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MBEI: Measuring Myanmar’s business landscape with data for policymakers

Myanmar’s first business environment index, surveying nearly 5000 companies, reflects how the private sector views governance, transparency and efficiency as implemented by central and local government. The findings provide policymakers with a set of data for making evidence-based decisions.

The Asia Foundation has published the first Business Environment Index (MBEI) for Myanmar, with the support of the UK’s Department for International Development. The index is based on a nationwide survey of 4874 companies – many of them small and medium-sized enterprises – in services and manufacturing industries and represents the voice of the private sector across the country. It measures 10 components of good economic governance and provides data and analysis which policymakers may use when reforming the business environment.

The MBEI, measuring transparency in government activities, complements the Pwint Thit Sa (Transparency in Myanmar Enterprises) report conducted by the Myanmar Centre for Responsible Business, which monitors the level of corporate disclosure to the public.

Proponents of economic reform say an environment that ensures businesses are operated and implemented responsibly and transparently will be critical for Myanmar’s efforts to address poverty and promote inclusive growth.

The Myanmar Times has published our six key takeaways of the report. Last week this newspaper talked to MBEI project manager and author Jon Keesecker on why the index matters.

1. The Myanmar Business Environment Index (MBEI) is the first business environment index for Myanmar. What is the rationale behind conducting this study and why is it an important benchmark?

Myanmar is still in the early stages of producing really comprehensive and reliable data about the overall private sector, and the MBEI is just one of several studies serving this purpose. But it is a valuable addition, particularly because it provides a more granular picture of the Myanmar business experience within each state and region. This is important because government and stakeholders in Myanmar are keenly interested that all states and regions enjoy economic growth, and yet there is evidence of differential economic growth across the country. Part of the value of an index is that it allows us to draw comparisons between different locations, and to do so in an objective way.

The MBEI is designed to measure the business experience within each state or region not against other countries but against other locations within Myanmar. Moreover, it looks at those features of the business environment which rest with government, or what we call economic governance, in order to provide policymakers with a practical tool for making reform decisions. In this respect, the MBEI stands out as an important step toward helping the government of Myanmar use data to make evidence-based policy reforms.

2. Vietnam pioneered the index over a decade ago. What relevance has it gained there and among Vietnam’s policy circles?

The Asia Foundation pioneered a similar economic governance index in Vietnam in 2005, and today that study continues to be conducted annually through a collaboration between the Vietnam Chamber of Commerce and Industry and USAID. Vietnam’s Provincial Competitiveness Index (PCI) has become a key resource for businesses, media and government to understand and discuss good governance, business reform and economic growth. This is partly because the PCI has shown these three things to be related.

Businesses, media and other stakeholders use the PCI to hold policymakers accountable to promises to improve the business environment. In equal turns, government officials in Vietnam have pointed to improving scores in the PCI to demonstrate their strong record on business reform. Overall, the PCI has tracked steady improvements in economic governance and shown that they correlate strongly with those things that really matter – business activity and economic growth.

3. How can policymakers and stakeholders in Myanmar make use of the MBEI findings?

The primary audience for the MBEI is policymakers in government who can directly improve Myanmar’s business environment. Each of the 101 indicators which underpin MBEI scores is tied to specific functions of government which can be improved through policy and administrative reform. For example, the time it takes to acquire a business operating license or acquire land for business expansion can be reduced by prioritising licensing and land reform or through more efficient administration.

There is a lot of data in the MBEI, so in order to make it more user-friendly we provide each of Myanmar’s state and regional governments with a diagnostic for assessing its own unique strengths and weaknesses in economic governance. In this sense, the MBEI is a tool to help state and regional governments chart a path toward stronger governance and more business growth. Other stakeholders, including investors and civil society organisations, will also find interesting data related to labour, infrastructure, environment and more.

4. The MBEI is a measurement of economic governance. Why does economic governance matter in Myanmar’s democratic transition?

In recent years Myanmar has undertaken both a democratic and an economic transition which are very much intertwined. At the heart of the democratic transition is the promise of increased public accountability of government to citizens, while the economic transition has involved a move toward an economy that is more dynamic, sustainable and hopefully more inclusive. Economic governance straddles the two reform agendas and is therefore an integral part of both.

Economic governance refers to the activities and policies available to government to affect the private sector in the short to medium term. Good economic governance is an important prerequisite for Myanmar to chart a course toward strong economic growth. Of course, as with many functions of government, achieving good economic governance requires a commitment to transparency and accountability on the part of government. As a lens for measuring economic governance across the county, therefore, the MBEI is a tool for supporting Myanmar’s economic and democratic transition.

5. How are responsible investment and transparency related to a competitive and robust business environment?

Government transparency is essential for Myanmar’s private sector to thrive and grow. In the MBEI study, we use the term “transparency” to describe the degree to which government activities and policies are clear and predictable. For example, this refers to government efforts to make business regulations, fees, public budgets and other planning documents available to businesses. Businesses require this information in order to effectively comply with law, but they also use it to plan for growth. For this reason, government transparency cuts across many of the issues most important to Myanmar businesses, including land, corruption, regulation and more.

In some ways, the MBEI complements the Pwint Thit Sa report published by the Myanmar Centre for Responsible Business. The MBEI measures government transparency while the Pwint Thit Sa looks closely at business transparency or the information which businesses disclose to the public. Business transparency is critically important to ensuring that new investment is at a minimum responsible, meaning businesses obey laws, respect human rights, and protect the environment. However, the focus of the MBEI is on the reciprocal transparency of government authorities. Both are integral to cultivating a dynamic, responsible and inclusive private sector in Myanmar.

Source: Myanmar Times

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