Myanmar is back to civilian government, after half century

While Thailand moved from civilian to military government, Myanmar moved from military (for more than half century) to civilian government. Congrats Myanmar people.

A friend suggested that Myanmar will be back to military dictatorship in 6 months and noted that Su Kyi refuses to acknowledge the persecuted Rohingya crisis.

Being a "rational optimist", I believe that if ever Myanmar will go back to a military dictatorship, it will be a 2 steps forward, 1 step backward, and hence, the civilian government -- with all its warts and imperfections -- will prevail. Meanwhile, it is true that Su Kyi is silent on the Rohingya issue. Now that her buddy is in power, let us see how they will deal with this issue.

There should be some credit to the ASEAN efforts at promoting human rights. Myanmar's generals and dictators dislike human rights protection. But being with the ASEAN for many years and seeing other countries in the region that are under civilian leadership and things are fine, no frequent riots or demonstrations when there is civilian supremacy over the military, the military softened and allowed elections and they were defeated.

Compare the state of human rights respect or violation, South East Asia vs South Asia or Middle East or Africa or S. America, SE Asia is better. Here in the PH for instance, things are not exactly heavenly but freedom of speech is more protected, almost anyone can curse the President or legislators or the Supreme Court, etc. without going to jail.

There are still remnants of the military dictatorship, but there are changes. From nearly 100% to 25% military presence in the Parliament, that is still an improvement.

"A key challenge for Suu Kyi's administration will be maintaining smooth relations with a military that locked her and many of her colleagues up for years.

The charter ring fences a quarter of parliamentary seats to unelected soldiers and gives the army chief control over the home affairs, border and defense ministries -- and with it sweeping powers over the civil service." http://interaksyon.com/.../suu-kyi-aide-htin-kyaw-sworn...

A good and brief timeline. The military dictatorship was in power from 1962-2015, 53 years. http://interaksyon.com/.../new-dawn-for-myanmar--timeline...

Meanwhile,  here's one proof of economic liberalization in Myanmar, coinciding with political liberalization that allowed elections. Myanmar made the biggest reduction in total tax rate among the 10 ASEAN countries, from the PWC "Paying Taxes 2016" report, in just one year. There is momentum in economic and political liberalization in that country.

From my article in BusinessWorld today.

Finally, I believe that the Thai military dictatorship won't last long. They should be gone from power within two years or less.

---------

See also: 
On Myanmar, Letter to Sec. Romulo, October 05, 2007 
Migration 24: Rohingya Boat People to SE Asia, May 12, 2015

Investment Liberalization 2, G7 and East Asia economies

Mobility of investments and capital across islands, countries and continents is part of human nature. A country or island for instance with plenty of beautiful white sand beaches will naturally attract investors who will put up modern resorts and hotels, that will attract more visitors from other countries, giving lots of jobs and other business opportunities to the locals and new migrants.

The UN Conference on Trade and Development (UNCTAD) released in late June 2015 its World Investment Report (WIR) 2015. The annex tables of that report are found here.

My sister's auditing firm published the 2nd issue of its monthly Business and Economic Update last month. Among the contents of that report are the tables below, original global data are taken from the WIR 2015.

Here, it shows that from 2012-2014, there was consistent net outflows of foreign direct investments (FDIs) in the G7 except UK and partly, Canada. Then in Hong Kong, Taiwan, S. Korea and Malaysia. 

http://alasoplascpas.com/publication-economic-02-Net-Inflows-of-FDI.php 

Numbers below show the ratio of FDIs over gross fixed capital formation (GFCF) or simply domestic investments. It is interesting to see how Germany and Japan have very small share of FDIs. This somehow gives an idea of their investment protectionism policies.

The most open economies to global trade and investments, Hong Kong and Singapore, have the highest FDI share to total national investments.  And an FDI share of 2.5 to 14 percent seems to be the average, possibly a healthy mixture, including the 10.5 percent for the Philippines. 

