(MENAFN- Gulf Times) Ahead of its anxiously awaited general elections slated for November 8, Myanmar is taking big steps forward in closing up to the modern world and making its economy fit for the 21st century.
After months of dispute between employers and unions, the government finally introduced a general minimum wage for the first time in the country, set at 3,600 kyat a day (around $2.80). Gulf Times reported the news. There was no minimum wage in the country before, except a regulation for salaried public employees who were to receive 60,000 kyat monthly, and a guideline to pay day labourers at least 2,000 kyat a day plus allowances.
For the newly announced minimum wage, workers and union leaders had pushed for a 4,000-kyat minimum as the basic amount needed to cover their day-to-day expenses. But employers have insisted that even 3,600 kyat is too high. Some threatened to close their factories if the government forced the wage. However, they finally agreed under the premise that workers "increase their productivity."
The minimum wage will take effect on September 1, and apply to all employees, other than small family-run businesses with less than 15 workers, the National Minimum Wage Committee said.
However, factoring one off day per week the monthly minimum wage is a bit more than $70 at current exchange rates, clearly below other minimum wages in Southeast Asia which means that Myanmar remains regionally attractive in terms of manpower costs. Only neighbouring Bangladesh has lower minimum wages ranging from $19 to $68 per month depending on the industry sector.
In its quest to close up to modern-age economies, Myanmar is also seeking to get its first-ever sovereign debt credit rating. Advised by Citi and Standard Chartered, the Myanmar government is approaching all three international ratings agencies, Standard & Poor's, Fitch Ratings and Moody's, to initiate a rating process to increase transparency and thus improve investor outreach and, ideally, reduce the country's borrowing cost on the global financial market. Citi and Standard Chartered will how work on establish a credit profile for the country, representatives of the two banks confirmed. It is expected that a first unofficial rating € a so-called shadow rating € could be received by the end of the year to give an indication about the country's creditworthiness.
Sean Turnell, Associate Professor at Sydney-based Macquarie University and specialist on Myanmar's economy told the Myanmar Times that "post-elections, assuming a good and stable government, I can see no reason why Myanmar can't aspire to the bottom of investment grade, say BBB," adding that "in the absence of this, something like Bangladesh's rating, which is BB-, could be expected," he said. Others are more pessimistic and say it could be lower € on a par with Cambodia's B rating. Both BB- and B are in the "speculative" to "highly speculative" non-investment grade range.
Meanwhile, the Myanmar government has also stepped up its efforts to establish the country's first modern stock exchange whose launch was initially expected for October 2015, but has been postponed until after the elections.
However, criteria perceived to be rather strict have been released for companies to be eligible to list at the new Yangon Stock Exchange (YSX) a few days ago. They include standards relating to corporate management, corporate governance, compliance, disclosure of corporate information, insider trading, internal management and internal control.
Among them is a mandatory two-year profits track record, which actually blocks startups and smaller companies from listing, and a minimum paid-up capital requirement of 500mn kyat ($390,000). Furthermore, no joint-ventures between local and foreign companies will be allowed to list on the YSX, at least in the first stage of the bourse's establishment, neither will be companies included on any government blacklist.
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