MYANMAR’S hopes of becoming Asia’s last frontier market would be realised only if the government could create a clear and transparent regulatory environment for attracting investment and financing the economy, according to Patrick Cooke, regional editor for Asia at Oxford Business Group (OBG), a global research and consultancy firm.
“It is imperative that the government devises a viable strategy to ensure its young population is equipped with the skills and entrepreneurial mindset required to shape the future economy,” he said.
Cooke said the nation must capitalise on its position between two emerging superpowers-China and India, without becoming beholden to either. He maintained optimism that Myanmar could become the fastest-growing economy in Asean in the coming years, despite a number of challenges.
In the latest edition of the “Business Barometer: OBG in Asean CEO Survey”, top executives from Myanmar were among the most pessimistic about the domestic tax environment. They were most negative about business transparency levels in Myanmar, similar to the perception of those from Vietnam.
On the other hand, CEOs from Vietnam, Malaysia and Thailand were more positive about their respective tax environments. Conducted on a face-to-face basis across a wide range of industries, the survey was designed to assess business sentiment amongst business leaders and their outlook for the next 12 months.
Cooke said the survey was conducted in six Asean countries_ Indonesia, the Philippines, Myanmar, Thailand, and Vietnam. Sixteen per cent of the companies surveyed were based in Myanmar while 12 per cent were based in Thailand. The study found investor sentiment buoyant in Asean, while China tops the list of trading partners for all six countries represented in the survey. Cooke however warned that external risks could derail Asean’s momentum, particularly as the world’s two biggest economies continue to impose anti-trade measures on each other.
Earlier this year, OBG published its second Myanmar CEO Survey which described positive outlook for the economy by the nation’s C-suite executives. There, Myanmar companies stressed the importance of access to credit and skilled labour.
“Some 76 per cent of executives in our latest survey (in Myanmar) described access to credit as difficult or very difficult. To put that figure in context, just 37 per cent of executives in Indonesia and 21 per cent in the Philippines described credit access as difficult,” he said.
Cooke considers the lack of expertise and skills in Myanmar’s labour pool as another major concern for businesses.
“I hosted an investment forum in Yangon in September 2017 where local and international panellists frequently highlighted the urgent need to improve the education system and deepen the local talent pool,” he said.
“Although the government has launched a national education strategic plan that runs through 2021, questions remain over how it will meet the necessary funding requirements for large-scale reform.”
Earlier this month, OBG signed a memorandum of understanding with British Chamber of Commerce in Myanmar for its forthcoming publication on the nation’s business climate. Under the MoU, the chamber will contribute to the research for The Report: Myanmar 2019 due out in the coming months.
The report will map out key reforms that have been implemented with the aim of facilitating FDI, and will shine a spotlight on the areas of business that have expanded significantly on the back of capital inflows, such as the telecoms sector. It will also consider the challenges that investors eyeing Myanmar’s opportunities face, many of which are reflected in the country’s low rankings on both the Transparency International’s corruption perception and World Bank’s ease of doing business indexes.