EuroCham Business Confidence Survey and Business Guides were launched at Melia Hotel in Yangon on Thursday. According to Filip Lauwerysen, executive director of EuroCham Myanmar, there was a significant drop in market entry from European companies, partly because of the Rakhine crisis.
“Even though we have noticed a decrease of activities and investments before the heights of the crisis, it does have an effect -- the European companies don’t see that as a very localised conflict, it affects the overall choice of investments,” said Lauwerysen.
Only around 5 percent of the European companies in Myanmar entered the market within this year, while 50 percent of the companies entered two to five years ago.
Tourism had been affected more than other aspects of investment. Long-term investments were less influenced, according to Lauwerysen.
Other challenges of investment in the country were the legal uncertainties and regulatory issues. According to U Than Aung Kyaw, deputy director general of Directorate of Investment and Company Administration (DICA), from the Ministry of Planning and Finance, the government had been undertaking substantial economic reforms in the past year.
The Myanmar Investment Law (MIL) was enacted last year to secure investment protections and create a business-friendly environment, according to U Than Aung Kyaw. It also granted different levels of tax exemption to the investors.
According to him, another regulatory reform was the new Companies Law which would facilitate company registration and reduce the regulatory burden for smaller companies. However, although the parliament passed the law last week, its enactment was delayed to August in 2018.
Pedro Campo Llopis, deputy head of cooperation of European Union Delegation to Myanmar said that it would be essential to dialogue with the government. He also responded the weakening business confidence in Myanmar by saying “the European Union will try to revive this.”
Guillaume Rebiere, executive director of French Myanmar Chamber of Commerce and Industry, said he hoped that the investments would grow again next year. He said he looked forward to more corporations between French companies and Myanmar government in terms of building more infrastructure.
Paolo Arnello, the representative of Chamber of Commerce Italia -- Myanmar, agreed by saying “it takes time to establish relationships with the people here and with the partners. It is a normal process -- I am sure we are growing slowly and staying strong.” He also added that he would expect more delegations next year.
Martin Klose, delegate of German Industry and Commerce in Myanmar, said both European companies and Myanmar should be “more modern, more proactive and more bold in opening up investments.” He said that German companies were interested to invest more in energy, water infrastructure and waste management in the coming year in Myanmar.
According to the newly launched Business Confidence Survey and Business Guides, some of the most popular areas for reinvestment are Mandalay and Yangon, followed by Tanintharyi.
Currently, the major sectors of the European Union’s investment are manufacturing, oil and gas and telecommunications, according to U Than Aung Kyaw.