Short update from a fast moving market
Unusually for UK Trade & Investment, we are suggesting that UK businesses consider investing somewhere other than the UK. We will even help you do it.
Although the business climate in Burma remains difficult, there are very positive signs that slow and steady progress is being made.
I was recently in Burma, speaking with MPs about their new foreign investment law. Because Burma is rebuilding and modernizing almost all its business-related laws, MPs wanted to understand what business needs, what investors want and how the government can create the right investment and business climate.
The new laws have now been passed and with them come clear opportunities for investors and exporters who are in garments, food production, infrastructure, construction, telecoms ― as well as for those professional services companies in a position to take a long view. This includes business services as well as vocational trainers, higher and primary education providers.
The new law allows foreigners to own 100 percent of a business without a local partner but property ownership remains a challenge. Tax incentives are to be introduced and a range of special enterprise zones to be developed.
While Burma does present certain risks, there does appear to be broad and genuine support for investment attraction.
MPs from all political parties we met were clear― they saw foreign investment as a way to help breathe new life into the economy and to provide much-needed jobs. They want to avoid the mistakes of others ― they want sustainable development with environmental and workforce protections. This is why they are keen to attract UK investors.
The reality faced by MPs is stark and they do not underestimate the challenges. MPs and community leaders said that they face chronic under-employment, low educational attainment along with poor infrastructure. However there are abundant natural resources and the energy of the people for change is evident.
British firms moving in to Burma can expect support from the Burmese government, the Myanmar Investment Commission and the Chamber of Commerce and Industry if they are responsible investors. Companies entering Burma using the same sort of practices they would in the UK can expect to be warmly welcomed so that they can get up and running as soon as possible.
The British Embassy in Rangoon is fully behind this agenda. It is running a programme to try to promote the principles of responsible investment, alongside the Institute for Human Rights and Business.
UK Trade & Investment is keen to work with UK-based firms who can help build Burmese telecoms infrastructure, roads, rail, logistics networks as well as property, financial, accounting and other business advisory services.
There are immense opportunities for food manufactures and agri-business operations ― the country is incredibly fertile but almost all agricultural or fishing produce is exported in a raw form.
Companies able to offer education courses and training in professional skills from carpentry, construction, farming, engineering, plumbing, computing, surveying, accounting, hotels and hospitality will find doors opened for them. The Chamber in Rangoon said that they had training rooms ready and are happy for people to come in offering courses. Universities are, of course, extremely welcome.
The government is setting up a number of special enterprise zones – indeed, there are probably opportunities for UK developers to construct business parks. The Japanese are developing an enterprise zone in Thilawa where they plan to attract Japanese firms to operate. A UK consortium could attempt the same.