Developments in Myanmar
PM Heblikar

A week-long business exploratory trip to Myanmar was a rewarding experience and confirmed the availability of exponential opportunities to participate in developmental activities. The first thing to strike was the perceptible change in the character of the former capital city Yangon. The skyline has changed for the better with several flyovers, newer varieties of imported cars and buses, modern hotels and bustling construction activities dotting the horizon. Right hand traffic has become the new norm signaling a departure from the past practice. Long and lengthy traffic jams are reminiscent of scenes in any Asian capital or big cities. These are signs that Myanmar has taken the highway to transformation and development.

A major take away from the visit is the confirmation that the changes ushered in 2010 are irreversible and the dividends are clearly visible. The civilian administration and the military, who are major stake holders in Myanmar’s political life and governance, have achieved appreciable comfort levels in discharge of their responsibilities. Both are on the same page despite differences. Political changes must obviously be underpinned by rapid economic development across the national spectrum and in that direction preparing the agents of change mainly the bureaucracy – both civil and military is important. Today there are multiple layers of civilian bureaucracy in the country both at the federal and provincial levels, where politicians are playing crucial roles. The Indian civil service model or experience is relevant for Myanmar in this connection. Myanmar civil servants and military officials can certainly benefit from their Indian counterparts. The incumbent political class is going to face its toughest test especially in meeting the expectations of the population for good governance, development, prosperity and stability. Long years of military rule since 1966 had affected the civil service as also other institutions in the country. The onus is on the political leadership to restore the civilian bureaucracy so as to step up to serious challenges that lie ahead to deliver on public expectations. The mood is favorable to the ruling party and even members of the opposition seem to share the enthusiasm of the public for improving the standard of life.

The federal government has embarked upon major initiatives to bring several important laws and regulations in line with requirements of economic development. The approved foreign investments are over USD. 10 billion in Financial Year 2015-16, despite a fall in economic growth to 7.2 % from 8.5% in previous years due to flood and natural disasters. A bulk of it is attributed to the previous government which stepped on the accelerator to usher in a speedy reform system and to create a positive image of its contribution prior to demitting office. This was a great game changer. The present government is taking forward several steps initiated by its predecessor especially in shoring up investor confidence. It has opened up the banking sector, made telecom sector more viable by inviting foreign participation and creation of Special Economic Zones (SEZ) in Thilawa, Dawei and Kyaukphyu to attract foreign investors. This is only the tip of the ice berg as there are several major initiatives underway to include measures making it easy to do business there. Reform of the century old Companies Act of 1914 and the Foreign Investment Law of 2012 are the precursor to the new business regime. The Myanmar Union Tax Law 2016 and Arbitration Law 2016 are among clutch of high profile reform list.

The preamble on economic growth accords the highest priority to improve key areas such as the financial sector, modernization of taxation regime and promote rural development. The decision to reduce the number of ministries from 36 to 21 underlines a commitment to run a lean and efficient administration. The growth horizon of 8.5 - 9% is envisaged to cover the tenure of the incumbent government and beyond, powered by foreign investments in energy, transportation and industrial estates. This projection is ambitious, forward looking and in keeping with the prevailing mood. Investment in the infrastructure development especially in transportation sector is valued at over USD. 50 billion over next ten years. Equal emphasis is placed on Tourism, Health and Family Welfare, Information/Information and Communication Technology (IT/ICT), and Education.

Good governance and economic development are contingent upon stability and safety. Myanmar is yet to address the problems of its ethnic community and the fears of the religious minorities. While there is no doubt that the ruling dispensation is on the job, the results are not yet commensurate with national aspirations and international expectations. It will perhaps take the civilian government additional time and energy to tackle the problems of both ethnic and religious minorities due to complex nature of issues though much work has taken place related to the ethnic community. Expectations were that the civilian government headed by Daw Aung San Suu Kyi will bring quick solutions to decades old issues within a short period of time. In my view, complex and emotive issues may have to be resolved within an agreed framework taking care to address all aspects in the space provided by the national constitution. To push for a quick resolution at the behest of local or international pressure may be counter-productive and cast shadow over the present process of political reconciliation. A legislative approach coupled with well-planned administrative measures is one way to deal with this vexed situation. A vibrant economy underpinned by stability is the best platform to address the situation.

The Rohingya issue is challenging the political acumen of the ruling dispensation. It is no longer a law and order problem for either the provincial government or the federal authorities. It has acquired the shape of insurgency with the potential to migrate to terrorism and this will be bad news not only for Myanmar but also Bangladesh and India as also others in the immediate concentric. The character of the unfolding insurgency is very worrisome and significant due toits violent nature underlining the fact that the perpetrators are determined, well trained and well equipped. The attacks on Myanmar security forces in October-December 2016 confirm the above. It also possibly reflects the inexperience of the local forces in dealing with the situation. The signature of a bigger conspiracy is very evident from reports on the subject. This is not a good augury from a strategic point of view. The custodians of law and order may need to review their standard operating procedures to handle the potentially explosive situation.

