Tokyo Activists Disrupt ASEAN Semin

[carol@xxxxxxx]

More than 40 people gathered at the Hotel New Otani in Tokyo June 16 to
protest the attendance by Vice Admiral Maung Maung Khin, Deputy Prime
Minister of SPDC and Chairman of Myanmar Investment Commission, at an ASEAN
investment promotion seminar held there.  The demonstrators, who included
Burmese and Vietnamese prodemocracy activists as well as their Japanese
supporters, shouted slogans in Japanese in front of the hotel, within
earshot of seminar participants.

Following is an excerpt of the address given by Vice Admiral Maung Maung
Khin at the seminar (transcribed from a recording, so apologies for errors
and omissions):
 	
	... We are gathered here today to exchange our views and experiences in
this area of promoting foreign direct investment ["FDI"].  We all share a
common goal to strive for promotion of FDI in our respective countries,
since it brings in foreign capital, technology, foreign market access and
managerial skills, thereby augmenting domestic resources, contributing to
domestic capital formation and fostering economic development.
	... Before touching upon foreign direct investment promotion, strategies
for economic development, please allow me to say a few words on political
developments in my country, as it has a direct bearing on economic development.
	As you all are aware, Myanmar, the largest nation on mainland Southeast
Asia with a land area of over 676,000 sq km, regained her independence in
1948.  After a brief period of parliamentary democracy, the democratic
system of 1948-1962, Myanmar has lived with socialist economic system from
1962 to 1988, for more than a quarter of a century.  Starting from 1988, the
centrally planned economic system was replaced by a market-oriented one,
redirecting our goal for a peaceful, prosperous, modern and developed
democratic state.  I would like other countries in the region to [      ]
the unique feature of our country is that Myanmar is a union composed of 135
different national races, and hence national unity and reconciliation is
essential for the preservation of our independence and sovereignty as well
as for ensuring peace and stability, which is a fundamental requirement for
economic development.
	... Since regaining of our independence in 1948, Myanmar has faced with
internal strife by various armed insurgency groups, adversely affecting the
development of the country.  Successive governments did not make any headway
in their efforts to consolidate the unity of national races.  In 1988 as a
result of economic difficulties, the country found itself on the brink of
ruin and disintegration, compelling the armed forces to take over the
responsibility of the state.  Less than one year after assuming the state
power, the new government tirelessly tried to achieve national unity and
reconciliation by making peace overtures to all the armed groups in good
faith and good will.  Today, after decades of doubt and suspicion, all armed
groups but one have returned to the legal fold and are cooperating with the
government and local inhabitants for regional development.  We are confident
that the remaining single group will also be able to follow suit soon.
Never before in the history of independent Myanmar have so many armed groups
returned to legal fold in such numbers to join hands with the government in
building a peaceful, democratic and modern state.
	At the same time, the government is also exerting great efforts for the
development of border areas and national races that have suffered most due
to armed insurrection.  A multifaceted program designed to alleviate rural
poverty was launched in May 1989 for the all-around development of the
remote and backward areas.  A new ministry devoted entirely to look after
the development of border areas was established, and the government has
already spent out of its own resources over 9 billion kyats to improve the
infrastructure, public utilities, as well as to introduce improved method of
agriculture with a view to uplifting economic and social [     ] in those
areas.  With the introduction of modern agriculture skills and provision of
a wide range of inputs, services and infrastructure, the program is
encouraging the national races to do away with the environmentally unsound
practice of shifting cultivation and to switch from illegal poppy plantation
to cultivating of high value substitution crops.
	Such efforts of the government have been accompanied by its own
anti-narcotics endeavors for the eradication of drug production and
suffering which is linked to the internal insurgency.  Drugs suppression
efforts are meeting with greater success as an increasing number of armed
groups are returning to the legal fold.  As a result of the government's
efforts, more than 3,700 kg of heroin, over 22,000 some odd kg of opium,
over 10 million tablets of stimulant drugs were seized and destroyed and 70
heroin-refining [camps] burned down during the period of September 1988 to
end of December 1997.  The success was achieved at a great cost in life:
766 members of armed forces, including 20 officers, were killed, and 3,000
members, including 81 officers, were wounded in such operations.  Nowhere in
the world has a nation sacrificed as much in combating drug eradication[!].
We are at present able to declare an area right in the heart of
poppy-growing region as an opium-free zone and are looking forward to
establishing more such zones in the near future.
	To accompany our full political objectives to ensure enduring peace, unity
and development in the nation, we are in the midst of convening national
convention which will [determine] the guiding principles and [chapter
headings] for charting a firm and enduring constitution that will reflect
the aspirations of the people and guarantee the interests and welfare of all
the national races residing in the nation.  A truly representative body
comprising of each [stratum] of people representing all walks of life in
Myanmar are participating in this delicate and urgent national task.
