Gov­ern­ment re­veals 12-point eco­nomic plan

The gov­ern­ment’s long-awaited eco­nomic pol­icy is widely seen as a step in the right di­rec­tion, while stake­hold­ers hoping for a de­tailed time­line or struc­tured plan were left dis­ap­pointed.

The Myanmar Times - - Front Page - AYE THIDAR KYAW ayethi­dark­yaw@mm­ CLARE HAM­MOND c.ham­mond@mm­ HTIN LYNN AUNG htin­lyn­naung@mm­ – Ad­di­tional re­port­ing by Aung Shin, trans­la­tion by Khant Lin Oo and Thiri Min Htun

THE gov­ern­ment pre­sented its lon­gawaited eco­nomic pol­icy in Nay Pyi Taw on July 29, high­light­ing the im­por­tance of de­vel­op­ing a mar­ke­to­ri­ented sys­tem “in all sec­tors” and estab­lish­ing an eco­nomic frame­work in sup­port of na­tional rec­on­cil­i­a­tion.

Stake­hold­ers look­ing for a de­tailed time­line or struc­tured plan were left dis­ap­pointed. Some felt the three-page doc­u­ment was too vague to be use­ful, while oth­ers were more for­giv­ing, not­ing that the gov­ern­ment has been in power for just four months, and has not had time to write de­tailed pol­icy pa­pers.

On July 29, Daw Aung San Suu Kyi pre­sented the pol­icy to diplo­mats, busi­ness­peo­ple and donors. Most re­porters were told to wait out­side, but a 12-point sum­mary was passed to mem­bers of the me­dia af­ter the event. A longer English-lan­guage doc­u­ment seen by The Myan­mar Times elab­o­rates on some of the key points.

The pol­icy puts na­tional rec­on­cil­i­a­tion as the top pri­or­ity, based on a “just bal­anc­ing of sus­tain­able re­source mo­bil­i­sa­tion and al­lo­ca­tion across states and re­gions”.

The gov­ern­ment will en­sure that nat­u­ral re­source ex­trac­tion is trans­par­ent and sus­tain­able and will ex­tend the Ex­trac­tive In­dus­tries Trans­parency Ini­tia­tive re­mit to in­clude the min­ing in­dus­try, it says, and will also weigh up the costs and ben­e­fits of eco­nomic poli­cies for their impact across the en­tire coun­try.

Ear­lier this week the Min­istry of Nat­u­ral Re­sources and En­vi­ron­ment Con­ser­va­tion demon­strated its in­ten­tion to shake up the trou­bled min­ing in­dus­try, by an­nounc­ing that jade and gems min­ing per­mits will not be re­newed un­til new laws are in place.

In its sec­ond point, the gov­ern­ment says it plans to sup­port com­pe­ti­tion and a vi­brant pri­vate sec­tor. It aims to prac­tise a mar­ket-ori­ented sys­tem in ev­ery sec­tor, cut un­nec­es­sary red tape, di­lute the power of mo­nop­o­lies and ex­pand ac­cess to credit.

The third point de­vel­ops the Na­tional League for Democ­racy’s prom­ise in its eco­nomic man­i­festo to strengthen pub­lic fi­nan­cial man­age­ment and work on fis­cal pru­dence and macroe­co­nomic sta­bil­ity.

This in­cludes mak­ing pub­lic spend­ing more ef­fi­cient, im­prov­ing bud­get trans­parency and pri­vatis­ing “ap­pro­pri­ate” state-owned en­ter­prises, which are an enor­mous bur­den on the bud­get, though an open and trans­par­ent process.

The gov­ern­ment also plans to tackle smug­gling, or “fully ac­count for Myan­mar’s for­eign ex­change earn­ings”, es­pe­cially from the sale of nat­u­ral re­sources, stream­line the tax sys­tem to boost pub­lic rev­enues, and de­velop cap­i­tal and money mar­kets to help finance the grow­ing bud­get deficit, which is ex­pected to reach K3.76 tril­lion by the end of this fi­nan­cial year.

The fourth point in the am­bi­tious doc­u­ment refers to in­fras­truc­ture devel­op­ment, not­ing that the gov­ern­ment is pre­par­ing an in­fras­truc­ture pol­icy, which will fo­cus on pro­duc­ing and dis­tribut­ing power, build­ing and main­tain­ing ru­ral roads, and de­vel­op­ing bet­ter port fa­cil­i­ties.

Fifth, the gov­ern­ment will sup­port the agri­cul­ture and live­stock sec­tors to pro­mote in­clu­sive growth, en­hance food se­cu­rity, in­crease ex­ports, and boost liv­ing stan­dards. Farm­ers will be given full pro­duc­tion free­doms, while the state will sup­port high value-added crops and live­stock breed­ing.

Farm­ers will have more ac­cess to credit, land tenure will be strength­ened and pro­duc­tion chain sec­tors im­proved, it says.

Sixth, the gov­ern­ment says it will fo­cus on job cre­ation to re­duce do­mes­tic poverty and in­equal­ity and en­cour­age mi­grant work­ers and the dis­placed to re­turn from over­seas. It sees most jobs be­ing cre­ated in spe­cial eco­nomic zones, and by in­fras­truc­ture devel­op­ment projects, par­tic­u­larly in ru­ral areas.

