By Jason Szep and Aung Hla Tun
NAYPYITAW, Sept 12 A law intended to accelerate
foreign investment in Myanmar will be signed soon by the
president after pro-democracy leader Aung San Suu Kyi helped
kill a clause that would have protected crony businessmen, a
government minister said on Wednesday.
The long-delayed foreign investment law, passed by
parliament last week and now awaiting approval by President
Thein Sein, is widely expected to clear the way for an increase
in foreign investment by companies such as Coca-Cola Co
in the resource-rich country that emerged only last year from 49
years of military rule.
Suu Kyi, the Nobel Peace Prize-winning opposition leader,
joined other lawmakers in opposing a proposal that would have
forced foreign companies to invest at least $5 million of
start-up capital to do business in Myanmar, said Soe Thein, a
minister in the president's office, describing her as
influential in the debate.
That clause, which would have been the largest such
provision in Southeast Asia, was widely seen as an attempt to
protect a coterie of businessmen who prospered under military
rule. It would have dramatically reduced foreign competition,
especially among small businesses, if included in the new law.
"She took part in talking about the new foreign investment
law and supported dropping stuff like the $5 million
requirement," Soe Thein said an interview.
Backing of the investment law marks a significant turn for
Suu Kyi, who in June urged corporate executives to avoid
"reckless optimism" and warned investors that "even the best
investment laws would be of no use whatsoever if there are no
courts that are clean enough and independent enough to be able
to administer those laws justly".
"We all our friends now," Soe Thein, a former naval
commander-in-chief and senior member of the ruling
military-backed party, said of the pro-democracy leader, who
spent 15 years detained at home by the former ruling generals.
He said the law would probably be approved soon, although it
was unclear if it would be signed before the president and Suu
Kyi visit the United States, scheduled for later this month.
Resource-rich Myanmar is opening up to the world after
nearly 50 years of military rule and economic stagnation.
Western countries have lifted or suspended sanctions since a
quasi-civilian government took over last year but most firms are
waiting to see details of the investment law, which was held up
in parliament for five months as proposed changes went back and
forth between the assembly and the president's office.
A FINAL FRONTIER
Among other companies that have expressed interest in
investing in Myanmar, one of Asia's last frontier markets, are
hotelier Marriott International Inc, car makers Suzuki
Motor Corp and Ford Motor Co plus tech firms
Panasonic Corp and Toshiba Corp.
But many executives say they want regulatory clarity in a
market dominated for decades by tycoons with ties to powerful
generals, a tightly knit circle of cronies who face competitive
threats as the government liberalises the economy.
Soe Thein was speaking on the sidelines of an investment
conference held by Euromoney magazine in the capital, Naypyitaw,
where the new law was hotly debated.
The latest draft raises the maximum share foreign companies
can hold in 13 restricted sectors by one percentage point to 50
percent, retaining a protectionist flavour by capping foreign
investment in several important industries.
Serge Pun, chairman of SPA Group, a Myanmar investment
company whose holdings range from real estate to financial
services, sees that as a mistake, illustrating the difficulties
the government faces in one of its most important pieces of
"My question is very simple. If it is a restricted industry
where we feel it should be kept in the hands of Myanmar
nationals, then the government must be very clear-cut that the
foreigner must be minority," he said.
He also believed the 13 industries were vaguely defined.
"Some of them are specific and some of them are general, so
is it really 13, or is it 13 that covers maybe another 35?"
The restrictions could cause confusion if 50-50 control
meant decisions were deadlocked, Pun said. "Who's actually going
to have the big say? That is the problem."