DICA pub­lishes pri­vate­sec­tor ac­tion plan

The Myanmar Times - - Front Page - STEVE GIL­MORE s.gil­more@mm­times.com

The com­pa­nies reg­u­la­tor pub­lished a re­port last week which sug­gests the gov­ern­ment should cre­ate a spe­cial coun­cil and a task force ded­i­cated to build­ing a stronger Myan­mar pri­vate sec­tor.

THE Direc­torate of In­vest­ment and Com­pany Ad­min­is­tra­tion pub­lished a re­port last week, writ­ten with help from the Asian Devel­op­ment Bank, which sug­gests the gov­ern­ment should cre­ate a spe­cial coun­cil and a task force – with the in­ter­ests of busi­ness­peo­ple clearly rep­re­sented in both – ded­i­cated to build­ing a stronger Myan­mar pri­vate sec­tor.

The Pri­vate Sec­tor Devel­op­ment Framework and Ac­tion Plan, pub­lished on the DICA web­site, high­lights the need for high-level and cross­gov­ern­ment sup­port in or­der to boost pri­vate en­ter­prise, held back by years of state-cen­tric poli­cies and eco­nomic iso­la­tion.

On the gov­ern­ment side, the ac­tion plan rec­om­mends a pri­vate sec­tor devel­op­ment (PSD) coun­cil re­spon­si­ble for set­ting a re­form agenda and mon­i­tor­ing the cross-gov­ern­ment ap­proach. The coun­cil would have to be able to con­sult with the pri­vate sec­tor, and must in­clude rep­re­sen­ta­tives of women in busi­ness as well as men.

Pri­vate sec­tor rep­re­sen­ta­tives, again in­clud­ing busi­ness­women, would also have to be cred­i­bly rep­re­sented on a task force that would help co­or­di­nate PSD poli­cies, and mea­sure tar­gets, out­comes and data.

A gov­ern­ment Na­tional Strate­gic Plan for the Ad­vance­ment of Women, ap­proved in 2013, had sev­eral ob­jec­tives rel­e­vant to the PSD ac­tion plan, the re­port said. These ob­jec­tives in­cluded cre­at­ing mech­a­nisms to en­sure equal ac­cess to em­ploy­ment op­por­tu­ni­ties, such as quota sys­tems for women in man­age­ment and im­proved hir­ing process, ac­cord­ing to the ac­tion plan.

The PSD ac­tion plan is also a prod­uct of the pre­vi­ous gov­ern­ment, which asked the Asian Devel­op­ment Bank for help in mid-2015.

The Mekong Busi­ness Ini­tia­tive (MBI) – an ADB re­gional tech­ni­cal as­sis­tance project – pre­pared the plan with guid­ance from the Min­istry of Com­merce, the Myan­mar In­vest­ment Com­mis­sion, and the Union of Myan­mar Fed­er­a­tion of Cham­bers of Com­merce and In­dus­try.

The MBI works on pri­vate sec­tor devel­op­ment across Laos, Viet­nam and Myan­mar, with a spe­cific fo­cus on im­prov­ing op­por­tu­ni­ties for fe­male en­trepreneurs.

Con­sultation took place from June 2015 to March of this year, and although the plan was com­mis­sioned un­der a Union Sol­i­dar­ity and Devel­op­ment Party-led gov­ern­ment, it was pre­sented to the in­com­ing Na­tional League for Democ­racy ad­min­is­tra­tion.

Since then the ADB has been work­ing with DICA and the Min­istry of Com­merce to raise aware­ness of the re­port and its rec­om­men­da­tions, Peter Brim­ble, the ADB’s prin­ci­pal coun­try spe­cial­ist for Myan­mar, told The Myan­mar Times.

Mech­a­nisms al­low­ing gov­ern­ment of­fi­cials and pri­vate sec­tor busi­ness­peo­ple to co­or­di­nate on the PSD are cru­cial – reg­u­lar con­sul­ta­tions be­tween rep­re­sen­ta­tives of those two groups and devel­op­ment part­ners are a fun­da­men­tal part of the ac­tion plan.

