December 21, 2015, 05:05:00 AM EDT By Dow Jones Business News
YANGON, Myanmar— When it forms Myanmar's government next month, the National League for Democracy—led by Aung San Suu Kyi—plans to largely continue the economic policies of the outgoing military-backed administration and won't attempt to shutter businesses linked to the former ruling generals.
"We don't need abrupt changes; we want continuity between our government and the previous one," said Han Tha Myint, who chairs the NLD's economic committee, in an interview last week. "We don't need to turn the present bureaucracy upside down, but at the same time, will find ways to alleviate corruption."
Before the historic November election, Ms. Suu Kyi frequently criticized the economic policies of President Thein Sein, saying they were insufficient to improve the lives of the poverty-stricken majority.
Mr. Han Tha Myint says his party understands that it will be entering what is effectively a coalition with the military, despite winning nearly 80% of the parliamentary seats that were up for grabs. The military-imposed constitution keeps significant power in the hands of the armed forces, including a quarter of seats in parliament and control over ministries overseeing security and local administration.
"Naturally, there must be compromise [with the military] in the economic arena as well," he said. "We have to give a guarantee that military enterprises will continue. We cannot nationalize it or privatize it abruptly."
The armed forces control two sprawling conglomerates, the Union of Myanmar Economic Holdings Ltd. and the Myanmar Economic Corp., which have interests in beverages, steel, cement, jade and gems, among others. The secretive companies are estimated to be worth billions.
Both companies are under U.S. sanctions—along with dozens of other Myanmar firms and individuals—due to their ties to the junta that ruled the country before a transition to civilian rule began in 2011.
Though the U.S. recently issued a license that would ease trade restrictions and allow companies to circumvent sanctions when using Myanmar's transportation infrastructure—particularly the main port, which is run by a blacklisted company—American officials have said it is too early for a sanctions revamp.
Mr. Han Tha Myint said his party plans to challenge the power of the blacklisted firms by guaranteeing a level playing field for all companies and foreign investors, which he said will "fade out" the problem of military-linked cronyism.
American companies are closely watching both the NLD's economic policies and developments on U.S. sanctions before rushing in to the country.
"From the perspective of the U.S. business community, we look forward to working with the NLD government, but we are not taking for granted that we are going to get everything we want right away," said Jay Martin, a consultant for the U.S.-Asean Business Council, a trade association. "We are looking to start from the ground level and need to make the case for increased foreign investment."
Mr. Han Tha Myint says the NLD's priority is to attract more foreign investment and continue the previous administration's success in growing foreign direct investment to $8 billion in the fiscal year which ended in March from $1.4 billion two years earlier.
Most of that investment has flowed into the oil and gas and jade industries. The party hopes to redirect much of that into manufacturing, tourism and "sectors that create more jobs, Mr. Han Tha Myint said. Agriculture remains a key focus of the party, which is seeking foreign help to improve yields and modernize farming methods.
Despite the assurances, many investors worry the NLD will lose its footing as it moves to governance from opposition. Special economic zones like Thilawa, backed by Japan, and Dawei, a planned project between Myanmar, Thailand and Japan, are led by ministers who will have to vacate their posts.
Maung Maung Thein, the outgoing deputy finance minister who sits on a number of panels overseeing economic projects, says the NLD hasn't approached these bodies to get up to speed on the projects.
The outgoing ruling party and the NLD have formed transition committees to manage the change of power. Mr. Han Tha Myint says ongoing projects will be reviewed to see "if they are all beneficial to the people" and question "any project that seems dubious."
Myo Myo contributed to this article.
Write to Shibani Mahtani at shibani.mahtani@wsj.com
http://www.nasdaq.com/article/aung-san-suu-kyis-party-wont-push-abrupt-economic-changes-20151221-00100
