Corruption, skill shortages pose 'severe barriers'

 

They ranked the top of 34 choices of major business obstacles ranging from infrastructure issues to human and institutional capital, said Sai Aung Mane, the manager for the survey project. 

“Corruption was identified most frequently as a very severe obstacle,” said the project manager.

Lack of technology, access to land, factory, or other official space, political instability, electricity supply, and high interest rates are also considered as important barriers to businesses in the Southeast Asian country.

Businesses indicated that undertable payments are required for the registration of companies or for a business licence or a permit. 

While 40 per cent of them found it unnecessary to pay above the officially required fees for registration, half of the respondents calculated the amount of extra payment for registration, licence, or permit to be Ks 500,000 or less (equivalent to slightly above US$ 500). A dozen of respondents reported the required extra payments exceeded Ks 10 million (over US$ 10,000). 

The Myanmar Business Survey 2014 was carried out by the Organisation for Economic Cooperation and Development (OECD) and the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) in cooperation with the Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI). It is aimed to provide a business insight for local and foreign investors. (Details of the survey can be found on Page A6.) 

Masato Abe, economic affairs officer at UNESCAP’s trade and investment division, said that the skilled labour shortage is also a severe barrier to business operations.

“Skilled labour shortages persists in all sectors. Nearly 60 per cent of all respondents find skill shortages a major problem. Hotels and restaurants as well as the manufacturing sector usually face shortage sof skilled labour,” said Abe, adding that extractive industries and traders face the least severe issues in finding the right skills, and skill shortages in agriculture, forestry, and fishing is similar and closer to the average.

The survey showed that companies is key sectors - post and telecommunications, electrical machinery manufacturing, air transport, motor vehicle manufacturing, petroleum product manufacturing, supply of electricity, gas and water, computer related activities, mining of metal ores, and chemical products manufacturing - find it more difficult to recruit skilled workers.

Abe said that computer and IT-related jobs are facing the most acute shortage of skilled workers. Jobs requiring technical skills or analytical thinking, creativity or initiative are also hard to fill.

The survey pointed out that little investment has been made to improve the work force as over half of the respondents allocate no funding to training. It was learned that only in-house training was provided by the majority of respondents, providing a minimal US$215 per employee per year.

To Abe, there are six key issues which the government should tackle to ensure the country’s economic growth - regulations and taxation; access to finance; access to markets, labours, supplies; technologies; conditions for international businesses; infrastructures and utilities; and corruption.

Business people and economists see the survey as a strengthening tool for the nation’s economic growth. Among them is Myint Zaw, member of the UMFCCI’s central executive committee.

“Without any (accurate) statistics, we cannot make policy. That is why this survey is very important. It is comprehensive but not specific yet. In order to draw up a policy, we need to know how many people are employed, where and how. We have to focus on the core statistics, rather than general ones,” said Myint Zaw, adding that capacity and quality are very important.

Than Cho, vice president at Myanmar Banking Association, also welcomed the survey. He emphasised the importance of the banking sector development, and expressed his belief that the survey would play a key role in the nation’s economy.

 Peter Tschumi, director of cooperation at the Embassy of Switzerland, and Achim Munz, resident representative of Hanns Seidel Foundation, shared the similar view.

“This survey is an important step forward in developing and better understanding of business environment in Myanmar,” said Munz.