Asiapacific Security

Singapore-Myanmar Ties 2020: An Update

KB Teo

SYNOPSIS

Singapore-Myanmar ties are strong and growing. Myanmar is expected to grow by about 7.5% annually over the next 5 years. Singapore companies are showing greater interest in exploring business opportunities in Myanmar, including DBS, UOB, and OCBC.

COMMENTARY

Myanmar is sometimes referred to as one of the “last frontier” countries in Asia. With a population of about 54 million, young working population and an average and projected GDP growth average 6 – 9%, Myanmar has promising investment opportunities, reported Enterprises.sg.

The youthful population is an emerging consumer market that offers opportunities for your business in food, retail and lifestyle. The number of middle-income consumers with higher purchasing power in Myanmar is expected to grow to 10 million by 2021.

With the country’s vast landmass and relatively young economy, there are opportunities in infrastructure, particularly in transport and connectivity, ICT and energy. Looking forward, Myanmar has much potential for growth, with new cities requiring smart and sustainable solutions.

At the same time, Myanmar’s agriculture sector encourages foreign investment and innovations in methods and technology. Owing to its favourable geographic location, fertile lands, and varied climates and crops, Myanmar could meet more of its regional neighbours’ food sourcing requirements.

Myanmar’s business climate is improving, with the country making big strides to encourage a business-friendly environment. Initiatives include liberalising the banking sector to address business concerns about the access of capital, and opening up the telecommunications sector. It has passed new legislation to put in place a coherent legal framework for domestic and foreign investors, and simplified the company administration required.

Singapore and Myanmar celebrated the 50th anniversary of the establishment of diplomatic relations in 2016. Both countries enjoy warm bilateral relations and work closely at regional and multilateral fora. Economic relations are growing, with Singapore being consistently among Myanmar’s top investors and trading partners in recent years.

Myanmar State Counsellor Daw Aung San Suu Kyi made a working visit to Singapore from 19 to 22 August 2018, where she called on President Halimah Yacob and Prime Minister Lee Hsien Loong. Daw Aung San Suu Kyi also delivered the 43rd Singapore Lecture organised by the ISEAS-Yusof Ishak Institute, titled “Myanmar’s Democratic Transition: Challenges and Way Forward”.

Minister (Foreign Affairs) Dr Vivian Balakrishnan made a working visit to Nay Pyi Taw, Myanmar, on 5 November 2018 and met Myanmar State Counsellor Daw Aung San Suu Kyi. Both sides discussed bilateral issues and developments in Myanmar, including the situation in Rakhine State.

In 2019, Myanmar Union Minister for Investment and Foreign Economic Relations and National Security Advisor U Thaung Tun attended the 18th Shangri-La Dialogue and also met with Minister (Foreign Affairs) Dr Vivian Balakrishnan.

Myanmar Union Minister for Investment and Foreign Economic Relations and National Security Advisor U Thaung Tun made a working visit from 20 to 22 September 2019, where he was a speaker at the Singapore Summit, and met with DPM Heng Swee Keat and Minister (Foreign Affairs) Dr Vivian Balakrishnan.

In December 2016, Singapore and Myanmar started talks on a bilateral investment treaty and updated an agreement on avoidance of double taxation in a sign of growing economic ties between the two countries.

The moves sent a positive signal to investors and boosted economic growth, said Prime Minister Lee Hsien Loong at a dinner which he hosted for Myanmar State Counsellor Aung San Suu Kyi.

It marks progress since both agreements were floated in the first half of the year, when Mr Lee visited Myanmar in June 2016.

These deals will give potential investors a greater sense of assurance, security and certainty about the regulations in Myanmar, said Foreign Minister Vivian Balakrishnan during a visit in May.

Air connectivity between Singapore and Myanmar will also be enhanced, said the Ministry of Foreign Affairs in a statement on Mr Lee and Ms Suu Kyi’s closed-door meeting in the afternoon.

At the official dinner at the Istana last night, both leaders spoke about how the countries could work together to help Myanmar grow its economy.

Ms Suu Kyi, who is on an official visit here until tomorrow, said her country is happy to learn from Singapore ways to control corruption and impart skill training to young workers.

Myanmar welcomes Singapore’s businessmen, she added. “We believe that from these businessmen, our businessmen can learn not just ways of making money, but how to make money without corruption.” Ms Suu Kyi encouraged local businessmen to invest in Myanmar at IE Singapore’s Global Conversations dialogue at the Shangri-La Hotel.

Since 2001, Singapore has been supporting Myanmar’s human resource development through the Singapore Cooperation Programme (SCP) and the Initiative for ASEAN Integration (IAI). Through the Singapore-Myanmar Technical Cooperation Programme (SMTCP), Singapore also shares our developmental experience (in economic development, human resource development, and public administration) with Myanmar.

Myanmar also wants to attract investment to its industrial sector. There are plans to develop three Special Economic Zones (SEZs). The first one, Thilawa SEZ, is already in operation in southern Yangon. The SEZ Law has made it easier to do business in Myanmar, by providing incentives such as income tax holidays, income tax relief, customs duty and import tax exemptions. There is also the option to lease land from the government or authorised private owners for up to 50 years, with the possibility to renew for a further 25 years.

As a Singapore company, you can take advantage of the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income Agreement between Myanmar and Singapore, for tax benefits when you invest in Myanmar.

The Myanmar business community is eager to collaborate with Singapore partners, whom they see as trustworthy and efficient.

Ride on the Singapore brand and enter the Myanmar market with well-connected local partners who can help you ease into the business environment. Your business can bring in management expertise and technological know-how, while Myanmar companies can help navigate the local customs and regulations that are difficult for foreigners to access. The active Myanmar diaspora in Singapore who are familiar with the language and customs of both places can help to bridge any cultural gap you may face.

Singapore is Myanmar’s second-largest investor after China, with a cumulative investment of US$19.3 billion (S$26 billion)2. Our investments are concentrated in Yangon and the main sectors include hospitality, industrial and residential property development, and urban solutions like water and power utilities.

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KB Teo is a former diplomat with the Singapore Ministry of Foreign Affairs. He attended the UN General Assembly as part of the MFA delegation.