Episode 2 / Myanmar, trick or treat? / Currently under production.
After a long period of military rule and socioeconomic stagnation, significant efforts to liberalize the economy and an ongoing political transition to democracy in Myanmar have positively reinforced the international image of the country and attracted foreign investment.
Nevertheless, Myanmar still faces numerous challenges for a broad-based socioeconomic and inclusive growth, while opportunities are arising in sectors such as energy, telecommunications, new technologies, transport, construction, real estate, tourism and the financial sector.
Our next TV program for CNBC Asia-Pacific aims at covering the current developments of these sectors through personal interviews with the policy makers of leading enterprises operating in the country
Rich in natural resources, such as oil and gas, geothermal and renewable, Myanmar’s diverse energy sector is essential to enhancing development and reducing poverty. Power generation has become a priority, and the Government is open and keen to foreign investment to meet the 100% electrification goal by 2030.
Telecommunication and IT have skyrocketed in the past three years in Myanmar, where mobile penetration is amongst the top three highest in the world and Internet users increased by 97% in one year. A new mobile operator –Mytel- has started its operations in Myanmar, intending to add 5 million new subscribers by 2020 in Myanmar’s telecom booming market where MPT, Telenor and Ooredoo have reached 50 million subscribers all together.
CONSTRUCTION & INFRASTRUCTURE
Myanmar’s construction and transport sectors have robustly grown in recent years, and the future holds unlimited opportunities due to the lack of infrastructures throughout the country and the demand for affordable housing.
Foreign entities are permitted to own up to 50% of a construction joint-venture company, and many international players have established their business in the country to invest in infrastructure development, real estate and transport. Between 2010 and 2030, some studies estimate Myanmar would require $320 billion infrastructure investments to meet the demand.
The number of tourists has increased by 25% over the same period last year, and although the number of Myanmar’s attractions are numerous and its uniqueness a quite solid asset, the country still lacks adequate human resources and tourism infrastructures.
With the upcoming opening of several five and four star hotels in Yangon, Bagan and Inle Lake, it looks like the tourism sector is expecting to refloat from the slowdown experienced in 2015 and 2016.
Revamping the sector will be challenging if there is not a strongly funded program to promote the country internationally, and a constant and well-grounded understanding and cooperation between the Government and the private sector.
The fast expansion of business in Myanmar and the partnerships with foreign companies have boosted the streamlining of international standards within medium and big local enterprises.Responsible business, sustainability or CSR are no longer alien terms used by big companies to polish their image, but rather embedded and transversal axis of any business activity.
Accountability and proactive business responsible policies must not represent a burden to local companies, but an opportunity to engage with community development and socioeconomic progress, and to seek growth and profitability for themselves.
FOREIGN INVESTMENT & JOINT VENTURES
As Myanmar’s rapid economic growth has exposed the country to the outside world’s appetite for new business opportunities, regulation has been conservative and cautious regarding the pace of opening up to foreign investors.
While the Government has issued a new law that will ease the business environment to attract foreign investment, many local companies have also started to deal with the dilemma of aligning, partnering with international companies or fighting the newcomers. The financial muscle and the technical know-how are qualities that foreign enterprises might bring to the nationals, whose strongest asset is the knowledge and experience in the local market.
The financial sector in Myanmar aims at overcoming numerous challenges. Strengthening the regulatory framework as well as the technical capacity of the supervisors, establishing financial stability mechanisms, improving transparency and enabling access to credit are the main priorities in order to have a sound, solid and stable industry.
Banks have to prove also their reliability, by building trust and raising awareness amongst the population on the benefits of their financial services. A high percentage of Burmese workers still receive their salary in cash and many of them are reluctant to open bank accounts or use banking services.
New licences have been recently granted to foreign banks to operate in the country, and the Central Bank has already spoken about the possibility of opening up further the sector for more overseas investors.
Below some of the personalities already interviewed for episode 2