In its sev­enth point the gov­ern­ment says it wel­comes for­eign di­rect in­vest­ment. It is pre­par­ing a more de­tailed pol­icy note on this, but in brief it will pro­mote re­spon­si­ble busi­ness by cre­at­ing a sta­ble en­vi­ron­ment where com­pa­nies feel se­cure to in­vest, and im­prov­ing prop­erty rights and the rule of law.

The eighth point ad­dresses hu­man cap­i­tal and com­mits to de­vel­op­ing a skilled work­force to fill jobs cre­ated in the man­u­fac­tur­ing and ser­vices sec­tors. To sup­port this goal, the state will im­prove health­care and aca­demic and vo­ca­tional ed­u­ca­tion, while en­forc­ing in­ter­na­tional stan­dards on labour rights.

The ninth point cov­ers mone­tary and fis­cal sta­bil­ity and the cre­ation of a fi­nan­cial sys­tem that can sus­tain­ably pro­vide cap­i­tal to busi­nesses, farm­ers and house­holds. The un­der­de­vel­oped fi­nan­cial sec­tor cur­rently ex­cludes large sec­tors of the econ­omy, but will soon be lib­er­alised to en­cour­age growth, the gov­ern­ment says. It will re­view lim­i­ta­tions on bank lend­ing, en­able mo­bile bank­ing, al­low for­eign in­sur­ance com­pa­nies into Myan­mar and aim to get a sov­er­eign credit rat­ing.

Tenth, the gov­ern­ment will re­form state-owned en­ter­prises, mak­ing them more ac­count­able and re­spon­sive to the pub­lic, and pri­vatis­ing them where nec­es­sary. They will be au­dited as a pre­req­ui­site for their re­form or trans­for­ma­tion.

In the 11th point the gov­ern­ment says it will help small and medium en­ter­prises by im­prov­ing the ease of do­ing busi­ness in Myan­mar, in­creas­ing ac­cess to fi­nan­cial ser­vices and de­vel­op­ing a more skilled work­force. Myan­mar was ranked 167 out of 189 coun­tries in the World Bank’s ease of do­ing busi­ness rank­ing last year.

Fi­nally, the gov­ern­ment says it will pro­mote in­clu­sive eco­nomic growth and devel­op­ment, “to en­able our coun­try to es­cape poverty and achieve the pros­per­ity our peo­ple de­serve”.

“Democ­racy, the rule of law, the pro­mo­tion of hu­man rights, are ends in them­selves, and need no eco­nomic or other jus­ti­fi­ca­tion,” it says.

A step in the right di­rec­tion

The pol­icy has been gen­er­ally well­re­ceived by busi­ness lead­ers, al­though some have been dis­ap­pointed by its brevity (see opin­ion right). U Maung Maung Lay, vice chair of the Union of Myan­mar Fed­er­a­tion of Cham­bers of Com­merce and In­dus­try, said it is a good first step.

“I see an elab­o­ra­tion of the Na­tional League for Democ­racy man­i­festo. It seems more will fol­low. Rules, reg­u­la­tions and laws have to be elab­o­rated and de­fined,” he wrote yes­ter­day in an email, while stress­ing the im­por­tance of sup­port from all sides.

“The stake­hold­ers are the most im­por­tant. We all should make the dreams come true. Each and ev­ery­one should con­trib­ute in order for Myan­mar to re­gain its past glory,” he said.

Su­nil Seth, the Myan­mar head of the multi-bil­lion-dol­lar Tata Group, one of In­dia’s largest com­pa­nies, said he is happy with the new pol­icy.

“While it sets the di­rec­tion go­ing for­ward at a broad level it cov­ers all im­por­tant sec­tors like power gen­er­a­tion, in­fras­truc­ture devel­op­ment, agri­cul­ture, min­ing, and small and medium en­ter­prises,” he said.

“It will cer­tainly trig­ger for­eign in­vest­ment and with this clar­ity on eco­nomic pol­icy, Tata Group will also con­sider op­por­tu­ni­ties in power gen­er­a­tion in­clud­ing re­new­ables, in­fras­truc­ture devel­op­ment, au­to­mo­biles and agri­cul­ture.”

U Kyaw Kyaw Hlaing, chair and CEO of Smart Group of Com­pa­nies and pres­i­dent of Myan­mar Oil and Gas Ser­vices So­ci­ety, agreed that the pol­icy is gen­er­ally good.

“How­ever, it cov­ers a lot of dif­fer­ent points, which raises the ques­tion of whether it can all be achieved or not,” he said, not­ing that three points should have been given more at­ten­tion – re­spon­si­ble busi­ness, ser­vices and the ex­trac­tion of nat­u­ral re­sources.

For U Soe Tun, deputy chair of theMyan­mar Rice Fed­er­a­tion, the wait is not yet over.

“All sec­tors are cov­ered by the pol­icy, but there are no pri­or­i­ties. It is too gen­eral, we can’t fo­cus on any­thing by look­ing at it,” he said. “So we just have to do one thing – wait and see.”

Photo: Aung Khant

A po­lice of­fi­cer passes in front of Myan­mar In­ter­na­tional Con­ven­tion Cen­tre 2 in Nay Pyi Taw, where the Na­tional League for Democ­racy held a highly an­tic­i­pated eco­nomic pol­icy an­nounce­ment on July 29.

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