MIC mulls guide­lines to by­pass min­istry ap­proval

The Myanmar Times - - Front Page - SU PHYO WIN su­phy­owin@mm­times.com

The Myan­mar In­vest­ment Com­mis­sion is hop­ing clear guide­lines will re­move the need for for­eign in­vestors to seek line min­istry ap­proval for many projects.

THE Myan­mar In­vest­ment Com­mis­sion (MIC) is work­ing on guide­lines that would al­low for­eign in­vestors to avoid the time-con­sum­ing process of ask­ing govern­ment min­istries for per­mis­sion un­der the new Myan­mar In­vest­ment Law.

Re­ceiv­ing a green light from line min­istries is al­ready a “big bar­rier” for in­vestors in Myan­mar, whereas deal­ing di­rectly with MIC takes much less time, said U Aung Naing Oo, di­rec­tor gen­eral of the Di­rec­torate for In­vest­ment and Com­pany Ad­min­is­tra­tion.

U Aung Naing Oo was speak­ing on the side­lines of a Euro­pean Cham­ber of Com­merce event last week to launch a new guide to do­ing busi­ness in Myan­mar.

He said that the MIC is in con­sul­ta­tion with dif­fer­ent min­istries to draw up clear guide­lines for in­ter­na­tional in­vestors that will avoid them hav­ing to ask line min­istries for per­mis­sion. The guide­lines will spec­ify which busi­ness ar­eas are off-lim­its, re­quire joint ven­tures or are open to full for­eign in­vest­ment, he said.

The long-awaited in­vest­ment law passed both houses of par­lia­ment in Oc­to­ber, and will come into force next year. In an ef­fort to stream­line for­eign in­vest­ment the law cre­ates a sim­pli­fied ver­sion of the MIC per­mit called an ap­proval order, which is avail­able for smaller non-strate­gic projects.

But according to the law, in­vest­ments need­ing only an ap­proval order will re­quire per­mis­sion or a li­cence from the rel­e­vant govern­ment agency.

This could make it harder for the MIC to “play its role as fa­cil­i­ta­tor and pro­moter of for­eign in­vest­ment if an in­vestor can­not even get to the MIC with­out first se­cur­ing line min­istry ap­proval”, said law firm VDB Loi.

If the MIC’s pro­posed guide­lines are put in place, how­ever, there will be no such re­quire­ment, said U Aung Naing Oo.

“Ev­ery [in­vest­ment area] will be put in a list, so that once the in­vest­ment pro­posal reaches the MIC of­fice the com­mis­sion can look at the list and de­cide,” he said. “We won’t [have to] seek con­sent or com­ment from the line min­istries, which is a big prob­lem for in­vestors in Myan­mar.”

U Wai Phyo, vice pres­i­dent of the Union of Myan­mar Fed­er­a­tion of Chambers of Com­merce and In­dus­try, said that re­mov­ing the need for con­sent or com­ment from line min­istries would save time and make things more ef­fi­cient.

“In the old in­vest­ment law there were busi­nesses that can only be per­mit­ted by line min­istries, so we need to wait and see what will be changed in the new law as the de­tailed rules have not been re­leased,” he said. “Though it might save time [to re­move line min­istry ap­proval] we need to have some checks and bal­ances. Be­ing fast isn’t al­ways good.”

Work is un­der way on draft­ing de­tailed rules and reg­u­la­tions to ac­com­pany the new law, which will be com­pleted by the end of Jan­uary, said U Aung Naing Oo. There are likely to re­main some sec­tors where govern­ment ap­proval is nec­es­sary, he added.

“Some cer­tain busi­nesses like min­ing or oil and gas may still need line min­istry ap­proval [un­der the pro­posed guide­lines],” he said. “But reg­u­lar busi­nesses would not. How­ever, this has not been de­cided yet.”

Dur­ing a con­sul­ta­tion with govern­ment min­istries in Nay Pyi Taw last week, there was broad agree­ment to lib­er­alise some of the ex­ist­ing re­stric­tions min­istries have put on for­eign in­vest­ment in their re­spec­tive sec­tors, U Aung Naing Oo said.

“We had a very good dis­cus­sion with the Min­istry of Com­merce,” he said. “We asked them to lib­er­alise some of their re­stric­tions and we all agreed.”

U Ye Min Oo, a mem­ber of the Na­tional League for Democ­racy’s Eco­nomic Com­mit­tee, said that in some cases govern­ment min­istries would be bet­ter placed to com­ment on for­eign in­vest­ment. But a faster per­mit and ap­proval sys­tem would be pos­i­tive, he said.

An­other im­por­tant change to the ap­proval sys­tem is that for smaller in­vest­ments – un­der US$5 mil­lion – state and re­gional gov­ern­ments will be able to give the green light, said U Aung Naing Oo. Any­thing larger would fall un­der the MIC’s re­mit.

U Ye Min Oo said that the de­cen­tral­i­sa­tion was a useful step, which gave lo­cal au­thor­i­ties with greater knowl­edge of lo­cal con­di­tions more power in di­rect­ing in­vest­ment.

U Aung Naing Oo, how­ever, is con­cerned about the de­cen­tral­i­sa­tion of de­ci­sion-mak­ing to states and re­gions will work in prac­tice.

“De­cen­tral­i­sa­tion is there to stream­line pro­ce­dures for the in­vestors, but I am not sure whether the state and re­gional gov­ern­ments are ready or have suf­fi­cient ca­pac­ity to im­ple­ment the new law,” he said. “That could cre­ate prob­lems for in­vestors, so I ad­vised my su­pe­ri­ors that we must have a stan­dard op­er­at­ing pro­ce­dure for all states and re­gions so that they can eas­ily fol­low the guide­lines.”

This op­er­at­ing pro­ce­dure is be­ing drafted along­side the rules and reg­u­la­tions that will ac­com­pany the new law, he added. But there are still likely to be chal­lenges and dif­fi­cul­ties given the pro­ce­dures are new, he added.

“If you look at the last 30 years the MIC used to want to screen ev­ery­thing,” he said. “This is a 180 de­gree turn, so the de­cen­tral­i­sa­tion and lib­er­al­i­sa­tion is go­ing to have some im­pact on the MIC.”

‘I am not sure whether the state and re­gional gov­ern­ments are ready.’

U Aung Naing Oo DICA di­rec­tor gen­eral

Photo: Kaung Htet

The au­thor­i­ties are con­sid­er­ing pro­mot­ing for­eign in­vest­ment in health­care.

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