Recently, the World Bank published its ‘Doing Business’ report for Myanmar in 2017. This marks countries based on specific criteria to work out how easy it is to do business in that country, and recommends improvements.
The report states that Myanmar ranks at number 170 in ‘ease of doing business’. It’s an improvement of one place on 2016.
Growing population in Myanmar
Myanmar’s population now stands at almost 54 million people, and the country has a gross national income of US$1,293 per year. The ranking shows that Myanmar is behind its neighbours in ASEAN, but the country is aiming to lift its ranking to 100 or less over the next few years.
The report specifically works out how easy it would be for an entrepreneur to launch and run an SME (small to medium sized business), while complying with regulations. To do this, it measures regulations that affect more than ten areas in the business life cycle.
These areas cover procedures in launching a business and regulatory changes. Here are some of the reports’ findings.
Starting up a business in Myanmar
This year, Myanmar began its plan to make it easier to start businesses by reducing the registration cost. The government has also made the process simpler by removing some restrictions on incorporating a company (these include submitting a letter of reference and a certificate detailing any criminal history).
As of 2017, starting a business in Myanmar takes 11 steps, 13 days and costs 40.4% of income per capita (the average amount earned per person in a set area). Myanmar does rank higher than Laos, India and Indonesia in terms of the ease of setting up a business, within the region.
Access to electricity
It’s vital that businesses can access a reliable electricity supply in order to conduct their business in Myanmar. Doing Business found that access to electricity in Myanmar needs six processes, takes 77 days and costs 1270% of income per capita.
This clearly shows that Myanmar needs to do more on this front. It currently ranks only above Laos for this criteria within the region.
Access to credit
This is another vital area when it comes to doing business. Myanmar is currently behind every other Asian country when it comes to accessing credit. At the moment, there are no legal rights for lenders or borrowers and no information available on credit.
It’s extremely difficult to obtain a loan in Myanmar, which makes starting a business difficult. Managing inflation is the key to reducing interest rates on loans, and it’s expected that the government will be working towards this as part of their wider economic plan for the country.
To raise its rank Myanmar must sort out the infrastructure problems that are rife in the country, as well as making bureaucracy and transaction costs simpler and cheaper.
Economist Dr Aung Ko Ko said: “It’s great that there’s an ambition to do something. We won’t know exactly what the improvements are going to be. But, I’m sure that it will be better than the current situation. The constitution will have to be changed. Every sector will have to be reformed. If we do these things, I think things will improve gradually.”