Kyat stronger as world awaits foreign investment law

“At the current rate, the currency has appreciated by 9 per cent from its record low, despite the authorities’ efforts to put a brake on sudden appreciation. Volatility is expected this month, chiefly because of the pending amendments,” the bank’s Economic Intelligence Centre said.

A number of laws are pending for screening by lawmakers after the parliamentary session started on Wednesday. Chief among them, which is the focus of global investors, is the amendment to the Foreign Investment Law, which has been in force since 1988. 

Among the proposals are greater incentives to foreign investors. For instance, the tax-exemption period would be extended from three years to at least five, and probably eight. Foreign investors may also be allowed to lease land directly from private operators, while at present they can only lease land from the government. The leasing period could also be extended from 30 years to 50.

The SCB research unit added that in return foreign investors would be required to assist the government’s policy of reducing unemployment and boosting human-capital development. Investors will be required to employ mainly locals for those positions that require no special skills. 

There is also a sliding scale for the proportion of local skilled labour. This will require both training and technology transfers.