Our leaders should ask for more financial support: Dr Thaung Han

Dr, Thaung Han told The Myanmar Times in an interview that Myanmar’s leaders should be bolder in asking for loans and financial assistance from international financial institutions.

Dr Thaung Han is an adviser of Max Myanmar Holding Co. Max Myanmar operates vehicles and heavy machinery trading and is involved in a wide range of sectors, such as construction, hotel and transport.

Myanmar has lagged behind in economic development compared to most of its neighbours. In order for the economy to pick up steam, what approach should Myanmar adopt? What are the possible remedies for the macroeconomic challenges? The Myanmar Times asked Dr Thaung Han questions on the country’s economy.

Myanmar is a developing country and our economy still lags behind, both internationally and in the region. What approach should the country take during this period? Which model would be more suitable?

When third-world countries shift their focus to the economy, the first factor which should be taken into account is foreign direct investments (FDI). Those countries usually take the route of labour-intensive, low-cost industries, which is FDI-based. Hence, they focus on labour-intensive sectors, and then move to value-added production.

The next factor is land. Factories have to be set up so that there are job opportunities for a lot of workers. At the same time, agriculture must be systematically improved and developed, given that there is an abundance of land.

Regarding the model Myanmar should adopt, we can reach a conclusion by looking at the previous factors – Myanmar can go from manufacturing to value-added sectors, or develop the agricultural sector, or come up with a long-term plan on reforming and developing natural resources. We should consider and carry out these three approaches.

How should we manage the many challenges in the economy on a macroeconomics level?

Capital investment is needed when you are going to do something, but the key issue is where you can locate the money. Countries such as Vietnam, China and Thailand took advantage of the massive influxes of foreign investment as well as financial support from World Bank, Asian Development Bank [ADB] and International Monetary Fund [IMF] during their transition periods – they could do anything. From data collected during their transitional periods – which may last 10 or 15 years – each of them has received more international financial support than Myanmar.

Our leaders must be bold to ask for more financial support, and we need leaders who are capable of asking for support. When financial support is worth just $1 or $2 million, our leaders already think it is enormous.

Myanmar suffers from its poor infrastructure as well as policy flaws, together with the inadequate legal framework. How long will these issues hinder the economy?

Our country stands at 160 in terms of ranking for ease of doing business. Hence, people will think it is not good to do business in Myanmar because of the country’s ease of doing business ranking is not high. But we can answer some questions: Is it easy to set up a company, gain access to electricity, and get construction permits? If we can solve these issues, our ranking would become higher. But other questions are hard to answer, such as the enforcement of laws.

Myanmar should try to be in the top 100 countries in the ranking.

Another issue is infrastructure – where do we get the money? It is necessary to get a loan from World Bank and the ADB. Well-trained and knowledgeable economic experts who deal with loans should be able to work with these financial institutions.

Does Myanmar have this kind of professionals?

I think we only have a few and some don’t fit in. There are many little-known talented people in Myanmar … We will have to ask for the required funding, and there shouldn’t be any abuse or misuse of the secured funding.

There are hundreds of experts at World Bank, ADB, Japan International Cooperation Agency [JICA] and IMF who want to contribute and be consulted. They should have good intentions for the nation.

What are the other difficulties in doing business in the country?

Most people think that company establishment is the difficult part, as well as power supply. For example, we must work on better power supply and mobile phone penetration. Our ranking in ease of doing business should improve with better internet coverage and services as well as the enforcement of the new investment law.

Our country also needs to promote a brand image. Have you ever seen a Myanmar advertisement such as “This is the last frontier” on the CNN?

Daw Aung San Suu Kyi is thought to emphasise too much on the peace process, and hence the economy is not the government’s top priority. More recently, a minister said Myanmar’s economy will take off this year. Will it really take off?

I heard what the minister said is that the economy is “running on the runway, the economy will take off”. Those are words of optimism.

But, we need to be practical. We have to consider what we have accomplished. For example, we have moved on from the 12-point economic policy to implementing policy details, such as the investment law and new legislation regarding financial institutions and the insurance sector. Leaders such as Daw Suu will still suffer if the politics falls apart. Hence, for the leaders, if the political question can be settled, the rest will follow. When the country has peace, the economy will develop – that is their mentality. Only if there is political stability, will there be economic and business development.

Source : Myanmar Times

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