EuroCham Myanmar, together with MRCCI, organises an event on Business climate in Upper Myanmar

EuroCham Myanmar, together with MRCCI, organised an event on Business climate in Upper Myanmar at the MRCCI conference room in Mandalay on 21st May 2019. The event was a focus on the challenges and opportunities in the upper Myanmar region.

The keynote speeches and panels featured government officials, leading private sector representatives, and key experts from international organisations and local associations. The combination of an extensive variety of European private sector professionals like Agro-business, B2B trade and pharmaceutical sectors, and several European and local chambers representatives facilitated multi-perspective views involving local and international participants.

The panelists are listed as follows:

Introductory Presentation on Business Climate (Regulatory & Policy constraints) in Upper Myanmar

  •  Mr Fabian Lorenz, Attorney-at-Law, Luther Law Firm Limited

 Panel discussion: Business climate, Regulatory & Policy constraints in Upper Myanmar

  • Mr Frederik Meerhoff, Vice-Chair, EuroCham Myanmar
  • Mr Martin Klose, Executive Director, Delegate of German Industry and Commerce in Myanmar
  • U Moe Kyaw Kyaw, Vice-President, MRCC
  • Jens Michel, CEO, Metro Wholesale Myanmar Ltd
  • Johan van den Ban, Managing Director, De Heus
  • Peter Crowhurst, Chief Executive Officer, British Chamber of Commerce Myanmar

Presentation on Intellectual Property Regulation in Myanmar

  •  Mrs. Marta Bettinazzi, IPR Business Advisor of South-east Asia IPR SME Helpdesk project

Introductory Presentation on Business Climate (Regulatory & Policy constraints) in Upper Myanmar

Mr. Fabian Lorenz, Attorney-at-Law, presented Luther's outlook on the legal framework in Myanmar, focusing on Mandalay. The presentation included the trades and Investment framework for different sectors alongside an emphasize on the investors’ concerns, highlighting the pivotal role of the compliance of business partners on corruption, confidentiality, ethical and legal guidelines.

Mr. Lorenz commented on Mandalay being at the crossroads between big Asian players, like China and India, leading the area to be a main trading and communications center.

He added that the availability of raw materials and labour offers to Mandalay Area a vast potential for development and investment, including agriculture, agro/food processing, manufacturing.

The attorney concluded that to increase competitiveness and make Mandalay Region more attractive, land prices, infrastructure, skilled workforce and support by the government should improve.

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The purpose of the event was to picture the current business climate in upper Myanmar, focusing especially on Mandalay. The gathering was an excellent opportunity for different business stakeholders to share their experiences on different business aspects, from the legal framework to supplies of utilities, including education and land titles.

While the European businesses alongside European chamber of commerce could give some insights on doing business in Mandalay, the regional government and MRCCI gave an update on the current and future plans for the regions.

During the discussions, it was a clear consensus on acknowledging Mandalay already being an effective platform to do business; Many participants recognised that a lot of progress has been achieved over the last years, and that the regional government was showing willingness to collaborate and go further. All keynote speeches highlighted the region was making strong efforts to provide a stable, peaceful and business-friendly environment.

As they were yet a great willingness from all parties to make Mandalay a success story, the gathering was also an opportunity to discuss the policy and regulatory constraints that the businesses still face today.

Panel on Business climate, Policy and Regulatory Constraints in Upper Myanmar

During the 2nd panel, panelists highlighted the fact that they are facing bottlenecks on a daily basis, on practical elements like licensing and non-transparent legal frameworks. In this sense, Mr. Meerhoff added that lack of transparency also undermines the business sustainability.  

   • Non-transparent bureaucratic procedures: All panelists agree that land issue is still a major challenge not only in Mandalay but in the whole country. E.g. changing land titles takes years along with non-transparent bureaucratic procedures. Neighbouring countries with which Myanmar is competing have already started to move forward on these issue, Mr. Meerhoff therefore insisted on this bottleneck to be tackled. That is why the government needs to be more transparent and efficient in managing land issues. Thilawa Special Economic Zone was quoted as a good example for good mechanism of investment facilitation.

    • Required incentives: Some limitations do not incentivise foreign investors. Although there are foreign companies which are interested to do retail/wholesale business in Myanmar, the threshold of initial capital money foreign companies must bring in may be too high to attract investors in this sector, especially SMEs.

   • Illicit trade: Illicit trade has also been impacting the sustainability of foreign companies that are importing consumer goods and pharmaceuticals as a substantial amount of goods flowing into the country are illicit ones. It also negatively affects consumer protection of the country. That is why the government should put more efforts in in controlling illicit trade, developing consumer protection regulations and enforcing them.

