MCRB director discusses Myanmar FDI and development in light of the Rakhine crisis

18 October 2017
MCRB director discusses Myanmar FDI and development in light of the Rakhine crisis
Dr Vicky Bowman, Director of the Myanmar Centre for Responsible Business.

Vicky Bowman is Director of the Myanmar Centre for Responsible Business and was previously a British diplomat in the country. Mizzima’s Aung Thura sat down with Ms Bowman to discuss the FDI, development in light of the Rakhine crisis.  
You have witnessed Myanmar’s transition, and you were also a diplomat to the country. Are you concerned now?
I am concerned about the current situation and for the half million people who have left their homes to go to Bangladesh. I am also concerned for what it does to the transition in the country and we know that the government has very limited capacity to deal with the most pressing problems around economic reform and peace. On top of that there is the problem in Rakhine which they have really to focus on. So, it is a concern for people who want to see sustainable development in the country.
Are you worried about the Myanmar investment climate because of the Rakhine situation?
So, I think that there will be an impact on investment, but I think there will also be an impact on the more immediate situation like whether or not to people want to come and source their garments from Myanmar. And the garment sector is a big employer as is tourism because these are the kinds of decisions made in very short timeframes. I do not think it will have an impact on existing investment like oil and gas which is much more long term. But in terms of people looking to source products from Myanmar whereas two or three years ago it was we would say ‘flavour of the month’, very popular, some people have even said to me we don’t want want to source Myanmar garments at all in our shops at the moment as it is too sensitive. So, this is a real problem for the country. I think we are lucky that just before the attack by ARSA, we had the report from Kofi Annan and that was very focused not just on questions of ethnicity but also economic development. I think it is really important that the government implements that report but it is also important that companies – both Myanmar companies and foreign companies and also development partners - all support the government to implement that report because for me, the recommendations of that report were a very good way forward for what is a very difficult situation.
The World Bank said that Myanmar’s economy is expected to recover with some growth but also it worries about FDI because of the country’s recent deterioration in security in Rakhine State. Does it negatively affect the investment flow?
I think that what was happening in Rakhine actually has an impact on both foreign investment and domestic Myanmar investment, because what it is doing in the first case is distracting the government from some of the very important economic reforms they need to make that has a very significant impact on all business. But certainly for foreign investors as well the images shown on TV screens are being reflected back to there customers, tourists who might be thinking to come here. So, we have had quite a lot of inquiries from companies asking us as the Myanmar Centre for Responsible Business what should they be doing if they are already investing here. And what we say is do your own human rights due diligence about how your company’s activity might in some way have an impact on the situation in Rakhine. In most cases, there will be very little impact because there is actually very little foreign investment in Rakhine and but what I think all companies can do is look at questions like do they have anti-discrimination policies which encourage their own staff not to harass or in some way discriminate against people from other religions and also do they have social media policies because if their staff are posting Facebooks post which are sending a negative image of the company  which is contrary to its values that will have an impact on that company. So, the company should insure that their staff are aware that posting hate speech or reposting fake news is something they should not certainly be doing in company time or with any company connection and frankly should not be doing in personal time either If they want to be showing that they are subscribing to that company’s values.
Will the Rakhine situation have a negative impact on the Myanmar economy?
I think there will be impact on the investment coming into Myanmar but I think the bigger impact will be on the short term such as decision to source garments from Myanmar and also the decisions by tourists to come and visit Myanmar. But actually in my view, the biggest impact on the economy will come not so much directly from the Rakhine situation but also for the potential to disrupt the government’s ability to focus on economic reform because it is actually the economic reform agenda and making important decisions on issues  like energy and power that is really one of the things holding up investment and holding up GDP growth. So, it is really important that the government maintains that focus on that agenda as well and does not get too distracted.
What advice would you give to the Myanmar government?
I think it is important that the government does not loose sight of its economic reform agenda becuase in the end that is actually the most important thing which will either attract or deter foreign investment. Certainly, what is happening on the border with Bangladesh is a factor. In the end, many companies including perhaps the companies from Asia, the things what will attract them most is a good investment climate. So, it is really important that the government both addresses the situation in Rakhine and implements the Rakhine report, but also, that is continues with economic reforms which create an investment-friendly climate here.