis.

https://www.mmtimes.com/news/nld-ministers-flock-eu-business-forum.html

From: THE MYANMAR TIMES (Myanmar) June 6, 2019

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