Thursday, 13 March 2014

In the chair: Suan Teck Kin

United Overseas Bank (UOB), a leading Singapore bank, signed financing deals for two natural-gas-fired power plants in Myanmar last week and organised a foreign direct investment symposium. The Myanmar Times spoke with UOB senior economist Suan Teck Kin.

Q: UOB has been in Myanmar since 1994. How do you see this country today?

A: Yesterday, I walked from Parkroyal Hotel to Shwedagon Pagoda. In some places there was no pavement and in some places no street lighting. I saw teashop customers crowding around a TV. It was like Singapore 40 years ago. This country has a lot of catching up to do. Proper policies must be put in place and companies must be able to take advantage of the situation right now. There is a lot of demand for investment.

Q: Apart from the challenges, what impression do foreign investors have coming to Myanmar?

A: Obviously there is so much interest in Myanmar. We expected only 100 participants in our symposium, but about 300 are requesting registration. The foreign investors’ point of view is very positive. Myanmar is the last emerging market.

Q: Reforms have been under way for three years now, but foreign investment is still lower than expected and big investors are not coming yet. Why?

A: Investments have been promised, but not delivered yet because the system cannot take it. It takes time. But you need people to come first, and development and more investment will follow.

Q: Current foreign direct investment figures are higher than actual capital inflows. How is it concentrated?

A: Myanmar Investment Commission (MIC) said FDI stood at US$44 billion. Chinese investment, meanwhile, is about $16 billion or so, but the concentration is mostly in oil and gas, and mining. That is why the government has really to be careful about infrastructure development and to set its own priorities and plan accordingly.

Q: Some people worry about the political track and the 2015 election. Can political change affect economic reform?

A: Definitely, politics is very important. Investors don’t want to find their investment has been suddenly nationalised. Strong institutions are needed.

Q: Do we have strong institutions?

A: You are starting to. These things don’t happen overnight. They take time, and experience.

Q: Do you think ASEAN integration will happen or not?

A: The ASEAN Economic Community (AEC) will bring trade of goods and services, an integrated market, free movement of labour and investment. The official start date is 2015, but the free flow of goods, investment, capital and skilled labour has already started within ASEAN, though the free flow of services is still behind schedule. I’m talking about mobile banking, transport, insurance, legal services and accounting.

Foreign lawyers cannot practise here because of the language barrier and the difference in legal systems. These kinds of barriers are not simple. But ASEAN is well integrated compared to the EU or the US or elsewhere.

Q: How about the development of the financial sector?

A: One thing you have to look out for is competition. There should be enough competition between companies, or some institutions will have too much power, and the people cannot benefit.

source: The Myanmar Times
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