Singapore and Myanmar Increasing Economic Cooperation
On Wednesday, February 4th, Singapore’s Emeritus Senior Minister Goh Chok Tong’s two day visit to Myanmar ended with the announcement of two new economic initiatives to tighten Singapore-Myanmar relations. The two initiatives, one, the revival of a joint ministerial committee and the other, a cooperation agreement to expand banking and finance, followed Goh’s meeting with Myanmar leaders, President Thein Sein and opposition leader Aung San Suu Kyi.
Revitalization of Cooperation
As part of the first initiative, Singapore's Trade and Industry Minister Lim Hng Kiang and Myanmar's Energy Minister Zay Yar Aung will co-chair a Joint Ministerial Working Committee (JMWC). The JMWC, which had been established in 1995 and lapsed in 2001, will promote bilateral economic cooperation and forge new business ties between the two countries. Specifically, the JMWC will target areas of trade and investment, finance and law for mutual interest.
"With this platform, the JMWC, we hope that we can enable the whole process to be more systematic and also make sure that we cover the areas that is more focused that actually bring a win-win for both sides. There's definitely competition, you saw the interest of several other countries' consortiums and businesses and even the government approaching the Myanmar government,” Minister of State for Trade and Industry Teo Ser Luck said during an interview.
The second initiative, aimed at the banking and finance industry, will involve cooperation between the two nations in the banking sector while also expanding Myanmar’s financial sector. Currently, two out of the nine foreign bank licenses awarded last October by the Central Bank of Myanmar were awarded to the Singapore banks, OCBC and UOB..
Myanmar’s Hopeful Future
The announcement comes at a favorable time for Myanmar as it opens its economy to foreign countries after a long period of isolation.
Myanmar, one of the poorest countries in Southeast Asia, is in the midst of a historical change in the region’s history--transitioning from an authoritarian government to a democratic regime. After years of colonial occupation, military dictatorships, and the house arrest of popular leader Aung San Suu Kyi which spanned over a decade, Myanmar is finding hope through economic progress and foreign investment. Even with its history of armed conflict lasting 70 years, the resource rich country’s democratic transition and trade liberation has spurred the interest of foreign investors worldwide.
Singapore in particular has made significant investment in Myanmar with projects across various sectors such as hospitality and tourism, industry and real estate.
According to Teo, "Singapore and Myanmar have a very deep relation starting all the way back...I think Singapore is well positioned to help Myanmar as well as enable our businesses to invest in the Myanmar market and do well here and at the same time to build our diplomatic relations and scale it to a new height."
Singapore is Myanmar’s third largest foreign direct investor with a cumulative investment of 8.3 billion U.S. dollars since 1988. Myanmar also moved up eight places to become Singapore’s 29th largest trading partner in 2014. With these new economic initiatives, Singapore and Myanmar are both benefitting as the former increases its economic influence over Southeast Asia and the latter emerges as a new contender in the regional economy.
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