Dialogue titled “Nation Building through Ease of Doing Business”
- By Shin Min, Photo by Aye Than
- Deputy Minister U Aung Htoo (Ministry of Commerce)
Myanma Radio and Television presents the dialogue under the title “Nation Building through Ease of Doing Business” in which Deputy Minister for Commerce U Aung Htoo, Yangon Electricity Supply Coporation General Manager U Tin Aung, Yangon City Development Committee Secretary Daw Hlaing Maw Oo and Executive U Zeya Thura Mon of Myanmar Chambers of Commerce and Industry are participating.
Facilitator: Today’s talks will focus on “Nation Building through Ease of Doing Business.” First of all let us hear on your talks on “Ease of Doing Business Index.”
Deputy Minister: Ease of Doing Business Index is one of the indexes practiced by the international community. It is an index created by a researcher of World Bank in 2002, and was used worldwide in 2004 and thus it is now about 15 years since the use of the index was first seen. Its purpose is to display the higher the ranking in the index, the better for doing businesses. In other words, in doing business there are regulations to be followed.
Doing business will be difficult if there is a rigid regulation. Therefore the index was introduced for ensuring ease of doing business by cutting the red tapes.
The higher ranking in the index indicates having a great potential for achieving more success in business, and stronger protection of property rights. And international comparison, the investors put more trust in countries with high ranking index. So, it can be deduced from the fact that high ranking index will surely attract more investment thereby resulting in economic development.
Myanmar saw reforms in 2011. In making reforms, the private sector plays a vital role in the economic sector of the State. With the aim of progressing the private sector, we have been cooperating in calculating the index after signing MoU with World Bank in 2014. World Bank for its part, attached its experts and consultants and gave suggestions on how to improve the index.
Myanmar’s participation in the index indicates her unwavering commitments to the idea that the State is encouraging businesses run by private sector. We accept the concept that national development will be achieved through private sector development.
The State has vowed to improve the index. When started calculating the index, Myanmar stood at the rank of 182. In 2018, the rank improved reaching 171.
The vice-president who is also the chairman of the Private Sector Development Committee has been giving guidance to improve the index to reach below 100 in 2021. In accord with this guidance, we are striving our utmost to improve Ease of Doing Business Index. There is no bias in calculating the index, but objective. We calculate the index based on regulations which are faced in the ten sectors.
For example, what is the need for a start-up? First, a company must be established. What amount of capital is needed for a start-up? What steps are to be taken for a start-up? How much time it is needed to register a company? The index is to show the answers.
And another thing is that after establish a company, buildings and warehouses are to be built. Then, what is required to do the job? There needs a construction permission. To obtain permission, what steps are to be taken? What recommendation needs? How much it will cost for applying permission? How much it will take time for the process? The above-mentioned are the example of calculating the index.
There also are many other steps. For example, after building a warehouse, there needs an electricity. So, there needs to apply for power supply. The fact that whether there is power outage or not contributes to calculating the ease of doing business. There are also other matters concerning property rights. The rights are to be registered at Registration Office. The index will show how to register, how much it will cost and how much time it will take.
Capital is needed to run a business. Investing one’s own money in the business is one of the ways and means, and getting loans from bank is the other. What is needed to get a loan from the bank? What steps are to be taken? How much time it will take? Is there any Credit Bureau for bank loan? The questions are to be considered.
Moreover, if we run a business, it may be not invested by a sole person but with stock and shares. In such cases, it is important to include the fact in the index that if a person who buys a share can easily sell or transfer his share or not.
There will surely be profits in doing business. Then, tax will follow. Is the process of paying tax is easy or not? There are voices concerning paying tax complaining there is a will to pay tax, but there are many difficulties to continue the process. Regarding these complaints, the question then arises: How to find an easiest way to pay tax? Can we pay tax online? Is it easy to get taxpayer identification number? These answers of these questions are to be considered to include in the index.
Exports and Imports are parts in doing business. Such questions as how difficult to get a license for export and import, what difficulties may be faced for logistics of the goods, how much time it will take and how much it will cost are considered in the index.
Last but not least, I would like to mention the covenants we make. We also make agreements and we need to abide by the agreements. Again, the questions then arise: what kind of actions will be taken against those who breach the agreements? how much time it will take? They are also included in the index.
When we look at the business process, we can see that there may be profits or losses. The loss can be dub bankruptcy. If a person is bankrupt, the firm has to be gone into liquidation. What is the process for declaring bankruptcy? How much time the process will take? To take such actions, it needs to consider if there is a bankruptcy law or not. Therefore, the index means how easily we can take steps in the above-mentioned ten sectors from the start of a business to liquidation.
Countries with higher index in the ease of doing business will have more potentials for economic development. Increase in the business will surely bring about economic development. With this end in view, the state is trying hard to promote the rank in ease of doing business index while in comparison with others in the international community.
Business score is another methodology in the ease of doing business index in addition to ranking. For example, in our schools 100 marks is the highest marks of a subject. A student can pass his exam if he gets 40 marks. He will have credit if he gets 80 marks. There also is such a system in ease of doing business index. Although there is not a rise in ranking there may be a rise in score. For example, Myanmar won over 44 scores in 2018. That means she got the passing score but not had the credit.
If we look at the nations in the Asia-Pacific regions, their average scores are over 60. As we are the member of the region we need to try hard to get over 60 from over 40. I would like to express here is that it is better to have credit with over 80.
New Zealand is currently topping the 2018 list of ease of doing business index in. The first runner-up is Singapore. Malaysia stands at 24; Thailand, 26; Brunei, 56; Vietnam, 68; Indonesia, 72; the Philippines, 113; Cambodia, 135; and Laos, 141. As mentioned above, Myanmar stands at 171. As we are the lowest comparing with them, we need to try hard as there are many opportunities.
(To be continued)