	... Let me now turn to the economic front to apprise the meeting of
economic development in Myanmar.
	At the time of assumption of state power by the government in September
1988, the economy was in a very bad shape, having suffered severe decline
for three consecutive years from 1986-87 to 1988-89, which was the
underlying factor for the political crisis.  Consequently, the government
had no other choice but to take urgent measures to stop the decline and spur
immediate recovery and stabilization of the economy.  Thus, as soon as the
rule of law and order was restored and economic stability re-established, a
short-term four-year plan (1992-93 to 1995-96) was formulated with a special
focus on the enhancement of production, especially in the agriculture sector
and for export promotion.  The [difficult] targets for the four-year plan
were fulfilled within three years.  Implementation of the short-term plan
was successfully completed with an average annual growth rate of 7.5%
against a targeted rate of 5.1%.
	Having successfully implemented the short-term four-year plan, the
government has formulated another five-year plan spanning 1996-97 to
2000-2001 in which the direction of priorities and strategies to be
implemented during the next five years were charted and clearly identified.
Average annual growth rate in real terms for the gross democratic--uh, gross
domestic product is targeted at 6%.
	The primary objective of the five-year plan is to further consolidate the
gains achieved in the recent years and to leave firm and stable growth
foundation for future development of the country.  Sustained efforts are
being directed towards maintaining the momentum of growth achieved during
the previous planning cycle and to provide the necessary economic conditions
and policy environment for the realization of modern and developed
market-oriented economy.
	... At the global scene, the increasing interdependence and economic
cooperation among nations has characterized today's world economy.  At a
time when external financial assistance is on a declining trend, FDI
constituted an essential factor in this process.  Each nation needs to chart
out their own strategy to attract FDI, thereby promoting the development of
the developing countries and enhancing cooperation between developed and
developing countries.  In doing so, the basic criteria of the governments in
promoting FDI is to formulate appropriate policies and to provide a
regulatory system in order to maximize the benefit by way of capital,
technology, employment creation, growth of trade, and pace of economic
development.  There is a set of factors that formulate the country's FDI
policies, such as resource endowment, level of economic development, level
of infrastructure development, requirements for capital technology
development, job creation and access to foreign markets.
	... In order to meet the objective of FDI promotion, each country has to
face its own unique challenges based on said factors.  In the development
process of the national economy, it is evident that the comparative
advantage of Myanmar lies in the endowment of natural and human resources.
In order to reap the best benefit out of such endowment, influx of capital
associated with appropriate technology, managerial skills, and access to
international markets is necessary.  In this context, the government
promulgated two significant new laws that will play a prominent role for
building of the market-oriented system.  Such law of the Union of Myanmar
Foreign Investment Law enacted in November 1988, which allows and encourages
foreign direct investment with the prime objective of export promotion and
expansion and acquisition of high technology.  The second law was the
State-Owned Economic Enterprises Law enacted in March 1989 to provide
private sector to invest in all economic activities with the exception of 12
economic activities that are reserved in the domain of the state sector.
Even so, those 12 activities can be allowed for the private sector if it is
beneficial for the state.
	Since the Union of Myanmar Foreign Investment Law was promulgated in
November 1988 and its procedure prescribed in December 1988, Myanmar has
opened the doors to foreign investors to participate actively in exploiting
natural resources, thereby enhancing long-term, mutually beneficial economic
cooperation.  Thus, the policy on foreign investment can be seen as an
important component of the overall economic restructuring and development
policy of the state.
	... The foreign investment law allows that foreign investment activities
can be undertaken either in the form of a wholly foreign-owned or a joint
venture with any Myanmar counterpart.  In all joint ventures and
partnerships, at least 35% of the total equity capital must be foreign
capital.  Minimum foreign capital to be brought into Myanmar has been
notified [      ] by Myanmar investment origin.  It is US$500,000 for
manufacturing and US$300,000 for services.
	... As the foreign investment law scheme is bringing in more foreign
capital into the country, it also has investment incentives and guarantees
to foreign investors.  An enterprise permitted by the Foreign Investment Law
shall enjoy a tax holiday of three years inclusive of the year the
enterprise commences its commercial operation.  And also extension is
possible for a reasonable period upon application, provided that the Myanmar
Investment Commission, in the interest of the state, considers appropriate.