Until 2012, the bulk of FDIs in the PH came from the US, HK and Japan. By 2013 until mid-2014, capital from the US withrew, from HK declined significantly, from Japan retained, and a surge of FDIs from British Virgin Island.

http://alasoplascpas.com/publication-economic-02-FDI...

In portfolio investments like the stock markets, Japan, China, India and Hong Kong received significant inflows while many in the ASEAN experienced net outflows overall except Vietnam.

In merchandise exports (X) as a share of their GDP, Hong Kong and Singapore are run-away leaders, followed by Vietnam, Malaysia and Thailand. In non-merchandise, services exports like tourism receipts, Macao is a clear leader because of its huge gaming and casino facilities.

Personal remittances by their nationals who are working abroad, India, China and the Philippines (and Mexico) are the world leaders. The Philippines is #1 in the ASEAN.

http://alasoplascpas.com/publication-economic-02-Global...

Meanwhile, from another source, these numbers are interesting. Until 2012, the US was a major source of FDIs in the ASEAN. By 2013, capital from the US declined significantly. Investments from Japan, intra-ASEAN, UK and Netherlands are big. 

Source: ASEAN Investment Report 2013-2014, http://www.asean.org/.../asean-unctad-launches-asean...

Favorite destination of FDIs in the ASEAN are the services and manufacturing sectors. Data also from the ASEAN IR 2013-2014.

The above numbers and figures are additional reminders that the Philippines need to amend its Constitution and remove protectionist provisions that restrict or limit the entry of foreign investments in some sectors, while outrightly banning/prohibiting FDIs in other sectors.

It is not wise that government dictates that these areas are only for local investors and those areas, foreign investors can be allowed. Investments, local or foreign, automatically creates local jobs. If Filipino workers are prevented from being hired by foreign  investors here because the latter are restricted or banned on certain sectors, then many Filipino workers are hired by foreign investors in foreign lands.
-----------

See also: 
Free Trade 35: EU-FNF Forum on 'FDI Engine for Job Growth', May 15, 2014 
BWorld 12, Investments, APEC and economic liberalization, July 25, 2015 
Investment liberalization, trends and lessons, July 26, 2015

AEC 10: Indigenous Rights, Labor and Human Rights in the ASEAN

Tomorrow, the ASEAN People's Forum (APF) will start in Kuala Lumpur, Malaysia. It is a gathering of largely anti-liberalization, anti-privatization and deregulation groups and NGOs. The 3-days event (April 22-24) is held before the annual ASEAN Summit will officially start, April 25-27, also in KL.

The APF Secretariat is sending teasers to registered participants about selected panels by email. Here are four of those teasers.

(1) On indigenous lands. This panel is an attack on state and corporations "collusion". The term "non-state" should actually and technically include not  only private corporations but also NGOs, people's organizations (POs), church groups, rebel groups and other CSOs as they are all "non-government" entities.

Land grabbing and stealing is a crime, and it does not matter if the land grabber is a local or foreign corporation or individuals, rich or poor. The main function of the state is to enforce the rule  of law, especially the law against stealing and disrespect of private property rights, and the law against aggression against individuals. This concern can be tackled anytime anywhere and not an ASEAN-specific issue.

(2) Forum on "right to work" and "rights of workers". These are fine. But it seems that the advocacy has stopped there. What about the "right not to hire", "right to fire" of lazy or dishonest or inefficient job applicants and/or workers? What about the "rights of entrepreneurs"?

Technically, "right to work" is an individual  decision. There are many individuals who do not want to work even if a job opening is available to them; or do not want to stay to jobs they already hold. The same way, a "right to entrepreneurship" or "right to create jobs for others" is also an individual  decision. Entrepreneurs can choose to hire only two workers instead of five or 10, and give those hired high pay, lots of gadgets and machines, training and seminars, to improve their productivity so they can do the work of 5 or 10 people.

