European companies are losing confidence in the Myanmar government’s management of the economy, The Myanmar Times reported on December 12.

The daily quoted the latest survey from the European Chamber of Commerce in Myanmar, which stated that 81% of the firms were not satisfied with the country’s business environment, compared with 76% in 2017 and 67% in 2016.

The present government, which is led by the National League for Democracy (NLD), took office in March 2016. This year, only 37% of European companies were able to report profits and, according to the survey and The Myanmar Times, the main obstacles appear to protectionism and economic nationalism.

“The government, for example, has not delivered to its promise made last year to open up the insurance market,” the daily reported.

Economic nationalism, or unfair protection of domestic producers, can be seen in sectors such as pharmaceuticals and liquor. Although Myanmar has implemented a new companies act and liberalization of the banking sector, a severe depreciation of the Myanmar currency, the kyat, regulatory issues, lack of qualified labor and legal uncertainty remain major concerns among foreign investors.

The human rights crisis in Rakhine State and the flight of hundreds of thousands of Muslim Rohingyas to Bangladesh have also diminished investor interest.

The European Union is now considering revoking Myanmar’s tariff-free access to the bloc. Should the EU go ahead with the revocation, Myanmar’s garment sector would be severely hit, causing even more problems for the country’s already troubled economy.