For Stable and Developed ASEAN

It can be said that with the goal of opening for a comprehensive international trade, especially to attract foreign investment to the socio-economic development, in November 2012 the Myanmar government issued a new investment law which is an important legal basis to attract the attention of international investors. This has become more significant, as the law has received great support from European investors who for a long time maintained a policy of sanctions to this ASEAN country. Specifically, this law consists of 20 chapters, of which chapter 4 refer to the core principles in the task of "political" mission to attract investment into Myanmar after a long period of seclusion. Accordingly, Chapter 4 of the Law on Investment refers to the fundamental issues serving national economic development goals, such as: promoting and increasing the use of labour; developing exports; producing import substitution; and producing goods requiring large capital investment; attracting high technology and technique; business development using energy saving; regional economic development; developing new energy sources and renewable energy; modern industrial development; environmental protection; introducing support information exchange and technology; developing knowledge and skills of local people; modernizing service companies to benefit the state and people; and promoting maximum national resources in the short term and long term.

 

It is from these major changes that Myanmar has attracted a large number of big companies from abroad such as: Coca-Cola, Pepsi Cola, Master Card, Visa, Western Union and PWC.

 

It can be said that Vietnam and Myanmar have a lot of similarities in the implementation of policies to attract foreign investment. Myanmar also learnt from the experience of Vietnam in the early opening to adjust the policy to suit the desires of western investors.

 

Current trade and investment ties between Vietnam and Myanmar have seen significant changes. By October 2012, trade turnover of the two countries reached more than US$186 million. In addition, Vietnam aims to increase foreign direct investment in Myanmar from US$500 million to US$ 2 billion and increase bilateral trade volume to US$500 million in the period from now to 2015. The Bank for Investment and Development of Vietnam (BIDV) has opened a representative office in Myanmar. An Giang Plant Protection Company and VinaCapital fund management company have signed an agreement with Eden Group, a consortium of Myanmar, to open an agricultural processing plant worth US$100 million. Vietnam’s 2 big telecommunications groups, VNPT and Viettel, are actively penetrating this potential mobile market. Also, Hoang Anh Gia Lai Joint Stock Company has announced plans to build a shopping, office and apartment complex worth US$300 million in Yangon, Myanmar. From these typical examples, it can be said that the potential long-term cooperation in trade and investment between Vietnam and Myanmar will continue to develop further in the future.

 

It is reported that the summit was attended by EU Trade Commissioner Karel de Gucht; ASEAN Secretary-General Le Luong Minh; Ministers, Ambassadors and more than 700 leading enterprises from ASEAN and EU. International observers said that this was a very good opportunity for the business community ASEAN - EU. The goal is to strengthen cooperation, connection, direct exchange and express their views as well as the desire and recommendations to the ASEAN and EU regulators. The summit is more important when it is held in the context of ASEAN nearing the completion of the goal of building the Community in 2015 and the economic relationship between ASEAN and the EU is growing strongly. This is expressed in trade relations between ASEAN and the EU increasing to US$234.8 billion in 2011, of which, foreign direct investment from the EU to ASEAN increased by 7.2 percent, a total of US$18.2 billion. In 2012, the EU is the third largest trading partner of ASEAN and continued to be the source of the largest foreign direct investment in ASEAN.

This summit became more important as ASEAN - EU trade cooperation and investment continues expansion and growth in the context of the world economy facing many difficulties. The EU is the second largest trading partner and continues to be the source of the largest foreign direct investment in ASEAN, while ASEAN is the third largest trade partner of the EU.

 

The EU is also the partner devoting more technical assistance to ASEAN for the purpose of development. In the process of building its Economic Community, ASEAN has continued to learn from the EU experience.

 

In the coming time, the EU and some ASEAN countries are in the process of negotiating the formation of the Free Trade Agreement (FTA). The premise of economic cooperation will deepen comprehensive ties between the EU and ASEAN in the near future.

 

However, we also need to note that, according to EU Trade Commissioner Karel de Gucht, ASEAN has been one of the biggest trade partners of the EU and vice versa. This is proved that many EU enterprises are particularly interested in the ASEAN market. In addition, when the global economy is growing faster then the old, saturated markets such as Europe, America, Japan and China. Asia including ASEAN are new markets, an attractive destination for investors around the world. But the new economic cooperation deal also has many potential risks for both invested countries and the investors’ countries. This requires both parties to learn carefully from their partners to achieve the desired contract.