The new Myanmar on CNBC.

In 2015 Myanmar voted its first democratically elected government in over half a century. The country today is going through an unprecedented level of transformations that will lay the groundwork for the future growth of the country; these events require an in-depth analysis and coverage by the international media.

Our TV program on Myanmar to be broadcasted on CNBC – the world’s leading business & financial news network, will highlight the economic reforms undertaken and the democratic progress so far and unveil the road map for further changes, aiming at contributing to a new perception of the country in the Asia, Australia and New Zealand.

We will be covering the most vibrant economic and socio political issues, including analysis on trade, investment and business opportunities existing in the country. We will also portray the wide range of attractions the country offers to the increasing number of tourists who visit this land scattered with gilded pagodas and where the traditional ways of Asia endure.

The program will feature a cross section of exclusive interviews with some of the most relevant personalities of the country in order to offer first – hand information by conveying the protagonists’ viewpoints on the hot topics of today’s life in Myanmar.

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SUMMARY OF TOPICS

A BLOSSOM ECONOMY.
With a multi-ethnic population of 60 million people, Myanmar is the biggest country in mainland Southeast Asia, and one of the least developed nations in the region. After one of the world’s longest civil wars and five decades under a military rule, a historic and peaceful election took place in November 2015 and brought the National League for Democracy party into power. Long ago the main trade route between India and China, Myanmar is today located in the heart of the world’s fastest-growing region, it has abundant natural resources and it is close to a market of half a billion people.

It is still an underdeveloped economy with an untapped potential that has been subject to crushing economic sanctions since the mid-90s, since its democratic and economic reform started, Inward FDI increased 50% from 2014 to 2015 ($8 billion in 2014/15), and was US$9.5 billion in financial year 2015/16, a dozen times the level of 10 years ago. Real GDP –underpinned by large projects funded by foreign investors, will grow at 8-9% average annually in the period 2016-20. With 46 million inhabitants of working age and its early stage of economic development, there is a unique opportunity to build a suitable economy for the modern world.

 

WHY IS THE WORLD RUSHING TO DO BUSINESS IN MYANMAR?
Today, the world is witnessing how Myanmar is increasingly attracting international attention and funding. Last fiscal year, the oil and gas sector attracted the biggest investment, followed by transport, communication and manufacturing. Myanmar received $8 billion in FDI in 2014/15, compared with $4.1 billion in 2013/14.Foreign direct investment (FDI) in Myanmar during the fiscal year that ended in March totalLed $9.4 billion, the country may woo as much as $100 billion in FDI by 2030.

The country’s early stage of economic development gives it a “greenfield” advantage: an opportunity to build a “fit for purpose” economy to suit the modern world.

The law allows for 100% foreign ownership in non-restricted sectors and an increase in land lease duration. It also grants foreign investors corporate income tax exemption for three years at a minimum. Myanmar’s GDP is growing at 7 to 8% annually. The consumer market is relatively young and offers great potential for suppliers of basic goods and services. The country’s attractive geographical location connects it with China, India, Bangladesh and the ASEAN members of Thailand and Laos, providing access to a market of approximately three billion people.


IS THE PRIVATE SECTOR READY TO LEAD THE ECONOMIC DEVELOPMENT?
“Myanmar has the potential for enormous growth. To realize this potential it is essential to create space for entrepreneurship. A vibrant private sector can generate jobs, and spur growth.”Kaushik Basu, World Bank’s Chief Economist and Senior Vice President.

Myanmar needs to strengthen the private sector, since its engagement it is fundamental to achieving the Government’s strategic goals and contributing to inclusive growth and jobs creation in order to reduce poverty and boost shared prosperity.

On the other hand, the country’s business community must consider their opportunities in different markets, reach international quality standards, and explore foreign partnerships. International companies need to move fast, be prepared to commit to Myanmar for the long term, and consider partnerships with local firms.

