Day Two
Directorate of Investment and Company Administration (DICA)
Republic of the Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI)
~Margaux Fimbres
Directorate of Investment and Company Administration (DICA)
Today
our group traveled to the Directorate of Investment and Company Administration (DICA), a government entity which oversees investments and joint ventures by
foreign companies in Myanmar. The Deputy Director took an hour to sit down with
us and explain the investment landscape of Myanmar, the goals of the Myanmar
government in terms of attracting investment and protecting local Myanmar
peoples’ interests, and the challenges an organization such as DICA faces in an
emerging country's early stages of development. She was candid and truthful
about the positive changes and current obstacles she and her department encounter daily.
The
most important change to foreign investment in Myanmar is the recent change of
the Foreign Investment Law, which has made an initiative in attracting further
foreign investment and encouraging greater corporate social responsibility by those
companies. The new incentives include a longer grace period in the tax exemption
law and the ability to create joint ventures with local companies. In addition,
the new law uses a new negative approach to identify actions foreign investors
cannot take, rather than the previous method indicating actions foreign
investors can take. The assumption therefore is that anything not specifically restricted is fair game for foreign investors. In regards to further protecting the local population, the
tax exemption law excludes companies associated with poor health and
detrimental environmental practices (e.g. tobacco, alcohol, and mining).
Finally, the law includes important customs duty exemption for construction of
new commercial operations. This tax holiday has a five-year period. Overall,
the Foreign Investment Law revisions have created a more attractive environment
for foreign investors.
In terms of better labor practices, DICA is enforcing better
corporate social responsibility practices that will employ local Myanmar
citizens in projects. This includes an incrementally increasing proportion of
Myanmar skilled labor over three two-year periods. In addition, investments in
technology will lead to training local Myanmar citizens; the government has an
increased focus on vocational training. However, many of these requirements are
only in effect for companies with contracts after the introduction of the new Foreign
Investment Law revisions. Companies operating in Myanmar before these revisions
can be grandfathered-in. These new labor
laws encourage skills-transfer, which will have a greater long-term impact on
the well being of the Myanmar economy than simple investment in projects.
The
growth in foreign investment can easily be seen by the Deputy Director General
and all those working within DICA. Before 2011, DICA oversaw less than thirty
new permits a year; while today DICA processes about twenty per week. DICA
seeks technological assistance from OECD and UNTP. As FDI continues to grow,
DICA struggles to continue operations with its limited staff for support.
~Matthew Florian
Republic of the Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI)
Today, our group met with officials from the Union of
Myanmar Federation of Chambers of Commerce and Industry (UMFCCI) to discuss
international investment in Myanmar and the role of the UMFCCI in facilitating
business opportunities. UMFCCI is Myanmar’s largest not-for-profit business
federation, and it was founded in 1919. UMFCCI acts as a bridge and voice
between the government and private sector, and provides various services to its
members.
The UMFCCI has the following objectives:
·
To participate in the implementation of the Four
Economic Objectives of the State
·
To accelerate the pace of economic development
·
To safeguard the economy for the State and
National people
·
To cooperate with the State in economic and
social activities
·
To lead and cooperate with the business
associations
·
To act as a bridge between the State and private
sector
·
To support for more competitiveness of SMEs and
SMIs
·
To lead Myanmar business community into
globalized economy
·
To develop commerce, production and services to
global standards
·
To act as independent NGO
·
To disseminate information and knowledge in
regards to global standards in commerce
UMFCCI is working together with 71 affiliated associations,
such as regional and state chambers of commerce and industry. The organization
aims to diversify and intensify its activities towards achieving the state’s
goal of simultaneously developing a modern industrial sector along with the
agricultural sector, in order to achieve rapid development, poverty
alleviation, and establish a modern, prosperous, developed nation.
Officials from UMFCCI told our group that Myanmar has a long
ways to catch up, given their recent bloody history and subsequent
international sanctions. Australia and the European Union have totally lifted
sanctions, whereas the United States has suspended sanctions.
The UMFCCI officials are emphasized that education will play
a key role in bridging the economic gap between Myanmar and its ASEAN
neighbors. In particular, there are plans to ramp up vocational training in
Myanmar.
~Margaux Fimbres
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