The Economy of Myanmar

Myanmar is located in a region of dynamic growth and is surrounded by the huge markets of China and India. With consistent growth in the gross domestic product (GDP) above 5% throughout the last decade, the country has been one of the fastest-growing economies of Southeast Asia for quite some time. Over the five years, the economy of Myanmar has been growing at a steady pace, according to the World Bank.

The economy of Myanmar is based on agriculture for 56% of GDP. The government of Myanmar initiated many schemes and policies for the primary sector of its economy (Agriculture) in recent times to boost the economy. They increase foreign exchange earnings with agriculture exports and promote rural development. Some major policies like Abolition of the Rice Production Quota for Farmer, Pesticide Law 2004, Farm Land Law 2012 were reformed in 2016. The government opened its economy to international trade, promoted competition in the regional market and introduced new investment law.

Sectors of Economy of Myanmar

Though agriculture is the central sector of the economy of Myanmar, let us look at other essential sectors of the economy of Myanmar.

• Primary Sector-Agriculture sector is the primary sector of the economy of Myanmar. Most of the population of Myanmar is employed in the agriculture sector, directly or indirectly. Rice production contributes more than half of the country’s gross domestic product (GDP).
• Secondary Sector-Mining, industry and energy is the secondary sector of the economy of Myanmar. Tobacco production is the leading industry in the manufacturing sector of Myanmar. Along with tobacco production, steel production, cement production, and production of transportation equipment are important industries of the nation—around 25 percent of the GDP of Myanmar, based on this sector. Myanmar has plentiful natural and energy resources. The energy sector of Myanmar is a growing sector that made the country a leading natural gas and petroleum producer in Asia. 
• Tertiary Sector-Tourism sector is a developing sector in Myanmar. There are many beautiful temples, pagodas, and other tourist attractions in the country, which further promotes the tourism industry. This industry plays an essential role in the economy of Myanmar as tourism has increased in recent times.

Foreign Investments in Myanmar

Significant growth has been seen in foreign investment in Myanmar in recent times. In order to increase trade with foreign countries, the Myanmar investment commission (MIC) introduced new policies and tax relief under the Myanmar Investment Law. To attract foreign investment, three Special Economic Zones are (SEZ) set up in Thilawa, Kyaukphyu and Dawai by the Government of Myanmar.

According to the Directorate of Investment and Company Administration, there was $2.2 billion of foreign investments in Myanmar in 2020. Singapore, China and Thailand are the key investors in Myanmar in the financial year 2019-2020. Chevron Corp has a large offshore gas project in a joint venture with Myanmar Oil and Gas Enterprise. Singapore-based Slita Pte Ltd, Myanmar’s Lita Company and Myint Myat Htut Khaung International are set to open CMP operations in Yangon city in the next month. 

Myanmar Investment Commission

Myanmar Investment Commission (MIC) is the body appointed by the government of Myanmar to develop foreign investment in the country. This Commission was formed in April 1994 under the Myanmar Investment Law. The formation of the Myanmar Investment Commission is mentioned in chapter IV, article 6 of Myanmar Investment Law. The Government of Myanmar formed the Commission with a minimum of 9 members. The formation of this Commission is as follows;

1. Chairman -The chairman is the head of the MIC and is nominated by the President of Myanmar. The nominated chairman should be a member of the Government of Myanmar. The chairman may assign any duty to any official of the commission.
2. Vice-Chairman – The Vice-Chairman is appointed by the Government of Myanmar and works under the Chairman of MIC. The Vice-Chairman of this commission acts as the chairman in the meeting in case the chairman is absent.
3. Members – Similar to the Vice-Chairman of MIC, the member of this commission is also appointed by the government of Myanmar. The members of MIC are suitable persons from government organisations, government departments, Union ministers, and specialists from private sectors.
4. Secretary – Secretary of MIC is the ex-officer of the Myanmar government and is responsible for administrative activities of the Commission office.

Powers of Myanmar Investment Commission

The powers of the Myanmar investment commission are mentioned in the Foreign investment law of Myanmar under section 56, subsection (b).

1. Myanmar’s investment commission may approve or reject foreign investment.
2. MIC provides the work permit with the recommendation of the relevant ministry.
3. MIC can provide tax exemptions and relief in tax to the investors.

Myanmar Investment Commission looks out for administrative activities of the commission office. Myanmar Investment Commission is responsible for protecting and assisting the investment of foreign investors. In the past decade, MIC has focused on the growth of the economy of Myanmar and attracting new investors. On 6 June 2017, a new Myanmar investment commission was established to achieve these goals. This New Myanmar Investment Commission is structured to grow and facilitate foreign and domestic investment. In order to generate employment opportunities, MIC approved 13 new investment projects in November 2021.

Conclusion

The economy of Myanmar is underperforming over the longer term, despite being a rich country in terms of natural resources. The economy of Myanmar is based on the agriculture and export of petroleum gases.

In recent times, the economy of Myanmar has received a boost, which is the result of the development progress of past decades in the field of foreign investment laws and ease of doing business.