In addition, the Myanmar Investment Commission may grant one or all of the
following exemptions and reliefs:  (a) exemption or relief from income tax
on reinvested profits within one year; (b) accelerated depreciation rates
approved by the Commission; (c) 50% relief from income tax on profits
accrued from exports; (d) right to pay income tax on behalf of foreign
experts and technicians employed in the business and the right to deduct
such payment from assessable income; (e) right to pay income tax on the
income of foreign employees at the rate applicable to Myanmar nationals; (f)
right to deduct research and development expenditures on assessable income;
(g) right to carry forward and set off losses up to three consecutive years
from the year the loss is sustained; (h) exemption or relief from customs
duties or other internal taxes or both on import of machinery, equipment,
instruments, machinery components, spare parts and materials used in the
business during the period of construction; and (i) exemption or relief on
customs duties or other taxes or both on imported raw material for the first
three years of commercial operation after completion of construction.
	The Foreign Investment Law provides an irrevocable state guarantee that an
enterprise permitted by the Myanmar Investment Commission under the Foreign
Investment Law shall not be nationalized during the permitted period or the
extended period, if any.  It also provides repatriation of profits after
deduction of all taxes and [       ] as well as legitimate balance of salary
[              ] for income of foreign personnel are the payment of living
expenses and taxes.  In the case of termination or [dissolution] of the
business, repatriation of foreign capital will also be allowed.
	... Since the time of enactment of the Foreign Investment Law, Myanmar
Investment Commission has permitted 303 projects from 23 countries and
regions in 11 economic sectors up to the end of March 1998, with a total
amount US$7,065 million.  The leading sectors are oil and gas,
manufacturing, hotel and tourism, and real estate, accounting for 81.17% of
total foreign direct investment.  The leading investors are Singapore,
United Kingdom, Thailand, Malaysia, and the United States of America,
representing 74.24% of total foreign direct investment.  Among those five
leading investors in Myanmar by country, there are three ASEAN countries;
namely, Singapore, Thailand and Malaysia.  At present five ASEAN countries
are investing in Myanmar.  As of the end of March 1998, the ASEAN countries
have already committed US$3,696 million in 143 projects in Myanmar,
realizing 52.28% of the total permitted amount of foreign investment.
	As for Japan, it has already committed to 19 projects with a total amount
of US$218 million, ranking as the ninth largest investor in Myanmar.  Some
are in the pipeline, and we expect Japan will find Myanmar as a convenient
place to do business.  I would like to stress the fact that the
complementary nature of the endowment of natural and human resources and the
standard of acquired technology will [           ] the level of economic
cooperation between the two countries.  What is really needed for the
maintenance and, moreover, the advancement of the momentum is a spirit of
mutually beneficial economic cooperation for the long term.
	The time is just right for us to boost up this momentum by promoting fair
and equitable ventures under the auspices of the Foreign Investment Law.
Myanmar always welcomes investors from a friendly nation like Japan.
	... In order to be in line with a market-oriented system and to encourage
foreign direct investment, financial reform measures were taken by enacting
new laws, terminating and substituting redundant laws, amending rules and
regulations, reforming financial and banking management systems, and
reforming taxation systems.
	Moreover, joint efforts between Myanmar Economic Bank and Daiwa Institute
of Research Ltd. of Japan will pave the way to set up a stock exchange and
related organizations.  Preparations and arrangements have already been made
for the emergence of such facilities.  In this context, capital market
formation will come into existence in the near future.
	In order to provide foreign investors with readily available facilities,
industrial park projects have been promoted in collaboration with the
foreign development.  Myanmar Investment Commission has already permitted
three industrial parks to be developed by Mitsui & Co. Ltd. of Japan,
[Sinmardev] International Pvt Ltd. of Singapore and Rojana Industrial Park
Plc Ltd. of Thailand.  These industrial parks will serve as the production
bases for export promotion and expansion.  Both development projects are
also under construction under build, operate and transfer schemes, as well
as joint ventures with the Myanmar Port Authority.  Moreover, Myanmar
Investment Commission encourages foreign investors to develop and operate
mixed commercial complexes and serviced [apartments] for foreign businessmen.
	... Myanmar's potential with regard to foreign direct investment is quite
evident.  What is needed in order to materialize such potential is to take
part actively in the process of mutually beneficial economic cooperation.  A
significant move towards a more open economy has started already.  Myanmar
will continue to take necessary action to encourage foreign direct
investment.  The government has laid down firm economic objectives, one of
which being development of the economy inviting participation in terms of
technical know-how and investments from sources inside the country and
abroad.  By this objective, one can foresee the provision for private
sector, both local and foreign, to play a vital role in the development
process.  Progress has already been made so far, and thus concerted efforts
will be needed for us to realize stable and sustained economic growth.
	In concluding, I would like to emphasize that there are indeed vast
potential and enormous opportunities in various sectors for foreign
investment in Myanmar.  This is still an opportune time for foreign
investors to do business in our country, making the best use of its abundant
natural resources and cheap and educated human resources for mutual benefit.
The golden opportunities are here; it is up to the foreign businessmen and
investors to decide and to seize these opportunities before it is too late.
But please remember:  opportunity never knocks twice.