NAYPYITAW Myanmar leader Aung San Suu Kyi on Saturday made a pitch to foreign investors, promising a clearer legal framework and opportunities in untapped economic sectors, two weeks after U.S. President Barack Obama lifted most sanctions on the country.
Since taking power in April, Suu Kyi has been criticized for delays in forming a commission to approve foreign investment projects, overzealous scrutiny of construction sites in the country's largest city, and an economic plan that lacked details.
That, combined with a big political shake-up after the first democratic elections in decades, meant foreigners invested only $380 million from April to July, down from $2.6 billion in the corresponding period last year.
The situation changed in September, when Suu Kyi visited Washington, where Obama announced his intention to remove economic sanctions. Suu Kyi quickly followed with a push to pass foreign investment law and other necessary regulations.
"Our government noticed particular criticism from the public that an economic growth of the country is slowing," said Suu Kyi at a meeting with foreign donors, diplomats and investors in the capital Naypyitaw.
"I would like to stress that no one but our government is more eager to achieve progress, because economic development would help us establish democratic institutions here,” said the Nobel Peace Prize laureate.
As part of her economic offensive this summer, Suu Kyi has embarked on a series of high-profile foreign trips, promoting Myanmar as an investment destination in China, Thailand, the United States and India. A trip to Japan is due in early November.
Finance and development minister Kyaw Win, also speaking at the event, sought to reassure foreign investors by pledging they would be treated equally with local companies and will not face arbitrary expropriation of businesses or licenses.
Nearly 50 years of economic mismanagement by a military dictatorship has shattered the country's roads, airports and electricity supply. This means there is little homegrown industry and Myanmar's recent annual economic growth of 8 percent of GDP has been mostly fueled by imports.
This has meant a widening trade and current account deficits that have pressured the local currency, the Myanmar kyat.
“We need to push trade by increasing exports and reducing imports, by creating import substitution industry," said Kyaw Win.
He said it was important to develop domestic production through small- and medium-enterprises in manufacturing, promising technical and financial assistance.
Kyaw Win also promised a crackdown on smuggling of goods that has seriously depleted tax revenues. Myanmar's central government has little or no control over large parts of the northeastern border with China and Thailand where ethnic armed groups control cross-border trade.
"Illegal trade is prevalent in Myanmar. The volume of illegal trade is higher than that of legal trade. So we are trying to stop it," the minister said.
(Writing by Antoni Slodkowski; Editing by Angus MacSwan)