Executive summary
Myanmar is emerging from decades of military rule, central planning and economic isolation as it implements political and economic reforms and, as a result, faces fewer international sanctions. The country has great potential for rapid development due to its vast natural resources, abundant labour force and geostrategic location.1 Capitalizing on these assets to achieve its goal requires well-implemented regulatory and institutional reform. To assist in these efforts, ESCAP and OECD conducted a multi-dimensional policy review of Myanmar from the end of 2012 in coordination with the Government of Myanmar.2 During the policy review, the lack of information on the business conditions on the ground was found to be a serious impediment to the development of appropriate polices. To address this issue, ESCAP and OECD carried out a business survey jointly with the Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI). The survey provides a rich dataset of more than 3 000 firms in all sectors and geographic regions to help in understanding the characteristics of firms on the ground, their business environment and the challenges they face. This publication explores the survey results in depth, in order to develop policies that address these challenges and promote private sector development in Myanmar. The survey results are discussed from various key perspectives of businesses in order to identify effective policy prescriptions. They include the business environment, market conditions, innovation, human resources, access to finance, productivity, corruption, agribusiness and food industries, which are briefly summarized below.
1. Business environment The development of an enabling business environment is crucial to the promotion of growth, productivity, employment and well-being. Although the country has instituted various reforms since the early 1990s the regulatory and policy framework remains fragmented. Permission from parallel line ministries is often required and coordination is reportedly lacking. This has led to the growth of a large informal sector, which makes conditions very difficult for small and medium-sized enterprises (SMEs). The survey results have revealed wide-spread dissatisfaction with several aspects of the business environment. Corruption, access to skilled labour, technology and access to land are most frequently cited as very severe obstacles faced by businesses in Myanmar. Access to finance is also found to be a major obstacle, especially by SMEs. Although infrastructure such as access to electricity and water supplies are not rated as severe obstacles overall, they are more severe in some geographical regions. The Government of Myanmar will therefore need to streamline administrative procedures for obtaining registration, licences and permits perhaps by providing a “single-window� service, which will also reduce the opportunities of irregularities. Infrastructure must not only be improved but also distributed equitably throughout the nation with a specific industrial zone development plan. Specialized assistance should be provided to entrepreneurs and SMEs in addressing issues such as access to finance and bureaucracy. The nation is part of the Association of Southeast Asian Nations (ASEAN) and borders two major economies, China and India.
1
OECD has, so far, published two books under the project (see OECD, 2015 and 2013). Both publications are available at www. keepeek.com/Digital-Asset-Management/oecd/development/multi-dimensional-review-of-myanmar_9789264202085-en#page1 and www.keepeek.com/Digital-Asset-Management/oecd/development/multi-dimensional-review-of-myanmar_9789264220577en#page1, respectively.
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