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Myanmar – Fascinating Newcomer

COUNTRY FACTSHEET MYANMAR


1. COUNTRY INTRODUCTION:

Country Profiles - MyanmarWith a rich natural resources base, an estimated population of over 51 million, a young labour force and a prime geographic location – between India, China and linked with the countries that make up the Association of South East Asian Nations (ASEAN) – Myanmar is of great interest to the international business community. The easing of U.S. economic sanctions, and the complete lifting by the EU and Australia of their sanctions (except for a ban on the sale of military goods and services), have encouraged foreign companies to view Myanmar as a potential market. Myanmar’s economy has grown at approximately 8% since 2012, and the annual growth is expected to consistently range between 7-8% until at least 2020.
Since the transition to a civilian government in 2011, Myanmar has begun an economic overhaul aimed at attracting foreign investment and reintegrating into the global economy. Economic reforms have included establishing a managed float of the Burmese kyat in 2012, re-writing the Foreign Investment Law in 2012 to allow more foreign investment participation, granting the Central Bank operational independence in July 2013, enacting a new Anti-Corruption Law in September 2013, and granting licenses to nine foreign banks in 2014 and four more foreign banks in 2016. Despite these improvements, living standards have not improved for the majority of the people residing in rural areas. Myanmar remains one of the poorest countries in Asia – approximately 26% of the country’s people live in poverty. The previous government’s isolationist policies and economic mismanagement have left Myanmar with poor infrastructure, endemic corruption, underdeveloped human resources, and inadequate access to capital, which will require a major commitment to reverse. The government has been slow to address impediments to economic development such as insecure land rights, a restrictive trade licensing system, an opaque revenue collection system, and an antiquated banking system.

 

2. KEY ECONOMIC DATA:

Population: 56.89 million
GDP (Current US$): US$ 68.28 billion / EUR 69.49 billion1
GDP (Current US$, per capita): US$ 1,307.00 / EUR 1,235
GDP (PPP): US$ 311.1 billion / EUR 293.9 billion
GDP (PPP, per capita): US$ 5,953.00 / EUR 5,623
Real GDP Growth: 8.1%
Consumer Price Index (CPI): 7%
Labour Force: 37.15 million
Unemployment Rate: 4%
Main Industries: Agricultural processing; wood and wood products; copper, tin, tungsten, iron; cement, construction materials; pharmaceuticals; fertiliser; oil and natural gas; garments; jade and gems
Main Exports: natural gas; wood products; pulses and beans; fish; rice; clothing; minerals, including jade and gems
Exports Partners: China 37.7%, Thailand 25.6%, India 7.7%, Japan 6.2% (2015)
Main Imports: Fabric; petroleum products; fertiliser; plastics; machinery; transport equipment; cement, construction materials; food products; edible oil
Imports Partners: China 42.2%, Thailand 18.5%, Singapore 11%, Japan 4.8% (2015)
Currency: Myanmar kyats (MMK)
Ethnic groups: Burman 68%, Shan 9%, Karen 7%, Rakhine 4%, Chinese 3%, Indian 2%, Mon 2%, other 5%
Religions: Buddhist 87.9%, Christian 6.2%, Muslim 4.3%, Animist 0.8%, Hindu 0.5%, other 0.2%, none 0.1%
Languages: Burmese (official)
Literacy Rate: 93.1%

