Myanmar business leader woos investors
By AYAKO MIE
Staff writer
At a symposium in Tokyo Saturday, a Myanmar
business leader encouraged Japanese companies to keep pace with their
Chinese and South Korean rivals who are investing in the newly
democratizing country or risk missing out on prime opportunities before
the 2015 elections.
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U Thein Oo, chairman of the Myanmar Computer
Federation, said Myanmar, which has a population of more than 60
million, sees Japan as a great business partner but that its companies'
feasibility studies take too long compared with South Korean or Chinese
firms, which are already receiving government help to tap the new
market.
Thein Oo said the next three years will offer the best opportunities for investment.
The Myanmar government, which will be tested
in the 2015 elections, is trying to show tangible evidence of social and
economic reform by inviting foreign investment.
"The window is open, but not forever," he
said. "Japan might not be left with any economic opportunities if it
does not act immediately."
Thein Oo also sits on a number of government committees, including one tasked with reviewing the constitution.
Japan's investment in Myanmar has remained
relatively low at $221 million since 1988, while China is spending $9.6
billion to build a dam and telecommunications system. But since U.S.
Secretary of State Hillary Rodham Clinton visited Myanmar last December,
Japan has been surveying its options for re-engaging there.
Prime Minister Yoshihiko Noda is expected to
announce the resumption of yen loans to the once-isolated nation for the
first time in 25 years when Myanmar President Thein Sein visits Japan
for the upcoming Japan-Mekong summit later this week. However, the two
leaders are scheduled to talk about Myanmar's unpaid $5 billion debt
first.
Japanese companies have been flocking to the
emerging economy, which they believe can serve as a gateway to South
Asia and become a source of cheap labor.
The latest companies to add their names to
the list are Tokyo Stock Exchange Group Inc. and Daiwa Securities Group
Inc., which struck a deal with Myanmar's central bank to set up a stock
exchange.
A stock exchange is bound to attract business
to Myanmar, but it will take two years to build the system to global
standards. Currently, only two public companies are listed and traded in
Myanmar.
The Myanmar government is also reforming
banking and foreign investment laws to improve transparency in an effort
to get the U.S. and European countries to lift economic sanctions. For
example, new legislation would lift a ban on private citizens renting
land to foreign businesses.
It is also offering to extend its tax exemption period to five years from three if they reinvest their profits in Myanmar.
However, analysts warn that the revision of
the investment law alone will not ensure favorable business conditions
because the government is notorious for taking ages to process business
applications.
"The question is how they are going to
implement that. They need to have better governance as well," said
Toshihiro Kudo, a Myanmar specialist at IDE-JETRO, a research
institution affiliated with the Japan External Trade Organization.
Kudo also said political uncertainty still
hangs over Myanmar. For example, the country might face severe setbacks
if National League for Democracy leader Aung San Suu Kyi proposes
drastic changes, such as by pushing for civilian control or the
indictment of military officers.
The league swept by-elections held earlier this month, and Suu Kyi won a seat in Parliament.
