Quarterly Business Magazine

In The Trenches Of Reform - The Myanmar Business Forum Seeks To Improve Public-Private Consultation

Posted :
Thursday, August 6, 2015

In The Trenches Of Reform –

The Myanmar Business Forum Seeks To Improve Public-Private Consultation

Author: John Hancock, John “Jay” Martin, The Su Mon

 

As The 2015 elections loom ever larger in the windshield, fighting flares up again along the Sino-Myanmar border, and students once again took to the streets, talk of reform in Myanmar tends to settle upon larger issues like constitutional amendments, ‘federalism’ and political inclusion. Yet while such general topics provide endless fodder for think tank seminars, classroom discussions and barroom debates, the day to day reality of reform in Myanmar at times seems a bit less spectacular. It is in point of fact tedious, painstakingly technical, and labor intensive. While many readers who have been in Myanmar for any length of time can no doubt think of a few programs or initiatives which fit this description, the intent here is to focus on one of them: the Myanmar Business forum.

President U Thein Sein initiated the Myanmar Business Forum (MBF) in February 2014, with the intention for it to serve as a channel of exchange between the Myanmar government and the private sector, both foreign and domestic. The Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI) and International Finance Corporation (IFC) jointly coordinate the private sector side.

UMFCCI provides links to its network of business associations, as well as basic logistical support – everything from providing the MBF secretariat with an office, to hosting most of the meetings to arranging for interpreters. IFC provides key technical support, also bringing to the table its experience in supporting such for a in other countries across ASEAN. The goal of the program is to create a space in which private sector consultation occurs as s regular feature of policy formulation, the end result being a legislative environment conducive to private sector growth.

Fostering Inclusion, Searching For Clarity

The Forum consists of seven working groups-Natural Resources, Infrastructure, Manufacturing / Trade & Investment, Hotels & Tourism, Services, Banking & Finance, and Agriculture, Fisheries & Forestry. Each working group identifies a limited number of common and significant issues which are critical to the effective development of that sector, and which require changes in law, regulation, policy, or practice. A subcommittee is then formed for each issue, and the submissions of the various subcommittees are then consolidated in the working group’s position paper. In drafting the position papers, forum participants draw upon lessons learned by IFC in other countries, particularly with respect to how problems with the business environment as seen as by the private sector should be raised with the government. MBF position papers which have been produced thus far are notably simple and direct: a problem is identified, a simple explanation of why it is a problem is provided, and a solution is offered. Working group papers, once finished, will be consolidated into a single report, which will be presented to a Plenary Session of the Myanmar Business Forum, to be chaired by the President. The intent is for two such Plenary Sessions to be held each year.

Besides in-country technical support, IFC has also funded study missions for private sector and government representatives to travel to Vietnam to Witness first-hand how such a public-private forum works in practice. Government representatives from Vietnam have also travelled to Myanmar in order to explain to their counterparts how the public side of the forum operates, and to impress upon them the importance of such dialogue in the context of economic reform. These interactions have proven effective in convincing some Myanmar officials that private-sector driven reforms can also be of benefit to the government.

While each of the seven industry working group has its own unique issues and problems, it became obvious early on that there were some issues that cut across nearly every industry. The way in which commercial tax is imposed and assessed is one example, and that land right acquisition is a problem for many should come as no surprise. Another constantly recurring theme among participants has to do with the need for simplicity, clarity and consistency in processes, procedures and supporting documentation in submissions to be made to the various government agencies. As is well known, registering companies and applying for licenses and permits with various government bodies can be a complex process, something which reflects (or likely exists because of) the way in which government ministries are organized and interact with each other. Untying such knots is perhaps where MBF will prove to be most effective.

“One of the things we have learned is that these for a are very good at helping the government to set priorities, “says Robb Preston, a consultant for IFC in the private sector secretariat, which coordinates the meetings of the working groups and helps to consolidate subcommittee suggestions into workable papers for presentation to the government. “Business people are naturally good at this. So where you have issues that everyone acknowledges are messy, the discussions that take place at MBF serve to at least disentangle them. Then we seek to provide a structured set of solutions. I guess you could say that providing structure really summarizes what we do overall.”