1 All exchange rates as of March 2017
 

3. BUSINESS & INVESTMENT ENVIRONMENT:

Since Myanmar began opening up in 2011, it has enacted a series of reforms, some of which have created favourable conditions for investors. The Foreign Investment Law, enacted in 2012, vastly simplified the process for investment application and offers a number of tax breaks and incentives, and guarantees rights and protections for foreign business ventures. Likewise, the Myanmar Investment Commission (MIC) was restructured and its members include stakeholders from the government, the private sector and academia. The MIC approves new investment proposals and provides regular market updates. Many other laws relating to the business environment were enacted, including the Central Bank Law, the Myanmar Foreign Investment Law (to be amended by the recently enacted Myanmar Investment Law, which consolidates the Myanmar Citizens Investment Law and the Foreign Investment Law), the Microfinance Law, the Myanmar Securities Exchange Law and the Special Economic Zone Law. However, Myanmar’s legal framework is not fully operational yet: many laws are outdated and some are not even in place, such as e.g. the Intellectual Property Law.
Challenges to the business environment include an insufficient infrastructure, lack of educated work force, and the unclear and unpredictable administrative and regulatory environment. In addition, there are ethno-religious tensions in the border areas as well as still existing uncertainties with respect to further political development. Specifically, infrastructure remains a major obstacle for foreign investors: Some of the fundamental requirements, such as a steady and reliable electricity supply and good road infrastructure, are still not in place in the country. With frequent power cuts, due to system breakdown and an inefficient power supply, businesses end up using alternative sources of electricity, such as generators. Moreover, laws prioritising local businesses remain an obstacle: With the aim of protecting local businesses, foreign participation in some sectors is restricted. Despite a large working-age population, skilled labour is in short supply, which can give businesses a headache – particularly those who demand highly skilled professionals. To fill this gap, some foreign companies hire expatriates and repatriates who meet their expectations. Finally, bureaucracy slows down businesses: Procedures at government agencies are often held up by bureaucracy and centralisation. Most of the processes at government agencies are still manual and thus, take a longer time.

 

4. MARKET OPPORTUNITIES:

Myanmar offers market opportunities in nearly every sector, including infrastructure, transportation, telecommunications, tourism, hotels, agriculture, energy, healthcare, professional services, and franchising. Specifically, companies specialising in construction equipment, resource extraction, refining facilities, power generation, renewable energy, processed foods, auto parts, chemicals, computers, textiles, fertiliser, animal feed, and medical equipment will find export potential in Myanmar. More opportunities are likely to arise in Myanmar, primarily because of the continuing political and economic reforms, the suspended or relaxed Western sanctions and embargos, the development of special economic zones, and the liberalisation of the once closed communications, telecoms, energy and tourism sectors.

 

5. SOURCES:

Country Introduction & Key Economic Data:

The World Factbook: https://www.cia.gov/library/publications/the-world-factbook/geos/bm.html
Statistical information: http://unctadstat.unctad.org/CountryProfile/GeneralProfile/en-GB/104/index.html
Economist Intelligence Unit Country Reports: http://country.eiu.com/myanmar
Knoema “World Data Atlas”: https://knoema.com/atlas/Myanmar

Business Environment & Market Opportunities:

Burma Commercial Guide: https://www.export.gov/article?id=Burma-market-overview
EuroCham Myanmar Business Guide 2016: http://eurocham-myanmar.org/publications
Myanmar Investment Laws: http://www.dica.gov.mm/en/foreign-investment

International Rankings:

IFC/World Bank “Doing Business” Report 2017 – 170 / 191:
http://www.doingbusiness.org/~/media/wbg/doingbusiness/documents/profiles/country/mmr.pdf
Transparency International “Corruption Perception Index” – Ranked 113 / 176:
http://www.transparency.org/country/MMR

 

Until the opening of our own representative office in Myanmar, ASEAN Business Partners is managing its activities in Myanmar from its office in Bangkok, an hour flight away from the metropolis Yangon. ASEAN Business Partners has already established excellent contacts with all relevant organizations and government agencies in Myanmar, and is actively engaged in chamber of commerce activities, to make your market entry in Myanmar a success story.

 

Useful Links:

https://country.eiu.com/myanmar

https://www.cia.gov/library/publications/the-world-factbook/geos/bm.html

http://www.adb.org/publications/myanmar-fact-sheet

http://www.worldbank.org/en/country/myanmar

http://www.asidnet.org/web/

http://cpi.transparency.org/cpi2013/results/

http://www.weforum.org/reports/global-competitiveness-report-2013-2014

 

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