Business confidence in Myanmar has fallen “drastically” during 2017 due to confused financial policies, according to a survey that blames State Counsellor Aung San Suu Kyi’s handling of the economy.
Suu Kyi promised economic reform as part of the democratic transition from junta rule, but limited attempts to pass reforms and her unwillingness to offend the all-powerful generals have disappointed investors.
Meanwhile, it has been reported that a corporate reform is being delayed. The measure would have allowed foreign companies to buy a 35-per-cent stake in Burmese firms. The delay will probably further reduce investor confidence in Suu Kyi’s government.
Aung Naing Oo, head of the government’s Directorate of Investment and Company Administration, said investment laws would probably not be reformed until next August 2018.
“We really want to implement the law as soon as possible but there are many things for us to do,” he said.
Economic reform is a key goal for her to complete Myanmar’s democratic transition after decades of isolation under military rule.
International backers are also aware that Nay Pyi Taw may face targeted sanctions over the treatment of its Rohingya Muslims in Rakhine State, which is increasingly being labelled as ethnic cleansing or even genocide.
Suu Kyi’s promises of huge foreign-direct investment have largely proved unfounded.
Myanmar’s short-term business confidence fell to 49 per cent this year from 73 per cent 12 months ago, according to a survey by consultancy Roland Berger and the Myanmar’s Federation of Chambers of Commerce and Industry.
The study of about 500 domestic and international firms, blamed the National League for Democracy (NLD) government’s “lack of a clear economic policy and plan”.
“What the private sector seems to be looking for are much more specific plans, endorsed by the government,” said Thomas Klotz, Roland Berger’s regional representative.
“What is missing so far is the communication of an overall economic transformation roadmap, with clear targets, timeline and quick wins,” he added. “‘More and faster’ will hopefully be the motto for the government’s economic agenda in 2018.”
Growth in investment and GDP have slowed since the NLD took office last April.
Myanmar recorded a monthly average foreign investment of US$739 million in 2017, remarkably below reported 2015 levels under the military-backed administration of Thein Sein, Roland Berger reported.
The International Monetary Fund downgraded projected GDP growth this year to 6.7 per cent from 7 per cent.
Myanmar’s citizens remain among Asean’s poorest. Picture credit: Asean Economist