This larger need to map out complex procedures and institutions, setting simpler structures in their place, comes up a lot in discussion with Preston.

“First, you have to map out the terrain that is already there’, he says. “Then it is easier to figure out where you can start to streamline.”

One example of this process has to do with the ‘gate-keeper’ approach of government agencies to issuing permits and licenses. This involves rigorous and detailed processes of examination, verification, multiple document submission, and crosschecking with other ministries in order to impose conditions and restrictions that are often already dealt with in existing laws and regulations – almost assuming that once approved, there will be minimal post-grant compliance or enforcement. These processes are inefficient, costly and time consuming for applicants, and can create discouragement for potential investors, not to mention long delays in project implementation.

Given the unique opportunity which MBF provides for collaboration, private business leaders have been able quickly to reach consensus about what is happening, and have been able to offer simple, specific, prioritized sets of practical solutions. The end result, in theory, will be more streamlined processes that are easier for businesses to negotiate, and which improve the efficiency of government, as well. The reality, of course, isn’t nearly as simple as is made out to be here. But again, it is a start.

Although it is easy to see where MBF can be effective, setting up and running the forum has not been without challenges. One such challenge has been trying to strike the right balance between local and foreign company participation. A look at the statistics provided by IFC suggest that the Forum is predominately comprised of Myanmar nationals, with foreigners making up about 25% of participants (although in the Natural Resources Working Group the figure is just over 40%). As Preston points out, foreign company participation is useful, as many of these companies have long experience working in other countries in the region, thus bringing with them knowledge of international best practices. Foreign company representatives in their turn are benefiting from Myanmar participants and their extensive local knowledge. U Zaw Win, a retired mining engineer with Ministry of Mines who now consults for the Myanmar Mining Federations, is one such example. When technical advice is needed concerning how to craft a position on the draft Mining Law, both locals and foreigners take note of his input.

‘The Myanmar Business Forum is essential for the country at this point in time’, he says. ‘Businessmen now have the opportunity to learn how to engage the government in a constructive way that brings benefit to everyone. We should be talking Full advantage of this.’ Another challenge is to insure inclusion of the wide range of players which exist in most sectors. Both IFC and UMFCCI recognize the need to expand the dialogue process beyond those accustomed to sitting around the table with the government. Thus, efforts have been made to reach out to SMEs, as well as group like the Myanmar Women Entrepreneurs Association and the Myanmar Young Entrepreneurs Association.

“We are also concerned about geography’, says Robb Preston. ‘And so this year we are going to increase our efforts to get input from businesses located outside of Yangon. We already have some input from people operating out of Mandalay, but obviously we want to go further. But it’s one step at a time.”

While MBF is primarily focused upon improving the business environment for the private sector, it is also notable that views from civil society are heard, as well. Vicky Bowman, head of the Myanmar Center for Responsible Business (MCRB), provides valuable input on several key committees. MCRB, together with the Danish Institute for Human Rights and the Institute for Human Rights and Business, recently produced a major Sector-Wide Impact Assessment of the tourism industry in Myanmar. The Assessment analyzes a range of issues in Myanmar upon which increasing levels of tourism in the country are likely to have an impact, from land and labor to the environment and culture, all from a human rights perspective. It puts forward concrete recommendations for industry, government, tourists and civil society on ways in which future impacts may be minimized and in which past mistakes may be avoided. For MBF, Bowman has made important contributions in many areas, including with respect to Environmental Impact Assessment (EIA) requirements for the extractives industry.

“Myanmar Centre for Responsible Business seeks to provide a neutral platform that brings together business, government and civil society in a dialogue about responsible business’, she says. ‘As such, we have welcomed the invitation to participate in the MBF, and we have sought to bring issues to the table of common concern, such as transparency in the extractives industries, and establishing an effective environmental and social impact assessment process.”

Counting the Results, Waiting For Answers

Of course, all of this does not serve to answer the most important question: Is the government listening, and if so, are they taking steps to address the problems that are raised? When asked about this, the chairman of one of MBF’s working group subcommittees was frank in his assessment.

‘The truth is,  we just don’t know yet. The government side has certainly been receptive to our suggestions. Where there are problems, they may have to do with how the government departments are organized. It is very complex, and so they may need to figure out just who would be responsible for addressing each concern.’

