Myanmar's foreign investment law, which has been delayed for months while the President's office and parliament debated clauses some saw as protectionist, could be finalised within days, President Thein Sein said on Sunday.
The bill has passed back and forth between the legislative and executive branches since March in a tussle involving a government eager to attract foreign investment, tycoons determined to protect their monopolies, and small businesses keen not to be shut out, sources close to the debate have said. Thein Sein took office in March 2011 at the head of a quasi-civilian government that brought almost 50 years of military rule to an end. He has undertaken economic and political reforms that have persuaded Western countries to suspend sanctions.
A parliamentary source told Reuters the investment bill would be on the agenda for the new session of parliament, which starts on Monday. Thein Sein, in a rare news conference at his residence in the capital, Naypyitaw, indicated it could quickly become law. "I think the new foreign investment law will emerge within a few days... There will be both protection and incentive for foreign investors," he said, giving no further details.
A parliamentary committee held an emergency meeting in Naypyitaw on October 8 to discuss the President's proposals, a member of the committee said.
"I am sure both foreign investors and local businessmen will find the new law really worth waiting for," he said. With vast energy resources and a primitive economy, Myanmar offers plenty of opportunity to international firms. GE, PepsiCo Inc and Coca-Cola, working with local distribution partners, have already started up, in a small way, but others want clarity on the legal framework before investing.
Once approved by parliament, the investment legislation will return to the president to be signed into law. The first draft sent to parliament in March allowed foreigners to run wholly owned businesses, but that alarmed some local firms, who pressed lawmakers to introduce restrictions on the percentage of foreign ownership and a requirement for a hefty start-up payment in 13 vaguely defined sectors.
A recent draft set maximum foreign ownership in joint ventures in the restricted sectors at 50 per cent. It scrapped a $5 million start-up requirement, which economists say would have priced out smaller local partners, to the advantage of existing tycoons, some of them blacklisted by the West. Some businessmen have argued that the 50 per cent rule could lead to deadlock in decision-making. Parts of the draft that were not expected to be changed would allow foreign firms to have land leases of up to 50 years, tax holidays for the first five years and guarantees against nationalisation.