CHAPTER 1. Business environment was assessed for the first time in 2013, it was ranked at 139 out of 148 countries (WEF, 2013); however, since then its ranking has advanced to 134 of 144 countries (WEF, 2014). However, challenges still remain as the country ranks beyond 100 in all pillars apart from labour market efficiency and market size. The labour market is ranked at 72, mainly driven by flexible wage determination and the high female-male ratio in the labour force (WEF, 2014). Market size refers to the domestic market, as the export market is not well-developed. During 2013-2014 the country has seen improvements in all pillars except health and primary education where its rank has been downgraded from 111 out of 148 countries to 117 out of 144 (WEF, 2013 and 2014).
conducting business in Myanmar. Access to finance, corruption and inefficient bureaucracy topped the list, followed by lack of skilled workers and unstable policies (WEF, 2014). The detailed results of the Executive Opinion Survey are presented in figure 1.3. The World Bank’s annual “Doing Business” report conducts a comprehensive survey of business conditions in more than 180 countries. It reviews quantitative indicators on regulatory conditions faced by a local SMEs by tracking changes in regulations affecting 11 areas in the operations of a business: (a) starting a business; (b) dealing with construction permits; (c) getting electricity; (d) registering property; (e) getting credit; (f) protecting investors; (g) paying taxes; (h) trading across borders; (i) enforcing contracts; (j) resolving insolvency; and (k) employing workers (World Bank, 2013). The report provides policymakers with a useful view of the position of their country compared to other countries in the region. As shown in figure 1.4, Myanmar is lagging behind its neighbours considerably (World Bank, 2014a). The distance from the frontier
A key ingredient of the Global Competitiveness Index is the Executive Opinion Survey which captures the opinion of business leaders from around the world on a broad range of topics. In the latest survey in Myanmar, a total of 165 leaders were asked to name the issues they believed were most problematic for
Figure 1.3. The most problematic factors in doing business in Myanmar Access to financing.......................................................18.0 Corruption.....................................................................13.9 Inefficient government bureaucracy................................9.7 Inadequately educated workforce...................................8.7 Policy instability...............................................................8.6 Inadequate supply of infrastructure.................................7.1 Foreign currency regulations...........................................6.2 Tax regulations................................................................4.8 Inflation...........................................................................4.0 Government instability/coups..........................................3.8 Poor work ethic in national labour force..........................3.8 Restrictive labour regulations..........................................3.8 Tax rates..........................................................................3.3 Insufficient capacity to innovate......................................2.1 Crime and theft................................................................1.6 Poor public health............................................................0.6 0
5
10 15 20 Percentage of respondents
Source: WEF, 2014.
Figure 1.4. Myanmar lagging behind its neighbours in doing business Malaysia (ranking 18)
78.8 75.3
Thailand (ranking 26) ESCAP Average (ranking 88)
63.5
China (ranking 90)
62.6 59.2
Indonesia (ranking 144) India (ranking 142)
54.0
Lao PDR (ranking 148)
51.5
Myanmar (ranking 177)
43.6 0
20
40
60
Distance to frontier score
Sources: Doing business database; authors’ calculations.
9
80
100
25
30