(3) 'Extraterritorial obligations in the context of cross-border investment in ASEAN: the role of human rights institutions'

Date: Friday, 24 April 2015, 1.30 - 3.30pm

"The ASEAN Economic Community is likely to produce an escalation in cross-border investments within ASEAN, which brings with it significant human rights and environmental challenges. The workshop will examine recent transboundary human rights complaints to the Thai and Malaysian National Human Rights Institutions regarding cross-border investment by Thai and Malaysian companies in Laos, Cambodia and Myanmar. The discussion will highlight the role of national and regional human rights institutions in holding states and companies accountable for the results of their investments. It will also address the accountability and rule of law challenges that enable such human rights violations to occur and experience to date in investigating and remediating human rights complaints."

Speakers

       - Dr. Nirun Phitakwatchara, Commissioner,

          National Human Rights Commission of Thailand (NHRCT)

     - Professor Dato' Dr. Aishah Bidin, Commissioner,

          National Human Rights Commission of Malaysia (SUHAKAM)

       - Dr. Seree Nonthasoot, Representative of Thailand to

           the ASEAN Intergovernmental Commission on Human Rights (AICHR)

       - Mr. Eang Vuthy, Executive Director,

          Equitable Cambodia (Cambodia)

      - Mr. Ye Lin Myint,

           Dawei Development Association (Myanmar)

      - Ms. Sor. Rattanamanee Polkla, Coordinator,

           Community Resource Centre, (Thailand)

Facilitators: Earth Rights International (ERI) and Towards Ecological Recovery and Regional Alliance (TERRA)

Organised by:

Community Resource Centre (Thailand), Suaram (Malaysia), 

Equitable Cambodia (Cambodia), Towards Ecological Recovery and Regional Alliance (TERRA)

I cannot attend this forum because I  will be flying back to Manila morning of that day. But similar to my comments in #1 above, human rights (HR) is a fundamental issue as it affects the right to life, right to private property ownership of the people. It does not matter if the HR violator is a local or foreign company or individual.

Now if the organizers and speakers of that panel would argue that AEC and intra-ASEAN investment liberalization is to blame, they are mistaken. With or without the AEC, or any other regional or multilateral economic agreements, the people's basic HRs should be promulgated and violators, local or foreign, government or private personnel, should be made accountable.

The AEC is about greater economic integration of the 10 member-states of the association. It is both integration and competition at the same time, the same way that neighboring cities in the same country can be competing in attracting investors and visitors. And  it is a good thing because it encourages, even forces people and officials, to become more efficient, more industrious and ambitious, more transparent and accountable, to their stakeholders and customers.

It is unfortunate that a number of NGOs and CSOs fall for the populist belief that accelerated economic liberalization, greater economic integration and competition within the ASEAN, can be a bad thing.

The new regional center and think tank South East Asia Network for Development (SEANET) would endeavor to help clarify these issues through more public education, citizens and civil society engagement. More choices and options, more freedom whom to buy from and sell to, ultimately redounds to economic empowerment and hence, poverty alleviation in the ASEAN countries and the rest of the world.
----------

See also:
Free Trade 37: Multiple Concerns and Regulations in the ASEAN, September 11, 2014
AEC 6: The ACSC/ASEAN People's Forum (APF) 2015, April 07, 2015 
AEC 7: AAA Law's Forum on Post-2015 ASEAN Integration, April 09, 2015 
AEC 8: Trade, Competition and Innovation in the ASEAN, April 13, 2015 
AEC 9: SEANET Forum on Economic Liberalization, Kuala Lumpur, April 23, April 19, 2015

AEC 9: SEANET Forum on Economic Liberalization, Kuala Lumpur, April 23

Next week, April 23, SEANET, IDEAS and APF/ACSC will jointly sponsor this forum in Kuala Lumpur. I will be there to  attend and hear this forum as well  as other panel discussions of APF/ACSC.

If I am asked that question, my answer is a quick Yes. Why?

Economic liberalisation (or liberalization) means giving the people more economic freedom to pursue various endeavors.. To produce various goods and services, to have more choices and options as consumers of final products (like food and shoes) or buyers of capital goods (like machines and trucks), raw materials and intermediate products that are used to improve their own production  of various goods and services (like laboratory/diagnostic instruments for healthcare).

