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October 24, 2019

Myanmar and World Bank’s Ease of Doing Business Index

  • By Aung Htoo
Vice President U Myint Swe addresses the 29th regular meeting between Private Sector Development Committee and Myanmar businesspersons in Yangon yesterday.  PHOTO:ၚMNA

World Bank consultant Mr Jose Ricardo Silva said on Friday 27 September 2019 that Myanmar was among the top 20 improvers list in the World Bank’s Ease of Doing Business Index 2020.
In a time when Myanmar was facing criticisms locally as well as internationally, it was a delight to hear this good news. It was to be expected that there still will be local criticism to this news too. World’s Bank Ease of Doing Business Index was not widely known in Myanmar. There were many factors that complicated the business market in Myanmar. The list would be long and almost never ending with corruption, red tapes, authorized persons taking advantage of granted rights and power, not following the contract/agreement, not following rules and regulations, illegal trade, unauthorized collection of various fees etc.
The first thing to do in straightening and strengthening the market economy was to re-establish the private sector that was the foundation of a market economy. However, the majority of the private sector businesses were not in the mainstream or formal sector but rather in the informal market sector. Most private businesses in Myanmar exist as small and medium enterprises (SMEs) that were weak in having proper accounts. Most don’t have a proper business plan and have no way of raising capital or investment. When companies were permitted to be formed,capitals or investment from the people, the unregistered businesses and SMEs, were untaxed and thus could not be put up as capital or investment in a legal sense. Remittance of Myanmar nationals working oversea amounted to US$ 2 to 4 billion but most were transferred back to Myanmar through the informal “Hundi” money transfer system rather than through the formal and legal banking system.

Raising the Ease of Doing Business Index ranking
To improve the situation the government had drawn up and was implementing Myanmar Sustainable Development Plan. Special economic zones were established. Efforts were made to attract foreign investment as well as to develop the travel and tour sector. Additional efforts were also made toward fulfilling the fundamental requirement for economic develop like road, communication and infrastructure development, developing the private sector and SMEs, eradicating and preventing illegal trade, raising employment opportunities, developing electronic management and raising the ease of doing business ranking index.

Drawing up of transparent work procedures
Transparent work procedures for government services were drawn up. Hluttaw was also interested in ease of doing business by businesses and conducted discussion in the Hluttaw about it as well as including the matter in its reports as well. However, in their discussions, the Hluttaw representatives pointed out that Myanmar’s Ease of Doing Business Index hadn’t improved much.

Ten supporting groups formed
Myanmar participated in the calculation of this index starting from 2014. Due to the reforms conducted after 2011, the index rises from 182 to 171. After 2016 Vice President U MyintSwe led the country’s effort to raise the index ranking to below 100. Ten supporting groups led by Deputy Minister for Commerce, Directors General and Managing Directors were formed toward raising the index ranking.

Reducing steps in work processes
Ease of Doing Business Unit was formed with World Bank and local consultants and meetings were held once every two week to reduce the relevant ministries’ time to conduct public service works, cost and work processes and to raise the quality of the services. Ease of Doing Business Index was calculated by the World Bank during the period October to May the next year and annual reports were published in 31 October. In 2018 Myanmar progressed in starting businesses, obtaining permit to construct buildings and for businesses to obtain power supply.

Three reforms per group
However in comparison internationally, during 2019 the index didn’t decline but there were no progress either. In 2018-2019, support groups were urged to increase reform works and for each group to conduct at least three reforms. Due to this Directorate of Investment and Company Registration conducted four reforms. Yangon City Development Committee conducted seven reforms. Ministry of Electricity and Energy conducted three reforms. Ministry of Agriculture, Livestock and Irrigation conducted three reforms. Customs Department and Ministry of Commerce conducted three reforms and Union Supreme Court conducted two reforms.

Raising the index marks
In doing reforms, legal and law reform need and take time. An example would be the enactment of Insolvency Law and Secured Transaction Law. If such laws can be enacted more marks can be obtained for Ease of Doing Business index through progresses in ability to acquire loan index and resolving financials difficulty index. Private Sector Development Committee led by Vice President U MyintSwe was working toward reducing formalities and processes and had held 29 meetings with private business persons.

Resolutions and coordination conducted
Up to the 29th meeting, a total of 358 suggestions and recommendations were received, resolved and coordinated. Reforms conducted in 2018-2019 for Ease of Doing Business Index 2020 was sent to Doing Business Unit of World Bank headquarter in Washington on 20 June 2019. Ease of Doing Business Index 2020 will be published on 31 October 2019. During the year 2018-2019 reforms conducted such as enactment of Myanmar Company Law and implementation of an online company registration system, cost reduction in company registration, more transparency in service works conducted by the government, reduction of documents required in applying for business permits and reduction of stages in work processes will result in achieving more points in the Ease of Doing Business Index 2020. This will result in rise in Ease of Doing Business Index 2020 ranking and more efforts will be made toward further progress in Myanmar e-government system.

Arrangements made for more reforms
The government will continue its effort toward increasing ease of doing business. Arrangements were made to conduct more reforms for 2021 Index and a total of 40 were earmarked. As the practice of an e-government system will support the progress in Ease of Doing Business Index, the government will continue its effort toward the progress and development of an e-government system.
(Translated by Handytips)

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