Burma’s lawmakers on Thursday approved a bill on foreign direct investment which they expect President Thein Sein to quickly sign into law following a number of amendments proposed by his office to an earlier draft which was deemed too protectionist.
The final version of the bill has gone through several changes since March and aims to draw foreign investment to the resource-rich country, whose economy has stagnated due to decades of mismanagement by the former military regime.
Member of Parliament Khaing Maung Yee from the opposition National Democratic Force said that he does not expect Thein Sein, whose nominally civilian government took power in March last year, to propose any further changes to the bill before signing it into law.
"The Union Parliament approved the FDI [foreign direct investment] bill through a vote ... Within a week, the president has to sign the bill to make it a law,” he said.
“The president’s office [recently] sent this bill back to parliament with 11 amendments, but we [the Union Parliament] only rejected one,” the MP said without elaborating on the change that was dismissed.
Thein Sein, who is struggling to balance the competing interests of foreign firms, local tycoons, and domestic businesses, had wanted an earlier limit of 50 percent for a foreign investor's stake in a joint venture to be dropped.
The new version allows the investment ratio to be decided by the foreign and local partners.
Reuters quoted a member of a parliamentary committee that held an emergency meeting in October to discuss the legislation as saying that a clause requiring foreign investors to provide at least 35 percent of start-up capital in a joint venture with local partners had been dropped at Thein Sein’s request, to make passage possible.
"Now it has been changed to 'the participation ratio of the joint venture is only to be decided by local and foreign partners'. It means anything they both agree," he said.
More detailed rules for each sector will be drawn up by the Myanmar [Burma] Investment Commission.
Agence France-Presse quoted Zaw Htay, an official at Thein Sein’s office, as saying that the new law will be “quite flexible and easier” for foreign investors.
“The previous law had restrictions which could be barriers. Even some foreign experts described it as the 'No Investment Law'," he said.
Foreign firms are chomping at the bit to gain access to rapidly reforming Burma’s large population and huge amount of natural resources—particularly in the extractive sector—but have complained about the country’s lack of a clear legal framework for doing business there.
The Thein Sein administration has introduced the most sweeping reforms in the former British colony since the 1962 coup, including freeing large numbers of political prisoners and easing rules on protests.
A major hurdle to the overseas business community was removed earlier this year when Washington eased sanctions against Burma in response to the reforms, clearing the way for foreign investment.
Reported by RFA’s Burmese service. Translated by Win Naing. Written in English by Joshua Lipes.