Suu Kyi Government's Economic Policy Still a Mysteryby
Developers stand to lose millions under new height regulations
International investors say risks currently outweigh benefits
Developer Bo San had already sold all the units in his 12-story high-rise in Yangon in Myanmar when he was forced to halt construction. Three months later he faces the task of having to remove two floors to comply with new height regulations, at a cost of $8 million.
Since May, the regional government of Aung San Suu Kyi’s ruling National League for Democracy has suspended work at 185 construction sites across Yangon, and ordered the number of floors to be reduced at a dozen previously approved buildings.
"I understand and accept that the policy was changed when the government changed," he said. "But the new policy should be imposed on new projects, without affecting previous projects."
The government says the old laws were written when Yangon had virtually no high rises and the approval process for new buildings was chaotic, but developers say the changes will cost millions and risk scaring off investment. It is some of the first public criticism of the NLD since it became the first democratically-elected government in more than 50 years and raises questions about whether Suu Kyi and her party are up to the task of managing an economy in transition.
Projected to have the fastest economic growth in Southeast Asia this year at 8.4 percent, foreign direct investment surged to a record $9.4 billion in the fiscal year ended March, and Myanmar’s kyat has outperformed most other Asian currencies this year. Yet while the economy benefited as the military gradually relinquished power and sanctions were eased, much work remains to be done. Two-thirds of Myanmar’s 52 million people live in the countryside, many without electricity, and annual per-capita gross domestic product is $1,200, on the low side for Southeast Asia.
The government said late last month it would make a long-awaited announcement about its economic plan. But after hours of waiting for a promised media briefing, the NLD merely released a list of broad goals.
“This is not an economic policy; it is the party’s general statement," said Khin Maung Swe, chairman of the National Democratic Force, formed from a split in the NLD six years ago. "They have to say how they will increase GDP and per capita income, how they will manage inflation, how they will increase productivity. They have to tell us these plans. But now there is nothing."
The business community is also looking for more guidance, said Thein Tun, chairman of the Myanmar Banks Association. "We want more detail and specific economic policies," he said. "I think this is important. When we know government policies, it is much better for us to work."
Some people are understandably disappointed by a lack of detail in the government’s economic program, but significant work is being done behind the scenes, said Sean Turnell, an associate economics professor at Macquarie University in Sydney who advises the NLD.
"The NLD has not stepped into a well-oiled, well-practiced process," Turnell said. "Rather, it has been handed the reins of a hitherto highly dysfunctional apparatus many parts of which were not geared so much to delivering social welfare, as to suppressing dissent and defending the privileges of a ruling elite."
He said people need to take into account that Myanmar under the previous administration was not a place where the opposition could securely prepare for running a government, and that before that, under the junta, NLD members were "hunted, imprisoned, harassed, impoverished and occasionally even killed."
Suu Kyi’s government has faced criticism for holding too few media briefings, sporadic press releases, and a lack of clarity about media access to government events, said Kyaw Swa Min, joint secretary of the Myanmar Press Council and general secretary of the Myanmar Journalists Association.
"Compared with the previous government, for example, President Thein Sein gave monthly policy and strategy addresses to the public," Kyaw Swa Min said. "The government should make more contact with the media, provide more information, and not control or restrict the flow of information if they want to strengthen democracy.”
The NLD is working to improve transparency, according to Myo Myint Maung, deputy permanent secretary at the Ministry of Information. "Expectations from the public are very high," he said. "Since people believe in the new government, I believe the tasks carried out by government will be a success."
Moe Moe Lwin, director of the Yangon Heritage Trust, who sits on a committee formed in June by the Yangon regional government to review high-rise buildings, said the new height regulations are in the city’s better interests. "Under the previous government, projects were awarded without any long term vision of the city."
Hundreds were approved without any city planning considerations, said Moe Moe Lwin, and lacked proper assessments except for structural safety. "The permit procedures and regulations applied haven’t been updated and scaled for where Yangon is headed. More surprising is that many of these projects did not comply even to basic design principles, let alone consider their environmental and other impact to their surrounding communities."
That might not be enough to convince investors like Apichart Chutrakul, chief executive officer of Sansiri Pcl., neighboring Thailand’s second-biggest home builder by revenue. While there are property investment opportunities in Myanmar, the risks outweigh the benefits, Apichart said. “We have looked, but it depends on the law itself,” he said. “For now I don’t think it is the right time.”
Nor is it the right time for the hundreds of workers who three months ago were rushing to finish Bo San’s Golden Dragon Condominium. Today, a lone security guard is on site.
"People think whatever this government does is good," said Bo San, who also voted for the NLD. "But in reality there are problems and I think we need to give constructive criticism. But we are facing people that don’t like it if we give constructive criticism."