The plan points to Malaysia, where col­lab­o­ra­tion be­tween the prime min­is­ter’s of­fice, pri­vate sec­tor chief ex­ec­u­tives and the heads of busi­ness as­so­ci­a­tions, has been key in boost­ing pri­vate sec­tor devel­op­ment.

Malaysia also adopted monthly high-level work­ing group meet­ings, a sep­a­rate public-pri­vate task force, and ded­i­cated gov­ern­ment “de­liv­ery units” charged with im­ple­ment­ing re­forms.

Mean­while, many of the ac­tual re­forms the framework high­lights as nec­es­sary to al­low Myan­mar’s pri­vate sec­tor to thrive are those al­ready iden­ti­fied by devel­op­ment agen­cies – in­clud­ing the ADB – and the gov­ern­ment.

The framework’s first re­form “pil­lar” is im­prov­ing the le­gal and reg­u­la­tory en­vi­ron­ment. This in­volves pass­ing and up­dat­ing leg­is­la­tion – such as the new in­vest­ment and com­pa­nies laws al­ready be­ing pre­pared – that help pro­mote pri­vate sec­tor ac­tiv­ity.

But ac­tual im­ple­men­ta­tion and en­force­ment of new and ex­ist­ing laws is cru­cial – in con­sul­ta­tions pri­vate sec­tor rep­re­sen­ta­tives iden­ti­fied this as one of the main ob­sta­cles to progress.

‘The coun­cil must in­clude ... women in busi­ness.’ Pri­vate Sec­tor Devel­op­ment Framework and Ac­tion Plan

Ac­cess to fi­nance is the sec­ond pil­lar, where the rec­om­men­da­tions in­clude broad­en­ing the cri­te­ria on el­i­gi­ble col­lat­eral, a spe­cific fo­cus on women’s ac­cess to fi­nance and con­trol and own­er­ship over as­sets, and the devel­op­ment of a mod­ern credit bureau that can help busi­nesses and con­sumers cre­ate a credit his­tory.

There has been wel­come progress on fi­nan­cial re­form in re­cent years – the Cen­tral Bank has in­tro­duced mo­bile money reg­u­la­tions, and is in the process of set­ting up a credit bureau with help from com­mer­cial bank of­fi­cials.

Pro­mot­ing trade and in­vest­ment is a third key fo­cus of the re­port. Cus­toms and trade op­er­a­tions are weak and slow, and im­port­ing many types of goods re­quires a li­cence. Set­ting up a busi­ness is time-con­sum­ing and dif­fi­cult, and com­pany reg­is­tra­tion is valid for only five years.

The gov­ern­ment is hop­ing to have an au­to­mated cus­toms ser­vice run­ning across Yan­gon later this year, and is in the process of re­mov­ing li­cence re­quire­ments on a va­ri­ety of goods.

While Myan­mar’s con­tin­ued tran­si­tion away from a state-owned econ­omy will also help the pri­vate sec­tor, the framework high­lights the need for care­ful plan­ning as state-owned en­ter­prises (SOEs) are re­formed.

Phas­ing out se­lected SOE mo­nop­o­lies will help cre­ate com­pet­i­tive mar­kets for ser­vices, and well-or­gan­ised and reg­u­lated public-pri­vate part­ner­ships will be a key part of SOE re­form, ac­cord­ing to the ac­tion plan.

Min­istry of Plan­ning and Fi­nance of­fi­cials told The Myan­mar Times ear­lier this year that the gov­ern­ment had started an SOE re­view to de­ter­mine which en­ter­prises could be privi­tised or cor­po­ra­tised.

The PSD framework also notes that the pri­vate sec­tor will need hu­man cap­i­tal to grow, which in turn will re­quire more spend­ing on ed­u­ca­tion and care­fully con­structed ed­u­ca­tion sec­tor laws and reg­u­la­tions.

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