NAYPYITAW, Myanmar — The president of Myanmar's main business
federation said that despite rising pressure from investors to ease the
country's investment laws Myanmar companies need protection from foreign
competitors.
Responding to questions from The
Wall Street Journal at an investor conference in Myanmar's capital, Win Aung,
the president of the Union of Myanmar Federation of Chambers of Commerce and
Industry, said he expected "there will be some" revisions to a
controversial foreign-investment law passed by Myanmar's Parliament last week,
which restricted foreigners to 50% ownership of ventures in certain politically
sensitive industries.
President Thein Sein hasn't yet
signed the law and pressure has been rising from investors—including some at a
conference run by Euromoney magazine in Naypyitaw this week—to send the law
back for amendments so that foreigners can get more control in some sectors.
Whatever happens with the law,
though, "we do have to give a chance to our SMEs so we can grow
together," Mr. Win Aung said, referring to small and medium-size
enterprises in what remains one of Asia's least-developed economies.
"We don't want to be too
protective," he said. But "we have to care about our SMEs."
Finalizing the foreign-investment
law is seen as a crucial step toward attracting more international capital into
Myanmar as its leaders try to turn the page on decades of military rule. A new,
nominally-civilian government that took power last year has eased constraints
on the media, freed political prisoners and floated the country's currency in
an effort to expand freedoms and modernize the economy, and Western leaders
have eased sanctions. But multinational companies have said they likely won't
commit significant sums of money to the country until a comprehensive foreign
investment rule is signed into law to clarify guidelines for taxation, foreign
ownership and other issues.
Government officials had
initially said the country's new investment law, which has been in the works
for many months, would be extremely welcoming to foreigners. But many domestic
companies pushed back, saying that opening the door too widely to foreigners
would wind up destroying some local businesses.
That resulted in last week's
compromise, which called for letting foreigners and local companies share 50-50
ownership in about a dozen sensitive sectors such as agriculture—a result that
pleased neither local firms nor foreigners, because it left too much
uncertainty over who would control the firms.
Although foreign investors are
now lobbying Naypyitaw to loosen the law, it's also becoming clearer that some
domestic companies will continue to fight if the law is sent back for changes.
Mr. Win Aung defended some
aspects of the new law, which he said wasn't as onerous on foreigners as some
investors think. For example, under the rule foreigners would be allowed to
apply for exemptions to the 50% cap, meaning it might not be enforced in all
cases in restricted sectors.
Either way, it is "very
natural that local companies are concerned about foreign investment coming into
their businesses," he said.
It isn't yet clear when Mr. Thein
Sein will make a final decision on whether to accept the law or send it back
for changes, as is increasingly expected.
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