Myanmar’s largely powerless civilian leader, Aung San Suu Kyi, has urged global investors to look to her impoverished country as she ignored the negative impact of the Rohingya crisis, the numerous other conflicts in the country and the slow pace of economic reforms.
The 73-year-old Suu Kyi hailed the country’s economic potential, its strategic geographical location — as the link between India, China and the rest of Asean — its expanding domestic markets and youthful population.
The World Bank said in December that it expected Myanmar’s GDP to fall to a still impressive 6.2 per cent in the 2018-19 financial year from 6.8 per cent the year before.
Slightly more optimistic, the Asian Development Bank forecasts Myanmar’s economy is set to grow by 7 per cent in 2019, up from 6.6 per cent last year, but warning that this might be adjusted downwards. Foreign-direct investment approvals peaked at US$9.5 billion in 2015-16, as Suu Kyi was coming to power.
The figure slumped to US$5.7 billion in 2017-18 as the bloodshed in Rakhine State peaked in August 2017.
“I stand here to reaffirm our commitment to continue our reform and to build an investment-friendly environment,” the state counsellor said in the capital Nay Pyi Taw, launching the first official investment conference under her administration.
She also promised to cut the red tape of which companies have long complained about.
“Please do come to Myanmar, soak in an atmosphere brimming with opportunities and witness our new-found economic vibrancy with your own eyes,” she told the business leaders, diplomats and journalists.
“Those who know this country well know that this country offers a possibility of immense returns to investors who are both patient and innovative,” Suu Kyi told the Invest Myanmar Summit 2019, pointing to the “positive forces emerging”.
As ever, her speech was light on detail but the event could signal a shift in Myanmar’s approach to business.
Investors have been encouraged by the government’s appointment of a new finance minister, Soe Win, who has a background in international finance.
For too long, Suu Kyi has appointed elderly stooges from within her obsequious inner circle, who have limited experience of government administration and zero will to challenge her decisions.
Although Soe Win is in his 80s, he was a managing partner of Deloitte and Touche in Myanmar, and previously worked at Myanmar Foreign Trade Bank and as a consultant on tax and investment for international corporations.
Investors have complained that Suu Kyi has focused largely on ending the numerous armed conflicts the borders states while neglecting economic reforms.
She came to office in April 2016 but her powers are still heavily limited by the 2008 constitution that ensures the military maintains control of the Ministry of Home Affairs, including the police and judiciary, and all security matters.
The ability to appoint the finance minister was one of the most important prizes won by Suu Kyi’s National League for Democracy in its crushing November 2015 election triumph.
It remains to be seen if Soe Win can shake up the tattered country’s economic fortunes.
The generals dominate how the national income is spent through control of the home affairs, defence and border security ministries and they maintain a grip on Myanmar’s most profitable sectors, like the illicit trade in methamphetamines and heroin, fossil fuel extraction and the jade mines, ensuring much of the profit avoids taxation.
The ongoing dominance of the generals also means Suu Kyi has had limited success in persuading armed groups to sign a peace treaty. The military chiefs, who are independent of Suu Kyi’s control, continue to plot military offensives while she promises peace.
The Rohingya crisis in impoverished Rakhine State has reduced western investment and led to fears that sanctions that used to stifle the economy could be reinstated.
The European Union is discussing trade sanctions over the Rohingya crisis, potentially stripping the country of tariff-free access to the world’s largest trading bloc. The measures could cover the key textile industry and put thousands of jobs at risk.
Meanwhile, investment in Myanmar has largely come from Burmese billionaires and Asian investors, most of whom have been silent about the Rohingya crisis and other human rights issues.
According to organisers, this week’s event was attended by more than 400 foreign delegates from 17 countries with most from China, Japan, Singapore and Thailand.
The tarnished democracy icon told the event that the government was planning an online registration system for companies.
She hailed the recent opening of the country’s retail and education sectors to foreign investors and the electronic cargo and customs systems, allowing quicker clearance through the previously sluggish ports.
Suu Kyi hopes the grindingly poor country can become a middle-income economy within 30 years. There are few signs on the ground of this happening.
“As Southeast Asia’s final frontier market — final and best — we offer a world of investment opportunities,” Suu Kyi said. “Investment opportunities are everywhere in Myanmar; some are there to see, and others are waiting to be found.”
Mrauk U in Rakhine State. Despite its beauty and vast potential, Myanmar remains crushingly poor.