Military-led Myanmar seeks to reassure foreign investors

Bangkok –

Thursday’s meeting was attended by officials from Myanmar to discuss concerns over currency controls, energy scarcity and sanctions. These are all contributing factors to the difficulties faced by the military-led government in managing its economy.

Two ministers in Myanmar’s army installed government saidIn an online briefing, approved foreign investors were informed that embassies and United Nations agencies are exempted recently from central bank rules that require conversion of foreign currencies into local currency.

Business groups and foreign governments protested strongly the Bank of Myanmar’s announcement that foreign currency bank deposits must be converted into kyats within one-day of receipt.

This policy adds to the many risks that investors face when doing business in the country. It appears to be aimed at reducing a shortage of hard currency after the February 1, 2021 military takeover which ousted Aung San Suu Kyi’s elected government.

They also dismissed as “myth” reports that suggested the country was running out of fuel. In fact, they said that there were long lines of cars forming outside of service stations in recent days.

Aung Naing Oo was the army-installed minister for Investment and Foreign Economic Relations and Minister of Information Maung Maung Ohn. saidA joint statement stated that the recent power outages in Myanmar were caused by rising prices for liquefied petroleum gas, a weakening currency, and damage to power lines by “terrorist force” — an acronym for armed groups fighting the Myanmar army.

After the army’s overthrow, the U.S., along with other predominantly Western countries, imposed targeted sanctions against the military, its leaders, families, army-affiliated business and the families of those who were involved. They also frozen assets that they had in these countries.

It is not clear how severe these measures have affected the military leadership or its finances.

The widespread resistance of the public to the military takeover, the pandemic and Myanmar’s economic collapse has caused the economy to plummet. Tourists have been unable to visit Myanmar due to their large consumption of foreign currency, which is needed to pay for imports fuel, food, and other necessities as well as repay foreign debts.

Aung Naing Oo saidThe central bank’s rule was meant to stabilize the exchange rate following the fall of the kyat to over 2,000 against the U.S. Dollar. He saidAlthough the military administration was preparing “standard operating protocols” for bank transactions, foreign companies and those who qualify would be exempted automatically. This includes businesses that operate in Thilawa, Myanmar’s sole economic zone, south of Yangon. said.

“We are in transition and we are improving our self-management skills. He stated that the new rules won’t place additional burdens on foreign businesses. said.

It is not clear if foreign entities will be exempted from the tax. This could cause a protest by domestic businesses that earn foreign currencies.

The American Chamber of Commerce, British, French and Australian Chambers of Commerce and other similar groups were established earlier. saidSwapping dollars and other foreign currencies in exchange for kyats will discourage foreign investment and business activity, and create trade tensions.

They state that the implementation of these measures, along with the lack of exemptions, creates significant, and sometimes insurmountable, challenges for businesses in Myanmar. saidIn a joint statement.

Myanmar’s independence from Britain in 1948 has seen it be ruled over by the military most of its history. In 2011, Myanmar began a slow transition towards democracy. Its economy started to recover as more foreign investment was made.

Since the military took power in 2013, many major foreign companies have decided to abandon Myanmar or suspend operations there. They cite rising risks, a worsening business environment and the sanctions.

Ministers issue a statement saidIn the first half, Myanmar attracted 18 projects from China and six from Hong Kong during the fiscal year that began October.

“Myanmar is committed in providing an environment conducive to investment that is safe, accessible, and conducive.” It does not want to see any investment withdrawals. said.

This is a transitional period, Aung Naing Oo said”And there will certainly be difficulties, but hopefully all these inconveniences and difficulties will be overcome.”

He stated, “We are willing to cooperate with any company out of any country.” said.