Observers accept the country’s imme

Observers accept the country’s immense economic potential, but also the problems to be resolved. The moves towards a market economy were formalised in 1989 when the 1965 Law was repealed with the intention of liberalising the economy through encouraging foreign investment, expanding the private sector and lifting regulations. The Foreign Investment Law was central to this policy and designed to increase exports, support capitalinvestment, promote high technology, provide employment, exploit naturalresources, save energy and stimulate regional development. Restrictions were removed on private participation in domestic and foreign trade and financial incentives provided for investors including tax exemptions and relief, approval forrepatriation of profits, guarantees against nationalisation for overseas investors and streamlined licensing procedures. Investors have the choice of setting up 100% wholly owned enterprises or entering into part ownership or joint ventures with a public or private agency; in the lattertwo cases, foreign capital mustrepresent a minimum of 35% of the total equity (Union of Myanmar, 2002a). According to the World Bank (1995), partnership with state enterprises is preferred because of its advantages in facilitating access to infrastructure and public services.