Myanmar

MKT10901 Emerging Markets

Assignment 1

Topic: Myanmar

Module Leader: Dr Maktoba Omar

Tutor: Noopy Ha

Student: Shek Chi Chung

Student ID: 40186848

Table of content 

1. Introduction

The report aims to find out whether Myanmar is suitable for the foreign companies to enter or not. The following paragraphs will cover different areas to show the current situation of Myanmar.

1. Overview of Myanmar

For the past few years, Myanmar has some big changes. It changed the authoritarian military system to democratic governance, the centrally directed economy to a market-oriented economy and 60 years of conflict to peace in its border areas (The World Bank, 2014). Those changes help Myanmar to become a competitive emerging market for the foreign companies to invest their businesses there because democratic countries are more attractive than authoritarian countries (Jensen, 2003). Myanmar has low population densities but rich of natural resources (The World Bank, 2014). It attracts the foreign companies to set up their production line in there because of the low cost labors and cheap renting (The Economist, 2012). Moreover, it located near China and India. It helps Myanmar to position to be a large mineral, natural gas and agricultural produce supplier (The World Bank, 2014).

1. The major challenge (Sanction)

In the past, Myanmar major challenge is the pressure under the other countries’ sanction. It leads Myanmar hard to do the businesses worldwide and facing a lot of problems, likely debts and trade barriers. 

Now, the western countries started to lower the sanction measures against Myanmar because of those changes (HKTDC, 2014). Also, the EU removed the economic sanctions against Myanmar in April 2013, and Myanmar regain the EU's Generalized System for Preferences (GSP) in 2013, it helps to enjoy both duty and quota free export to EU (HKTDC, 2014). Those benefits help Myanmar to boom its economics and attract the foreign companies to set up their businesses.

Moreover, the Unite State (US) paused the investment ban and lowered the import ban against Myanmar (HKTDC, 2014). In addition, it encourages the US companies to do the businesses with Myanmar (HKTDC, 2014). It provides great confidence for the foreign companies to invest.

1. Global Organization

Myanmar is one of the members of the Association of Southeast Asian Nations (ASEAN) (HKTDC, 2014). It helps Myanmar to cooperate with other countries and enjoy better conditions to do the business with other members. The Paris Club of creditor nations and The World Bank agreed to cut down outstands loans, in order to let Myanmar lending for improving the transportation and telecom infrastructure (HKTDC, 2014). It shows that Myanmar has a better relationship with the other countries and other global organizations after those changings and increasing the foreign direct investment for improving the transport and telecom infrastructure.

1. Country Analysis

The country analysis will focus on the political, economic and ideological factors and trade, investment and migration as well.

1. Political factors

Western countries ease the economic sanctions in response to the Myanmar’s changes (HKTDC, 2014). After ease those sanctions, Myanmar booms its economics.

1. Competition law

Myanmar has its own competition law, which aims to protect the public interest from monopolistic in goods and services (Myanmar Times, 2015). It helps to attract the foreign investors to set up its businesses as there is no monopolistic and it provides a good environment for fair competitions.

1. Government regulations

In order to provide a better business environment for the foreign countries, all the import and export products will be granted license-free from April 2013 (HKTDC, 2014), it helps to improve its efficiency in trading. Simplify the regulations helps to attract foreign companies and reduce the uncertainty.

1. Decision to improve infrastructure

In order to improve the local infrastructure, the Myanmar’s government liberalized the telecom industry and allowed the foreign investors to bid the telecom licenses in 2013 (HKTDC, 2014). The current mobile subscriptions rate in Myanmar is about 2% in 2012, 7% in 2012 and 13% in 2013 (The World Bank, 2015). The data shows that the Myanmar’s mobile phone industry has high potentials for the future. It provides an attractive market for the foreign mobile phone companies. It may attract the low cost mobile phone providers to export its products or invest their production line in Myanmar.

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