Myanmar’s economic landscape diversifies

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The Central Bank of Myanmar has issued a directive on 8 November, permitting foreign banks to lend to local businesses in Myanmar kyats. This will provide local businesses access to much-needed financing and other banking services as local banks are not as developed or ready to offer the services, said Central Bank of Myanmar Vice Governor U Soe Thein.
The Vice Governor remarked that foreign banks can no longer be restricted from doing business in Myanmar and we must focus on building up the financial sector as a whole.
Banking services are important in nearly all business ventures, from trading and social enterprises to administrative tasks and daily public transactions. As Myanmar’s social and economic landscape continues to grow, interaction between the people and banks is increasing day by day. At present, there are 4 state-owned banks, 27 local private banks, and 13 foreign bank branches in the country.
Managing foreign investments flowing into the country requires more skilled banks that are firm enough to handle the increased money supply in the country. This is why the state is setting economic policies that encourage the growth of both domestic and foreign banks.
Not too recently, on 2 November, the Myanmar Investment Commission – (MIC) gave approvals to ten enterprises, including education and health services. The decision is expected to create about 800 jobs for local people and will contribute to the increase in money supply.
Between 1988 and the period before the new administration took office, Myanmar had over a thousand foreign businesses investing above US$64 billion in the country. In the two-year timeframe of the new government’s administration, 360 additional foreign businesses have increased foreign investments by US$12 billion.
More businesses and overseas corporations are expected to foray into Myanmar with the country’s leaders and high-ranking officials offering cordial invitations to businesses and entrepreneurs during their visits abroad.
U Thaung Tun, Union Minister for the Office of the Union Government and MIC Chairman, extended a similar invitation recently at the inaugural Singaporean Association of Myanmar (SAM) Business Summit, held at the LOTTE Hotel in Yangon on 15 November.
“With a fast-growing consumer market and industry sectors which require development, Myanmar is attracting large MNCs in a number of sectors including oil and gas, finance, construction, transport, logistics, telecommunications, and tourism. Myanmar’s economic potential is well-recognised but we will need to take a proactive approach to secure investments,” said U Thaung Tun.
A growing foreign investment scene requires more than 13 foreign banks to handle it. External investors will want to work with their banks of choice, and giving foreign banks nearly as much authority as local banks is a wise tactic.
Not only will this create more business opportunities in the country, it will undoubtedly increase national economic development and elevate the livelihood of the people as well.

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