Opening up to democracy, Myanmar offers new opportunities for EU enterprises
European Commission - MEMO/13/974 11/11/2013
Other available languages: IT
Brussels, 11 November 2013
Opening up to democracy, Myanmar offers new opportunities for EU enterprises
After decades of isolation under authoritarian rule, Myanmar recently started opening its doors to democracy, foreign investment and a liberal economy. To help both European and Myanmar companies take advantage of new opportunities that will come with Myanmar's reintegration into the global economy, European Commission Vice President Antonio Tajani, responsible for Industry and Entrepreneurship, will travel to Myanmar from Nov 13th to 15th. During his visit he will be accompanied by more than 100 companies and associations from 16 Member States, representing a turnover of 420 billion euros, to help both Myanmar and European companies form new partnerships and expand into new markets. He will also sign three letters of intent to strengthen cooperation on SME policy, sustainable tourism and raw materials.
His visit will take place under the umbrella of the EU-Myanmar Task Force chaired by the High Representative for Foreign Affairs and Security Policy, Catherine Ashton. Other members of the task force include Commissioner Andris Piebalgs, responsible for Development and Cooperation, and Commissioner Dacian Cioloş, responsible for Agriculture and Rural development. A delegation of the European Parliament will be also part of the task force and an inter-parliamentary meeting will be held with Myanmar’ parliamentarians. The task force's mission to Myanmar will have three main objectives:
For Vice President Tajani, this visit will also be part of his "Missions for Growth" to help European enterprises, in particular small and medium sized businesses, better profit from fast growing international markets.
EU private sector can aid in Myanmar’s development
Decades of economic mismanagement and isolation in Myanmar have led to deep-rooted structural poverty. Unemployment is very high and GDP per capita is the lowest among South East Asian Countries. Furthermore, more than 50 years of dictatorship have eroded state institutions and undermined citizens’ confidence in the state’s capacity to deliver. The EU recognises the vital contribution that the private sector can play in this country’s development and that is why an important part of this mission will be to create trade and investment opportunities for both Myanmar and European companies.
To that effect, on the morning of Nov 14th, Vice President Antonio Tajani will be co-chairing a Business Forum in which high-level officials and representatives of the European and Myanmar business communities will participate. Discussions will focus on five economic areas: tourism, agriculture business, manufactured goods, energy and infrastructure as well as business environment support services (e.g. financial services, insurance). On the same day in the afternoon, a matchmaking event will take place for European companies interested in contacts with Myanmar entrepreneurs in these five sectors. In parallel, a Development Forum will take place that morning, with the presence of Commissioner Piebalgs, to highlight EU's contribution towards the inclusive and sustainable growth of Myanmar. Further financial assistance to the country during the next few years will also be discussed at the development forum.
On Nov 15th, Tajani will participate in the task force’s Economic Session, which will focus on Myanmar’s economic development programme and planned measures to attract private investment. Participants will also discuss measures that the EU and Myanmar will implement in close collaboration in order to accelerate sustainable development and economic cooperation.
On the same day Tajani will meet with several high-level Myanmar officials, and sign three letters of intent.
1) With the Minister for Industry, U Maung Myint, Tajani will sign a letter of intent on SMEs
By signing a letter of intent on SME policy, Myanmar and the EU will pledge to work together to improve the business environment for SMEs by reducing administrative burdens and encouraging the internationalisation of companies on both sides. Special attention will be paid to exchanging best practices to create SME friendly legislation; cooperation between the public and private sectors in research and innovation; and building strong business associations.
2) With the Minister for Tourism, U Htay Aung, Tajani will sign a letter of intent on sustainable tourism
For both countries, it is strategically important to develop new tourism initiatives based on the principles of sustainability, responsibility and competitiveness. The tourism sector developed in a sensitive and sustainable way could help maintain Myanmar's cultural heritage and traditions and, at the same time, preserve its natural environment. Therefore, Myanmar and the EU will strive to establish a dialogue in the tourism field and exchange good practices, especially in the fields of natural and cultural heritage.
3) With the Minister for Mines, Myint Aung, Tajani will sign a letter of intent on raw materials
In Both Myanmar and the EU, raw materials – such as minerals and forest-based materials – are indispensable to industrial production which provides growth and employment. By signing a letter of intent, Myanmar and the EU will open a dialogue in two main areas: mining and the forest–based sector. It is hoped that the dialogue will promote mutual understanding, enhance bilateral cooperation and the exchange of information on policies related to raw materials.
Establishing long-term economic dialogue
To further strengthen and promote economic cooperation between EU and Myanmar, during the mission Vice-President Tajani will also initiate the formation of the EU-Myanmar Business Advisory Council. The Council would be composed of a limited group of European business associations and entrepreneurs (big and small), with a wide and diverse range of expertise. It would maintain a dialogue with a wide-variety of Myanmar and EU enterprises and provide advice to the Myanmar government on the development of a business-friendly environment. Furthermore, it would explore new business opportunities for both Myanmar and European companies, and suggest ways to deepen the industrial cooperation and promotion of the entrepreneurship.
EU is also in the process of supporting the creation of a European Chamber of Commerce in Myanmar, which will help boost contacts with Myanmar companies and ensure advocacy with the authorities.
Data on Myanmar (2012)
Population: 61,2 million
GDP, current prices: € 34 billion
GDP per capita, current prices: € 923
EU exports to Myanmar: € 132 million
EU imports from Myanmar: € 164 million
Inflation rate: 6 %
Myanmar is the largest country on mainland Southeast Asia. Its strategic location - linking Southeast Asia, China and the Indian sub-continent - makes it the gateway to a potential market of 2 billion consumers. It is still the poorest country in Southeast Asia, but the economy is projected to grow 6,8 % this year (up from 5,5 % last year). The pickup reflects business optimism following the government’s steps since 2011 to liberalize the economy. Improved economic prospects have drawn interest from foreign investments. For example, two large gas fields are expected to come online in 2013, more than doubling gas production and raising exports to China and Thailand (gas represents 38 % of total exports).
EU And Myanmar: the history of trade
Bilateral trade between Myanmar and the EU has been very limited. From 1990 onwards, the EU imposed numerous sanctions on Myanmar including a ban on imports, exports and investment in key sectors such as timber, gems and precious metals. Furthermore, in 1997 the EU withdrew its Generalised Scheme of Preferences (GSP), which allows developing country exporters to pay lower duties on their exports to the EU. However, in 2012 EU Exports increased by 60 % compared to 2011, reflecting renewed EU confidence in trading with this country, as well as the increasing need of Myanmar for input for its industry.
In recognition of the democratic reforms under way and the progress Myanmar has made in combating forced labour, the European Council lifted EU sanctions in April 2013 – except the arms embargo. Furthermore, the Commission doubled development aid to the country to 75 million per year. In July of 2013, the EU also reinstated Myanmar’s access to the GSP which provides duty-free and quota-free access for the country’s products to the European Single Market. Additionally, The EU-Myanmar Task Force is expected to provide high-level political and business contacts to step-up the EU’s support to the transition process and help the socio-economic development in Myanmar. Thus, the trade and investment relations between the EU and Myanmar are bound to be substantially increased.