Since Myanmar embarked on its political transition, political elites in the country have championed that peace is the premise for economic and social development.
In the first two years of the government led by National League for Democracy (NLD), Nay Pyi Taw devoted a lot of efforts to promoting national reconciliation with the hope of making a major breakthrough and consolidating public support.
Regrettably, results are not satisfactory. The NLD government is currently locked in a stalemate over national reconciliation.
It has also performed poorly in boosting the economy and improving people’s lives. Main economic indicators suggest that since the NLD government assumed power, Living standards haven’t substantially improved, and more economic problems have surfaced to plague the country.
One of the main reasons why the NLD lost seats in the 2018 elections is the government’s lackluster economic performance. If the economy doesn’t improve, it will inevitably affect the NLD’s potential for victory in the 2020 election.
Therefore, the NLD government is now attaching increasing importance to economic and livelihood issues. It has issued a string of policies to attract foreign investment. Take the new Myanmar Companies Act.
Under the law, foreigners are permitted to take up to a 35 percent stake in local companies and businesses with foreign stakes of more than 35 percent will be classified as a foreign company, which facilitates cooperation between foreign investors and local businessmen and will help attract more foreign investment.
But Myanmar still has some obstacles to deal with in order to attract foreign capital. The first is instability in the job market and relatively low labour efficiency. Particularly, the recent years have seen an increasing number of strikes and the failure of the government to ease industrial relations conflicts with effective measures has crippled investor confidence in the country.
Some foreign enterprises even withdrew from Myanmar and shifted to neighbouring countries, denting the image of the nation.
Second, Myanmar’s backward infrastructure may deter potential investors. A small number of power generation facilities and fragmented grids cannot ensure stable and sufficient power supply. Access to electricity is limited to only 26 percent of the population, impeding Myanmar’s economic development.
Third, some Myanmese are prejudiced against foreign investment. Worrying that Myanmar’s economic and social interests may be impaired, they turned their backs on foreign investment. Demonstrators rallied in Kachin State to demand the government permanently halt the Myitsone dam project, without giving any constructive suggestion on the follow-up arrangements.
It’s fair to say some movements against foreign-invested projects, driven by nationalism and so-called environmental concern, are of no help in improving the country’s investment environment, and have hijacked economic development. Respecting the spirit of the contract is a basic requirement for modern states and their people. Myanmar State Councillor Aung San Suu Kyi recently said an administration shouldn’t terminate foreign-invested projects approved by its predecessor.
As the West steps up its criticism of Myanmar over the Rohingya and Rakhine issues, the country’s relations with the West have deteriorated. China is one of the few powers Myanmar can rely on. There is vast cooperation potential between the two countries.
China and Myanmar can advance industrial cooperation under the framework of the Belt and Road Initiative, the China-ASEAN Free Trade Area, the China-Myanmar Economic Corridor and the Bangladesh-China-India-Myanmar Economic Corridor.
How to unleash Myanmar’s huge development potential with the help of China should be placed on the NLD government’s planning agenda.
As Myanmar’s largest neighbour, China will continue to play an active role in promoting Myanmar’s national reconciliation and addressing the Rakhine issue as well as build mechanism for talks. It will assist Myanmar as much as it can. When investing in Myanmar, Chinese enterprises should pay attention to their social responsibility.
They should also address local people’s suspicions and misunderstandings on Chinese-invested projects. We have reasons to believe that the prospect for China-Myanmar cooperation under the Belt and Road framework is promising.