Dialogue titled “Is Doing Business in Myanmar Easy?”
- By Kyaw Thu Htet &
Myo Thu Hein
Myanma Radio and Television presents the dialogue under the title “Is Doing Business in Myanmar Easy?” in which Director General U Aung Soe of Myanmar Trade Promotion Organization, Director General U Aung Naing Oo of Directorate of Investment and Companies Administration, Director Daw Thidar Myint of Internal Revenue Department and Secretary Daw Khaing Khaing Nwe of Myanmar Garment Entrepreneurs Association are participating.
Facilitator: Please explain functions of Ease of Doing Business Ranking.
U Aung Soe: Myanmar has been participating in the process of Ease of Doing Business Ranking conducted by World Bank since 2014. In Myanmar, there is a team called Task Force on Business and Trade Promotion headed by the Union Minister for Commerce. This task force has supervised the business functions. Under this incumbent government, there emerged a committee called Private Sector Development Committee led by Vice-President U Myint Swe. This committee also supervised business functions. In doing so, ease of doing business is measured by ten indicators. To be able to increase the momentum of the functions, Supporting Groups led by Directors General concerned were formed. Then, to supervise these groups, a working group called Ease of Doing Business Index Promotion Working Group led by deputy minister for commerce was formed. I am the secretary of the working group and also taking charge of all the office works for the smooth running of the whole works.
This group led by the deputy minister holds a meeting once in every two weeks. With the scope of the respective indicators, the directors general call meetings as necessary to discuss measures taken in their respective fields. IFC of World Bank offers a helping hand to us to get more understanding on the indicators. They invited experts and these experts clarified us the nature of each indicator. If the indicator is new for our country, they explain us how this must be handled and how the answers are made. They sent queries and sometimes, we do not understand what the question is about. The queries are also sent to some departments concerned, private sectors and users. Some are sent to law firms and some to entrepreneurs. As they do not know the questions they gave the wrong answers.
Departments concerned also have the same problems. As they do not understand the business in depth, they gave the answers lightly. This is a great impact on us. At the outset, altogether 189 countries have been participating in the process. When we joined the process in 2014, we are ranked 182. Only seven countries were at the bottom of us. With cooperation of experts from World Bank we have studied more to improve the situation. In September 2017, I myself led a team to make a study tour of Malaysia. In the ranking, Malaysia stands after Singapore. We studied their practices in the private sector, between private and government sectors and we applied these methods in our country. We held workshops with the aim of improving ease of doing business ranking.
To Increase Investment
To open up the economy to the world and to attract investors, it is needed to prove that our country possesses great opportunities to do business. To prove this, the indicators are the best proof. The investors keep a watchful eye on these indicators and study the business. As the improvement of these indicators are of most importance, the vice-president himself concentrated on it and gave instructions on improving the ranking within three years to remain under 100. To transform the vision into reality, union minister and deputy minister led the efforts of departments concerned and the private sectors. My presentation is aiming at making the public known the process. Officials of the departments concerned will also clarify their works.
Regarding doing business, there are many obstacles and difficulties worldwide. As for our country, we have little businesses and we are trying to keep stability and thus there are also difficulties in doing business. Nevertheless, we have set the goal definitely to which we need to march and this will help ease doing business thereby attracting investment.
If doing business is easier than ever for both foreign and domestic businessmen, Myanmar’s economy will improve sustainably. That’s why we are trying our best to reach this goal.
Facilitator: As far as I know, Directorate of Investment and Companies Administration is engaged in carrying out the tasks of improving two indicators. To what extent these have been completed?
U Aung Naing Oo: For the general public, the ten indicators in doing business are difficult to understand. I would like to explain about doing business to enhance people’s knowledge. Doing business is just like a life cycle of human being that is to say birth, living and deceased. In like manner, in doing business, there is a startup, running and going into liquidation in case of bankruptcy. So, the ten indicators are used to measure such three situations. Born means startup.
The second step is construction permit. To start a business, there needs to build factories, workshops and buildings. The fact that how much it is easy and takes time to get the permission to build such facilities is like giving birth. Thirdly, power supply. A factory or a workshop needs electricity. These three indicators represent birth. As regards living, there needs capital and funds. If you are going to start a business, you need to pay tax. It is measured by the fact that how much it is easy to pay tax and how much it is convenient. Thirdly, the indicators show how much it is clear and easy in conducting import and export.
In establishing a startup, the properties shall be registered. The indicators rank the process of registering. If we make an agreement with someone, both sides need to follow the rules and regulations enshrined in the agreement. The indicators show how to make the agreement come into force, not only in the paper.
Next, a wealthy man can have a big share and a man with little capital can have a small share in a company. In such a case, there must be protection for investors. These are six indicators in running a business.
Finally, bankruptcy. What I want to mean is that a firm must be liquidated for various reasons. It is like an ill person. First, we must consider how we can make him well again. If we cannot save him then we are to consider how we can help him to abandon his life in an easiest way. This is called filing for bankruptcy. It is much complicated to say just 10 indicators for doing business. But it is just birth, living and dead. The indicators show how much it is easy to run a business and if it needs to be liquidated what will happen.
Our department is responsible for startup business. There was a big challenge for starting a business. In 2014, when the World Bank made assessment through ten indicators, we were at the rank of 182. As regards startup business, we were at the rank of 189 among 189 countries. We were the last.
We have started from the last because we made reforms at that time but the reform process was too slow. For example, the Company Law is of 1914. There is a lot of companies doing business under the law. It is very difficult to register a company. This difficulty is posed by the law. Moreover, there were limitations due to institutionally established mechanism.
(To be continued)
(Translated by Wallace)