‘US keen to invest, strengthen ties with Myanmar, but faster reform needed’

The lack of infrastructure, clearer rules on business and domestic politics continue to be issues weighing on investor sentiment towards Myanmar.

US Ambassador to Myanmar Scot Marciel, who spoke at the American Chamber of Commerce Myanmar’s “Improving Ease of Doing Business Forum” yesterday, acknowledged that while the government has been implementing reforms and building infrastructure, more still needs to be done in order for investors to be more confident in channeling their funds into the country.

He was critical of the “Look East Policy” pushed by the Myanmar Investment Commission since late last year, pointing out that investment and trade opportunities existed globally, including from the US.

He added as reforms have recently gathered pace, more US companies have shown interest to invest.

The US is currently the 13th largest foreign investor in Myanmar, having invested a total of US$430 million so far. Marciel said US investors would flock here so long as the business environment remains welcoming with stable domestic politics.

Earlier, Marciel spoke in an exclusive interview with the Myanmar Times on the country’s politics and economic reforms. Here is an excerpt of that interview, which has been edited for clarity and brevity:

What is the US’s stance on the economy and politics of Myanmar?

We continue to support the people of Myanmar in their economic development needs and their move towards democracy and peace. We want to help bring the benefits of economic development through US government aid and through increased bilateral trade.

The US continues to extend the Generalised System of Preferences to Myanmar and this year, bilateral trade has touched nearly US$1 billion. What is important is not the volume of trade but how fast it is improving while US investments in the country is also rising.

Why is it that even after US sanctions were lifted following the peaceful transition to NLD rule, investments remain lower than expectations?

The US government cannot tell investors where to invest, this is up to them and US companies also have strict rules on where they can invest. It is true that recent political volatility has affected investor sentiment towards Myanmar.

We believe Myanmar is trying its best to implement various reforms such as improving the business environment and as these reforms take root, more US investors will be interested. For example, there were US investors

when Myanmar liberalised retail and wholesale tradeand when life insurance was liberalised, a US insurer (Chubb) received its licence to operate here. It goes both ways as it not only benefits Myanmar but creates opportunities for US investors as well.

What areas are US companies interested to invest in?

US companies are definitely interested in the telecommunications sector and there are already US companies invested in this sector. There is interest in tourism, where are starting to see US investors entering as well as in agriculture and manufacturing. US investors are definitely watching closely the reforms taking place in this country.

What does it take besides infrastructure and a legal system to convince US investors?

There needs to be consistent and clear implementation of the law, regardless of who is involved, this will spur not only interest but also confidence among investors. We acknowledge that the government here is making efforts by introducing a new Companies Act, strengthening anti-corruption measures and liberalizing investment in different parts of the economy.What is important is to quicken the process of obtaining approvals and have clear rules and regulations, this will be good not just for US companies but for others as well.

Infrastructure upgrades including access to a reliable supply of electricity is important too, not just for businesses but also for people’s quality of life and there is need for reforms that will provide more conducive operating environment for the private sector.

We know that Myanmar is facing a lot of challenges and that it’s a balancing act especially where financing is concerned. We need to see lots of reforms of old laws and a wider engagement with the global economy because from experience, countries that are more open are always better off. Myanmar can look to examples of how reforms are carried out in neighbouring countries and we are hoping that the pace of these reforms will pick up as this country has lots of potential.

We also would like to point out that Myanmar should broaden its appeal to investors not only from Asia but also from the Western economies including the US. It is a misperception that Western investors are staying away. Myanmar should seize any opportunity as its neighbours are doing.

There is a disconnect between how the government views the health of the economy and how the private sector views it. What do you think?

There will always be differing views. There may be economic growth but that does not mean that it is easy to operate a business. Myanmar’s transition is only beginning and while positive changes have indeed taken place, expectations have outstripped the pace of reforms. What is needed is to quicken the pace of reforms while at the same time seizing the opportunities that materialise from opening up.

Do you see any impact on Myanmar from the US-China trade war?

We prefer the word “dispute” instead of “war”. We have always been supportive of China’s economic growth and we supported its entry to be a member of the World Trade Organisation (WTO). China just needs to follow WTO rules and regulations like others.

This dispute can mean opportunities for Myanmar to attract US investors since they may not want to be based in China. Myanmar’s neighbours are already trying to benefit from the dispute. Our policy has always been to contribute to the peaceful development of Myanmar and the region while following international rules and regulations. Our negotiations with China centre on compliance to these rules and regulations as we believe compliance will benefit all.

What does the US expect from the Myanmar’s elections in 2020?

We have always supported peaceful democratic transitions across the globe, including Myanmar’s. We see a competitive election next year given the number of political parties in the country. The most important thing is for the people of this country to see democracy in action, with competitive and transparent politics. Only then will the people know who is best suited to govern this country.

Source: Myanmar Times

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