Myanmar aims to improve lives, modernise with new reforms

NAYPYITAW, Myanmar Sat Jan 19, 2013 8:57am IST

A vendor carries snacks on her head for sale near a brick kiln near Hlawga village, 35 km (22 miles) north of Yangon, January 18, 2013. REUTERS/Soe Zeya Tun

A vendor carries snacks on her head for sale near a brick kiln near Hlawga village, 35 km (22 miles) north of Yangon, January 18, 2013.

Credit: Reuters/Soe Zeya Tun

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NAYPYITAW, Myanmar (Reuters) - Myanmar's government will unveil a slew of new reforms to donor countries and international organisations this weekend, aiming to consolidate achievements since the end of military rule in 2011 but also quickly improve the lives of its citizens.

A wide-ranging "Framework for Economic and Social Reforms" to be presented in the capital, Naypyitaw, sets out priorities until 2015 and broader initiatives "that will allow Myanmar to become a modern, developed and democratic nation by 2030".

The document seen by Reuters, which addresses such issues as liberalisation of trade and investment, health and education, transparency and infrastructure, admits Myanmar "is way behind neighbouring countries".

President Thein Sein, himself a former junta general, has transformed the country since taking office in March 2011 at the head of a quasi-civilian government.

He has introduced sweeping economic reforms, including a more market-oriented exchange rate, released hundreds of political prisoners, and agreed ceasefires with most of the ethnic rebel groups that have fought for decades for autonomy.

Late on Friday he issued a ceasefire order in Kachin state, where tens of thousands of people have been displaced in 20 months of fighting, although rebel leaders would not immediately commit to the truce, suspicious of the government's motives.

The army's continued attacks in the state had raised doubts about his control over the military and even led some to question his sincerity about the reform process in general.

ENCOURAGE INVESTMENT

Western governments have dropped or eased sanctions imposed on the former junta in recognition of Thein Sein's reforms, and international firms are keen to move into a country with vast resources, located between China and India and part of a vibrant Southeast Asia heading for closer economic union in 2015.

Improving the environment for foreign investment is a central aim of the latest proposals.

The unification of exchange rates, already undertaken by the government, will be bolstered by further liberalisation efforts, such as removing all exchange and non-tariff restrictions on imports "as a matter of urgency".

The government says it will give priority to a new central bank law that will grant it operational autonomy.

A new foreign investment law was passed at the end of 2012 but left many questions open about how it would work.

"Feedback from the business community suggests that it is particularly important that the law and procedures are specific as to which sectors are restricted with respect to foreign investment and does not allow for discretion with respect to implementation," the reform document said.

Further efforts at transparency will be made in the natural resources sector. The government will disclose the revenue it gets from oil, gas and mining assets and companies must publish what they pay to the state.

In the past the sector has been opaque and companies paid little attention to how they affected local communities.

The most recent controversy involved a Chinese-backed copper mine at Monywa in the northwest.

Dozens of people protesting at the mine's eviction of villagers were injured in a police raid on their camp in November last year. Thein Sein has set up a commission to investigate the problem, headed by opposition leader Aung San Suu Kyi.

In the telecoms sector, the government will aim for an 80 percent penetration rate for mobile phones by 2015. The rate in 2011 was less than 3 percent.

The tourism industry, which requires "immediate adjustments", will receive a boost from looser visa rules, modelled on those of successful holiday destinations such as Thailand.

Fiscal proposals include raising the threshold for income tax and introducing a value-added tax, and the government will look at how it can make the national budget more transparent.

As one of the "quick wins" to help ordinary people, the document says it will improve public transport in the commercial capital, Yangon, perhaps by lifting restrictions on motorcycles, and banks will be able to start offering mortgage financing. (Additional reporting by Aung Hla Tun in Yangon; Writing by Paul Carsten; Editing by Alan Raybould and Daniel Magnowski)

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