European companies in Myanmar have a positive outlook regarding their business in terms of services provided, market share, profits and overall business activities in the country, the EuroCham Myanmar Business Confidence Survey 2019 showed.
A total of 74 companies participated in the survey, which was released last week, and shared their business projections and sentiment of doing business in Myanmar.
More than a third of the survey respondents said that the local business environment had greatly improved or improved over the last 12 months, marking a 19 percentage-point increase from last year.
A larger number of firms also found the current business environment to be satisfying with almost two-thirds of European companies saying the business environment in Myanmar has improved or remained the same compared to last year.
That level of confidence can also be seen elsewhere, with more businesses having expanded their footprint in the country by investing in developing their business in new cities such as Mandalay and Shan State, said Nicolas Delange, chair of EuroCham Myanmar.
The majority of the European companies expect their market share to increase or greatly increase in the coming years. Furthermore, 82 pc of the European companies expect that they will increase 66 pc or greatly increase 16 pc their services in the coming years Most surveyed companies expect that their profits will increase in the coming years, or at least stay the same, the survey stated.
However, their willingness to invest further going forward has tapered, with 42 pc of the companies surveyed not expecting to invest more next year.
The challenges limiting Myanmar’s potential for growth are quite similar compared to last year.
These include lack of clarity and efficiency of the regulatory frameworks, legal uncertainty and a shortage of skilled people.
This year though, a new risk is rising for European companies doing business here: reputational risk related to the crisis in Rakhine and the country’s human rights record. Addressing these issues is fundamental for unlocking Myanmar’s potential and key in convincing European companies to invest for the long haul said Mr Delange.
Nevertheless, the EU remains committed to engaging with Myanmar and hopes to support European businesses to do the same, Kristian Schmidt, Ambassador of the European Union to Myanmar, said in a statement.
The majority of responding companies of 38 pc belong to a parent company that reports more than ¤1 billion in global revenues. In Myanmar, 30 pc of the survey takers have revenues between ¤1 million and ¤10 million.
The responding businesses operate in a wide variety of industries including 13 pc in the healthcare sector, 11 pc in the construction sector, 11 pc in consumer goods sector, 8 pc in business services, and 8 pc in logistics.
The main motivation to establish an office in Myanmar is to serve the local market and produce locally.
