Burma Investment Climate Statement (2005)

This is my note of 2005 Invesment Climate Statement --Burma by U.S. Department of State.

1) US still holds a ban on U.S. investement in Burma since 1997, and sanctions have been imposed since 2003 to ban all imoprts from Burma and all financial transactions between U.S. citizen and Burma.

-1997 ban was Executive Order 13047 by the President due to human rights records of Burma.
-Every six months, US review own economic bans. but there is no progress in Burma.

-1997 federal sanction ban prohibits new investment to Burmese investment.

-2003 the Burmese Freedom and Democracy Act prohibits imports from Burma and transaction btwn Burma and U.S. It stops military sale or any institutional assistanc, and issuing visas to Burmes

-BUT! US EXPORT TO BURMA DOES EXIST.

2)But the ruling junta (the State Peace and Development Council) is having open economy policy to call investments, but foreign farms have to obey a lot of absurd regulations.

-1988, Foreign Invesment Law was implemented. Its priorities are folloing : expansion of exports, imposing heavy investment on natural resouce exploitation, advanceing technologies, suppoting domestic industries, increasing educations, developing infrastracture and local regions

-1989, the State-Owned Economic Enterprises Law let domestic enterpirises have following rights: to have exploit or sell natural resources such as teak, firewood, natural gas, pearls or jems, fish and prawns, metals ; to preserve telecomunication services, transport services, banking and insurances, braodcasting, energy generating services, security production services.

-The Myanmar InvestmentCommission (MIC) can make exceptions for state interest under 1989 the State-Owend Economic Enterprises Law in areas such as asbanks, extraction of petroleum and natural gas, and air services. But its authority deserves critique due to corruptions since 1999. Everything is just judged case by case.

-Foreign companies have to get lisences to invest and to trade from the junta goverment. However, the administration service is always problematic. Now foreign investor have to make deal with local firms with cover of Burmese partners having risks. In order to invest firms, it's gonnna practically cost $500,000 in cash or kind at least.

-Even though the Foreign Investment Law (FIL) guarantees that they can repatriate profits to the investors, foreign investors hardly transer their net profits legally due to the shortage of foreign exchange. Foreign currency can be transferd only through the Foreign Exhchange Management Departement of the Central Bank of Myanmar.

-There are only three state banks: the Myanma Foreign TradeBank (MFTB), the Myanma Investment and Commercial Bank(MICB) and the Myanma Economic Bank (MEB) are allowed to deal with foreign exchange transactions.

(3) Labor
Labor unions are basically illegal in Burma. Although regulations set a minimum employment age and wage, and maximum workhours, these are not uniformly observed, especially inprivate factories and other establishments. That Burma uses forced labor is agaisnt ILO standards.

Burma's cost of labor is very low, even compared to some ofits Southeast Asian neighbors. Basically, through older generaion is well educated, young generation is quite low skilled labor due to unaccessbility to university educations for 15 years. They are basically caplable of speaking of English. An average worker in Burma will make about 500-800 kyat (roughly $0.50 to $0.80) per day.