Dr. Thet Thet Khine, Founder and Managing Director of Golden Palace Gold & Jewelry, is similarly noncommittal on this question, but also sounded an optimistic note:

“Naturally, the government has had some reluctance and hesitation at the beginning and even some resistance and misunderstanding over what the private sector has proposed through MBF, But over time, with the series of formal and informal conservations, the government may buy in to the concept of private-public dialogue and MBF may be accepted as an effective tool for the economic reform and private sector development. I believe that it will also contribute to the administrative reform that the government is pursuing during the transition period.”

While perhaps not addressing many specific concerns as of yet, it should be noted that the government has also responded in some positive ways. Recently, the Government formed the Special Task Force on Business and Trade Promotion, its primary purpose being to coordinate the government’s responses to issues raised by MBF participants. There have also been meetings in Yangon between some sector committee chairs and senior officials from relevant ministries for preliminary discussions and explanations of issues, in order to ensure that the relevant agencies can understand and focus on way to respond effectively to requests. And according to a recent statement by an MIC official, both MIC and DICA are moving to improve company registration and investment licensing processes by eliminating redundancies and reducing waiting times. While most interactions thus far have been with officials from executive branch ministries, members of parliament will become increasingly involved in the future.

There is other evidence of progress. As pointed out earlier, the process by which the private sector is able to raise these issues with the government, and the kind of solutions it is offering are what make MBF an important element of the larger push for reform in Myanmar. The effect of clearly articulating narrowly defined issues and offering targeted, concrete solutions is that it shines a spotlight on specific institutions and procedures, effectively singling them out as being in need of reform. Progress may then be tracked and follow-ups may be conducted easily, with the result that officials have to be responsive. Some of the more recent dialogues that have occurred with the government seem to demonstrate this. Myanmar businessmen and women are not accepting evasive or defensive responses from officials which do not address nor advance the overall objective of private sector and government collaboration for mutual benefit.

Just as with the larger process of economic and political reform, participants in the Myanmar Business forum cannot be sure what will be the ultimate outcome of their efforts. But though the future is uncertain, it is difficult not be impressed by the progress that has been made thus far, especially by the local private sector. Businesses both large and small from across the industry spectrum have a platform now that they never had before, and many of them are taking full advantage of it. Their concerns have the ear of government at the highest level, where before nobody at those levels even saw the need to listen. That is a lot of progress made in a relatively short amount of time.

In conclusion, it should be noted that the opportunity still exists for more businesses to pro-actively participate and lend weight to constructive reforms and changes proposed by their colleagues who are already engaged with MBF. As to what the government will ultimately do with all of this, the most that can be done at this point is to wait and watch. But at this point, it is most important to put forth the effort. Through MBF, every business can be a positive agent for change.

For More Information on the Myanmar Business Forum, Please contact mbf. secretariat@gmail.com.

Address: UMFCCI No.29 Min Ye Kyaw Swar Street, Lanmadaw Township, Yangon, Myanmar.

 

 

 

 

 

 

John Hancock

Chairman of John W. Hancock & Associates (JWHA). Corporate and commercial lawyer with Baker & Mckenzie in Thailand, New York, Hong Kong and Singapore for over 35 years, and was involved in the establishment and management of various B&M offices in Asia - Pacific. He retired as a Principal of Baker & McKenzie some 12 years ago and since then has been active as an Independent Director several of public companies and as the Chairman Of JWHA. john@johnhancockassoc.com.

John " Jay " Martin

Researcher and Business Analyst for John W. Hancock & Associates, specializing in focused sectoral research and analysis of market conditions. He also consults for the US-ASEAN Business Council, a trade association representing over 130 top U.S. corporations.jmartin@johnhancockassoc.com

The Su Mon

Manager , John W. Hancock & Associates.

The Su Mon acquired her Law Degree from Dagon University, Yangon. After granduation she furthered her studies in SIngapore (Diploma in Business), and has worked in Singapore and Myanmar in sales, marketing, research and Government liaison roles in the property management and investment advisory fields. tsm@johnhancockassoc.com

 

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