From a HSBC study in 2012, four ASEAN countries would be in the top 25 largest economies in the world by 2050 -- PH, IN, MY and TH. Economic liberalization in these 4 countries plus their rising and young population are the main factors for this good outlook.

Trade and economic liberalization has been very beneficial to developing countries of Asia. Their GDP sizes have been doubling every decade on average.

More liberalization means more access to more products from neighbors and other countries -- better products and/or cheaper prices. More laptops and computers, more mobile phones and tablets, more internet service providers, more telecom companies (except in some countries), competing for more subscribers.

source: http://www.slideshare.net/devkambhampati/dr-dev-kambhampati-asean-economic-community-chartbook-2013?qid=18440cec-07c6-4174-9a73-99836723c0ae&v=qf1&b=&from_search=46

More liberalization  means more choices, more freedom.
--------------

See also:
AEC 5: Aviation, Telecom, Mobile Money and Retail in the ASEAN, March 23, 2015 
AEC 6: The ACSC/ASEAN People's Forum (APF) 2015, April 07, 2015 
AEC 7: AAA Law's Forum on Post-2015 ASEAN Integration, April 09, 2015 
AEC 8: Trade, Competition and Innovation in the ASEAN, April 13, 2015

Economic Liberalization via Charter Change, the FEF Statement

Investments and job creation is not a crime that must be restricted by governments. The Philippine Constitution, ratified in 1987 or 27 years ago, is nice except that it explicitly limits or bars foreigners from owning certain assets and businesses in the country. Some sectors are limited to either 40 percent maximum equity ownership by foreign investors, some are outright off-limits to foreign investors.

I believe that the PH constitution needs to be revised and amended. In addition, I wish to see a Constitution that is 10 pages max. Very few details, mostly motherhood statements. All details -- like the minimum age for a candidate to run for Congressman/woman, for Senator, for President; what sectors to be reserved only for Filipinos, etc. -- should be done via legislation. That way, there is no need to clamor for frequent changes in the charter. People can lobby for new legislation or amend an old law without affecting the entire constitution.

Below is one statement calling for charter change.
--------

FEF Statement of Support to the move of Speaker Belmonte to amend the economic provisions of the PH Constitution

CHACHA NOW!

STATEMENT BY THE FOUNDATION FOR ECONOMIC FREEDOM

February 3. 2014

 We, the Foundation for Economic Freedom, support the move by Speaker Feliciano Belmonte Jr. to amend the economic provisions of the Constitution to include the phrase “unless provided by law” to the foreign ownership restrictions in the Constitution in public utilities, land, mass media and advertising, educational institutions, and development  of natural resources.

We believe that vesting on Congress, rather than the Constitution, the power to determine the restrictions in foreign ownership will send a strong signal to foreign investors that the government will level the playing field by opening up the economy as conditions permit.

We believe that opening up the economy to foreign investors is necessary to increase  Foreign Direct Investments (FDI) in the country, which remain one of the lowest in the ASEAN.

Poverty and hunger levels have remained unchanged despite the country’s 7.2% economic growth.  To attain “inclusive growth,” the country must boost investments by liberalizing foreign ownership  rules in order to generate employment and reduce poverty.

The country also risks being left out of the Trans-Pacific Partnership (TPP), an economic grouping of nations intended to boost trade and investments among member countries, if it does not amend the restrictive provisions in the Constitution and give foreign investors equal treatment as local investors.

Opening up the economy to more foreign investors, especially in strategic industries where foreigners are presently prohibited from owning a majority, will help improve competition, increase consumer welfare, lower prices, raise productivity, and generate technology transfer.

While the Constitutional amendment will not immediately liberalize the economy, it will provide an evolutionary path to making the necessary changes as needed.  The Belmonte proposal represents a practical political solution that provides the “key” to opening up the economy.

We urge President Aquino to reconsider his stand about not amending the Constitution and allow Congress to pass the Belmonte bill in time for a national referendum in 2016.  The millions of poor and unemployed are looking up to his government to live up to his promise of inclusive growth.