European firms are expected to bring with them three things - finance, technology, and management, said the presidential economic adviser to welcome the launch of European Chamber of Commerce on Friday.
“We need finance. We hope good European companies will come. Global brand names will come. We also hope the European companies will give us the cutting-edge technologies that you possess. That is very important and critical to us, too,” Aung Tun Thet said.
“We need to have creative technologies, innovative technologies, which we can leapfrog. Please bring in your management and leadership skills that we need. The way you operate a business is very important for us.”
The professor also reiterated that foreign investors need to be patient and should look at long-term profits.
“We must accept finite disappointment. Of course, in the course of your works, in the course of trying to invest in Myanmar, you may have disappointments. I recognise that. We will do our best to ensure that doing business in Myanmar is as earliest as possible. We know it is still not very easy as the transaction costs are still very high. We know there are a lot of delays. But we will do our best. Please accept finite disappointment but we will never lose our infinite hope,” said Aung Tun Thet.
The EuroChamber was launched two years after the European Union lifted sanctions against trade with Myanmar. After the sanctions were lifted, trade between the EU and Myanmar grew significantly. The launch is expected by both sides to strengthen their trade link.
“I believe that the launch of the EuroChamber Myanmar will help support our economic growth. Ambassador Kobia said about doing good. May I request you to do well. You must make a profit if you come and work in Myanmar. That is not a crime. Do well. But also do good. We are promoting to do well and do good,” said Aung Tun Thet.
Julien Esch, president of the French-Myanmar Chamber of Commerce and Industry (FMCCI), said that the EU supports the launch of the EuroChamber with a grant of 2.7 million euros.
“The launch of the EuroChamber in Myanmar is a fantastic opportunity to increase ties between Myanmar and Europe. Myanmar and Europe benefit indeed from large complementarities, which would certainly bring jobs creation and increase exports,” said Esch.
“It is just a start of a very long journey. It would help make Myanmar business partners’ choice for Europe. The EuroChamber will get strong support from the EU member states and the French,” he added.
The EuroChamber will be set up by a consortium led by the FMCCI along with Eurochambers – the European umbrella organisation of chambers of commerce – as well as chambers from Belgium, France, Italy and Hungary. Other key EU business representatives in Myanmar and the UMFCCI support this project.
EU Ambassador Roland Kobia sees the launch as a linkage between Myanmar businesses and their European counterparts.
“The European Chamber of Commerce has the unique ability to draw from a wide range of business experience across Europe. Businesses need a stable and peaceful environment to prosper. And in turn, if they prosper, they can make a huge contribution to social and economic development,” he said.
In 2013, bilateral trade in goods with Myanmar amounted to 570 million euro, a 44 per cent increase compared to that of 2012 (404 million). The seven-month (Jan-July) trade of 2014 reached 520 million euro. It is expected that trade will continue to grow strongly towards the end of the year.
Myanmar exports to the EU increased by 35 per cent in 2013 to amount to 224 million (compared to 165 million in 2012). EU exports to the country increased by 45 per cent in 2013 reaching 346 million (compared to 239 million in 2012). Key EU exports were powered aircraft, pharmaceuticals, electrical machinery and equipment.
The exports to the EU in the first 7 months of 2014 surged 52 per cent on year to 215 million.
The lifting of all sanctions also opens the door for EU investments, although the current FDIs from the EU have so far been limited due to decades of Myanmar's isolation and closed economy, sanctions by the world economic powers, unclear legal framework and lack of infrastructure.
The effectiveness of the EBA scheme for Myanmar's exports is strengthened because there are fewer beneficiary countries under the new GSP scheme (due to the graduation of many beneficiaries, in accordance with the new criteria). This has helped reduce the competitive pressure on Myanmar's exports and make the preferences for Myanmar more attractive to the EU importers. This means more opportunity for the country to export.
Negotiations for an EU-Myanmar Investment Protection Agreement were launched in March 2014. The agreement is intended to improve the protection afforded to investors of both parties and to contribute to attracting investments to Myanmar and the EU by ensuring that they will be treated fairly and on an equal footing with other investors. A first round of negotiations is expected early next year.