   • Skilled labour: For the participants, skilled labor is perceived more as an opportunity than a challenge in upper Myanmar.

European companies are making strong efforts to localise their workforce as much as possible.

Mr. Jens Michel, CEO of Metro wholesale Myanmar Ltd, highlighted that Metro has started in the country with the objective to build a Myanmar business that works as a subsidiary of the German group. He testified on the company ability to recruit locally excellent talents up to senior management level. However, he insisted on the needs to continuously partner with local businesses and legislatures in developing a skilled labour force.

Mr Peter Crowhurst, Chief Executive Officer, British Chamber of Commerce Myanmar, explained that British educators also show interest to train young people in different skills as well as to accredit them.

   • Compliance to standards for a mutual sustainability: European businesses are focusing on quality and traceability as core values, and they wish their suppliers and local partners to share the same goal. Indeed, cooperation on their standards are essential to reach profitability on the long run. They believe this can be achieved through a close partnership and training, with a mutual success for all parties as a final goal.

As an example, Mr Johan van den Ban, Managing Director of De Heus, testified about the relationship created with the fish farmers to help increase their partner’s skills and profitability;

In line with this approach, Metro is aiming at 70% of the product sales to be produced and sourced locally, with a “Farm to fork” transparency chain to be implemented; this involves the company to work very hard with their stakeholders to meet their standards.

As a conclusion, the significance of the coordination between the government and the private sector to pursue Mandalay achievements has been highly outlined.

The panelists were all very positive on what they could have experienced so far in upper Myanmar, mentioning a good organisation, clear procedures, good supplies of utilities (electricity is more reliable than in Yangon) and good support from the regional government. They also mentioned the Mandalay area has accomplished a huge transition especially in digitalisation, telecommunications and new technologies.

MRCCI agrees with the panelists on the common issues and appreciates the optimistic outlooks of the EU investors. MRCCI strongly supports the strengthening of the current cooperation between the EU and Mandalay business community.

Presentation on Intellectual Property Regulation in Myanmar

Lastly, Mrs Marta Bettinazzi, IPR Business Advisor of South-east Asia IPR SME Helpdesk project, presented an outlook of the Intellectual Property Protection.

She clarified legal definitions of intellectual properties and presented the current legal framework for intellectual rights in Myanmar. She also updated recent legislation of the IP laws such as Trademark Law, Industrial Design Law and Patent Law.

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Key Takeaways:

H.E. Zaw Myint Maung, Chief Minister of the Mandalay Region

In order to facilitate investment, businesses need political stability. And in that sense, Mandalay is the perfect place to offer this condition.

H.E. Kristian Schmidt, EU Ambassador to Myanmar

“Like China, the EU believes in open, free trade, within a rules-based multilateral order. We are not against the Belt and Road Initiative, which offers many interesting opportunities, but like the State Counsellor said at the BRI forum end of April, Myanmar, and Mandalay need high quality projects, with sustainable debt levels, respect for social and environmental concerns, full involvement of the local authorities and people, and open and competitive international bidding and expertise to keep quality high, costs low, and local benefits above all.”

Acting Director General U Thant Sin Lwin of Directorate of Investment and Company Registration

Mandalay region is blessed with geographical strengths being a regional trading hub which can be connected to borders with China and India. It is also rich in agricultural resources and has good potentials to diversify its sectors in the future.”

Chairman U Kyaw Min of Mandalay Region Chamber of Commerce and Industry

“The event is a fruit of the Memorandum of Understanding signed between EuroCham and MRCCI. The Mandalay Chamber has been actively engaging with counterpart organisations from foreign countries in terms of promoting trade and business relations. Foreign chambers such as German Chamber of Industry and Commerce and the British Chamber of Commerce have appointed their representatives in Mandalay. The Mandalay Chamber looks forward to organising similar dialogues in the future.”

“Supporting the development of SMEs and MSEs will drive the acceleration of Mandalay’s economy”

Mr. Frederik Meerhoff, Vice-Chair, EuroCham Myanmar

“In the business confidence survey which is sent each year by EuroCham to all its members, Mandalay ranks as the number one priority for European companies to extend their current footprint”

It is the joint responsibility of all economic participants including EU and Mandalay companies and regulators, to promote Mandalay’s capacity to better facilitate foreign investments, after all we all have the same ambition: To make the Mandalay region the success story it deserves to be.”

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