The year 2017 was annus horribilis for Myanmar with the ripple effect of the Rakhine crisis affecting the economy of the country. Some institutions who granted awards to Daw Aung San Suu Kyi for her efforts in promoting peace and human rights withdrew the awards because of the perceived inadequate response to what happened in Rakhine. There were even efforts at re-imposing sanctions to ‘punish’ the government. The start of 2018 will be a good time to focus on the issues that will define the rest of the year. Positive results of the recommended ten items will make this year a better time for Myanmar people and those residing in the country.
- More optimism and confidence in the local economy
A business survey conducted among UMFCCI members showed a decrease in investors’ confidence in the country. The dip in the business confidence were attributed to various factors, with government policies and the Rakhine crisis among the top issues. With a clear manifestation from the business sector, the government should take a second look at how the issues expressed can be addressed, and respond to them as fast as possible. Policy-making and promulgation of the needed laws should be prioritized to convince investors the government is serious in addressing their concerns. As for the Rakhine crisis, the government should continue to work with the international community in working out a solution, instead of looking at it as just an ordinary domestic problem.
- New telecom company will bring more benefits
Myanmar leapfrogged from analog to digital telecommunications in a short span of time. With three main players, telecom services became affordable allowing even those in the rural areas to have a hand phone. Smart phones are now a common necessary gadget, and with it potentials for online businesses. The news of a fourth telecom company MyTel, was met with mixed responses. Many people expect the new provider will further make the market more competitive and that would mean lower fees for services. There were also those who thought that the new player will only result to migration of clients from existing telecom companies to the new player, affecting the bottomline of existing telecom companies. Migration may actually happen if there is a perception that the services of the new player is more efficient, when in fact, it may be due to the initial small number of clients as it open its services in the country. If ever there will be decrease in the bottomline of existing telecom companies, it is hope that the services will not digress and the fees will not increase.
- Increased confidence in the stock market
Despite low trading volume, the stock market has consistently attracted companies to list. So far, there are now five listed companies: FMI, Thilawa SEZ, First Private Bank, Myanmar Citizen Bank and the latest company TMH Public Company. It is also noteworthy to consider that the listed companies are from various industries – banking, industry, telecom and a holding company. Opening up the market to foreign investors will not only induce more volume develop more trust to the market.
- Real estate to continue on its growth
The real estate sector is continuing to grow as the government focuses on urban development, high end properties and promotion of low cost housing. More laws are also providing impetus for the sector to be more vibrant. With the new Condominium Law, the sector is expected to attract more foreign investors and buyers.
- Improved facilities in tourism areas
Tourism is one of the main drivers of the local economy as tourist areas are spread out in various regions and states. People in tourist areas also benefit through the employment they generate and the related industries that supply the facilities in the areas. As investments in tourist areas consistently flowed, the quantity and the quality of facilities also improved to the benefit of the tourists, resulting to the rise in the number of visitors. Another positive result is the reduction in price, where in some areas the price are closer to the level of neighboring countries like Thailand, Vietnam and Cambodia. The quality of the facilities and the area makes tourism in Myanmar not only an enjoyable experience but a memorable one.
- Reliable urban transportation system
The liberalization of car importation increased the number of cars. Problems related to it also started to manifest, the buildup of traffic congestion. More cars, more idle time as traffic congestion is nearing the level of Thailand and the Philippines. Plans to have more roads and the improvement of existing ones have to be initiated to cope with the demand of the future. Another concern is the right-hand driving with a left-hand traffic rules. For the commuters, there is a need to fix the operation of taxis – metering and ridesharing units like Uber. Upgrading of the train system is also necessary to decongest the roads.
- More sustainable financing for SMEs
The missing middle becomes evident in Myanmar as banking regulations restrict access to finance of small and medium enterprises (SME). Small livelihood types of economic activities are provided with financing from hundreds of microfinance institutions (MFI), while large enterprises are able to access from commercial banks. But the more than 90% SMEs in the country has nowhere to go. Policies on collaterals restrict the flow of funds to SMEs, making them prey to informal moneylenders who charge high interest rates. Some banks are pilot-testing guarantee programs and hope it can be mainstreamed in the near future.
- Kyats will stabilize in relation to the dollar
The Kyats has been down and continue to go down since the country opened up to the global market. The challenge is for the government to follow an economic program that will strengthen domestic production and focus on importing goods that will enhance the country’s production capacity. Other factors have to be addressed as well to stabilize the kyats.
- Reasonable wages for workers
Cheap labor is an advantage of the country, but as inflation eats up the value of the workers’ wages, the clamor for higher wages to cope with the cost of living will be heard. There will be a conflict of interest as workers fight for higher wages while employers will protect their profits and return on investments. There needs to be a balance where people can live with their wages and at the same time corporate income is assured.
- Poverty will be reduced
One third of the country is considered poor. As the country progresses, the people should also advance economically. No sector of the population should be left out. As such, the benefits of development should not only trickle down to the poorest, but it should be sustainable. Government programs are in place and it is hoped that it will prevent people from falling into the pit of poverty. The business sector is also expected to share the burden through their corporate social responsibility (CSR) activities.
Originally published in Myanmar Insider, January 2018