Therefore, Myanmar’s private sector approach should be pro-active to reach out to the international business community, not just by highlighting the great opportunities but also to talk openly with investors and business analysts about the risks and rewards – about the progress, yes, but also the challenges, and the strategies for dealing with them

 

 

A MAGNET FOR TOURISTS.
The Tourism industry is on the rise, and it will play a vital role on the country’s future growth. Last March the Ministry of Hotels and Tourism predicted 6m inbound tourists for 2016, up 25% on the 4.68m arrivals last year and far above the 2010 total of 800,000, which reflects the interest the country is raising amongst international travellers, also in countries like the US, which tourists are ranked the 4th. Currently, eight domestic airlines and five international airlines are operating services in Mandalay and the plans are underway to expand the international flights and airline access .

Following the lifting of some of the Western sanctions, Myanmar has become a magnet for tourists. The country  has some wondrous sights: a thousand temples scattered across the countryside in Bagan; the leg-rowers and floating gardens of Inle Lake, and majestic rivers – the Ayeyarwady and the Chindwin – navigable into the furthest reaches of the country. There is still a strong sense of the old Orient here, it’s a place where Buddhism is still a way of life.

Myanmar attracted 2.64 billion U.S.dollars’ foreign investment in 47 projects in the sector of hotels and tourism in 2015, up 1.5 billion dollars from 2011’s 1.14 billion dollars in 36 projects. Limited hotel rooms, logistical capacity and coverage, as well as an underdeveloped banking system hold back a boom in tourism. As such, the government has formulated a seven-year tourism development master plan worth US$500 million.

MYANMAR IN THE REGION
While other international investors are still hanging back or moving slow until the U.S. Government removes all the sanctions, the interest on Myanmar within the region has rapidly escalated.

In the last three years, laws and regulations have also been enacted to strengthen the labour market and enhance regulatory oversight of foreign currency transactions, including the ability to register inward capital remittances with the Central Bank of Myanmar (CBM).

According to the Directorate of Investment and Company Administration (DICA), Myanmar has received a total of over $ 23.84 billion in foreign direct investment between the 2011-2012 fiscal year and the 2015-2016 FY.

China and Singapore are the top foreign direct investors, leading the economic inflows in Myanmar and pushing some key industries forward in order to boost development across the country. Considering the fact that China, Thailand, India, Japan and South Korea are the main Burma’s exports markets, the influence and the impact of the region in Myanmar’s economy is unparalleled and needs to be reinforced and encouraged.

DEEP WATERS AHEAD, HOW TO WADE THROUGH.
President Htin Kyaw, who was sworn in March 30, 2016, and State Counsellor Aung San Suu Kyi –who also holds the foreign affairs and president’s office portfolios- have set their priorities in order to tackle the most important challenges for the Myanmar’s development: improving transparency, consolidating democracy, pushing for inclusive growth and alleviating poverty, supporting peace and increasing spending on health and education.

High inflation and wide fiscal and external deficits need to be under control. If that was achieved, reports says, Myanmar could conceivably quadruple the size of its economy, from $45 billion in 2010 to more than $200 billion in 2030, but it will require solid monetary and economic policies and a strong determination to implement the necessary measures.

The Asian Development Bank has estimated that Myanmar will need around US$80 billion of investment in power, transportation and technology through 2030 –with the vast majority of that being FDI, too boost inclusive and sustainable growth.To accomplish all this, the country have to establish a business-friendly regulatory framework, support the diversification of the economy, reinforce the rule of law, invest in vocational training and higher education, upgrade the transport system, improve the energy supply and develop infrastructures. Moreover, access to finance is still a top constraint for private enterprises. Focusing Myanmar’s economic reforms on removing these obstacles will create a better business environment and enhance the productivity and efficiency of private enterprises allowing them to grow and flourish.

QUOTES FROM SOME OF THE PERSONALITIES INTERVIEWED FOR THE PROGRAMME