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Country Basic Facts

 

THE MYANMAR ECONOMY

One of the major tasks it set forth for itself immediately upon its inception on 18-9-88 by the State Law and Order Restoration Council was to strive its utmost to ease the living conditions of the people and help the private and the co-operative sectors to do so as much as possible.

Then the State Law and Order Restoration Council set out to transform the former socialist economy into a market-oriented economy.

The first measure it took was to remove all the then existing proclamations, orders and notifications that had barred the private sector from pursuit of businesses and services in the past and establish with the Ministry of Trade on 29-10-88 an import-export business registration office and a companies registration office, so as to enable private sector and co-operatives to pursue commissioned agencies, import and export businesses and legally set up business enterprises and organizations.

In this way private businesses became alive again in the country.

Registered business organizations in Myanmar as of 30-6-97 were as follows:

Exporters / Importers

Foreign business representatives

Partnerships

Myanmar companies

Foreign companies / branches

Joint venture enterprises

Chambers of commerce and industry

7,799

2,015

1,181

9,341

1,042

107

34

As it strove to improve the economy of the country, the government took measures to bring out the fullest participation of the private sector and seek investments from abroad to mutual benefit. At that time companies and individual entrepreneurs from abroad too were making inquiries as to how they could do businesses in Myanmar to mutual benefit.

So, in order to handle matters concerning foreign investment by means of legislation, the State Law and Order Restoration Council enacted the Foreign Investment Law on 30-11-88.

The law prescribes that foreign investment shall be made in accord with the following basic principles:-

(a) promotion and expansion of exports;
(b) exploitation of natural resources which require heavy investment;
(c ) acquisition of high technology;
(d) supporting and assisting production and services involving large capital;
(e) opening up of more employment opportunities;
(f) development of works which would save energy consumption;
(g) regional development.

Foreign investment may be made in any of the following forms:-

(a) investment made by a foreigner to the extent of one hundred per cent foreign capital;
(b) joint-venture made between a foreigner and a citizen.

In this way foreign investments came into Myanmar.

Permitted foreign investment in Myanmar by country as of 30-6-97

Sr

Country

Nos.

Approved Amount

US$ million

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

11.

12.

13.

14.

15.

16.

17.

18.

19.

20.

21.

22.

UK

Singapore

Thailand

USA

Malaysia

France

The Netherlands

Indonesia

Japan

Republic of Korea

Austria

Hong Kong

Australia

Canada

China

Germany

Denmark

Philippines

Bangladesh

Macau

Israel

Sri Lanka

29

55

41

16

23

3

5

4

15

14

2

17

11

9

8

1

1

1

2

1

1

1

1318.81

1215.15

1132.80

582.07

524.17

470.37

237.84

210.95

195.89

72.62

72.50

64.44

40.06

32.53

28.76

15.00

13.37

6.67

2.96

2.40

2.40

1.00

TOTAL

260

6242.76

Permitted foreign investment in Myanmar by sector as of 30-6-97

Sr Sector Nos. Approved Amount

US$ million

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

11.

Oil and gas

Manufacturing

Real Estate

Hotel and Tourism

Mining

Transport and Communication

Livestock and Fisheries

Industrial Estate

Construction

Other Services

Agriculture

38

88

14

39

42

12

17

3

1

4

2

2192.82

1140.13

874.95

762.56

498.03

275.09

269.54

193.11

17.27

10.58

8.68

TOTAL

260

6242.76

After that, the State Law and Order Restoration Council enacted the State-owned Economic Enterprises Law on 31-3-89.

The law prescribes as follows:-

The Government has the sole right to carry out the following economic enterprises as State-owned economic enterprises:

(a) extraction of teak and sale of the same in the country and abroad;
(b) cultivation and conservation of forest plantation with the exception of village-owned firewood plantations cultivated by the villagers for their personal use;
(c ) exploration, extraction and sale of petroleum and natural gas and production of products of the same;
(d) exploration and extraction of pearls, jade and precious stones and export of the same;
(e) breeding and production of fish and prawns in fisheries which have been reserved for research by the Government;
(f) Postal and Telecommunications Service;
(g) Air Transport Service and Railway Transport Service;
(h) Banking Service and Insurance Service;
(i) Broadcasting Service and Television Service;
(j) exploration and extraction of metals and export of the same;
(k) Electricity Generating Services other than those permitted by law to private and co-operative electricity generating services;
(l) manufacture of products relating to security and defence which the Government has, from time to time, prescribed by notification.

Myanmar's overall restructuring and development policy is based on three main components, namely, adoption of the market economy for allocation of resources, encouragement of private investment and entrepreneural activities and opening of the economy for foreign trade and investment.

The first step in price and market reforms was taken with dissolution of price control in agriculture sector, and the next step was taken with the dissolution of price controls on products of the State and co-operative sectors.

In one of the measures taken for evolvement of the market economy, the State economic enterprises were granted operational autonomy in procurement of inputs, production as well as pricing. In procurement, procedures were relaxed so that they could raise the price of inputs to be competitive with the private sector. With regard to production they were allowed to engage in such schemes as buy-back arrangements, counter-trade, consignment basis, etc.

Other notable reforms involved leasing out factories to private entrepreneurs, entering into joint ventures with local and foreign investors. Moreover, a privatisation scheme was launched on an extensive scale.

In the process of transforming the economy into a market-oriented one, measures were also taken to develop the financial system and improve efficiency of financial activities.

The State Law and Order Restoration Council thus enacted the Central Bank of Myanmar Law on 29-6-90 and the Financial Institutions of Myanmar Law on 4-7-90.

The Monetary policy was streamlined and banking services were extended. Myanmar citizens were permitted to set up banks and foreign banks were permitted to open representative offices in Myanmar.

To consolidate and promote large, medium and small-scale private industries, the State Law and Order Restoration Council enacted the Private Industrial Enterprise Law on 26-11-90.

To promote inducement of domestic investment to bring about increase in commodity production and exports by the private sector, the State Law and Order Restoration Council enacted the Myanmar Citizens Investment Law on 31-3-94.

Investment by Myanmar Citizens as of 30-6-97

Sr Sector Nos Approved amount

US $ million

1.

2.

3.

4.

5.

6.

7.

Construction

Real Estate Development

Manufacturing

Transport

Hotel and Tourism

Others

Livestock and Fisheries

2

5

44

4

10

5

5

2262.00

2161.20

2066.56

2034.93

759.10

503.00

250.27

TOTAL

75

10037.06

Now Myanmar has become a full member of the Association of South-East Asian Nations and there have come to be greater possibilities for more extensive business links with other member countries and there may also come to be greater investments coming into Myanmar with its very favourable conditions.

With more extensive business activities within the region involving Myanmar, the forces of the market-oriented economy will come to play a stronger role in the domestic economy and as much as Myanmar business people can come abreast and work well together to mutual benefit with those in the more developed member countries of ASEAN, the market-oriented economy in Myanmar will further develop well and bring greater benefits to the business world and the people in general of the Union of Myanmar.

 

 

 


 

 
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