The plight of the Rohingya people is dominating the headlines about Myanmar at the moment, but the country has other big problems caused by the absence of effective rule of law, says a new study.
That is allowing a range of criminal activities to emerge and pose a risk to legitimate businesses, with organised crime prevalent, according to market research company BMI Research. Criminal networks are “facilitating the proliferation of counterfeit goods and forging connections between the political elite and the criminal underworld, which exacerbates corruption,” it says.
Recent incidents hitting the headlines in the Southeast Asian country have involved counterfeit banknotes, consumer electronics such as cell phones, automotive components and food products. Earlier this month, Japanese food and chemicals group Ajinomoto said it was reluctant to expand further in Myanmar – having set up a plant there in 2016 – because of the high level of counterfeits of its products circulating in the market.
Adding to the difficulties facing companies are frequent cyberattacks and high levels of financial crime “against which the government offers little protection,” and inadequate policing that means businesses need to pay for extra security measures in some regions, according to BMI. However, aside from the general instability caused political unrest and ethnic and religious strife, the risk of violent crimes and terrorism to foreign businesses is low.
“Myanmar's underdeveloped financial sector and cash-based society mean that regulation of transactions is almost entirely lacking, allowing criminals to launder funds obtained from illegal activities such as smuggling of drugs, gems and timber,” says the report.