Myanmar narrowly escaped being named as one of the top 10 most difficult places to do business, coming in 177th spot on the 189-country list released by the World Bank on Oct 29, The Myanmar Times reported.
It is the lowest-ranked ASEAN member in the Doing Business 2015 report, and with the exception of Afghanistan, the lowest-ranked Asian country. Nevertheless, foreign investors are consistently ignoring World Bank findings, and are pouring more money in the country.
For instance Thailand’s total investment in Myanmar has nearly reached US$10 billion, making the Kingdom the second-largest source of foreign direct investment (FDI) into the country after China, whose investment swelled past $14 billion.
Myanmar scored last in the “starting a business” category, but did relatively well in the “paying taxes” and “trading across borders” categories, finishing 116th and 103rd respectively.
Myanmar was singled out as the country showing the most improvement for trading across borders in the report.
“Its Ministry of Commerce abolished the export licence requirement for 166 types of goods and the import licence requirement for 152 – reducing the time, cost and number of documents required to export and import general cargo products,” it said.
“As measured by Doing Business, exporting now takes 20 percent less time than before, and importing 19pc less time.”
Investors unphazed by poor ranking of Myanmar
Jim Rogers, chairman of Rogers Holdings in Singapore, and Mark Mobius, executive chairman of Templeton Emerging Markets Group, are among investors who see opportunities in the country over time.
“It’ll take time for Myanmar, but Myanmar definitely is going to get more and more investment,” mainly in infrastructure, Mobius, who manages $53 billion, said in an interview on July 29.
About eight companies may be listed when the exchange opens, according to Shigeto Inami, managing director of Myanmar Securities Exchange Centre, a joint venture between state-owned Myanmar Economic Bank and Daiwa Institute of Research Ltd., a unit of Japan’s second-largest brokerage.
Following in the footsteps of Coca-Cola (KO), Colgate Palmolive (CL) has decided to invest in Myanmar, which has a population of 51 million. They purchased a local company, Laser Brand Toothpaste, for about $100 million.
Other US based companies including General Electric (GE), Caterpillar (CAT), and Ford (F) have also entered the market in Myanmar. Ford is opening a dealership there next year selling F150s manufactured both in the US and Thailand. Although the country does not yet have an active stock market, there are plans to open one in mid-2015 with the assistance of the Tokyo Stock Exchange and Daiwa Securities.
The hope is to have about 6 to 8 companies listed initially; however, Foreign Direct Investment is being encouraged. Recently, Myanmar granted licences to 15 banks to operate in that country but not as retail locations. The licences were granted only to banks in that part of the world; no US or European bank was granted an operating licence.