CLOSER LOOK

Sup­port­ing Myan­mar’s bud­ding fi­nan­cial sec­tor

Mizzima Business Weekly - - CONTENTS -

The launch of the UK-Myan­mar Fi­nan­cial Ser­vices Task­force fol­lowed meet­ings in­volv­ing Pres­i­dent U Thein Sein, Fi­nance Min­is­ter U Win Sein and Bri­tain’s then Trade and In­vest­ment Sec­re­tary, Lord Green, in London in July 2013.

The vi­sion of the task­force, com­pris­ing the Bri­tish For­eign and Com­mon­wealth Of­fice and three pri­vate com­pa­nies, is to support the de­vel­op­ment of Myan­mar’s bud­ding fi­nan­cial sec­tor.

“We want to pro­vide an over­all vi­sion of what a fully func­tion­ing fi­nan­cial sec­tor could de­liver for the econ­omy and iden­tify ar­eas that should be pri­ori­tised to en­sure faster adop­tion of fi­nan­cial ser­vices, in­clud­ing the nec­es­sary tech­nol­ogy and in­fra­struc­ture re­quired,” said Bri­tish am­bas­sador An­drew Pa­trick.

“Also we want to as­sess op­por­tu­ni­ties and strate­gies to lever­age new tech­nolo­gies in ar­eas such as on­line chan­nels and mo­bile bank­ing,” said Mr Pa­trick.

The task­force will also be in­volved in pro­vid­ing train­ing for the pri­vate and pub­lic sec­tors as well as pro­vid­ing ad­vice to the Min­is­ter of Fi­nance, At­tor­ney Gen­eral and the gov­er­nor of the Cen­tral Bank of Myan­mar.

As part of its train­ing role, the task­force is or­gan­is­ing a cor­po­rate gov­er­nance work­shop at the head­quar­ters of the Union of Myan­mar Fed­er­a­tion of Cham­bers of Com­merce and In­dus­try from Novem­ber 18 to 20. An out­come of the work­shop will be an ac­tion plan.

The chal­lenges to cor­po­rate gov­er­nance in Myan­mar in­clude the way company meet­ings have been con­ducted, said Ka­tryn Thorn­ton, a se­nior as­so­ciate with Allen & Overy, one of three com­pa­nies on the task­force.

“From a le­gal per­spec­tive I think that a ma­jor chal­lenge is that for many years a lot of com­pa­nies have not re­ally fol­lowed the strict pro­ce­dures in the law in relation to hold­ing direc­tors and share­hold­ers meet­ings, or even main­tain­ing a reg­is­ter of share­hold­ers,” said Ms Thorn­ton.

This had re­sulted in the dis­tinc­tion be­tween man­age­ment and share­hold­ers be­ing blurred, she said.

“Good cor­po­rate gov­er­nance is about be­ing more trans­par­ent and open; this def­i­nitely is an area to work on as the coun­try opens up,” said Ms Thorn­ton.

Pru­den­tial is another part­ner in the task­force and its chief coun­try rep­re­sen­ta­tive, Allen Thai, said there were cor­po­rate gov­er­nance is­sues in Myan­mar aris­ing from most big busi­nesses be­ing pri­vately owned, with decision-mak­ing and strat­egy-set­ting of­ten be­ing top down.

“In gen­eral the con­cept of gov­er­nance is lit­tle known by many com­pa­nies,” said Mr Thai. “In the in­surance sec­tor all the com­pa­nies, ex­cept for Myanma In­surance, are newly set up. It will take time for them to build a ro­bust gov­er­nance struc­ture, in­clud­ing suc­ces­sion-plan­ning, con­flict­ing in­ter­ests and risk man­age­ment,” he said.

The third cor­po­rate part­ner in the task­force is Stan­dard Char­tered Bank, whose chief coun­try rep­re­sen­ta­tive, Tina Sing­hasacha, said the gov­ern­ment had in­tro­duced a roadmap to mod­ernise the fi­nan­cial sec­tor and ex­pand ac­cess to fi­nance, in­clud­ing a fur­ther open­ing of the bank­ing sec­tor.

Ms Sing­hasacha said there was also a move to de­velop the cap­i­tal mar­ket, with the launch of a stock ex­change ex­pected in 2015.

“AS work con­tin­ues re­forms must also be com­ple­mented by ef­forts to es­tab­lish sound cor­po­rate gov­er­nance prac­tices aligned with in­ter­na­tional stan­dards,” said Ms Sing­hasacha.

“An ef­fec­tive cor­po­rate gov­er­nance sys­tem is es­sen­tial, both within in­di­vid­ual com­pa­nies and across the econ­omy as a whole, as in­vestors need the as­sur­ance that cap­i­tal mar­kets will func­tion in a frame­work of trans­parency and ac­count­abil­ity,” she said.

“As you know, this coun­try is at a very early stage in its fi­nan­cial sec­tor’s de­vel­op­ment and the task­force looks for­ward to work­ing with the lo­cal business com­mu­nity on this im­por­tant is­sue.”

Asked if the task­force process was in­tended to re­sult in in­ten­si­fied ac­tiv­i­ties in Myan­mar of the three com­pa­nies, Mr Pa­trick said they had each es­tab­lished a pres­ence in the coun­try at least two years ago and had been pro­vid­ing pro bono support to the gov­ern­ment and the pri­vate sec­tor.

“Of course, all three part­ners see com­mer­cial op­por­tu­ni­ties here but I think their work so far ex­em­pli­fies a long-term com­mit­ment to en­sure that the do­mes­tic sec­tor pros­pers,” said Mr Pa­trick. [Marnix Krouwel]

The happy bunch of the Fi­nan­cial Se­vices Task­force. Photo: Hong Sar

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