Myanmar economy needs 'predictable policy,' new reform leader urges
In first public speech after taking new role, Set Aung offers to-do list to government leaders
YUICHI NITTA, Nikkei staff writer
NAYPYITAW -- "Winston" Set Aung, Myanmar's newly-appointed deputy minister for national planning and finance, has urged fellow government leaders to pursue further regulatory and policy reforms for the economic development of Myanmar during a panel session at the Myanmar Democratic Transition Forum.
"It is required to establish predictable and stable policy with clear and simple procedures," said Set Aung, emphasizing the importance of consistency and transparency of policy, such as license and permit application procedures.
Under former President Thein Sein, Set Aung was instrumental in advancing market reforms and opening up the Myanmar economy to foreign investors. He played a key role in creation of special economic zones, including the Thilawa special economic zone on the outskirts of Yangon, of which he was chairman of the project's management committee.
Set Aung was an economic adviser to former President Thein Sein from 2011. In 2013, he took the post of deputy minister for national planning and economic development, and also became deputy governor of the Central Bank of Myanmar.
After the National League for Democracy took power in March 2016, Set Aung vacated all roles except his position at the central bank. Some observers have suggested the lack of Set Aung's broader leadership had led to a period of drift under the new government.
During Saturday's panel session, Set Aung said the NLD administration "needs to evolve its regulations immediately." Noting that reforms cannot be achieved overnight, he called for a trial-and-error approach where the government should implement reform policy first and "collect feedback from the market, analyze [the action's] impact," and then modify policy based on these analyses. His experience in economic policy formulation includes stints as a consultant in Vietnam and Cambodia.
On the subject of Thilawa, Set Aung held up the SEZ as a "laboratory" to test regulatory reforms before implementing them on a nationwide level. The Thilawa SEZ comprises new residential and commercial zones with special regulations in addition to manufacturing facilities.
He also criticized the persistence of crony capitalism in the national economy, where many companies and business leaders relied on personal relationships, rather than competition, to build their fortunes. He proposed stronger corporate governance rules on family-controlled conglomerates and other powerful firms, in order to promote more transparent competition and meritocracy.
Set Aung noted that the weakness of the global economy was dragging down Asian economies, but was optimistic about opportunities in Myanmar, citing the 7.5% growth forecast for 2017 published by the International Monetary Fund -- the highest among Southeast Asian nations. He also cited the removal of United States and European economic sanctions against Myanmar in recent years, which were enacted in an effort to pressure the military regime to open up the country and defend human rights.
At the three-day forum, which concluded Sunday afternoon, policymakers and domestic and foreign experts discussed Myanmar's transition from the perspective of political reforms, the economy, and the peace process aimed at ending decades of ethnic conflict in the country.
In the economic session, panelists talked about the challenges that lie ahead as Myanmar shifts from a centralized economy to a market economy. Not all shared Set Aung's optimistic outlook.
"I have to say that Myanmar's economy is stagnant," Myo Myint, chairman of local think tank Renaissance Institute Myanmar, told Saturday's audience. He told Saturday's audience that the country's ministries "lack the cooperation and coordination" to pursue economic reforms. As late as July, more than a year since the NLD took power, State Counselor Aung San Suu Kyi decided to introduce a weekly meeting allowing ministers and their deputies to discuss policy issues and work together in a more regular manner.
Myanmar's consumer goods imports have steadily increased since an earlier tranche of economic reforms were enacted earlier this decade. Meanwhile, it is likely that domestic production of natural gas, one of the country's largest export earners, will begin to decline from 2025. Policymakers are under pressure to develop alternative export industries to address a steadily growing trade deficit.