Thein Sein stalls on business reform

Thein Sein stalls on business reform

President Thein Sein has scheduled a law limiting business monopolisation to take effect in February 2017, guaranteeing his government will not have to pursue its mandate.

The Pyidaungsu Hluttaw Law No.  9 /2015, commonly referred to as the Competition Law, was passed by the union parliament in February this year. It aims to ensure fair business competition, and curtail market monopolisation by large companies. Army-linked businesses, and those owned by figures close to the former military regime are likely to be impacted.

The tabling of the law followed Burma’s appointment to ASEAN chair in 2014, as well as the broader implementation of economic and business reforms enacted after the nominally-civilian government came to power in 2011. ASEAN-member states had recently committed to introducing competition policies by 2015.

However, some have questioned the intent behind the law and the decision to wait two years to enact it.

Mandalay-based lawyer Thein Than Oo said while the president does have the legal power to set the date to 2017, he suspects the motivation is political.

“The [Thein Sein] government during their term gave large business groups like Zaykabar and Skynet free reign over the market, and now they want to prevent the new government from doing so – which I think is rather contentious. It implies that the government, despite having worked with cronies themselves, wouldn’t allow their successors to do the same thing,” Thein Than Oo told DVB.

Once adopted, the law will require the implementation of a regulatory body – which will be able to investigate and adjudicate on matters of ‘unfair trade practices’ (UTP). Further, it will set the foundation for a penalty system that allows for the awarding of private damages and the conviction of senior business managers. It covers four key areas: acts controlling market competition; monopolising markets; company mergers, and UTP. While explicitly intended to act as a framework to safeguard the fast-opening market in Burma, the domestic companies that dominate the Burmese market have long held links to the ruling party and military elites.

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Such regime cronies have enjoyed a monopoly over many of Burma’s main industries and sectors. Conglomerates such as Union of Myanmar Economic Holdings Limited (MEHL) and the Myanmar Economic Corporation, both military-owned enterprises, control the majority if the import sector in the country. Further, MEHL also has a significant share of the beer market in Burma, at some 45 percent of the main distributor Myanmar Brewery Limited.

Much of the jade and resource industry, which has claimed many lives this year alone, is also controlled by cronies or military-linked businesses. The jade mining industry alone is estimated to be worth as much as US$31 billion, close to three times more than its official export worth. Almost none of the profit makes its way into the pockets of ordinary Burmese citizens.

An incoming National League for Democracy government will have to grapple with balancing the military’s interests against a legislative obligation to uphold the law. The incoming law, adopted on 24 February of this year, stipulates a three year prison term or a fine of some 15 million kyat (US $12,022), to those found in contravention of the law.

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