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Myanmar Labour Market beyond 2015

Decades of isolation had kept the world away from Myanmar until recently. The democratisation process that began in early 2011 has resulted in a ground breaking free and fair election in November. With the new democratically-elected government expected to take reign in March, this could become a big turning point to flourish Myanmar’s labour sector.

Just one week after the November 8 General Election Forbes published an article stating that investors are already lining up to invest in the “golden land of opportunities”. Myanmar could become a hub for the manufacturing sector as it sits right in the middle of the world’s most heavily populated region – billions of potential consumers are just across the fence.

According to the recent census data, Myanmar’s population is about 52 million – among them 65 percent are of productive age and about 28.6 percent are under 15 years of age. The latter will be ready to join the workforce very soon. It is an impressive number of working age population compared to other countries. In developed countries working age population is expected to shrink over the next decade – Germany could see a decrease of 4 million. China’s working age population has also started to dry up and last ditch efforts to allow more than one child won’t have an impact for some time to come.

Despite having a big workforce firms in Myanmar are currently facing shortages of skilled workers. Myanmar Business Survey 2014 cites lack of skilled labour in Myanmar as one of the biggest obstacles to start a business.

Many of the young people in Myanmar lack formal education and English language proficiency that renders them unqualified for many jobs. On the other hand, experienced and skilled worker usually find jobs with attractive salaries abroad. Qualified workers who remain in the country demand high salaries.

The government tried to tackle the problem by stipulating in a new law that all unskilled positions should be filled only by Myanmar citizens. There are also special rules and regulations regarding skilled worker in the Foreign Investment Law. In an incorporated company at least 25 percent of the workforce should be Myanmar nationals for the first two years –the amount should double to 50 percent during the second two years and jump to 75 percent during the third two-year period. The investors are also required to submit a report to the Myanmar Investment Commission (MIC) with details of the practices and training methods that have been adopted to improve the skills of Myanmar nationals.

Those rules and regulations do support the local workforce but it doesn’t means that the government should sit back and relax. There are always some parts that need improvement. Currently, IT, telecommunication and banking sectors are severe shortage of human resources. In 2013, a labour market assessment report pointed out that there are many business sectors that need vocational skills from the workers – among them sales and accounting were in high demands. An estimated 5 million Myanmar nationals are living in abroad. Recent political change might lure them back to their home country along with the skills and knowledge to fill in the gap.

In 2009, foreign investment in Myanmar was only around $300 million. It hit $4.1 billion in 2013-14 and went over 2014-15 – a dramatic leap within five years. Upcoming years will also present immense opportunities for the local workforce. In the World Bank’s Doing Business 2016 report, Myanmar jumped from the bottom (189) to 167th this year – making it one of the most-improved countries. However, there are still some international sanctions in place which need to get lifted for more growth.

Despite having such opportunities, 2014 Myanmar census shows that the unemployment rate is 4.1 percent for the population aged between 15 and 65 years.

However, opportunities are still in line. At the 21st ASEAN Summit in Cambodia, leaders showed their interest to form an ASEAN Economic Community (AEC) which will transform the 10-nation bloc into a single production base allowing free movement of goods, services, investment, skilled labour and capital.

Furthermore, Myanmar is also a party to the Bay of Bengal Initiative for Multi-sector Technical and Economic Cooperation (BIMSTEC), which aims to create a free trade area by 2017 among Bangladesh, Bhutan, India, Nepal, Myanmar, Thailand and Sri Lanka.

There are concerns that joining these trade blocs will hurt Myanmar’s feeble home grown companies, which are not equipped to compete with their superior counterparts in the region. However, competition is unavoidable if Myanmar has to integrate with the global business community.

To understand the current nature of the labour market I had setup an account to conduct research on a popular job hunting site in Myanmar and advertised two vacant positions. One European national and around 30 job hunters applied for the two posts within one month. It seems competition is already firing up.

Source: Myanmar Business Today

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