Myanmar's leader on Friday signed into law an eagerly awaited foreign investment bill, while the...
Myanmar's leader on Friday signed into law an eagerly
awaited foreign investment bill, while the World Bank pledged to resume
aid to the country as it emerges from decades of military rule.
Global corporate giants from Coca-Cola to Visa are lining up to enter the impoverished but resource-rich nation, as Western nations roll back sanctions against the one-time pariah state.
The World Bank announced it would inject $245 million of aid into Myanmar, resuming assistance after a quarter-century absence.
The Washington-based institution closed its Yangon office in 1987 and ceased new lending after the then-ruling junta stopped making payments on debts worth hundreds of millions of dollars from previous aid programmes.
The enactment of the investment bill follows weeks of wrangling about how far to open the doors to overseas firms, with business "cronies" of the former junta thought to have opposed rapid change.
"Investors are waiting for the bill to be approved. That's why he signed it as soon as he could," Zaw Htay, an official in President Thein Sein's office, told AFP by telephone.
He said the former general wanted to enact the bill before flying to Laos to attend a major summit of Asian and European leaders which starts on Monday.
A business-friendly version of the bill was approved by parliament on Thursday, after Thein Sein sent back an earlier draft to lawmakers amid concerns that it was too protectionist.
An earlier limit of 50 percent for a foreign investor's stake in a joint venture has been dropped, and the new version allows the investment ratio to be decided by the foreign and local partners, MPs said.
More detailed rules for each sector will be drawn up by the Myanmar Investment Commission.
One of the major complaints of businesses eager to enter the country formerly known as Burma has been the lack of a clear legal framework.
"I think it will attract investors who are interested to come to Myanmar," said Aung Kyi Nyunt, a lawmaker with Aung San Suu Kyi's National League for Democracy opposition party.
Thein Sein has vowed to put the economy at the centre of a new wave of reforms, following dramatic political changes since almost half a century of outright military rule ended last year.
"Job opportunities are rare in our country," the president said last month at his first domestic news conference since taking power 18 months ago.
"To get these opportunities we definitely need foreign investment," he said.
Myanmar is seen by many investors as the next regional frontier market as businesses eye its oil, gas and other natural resources and strategic location between China and India.
The country was once known as the "rice bowl of Asia" because of its agricultural riches. But economic mismanagement during nearly 50 years of junta rule left the country deeply impoverished.
Global corporate giants from Coca-Cola to Visa are lining up to enter the impoverished but resource-rich nation, as Western nations roll back sanctions against the one-time pariah state.
The World Bank announced it would inject $245 million of aid into Myanmar, resuming assistance after a quarter-century absence.
The Washington-based institution closed its Yangon office in 1987 and ceased new lending after the then-ruling junta stopped making payments on debts worth hundreds of millions of dollars from previous aid programmes.
The enactment of the investment bill follows weeks of wrangling about how far to open the doors to overseas firms, with business "cronies" of the former junta thought to have opposed rapid change.
"Investors are waiting for the bill to be approved. That's why he signed it as soon as he could," Zaw Htay, an official in President Thein Sein's office, told AFP by telephone.
He said the former general wanted to enact the bill before flying to Laos to attend a major summit of Asian and European leaders which starts on Monday.
A business-friendly version of the bill was approved by parliament on Thursday, after Thein Sein sent back an earlier draft to lawmakers amid concerns that it was too protectionist.
An earlier limit of 50 percent for a foreign investor's stake in a joint venture has been dropped, and the new version allows the investment ratio to be decided by the foreign and local partners, MPs said.
More detailed rules for each sector will be drawn up by the Myanmar Investment Commission.
One of the major complaints of businesses eager to enter the country formerly known as Burma has been the lack of a clear legal framework.
"I think it will attract investors who are interested to come to Myanmar," said Aung Kyi Nyunt, a lawmaker with Aung San Suu Kyi's National League for Democracy opposition party.
Thein Sein has vowed to put the economy at the centre of a new wave of reforms, following dramatic political changes since almost half a century of outright military rule ended last year.
"Job opportunities are rare in our country," the president said last month at his first domestic news conference since taking power 18 months ago.
"To get these opportunities we definitely need foreign investment," he said.
Myanmar is seen by many investors as the next regional frontier market as businesses eye its oil, gas and other natural resources and strategic location between China and India.
The country was once known as the "rice bowl of Asia" because of its agricultural riches. But economic mismanagement during nearly 50 years of junta rule left the country deeply impoverished.
© 2012 AFP
By Sam Holmes
- Agence France-Presse/Getty Images
- A Myanmar labourer works in a paddy field on the outskirts of Naypyidaw.
The bank is scheduled to take part in a multilateral effort in January to help Myanmar deal with some of its crippling debt obligations to various creditors, which need to be cleared before the country can fully access a full suite of international aid financing. Other creditors include the International Monetary Fund, the Asian Development Bank and the Paris Club of sovereign creditors.
The World Bank is one of several multilateral lenders that have re-engaged more closely with the Southeast Asian nation since a nominally civilian government took power last year and began implementing a political and economic overhaul. The bank and other international financial-aid organizations gave Myanmar a wide berth after its former military regime began cracking down on its pro-democracy opponents in 1988 and the re-engagement reflects Myanmar’s improved standing in the world under the leadership of President Thein Sein.
“Our strategy has a strong focus on inclusive development and reforms that create real opportunities for all the people of Myanmar,” World Bank East Asia and Pacific Regional Vice President Pamela Cox said. “Transitions take time, but we are committed to working with all our partners to ensure that poor people start to feel the benefits of reforms quickly, especially through better services from the government.”
The $80 million project grant will be provided ahead of any arrears clearance to help deliver quick benefits to the poor and vulnerable.. The project will establish community-elected councils in 15 townships, one in each of Myanmar’s states, regions and territories. Each council will identify urgent needs and prepare plans for development projects.
Another $165 million in assistance has been earmarked for the country once it clears its $406.5 million in arrears to the bank.
The World Bank has also released an interim country strategy for its re-engagement with Myanmar over the next 18 months, which includes the provision of technical assistance in public finance, regulatory reform and private sector development.
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