Prime Minister Lee Hsien Loong had announced during his visit to Myanmar in June that citizens from both sides will not need visas to enter each other’s country for visits of up to 30 days. Currently, Singaporeans have to apply and wait for a visa, which costs at least S$35, depending on the purpose of the visit.
ANZ Research economist Ng Weiwen said the new visa rules will allow Singapore businesses to tap on emerging opportunities in Myanmar, particularly the rise of the middle-class. “This is where Singapore businesses could come in to complement this new consumer space, as well as (provide) urban solutions, as Myanmar develops in the coming years,” he added.
The visa-free initiative comes as the Myanmar government opens up the country to foreign investors.
A recent research report by OCBC economist Terence Wu noted that the manufacturing sector is receiving a greater share of foreign investments. As of September, total investment into the manufacturing sector made up 53.1 per cent of all investment since the new government took over, totalling US$686.9 million (S$981.8 million). This is significantly higher than the 14.1 per cent of all investment in FY2015/2016 under the previous government, he said.
Mr Wu added that the new Myanmar investment law, which is expected to come into force in April next year, could help provide policy clarity for investors. Changes in incentives in the areas of income tax exemptions and land use may serve to redirect investment flows.
“The new Myanmar investment law has been passed by the Myanmar parliament and the by-laws are being formulated,” he said. “This new law, and the policy clarity that may come with it, is more likely to bring a material change to Singaporean businesses looking to be more involved in Myanmar.”
Describing Myanmar as an “uncut gem”, Mr Ng said getting the right policy mix is critical for the country’s economic development. “It’s the last frontier economy within ASEAN. So to me, Myanmar was what Singapore was prior to independence. It has a huge potential to be the jewel in Asia; probably it will take the next 50 years or so if it gets its policy mix right.”
INFRASTRUCTURE DEFICIT, LACK OF POLICY CLARITY COULD BE OBSTACLES
Despite the opportunities for growth, observers have suggested that it may not be a game-changer for Singapore businesses going there due to issues such as an infrastructure deficit, as well as the lack of policy clarity in Myanmar, which continue to be obstacles for investors.
Acknowledging these challenges, the Singapore Chinese Chamber of Commerce and Industry’s (SCCCI) president, Thomas Chua, said: “We are worried about the transparency of the government, especially when we are applying for a government grant. It may not be as straightforward. But it also means that if you really want to invest or do business in Myanmar, the first thing we need is to find a reliable local partner.”
SCCCI, however, is keen to tap on Myanmar’s potential as it recently led a 36-member delegation to visit Yangon and Mandalay to engage and strengthen the network with the business community there.
For instance, the delegates met with the Chief Minister of Yangon Phyoe Min Thein and visited the Republic of the Union of Myanmar Federation of Chambers of Commerce and Industry, Thilawa Special Economic Zone and Mandalay Myotha Industrial Park.
One of the delegates was Ms Teresa Chan, executive director at cold-chain logistics company ITC, which is looking to open an office in Myanmar. “The networking was excellent – we got to meet a lot of people and also made some very good contacts,” she said. “From what I hear, logistics is one of the big things in Myanmar now, so we are very excited that we are going to step into business there in the country.”
For Ms Chan, whose company has already been working with Myanmar companies for 10 years, the key to doing business there is to have “patience, a lot of patience”.
Mr Robert Chua, Singapore’s ambassador to Myanmar, added that he is upbeat about business opportunities in Myanmar. “For many investors, resource-rich Myanmar is seen as the latest frontier in the region,” he said. “With a young and diligent work force under 30 years old, largely untapped capacity and projected annual GDP growth of about 7 per cent for the next three years, the opportunities are bountiful.
“As Myanmar strives to align itself to the benchmarks set for the ASEAN Economic Community and efforts are being by the new government to improve the investment climate by updating legislations and procedures, like the new Investment Law, the economic prospects appear promising,” he said.
Source: Channel News Asia
