More reforms needed across several sectors

 The Enterprise Survey was released two days after the Ease of Doing Business Survey, which ranked Myanmar at 177th among 189 economies in the world.

The survey, covering business owners and top managers in 632 firms interviewed from February through April 2014, showed that more than one-fifth of those surveyed indicated access to land as the main problem, while 17 per cent and 9 per cent cited access to electricity and access to skilled workers as their primary constraints, respectively.

“The findings from the survey offer not only a good snapshot of Myanmar’s current situation, but also allow comparison across countries, in order to assess the business environment and barriers facing firms doing business in Myanmar,” said Abdoulaye Seck, World Bank country manager in Myanmar. “The survey results and analysis will help inform government policy to create a level playing field that helps promote investment, productivity, growth and jobs.”

Addressing these key constraints is critical to ensuring a fair and transparent business environment in which all private enterprises can grow and create jobs, the World Bank said.

The World Bank Group has conducted similar surveys in 130 countries with more than 130,000 firms across the globe. In Myanmar, the survey was carried out in the spring of 2014, covering Yangon, Mandalay, Monywa, Taunggyi, and Bago. This survey of private sector firms in Myanmar included interviews from more than a thousand foreign and domestic non-agricultural businesses, in manufacturing, retail and other services. Some 23 per cent of firms identified access to finance as the top barrier to their operations – just 30 per cent of the surveyed firms have a bank account, the lowest figure in the region by far.

The survey, highlighting the biggest obstacles experienced by private-sector firms in Myanmar, covered companies of all sizes – 103 large companies which employ more than 100 workers, 162 medium-sized enterprises with 20-99 workers, and 367 small companies with 5-19 workers.

Most of the companies interviewed, 375, are in Yangon. The rest operate in Mandalay, Monywa, Taunggyi and Bago.

The survey covered 12 areas from corruption, crime, finance, legal and ownership status of companies, workforce gender, infrastructure, innovation and technology, corporate performance, regulations and taxes, trade and the characteristics of workforce.

In the area of finance, the survey found that 94.8 per cent of the companies needed collateral for their loans, against the 78.3 per cent average of the countries in East Asia and the Pacific and 77.1 per cent in the world.

Meanwhile, collateral is valued at 224.3 per cent of the loan amount, against the 197.5 per cent average in the region and 193.4 per cent in the world.

In the corruption area, electrical connection and import licences appeared to be the biggest issues that paved way for corruption in Myanmar, as over half of firms are expected to give gifts for such approvals.

While 55.8 per cent are expected to give gifts to get an electrical connection, the percentage of companies expected to give gifts to get an import licence is 53.5 per cent.

Comparatively, in the two categories the global averages are only 15.6 per cent and 12.6 per cent, respectively.

In the infrastructure area, the companies suffered from 12.5 power outages in a month, compared to 3.3 in the region and 5.6 in the world. Nearly one-fourth of the companies, 23.5 per cent, identified electricity as a major constraint, compared to 21.8 per cent in the region and 33.5 per cent in the world.

Regarding the workforce, the survey showed that 48.7 per cent of Myanmar workforce was offered formal training, against 60.2 per cent in the region and 53.6 per cent in the world.

Yet, only one-tenth, 12.4 per cent, identified an inadequately educated workforce as a major constraint, compared to 20.7 per cent in the region and 24.4 per cent in the world.

The Enterprise Survey in Myanmar was supported by the United Kingdom’s Department for International Development and was carried out in close collaboration with the Ministry of National Planning and Economic Development.

The Enterprise Survey data and Doing Business 2015 report will inform recommendations for reforms to improve the investment climate. A detailed Investment Climate Assessment will be published by the World Bank Group in early 2015.

Myanmar's ranking in World Bank Doing Business 2015 moved up one place, thank mainly to improved border trade.

“Myanmar made trading across borders easier by reducing the number of documents required for exports and imports,” the report said.

The newly launched Doing Business 2015 finds that Myanmar made trading across borders easier by reducing the number of documents required for exports and imports. Myanmar is among 15 out of the 25 economies in East Asia and the Pacific that implemented at least one regulatory reform to ease business during the fiscal year that ended in June 2014.