Myanmar, also known as Burma, is located in Southeast Asia and borders the Indian Ocean. Historically, agriculture has accounted for a significant portion of GDP (up to 38%) and employed up to 60% of the country’s workforce. Recently, in addition to agriculture exports, an increase in demand for locally made garments has boosted the economy, which has been important for economic health, since adverse weather including drought, flood, and sea-level rise in 2016 and 2017 negatively impacted returns in the agriculture sector. Economic reform, while slow to be implemented, is improving the investment in small business for the Southeast Asian country, described by some as “the last frontier”. In 2016, the Government of Myanmar passed the Myanmar Investment Law to incentivize both foreign and domestic investment in the country. In 2018, Myanmar ranked on par with India and just below the regional average on the scale of “ease of starting a business in the country.” However, Myanmar still has some improvements to make before it can make its way into the upper half of the World Bank’s Ease of Doing Business Ranking, where it currently sits at 171st. A key challenge weighing down Myanmar’s score is the time and cost associated with starting a business. The Myanmar Investment Law directly addresses this, having been developed with input from international experts and lawyers; its intent is to simplify the rules and regulations for making investments in the country. In 2016, the United States also lifted the sanctions it had placed on Myanmar in 1997, in the hopes of continued economic development in the country.
But in 2017, the Directorate of Investment and Company Administration (DICA) approved US$5.6 billion worth of new foreign direct investments (FDI), compared with US$7.8 billion in 2016 according to a recent Asia Times article. Despite this dip, the overall forecast for Myanmar is positive. The Companies Law, effective since August 2018, was approved to remove barriers and restrictions for foreigners to do businesses in Myanmar. The legislative reform has liberalized many sectors and allows domestic businesses to grow by seeking foreign capital and expertise via joint-ventures. It allows foreign entities to take up to a 35-percent stake in domestic companies and opens up the Yangon Stock Exchange to non-Myanmar customers. The company registration process has also recently been digitized with a 50% reduction in the registration fee.
Also, the Central Bank of Myanmar (CBM) issued a license to Myanmar Credit Bureau Limited in 2018, allowing it to establish a credit bureau in the country, which will help increase access to finance for borrowers and improve risk assessment procedures. Ultimately, it will enable many entrepreneurs and small and medium enterprises (SMEs) to qualify for loans.
In addition to economic improvements, Myanmar’s government is in the process of finalizing its national Sustainable Development Plan, which some at the World Bank Group in Myanmar are hoping will address the slow implementation of economic reform and make progress towards inclusive and sustained growth.