From the political point of view, it will require the best out of the two outstanding women leaders of the region, Daw Aung San Suu Kyi and Sheikh Hasina, to bring respite to the situation that is hosting ethnic problems. India too has an opportunity to bring its experience to the fore to help its neighbors. This will also preempt outside powers from interfering in this sensitive region.

Among Myanmar’s immediate neighbors, India is arguably well placed to contribute its experience and expertise towards the cause of peace, stability, economic development of that country. This view is increasingly gaining traction among the policy makers. This groundswell is a significant development in India’s favor. India ranks ninth (USD. 733 million) amongst the top ten main foreign investors. China leads the table with over USD 18 billion accounting for 29% of the total FDI coming into Myanmar as of March 31, 2016. South Korea, and Japan are other major economic powers waiting to break into the top-ten list. Japan is best favored among them. India has the ability to participate in the 12 key sectors open for foreign investors.

There is also the need for Indian policy makers and private sector entrepreneurs to consider “out of the box” initiatives for Myanmar. South Myanmar occupies the cynosure of attention from a strategic view point. India’s focus should be the central region and on Mandalay. India would serve its bilateral interests by setting up an exclusive Special Economic Zone (SEZ) in Mandalay for manufacturing and consumer product industries. Products of this SEZ can be exported to India’s northeast region and to Laos and Cambodia. Indian IT and ICT companies can be encouraged to participate in joint venture projects or multilateral projects. Another high profile area is to create agriculture development zones by providing machinery and experience to local farmers at subsidized rates to improve food grain production on a joint venture basis. Even food processing industry can become a force multiplier. This will obviate the need to transport food grains and other essential commodities from the heartland and production centers to India’s northeast region. Myanmar will have ready markets in the northeast region for its products and also harness the huge potential of Northeast region for mutual benefit. By this, India’s northeast region will become a bridge to Myanmar and beyond within the Act East policy. India’s prestigious Border Areas Development Program (BADP) administered by the Home Ministry can be integrated into this plan of action.

In September 2016 the Government of India announced the establishment of a Rs. 500 crore Project Development Fund (PDF) to increase its economic presence in Cambodia, Laos, Myanmar and Vietnam (CMLV) countries. The Commerce Ministry is the nodal body for the PDF with the EXIM Bank. India will have a dedicated market for raw materials and intermediate goods on long term basis. Again, importantly the PDF will be an information platform for India’s industrial community and others. PDF requires more public animation in India as also in CMLV countries.

One of India’s least known contribution to international peace and stability is its rich experience in Humanitarian Demining. Two Indian Non-Governmental Organizations (NGOs) participated in an international Civilian Demining program in Sri Lanka from December 2001 till July 2012. Both of them received kudos at the highest political levels of Sri Lanka government besides the United Nations Office of Special Projects (UNOPS) and western agencies. India can use this ‘soft power’ to the best benefit of Myanmar. Several western agencies are present in this field in Myanmar for several years working with the National Reconciliation and Peace Centre. Both Indian NGOs have rich experience of also working in the Middle East and North Africa.

Large Myanmar construction companies are very active in infrastructure sector and have traditionally looked to China and Southeast Asia for meeting their business requirements. Many of them would like to look at India as an alternative. We need to reach out to them and a way forward can be found.

Dissemination of information in both countries on business opportunities is another way forward. Myanmar-specific workshops could be organized as a joint venture programs between government agencies of both countries as also by the private sector. The role of Myanmar Investment Commission (MIC) must be emphasized and efforts should be made to invite its top brass for a road show in India. Mini workshops can be held at designated centers in both countries. It is understood that a 37 Kilometer long elevated highway is being planned in Yangon to reduce traffic problems and there are equally ambitious projects on the anvil. These are the kind of projects that would be of interest to Indian companies.

The business community attaches significant importance to the budget for 2017-18 and major policy announcements are expected. The mood is upbeat on this score.

Air connectivity between India and Myanmar must flag attention of the Civil Aviation ministry. Improvement in the frequency of air services for travel, tourism and cargo traffic between both countries has a strategic value for India. Air India has other skills that may be useful for its counterparts in Myanmar and other countries.

The recent developments in India are being closely followed by interested parties in Yangon. Myanmar’s response to domestic desire for political change is overwhelming and it is opening up even more than envisaged earlier. There is even more interest in recent developments of India and this has generated a groundswell to take forward bilateral engagement to next level. Government of India has put its best foot forward and we must now expect that other Indian stakeholders will not only follow suit but take the lead in areas of their expertise. Optimism must translate into quick action.

(PM Heblikar is Managing Trustee, Institute of Contemporary Studies Bangalore (ICSB) and a former Special Secretary, Government of India).

Published Date: 5th January 2017, Image Source:

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