How easy is it to do business in Myanmar? The World Bank and the International Finance Corporation have for the first time added Myanmar to their annual ranking of business-friendly countries around the world. The 2014 Doing Businessreport examines the legal and regulatory environment in 189 economies. Overall, the trend around the world is towards improvement, with the pace of regulatory reform for small and mediumsize businesses – the main job creators in many parts of the world – on the up.
The report, in its 11th year, uses 10 indicators to evaluate the ease or otherwise of doing business in a country: starting a business, obtaining construction permits, getting electricity connected, registering property, paying taxes, trading across borders, accessing credit, investor protection, enforcing contracts, and resolving insolvency.
It is inevitable that Myanmar will rate poorly at this stage. The country ranked 182 out of the 189 economies, ahead of Democratic Republic of Congo, Eritrea, Republic of Congo, South Sudan, Libya, the Central African Republic and Chad. This sounds bad but we have to remember that the country has suffered from half a century of economic mismanagement and has also been included on the list for the first time. This is a less a rap on the knuckles, more a wake-up call.
Myanmar’s inclusion on the list means that it will be possible, year by year, to track the country’s progress in implementing economic and political reforms. In simple terms, the only way is up as the Naypyitaw government introduces more legislative and regulatory reforms and improves the environment for doing business, not only for domestic firms but particularly for foreign investors.
The report recognizes the efforts being made to make Myanmar more business friendly but noted there is clearly considerable scope for reform.
A better business climate will enable entrepreneurs and investors to create more job opportunities, said the IFC’s resident representative, noting that measuring regulations and other indicators of a business-friendly environment in Myanmar will be a great step forward for the country’s economy.
If there is danger of the country continuing to lag as the years go by it might lie in complacency. Foreign investors have been and are banging on the door, yet there is also a realization in foreign business circles that there are many hurdles to doing business in Myanmar, not least of which are opaque accounting practices, corruption, and human resource weaknesses in many sectors. The hype and hoopla about the country being “Asia’s new frontier” is dissipating as reality sets in. While Myanmar clearly offers a wealth of investment opportunities, the business environment can seriously test the patience of the outsider.
So rather than disappointment at Myanmar’s ranking – after all 182 out of 189 is dire – we should look to it as a challenge, a call to build and improve, to improve mindsets and to make Myanmar an easier and more efficient place to do business.
Source: Mizzima News Myanmar