Will Myanmar be able to cope with the fast-paced dynamic landscape of the world’s economic climate as it records the fastest GDP growth in Asia?
Is the government doing enough? Is Myanmar equipped to handle the torrent of foreign interests waiting to pour into Myanmar?
These were some of the questions business leaders and foreign experts were trying to answer at the first ever Bloomberg Invest Myanmar summit.
Andrew Patrick, the UK’s ambassador to Myanmar, was optimistic.
He said that while Myanmar had its fair share of problems, there were also plenty of opportunities from demographic and geographic strengths.
While he claimed that Myanmar would require at least 20 to 30 years to catch up with advanced nations in Asia, he saw de facto leader Aung San Suu Kyi pushing hard for change.
But pointed to crippling key issues such as infrastructure, the need to upgrade human resources and for policymakers to be quicker in implementing concise economic regulations.
However, despite a recent pause in the flow investment owing to international condemnation of the Rakhine State crisis and the ongoing civil wars with insurgents as well as businesses waiting for clearer investment laws, the “political will” had been shown under the Nobel Laureate’s leadership.
He said Myanmar could be the next Vietnam, capable of realising “6 per cent to 8 per cent, even 10 per cent growth”.
Chairman of Max Myanmar Holdings, Zaw Zaw highlighted the issue of upgrading human capital, particularly in his drive to develop the financial sector, which he said was the backbone of any economy looking to ramp up growth.
He said institutions could try to change but it would always fail if staff and consumers could not adapt.
“It’s not only the private sector but the public sector as well. We need more skilled staff to run all types of businesses. Only then, one day can they earn higher salaries and may be able to live better lives,” said Zaw Zaw.
“I have four training centres when it comes to banking. I plan to employ 3,500 more staff this year at entry levels. They need to know next to nothing. So we have to instill in them how things work day to day.”
He said his firm was currently relying on foreign staff who already had the know-how.
Max Myanmar should one day be on the Yangon Stock Exchange but for now, Zaw Zaw said he was looking at the London Stock Exchange.
It was seen as imperative that, after years of isolation, the workforce was brought up to date.
Delta Capital Myanmar’s managing partner Nick Powell suggested plugging the brain-drain.
He said that one solution to the talent pool issue was to bring back expats that had received education and work experience overseas.
More foreign investment is expected after April when Parliament passes new investment laws that will allow foreigners to own up to 35 per cent equity in domestic firms, to be eligible for tax incentives without going through the Myanmar Investment Commission and to allow foreign companies to purchase stocks from the fledgling Yangon Stock Exchange.
Myanmar must now, more than ever, improve the standards of its human capital before more international firms invest.
According to Vicky Bowman, director of the Myanmar Centre for Responsible Business, Parliament must draft laws to quicken the bureaucratic process, especially for companies within extractive industries that sometimes were required to perform environmental or social impact assessments that the government should already have the data on.
It was also a similar situation within the energy and infrastructure sector, according to Energize Myanmar’s chairman Billy Harkin, who said energy prices had to be increased to make it profitable to supply reliable electricity.
“There are companies that want to pay 15 cents per unit and be done with it because they want the energy supply to be more reliable,” said Harkin.
For that to happen, engineers and other professionals in the energy sector in both production and transmission must be able to apply technology and experience brought over by overseas investors.
He also mentioned that skilled workers were crucial in realising the plan to achieve 100 per cent electrification by 2030 in building more power stations as well as retrofitting existing ones.
Despite all the challenges ahead, Myanmar was still regarded as the “final frontier”, brimming with potential for the brave that were willing to face early investor challenges.
Many potential investors may get put-off by existing risk factors and challenges but numerous overseas investments remain interested.
“I would like to advise both domestic and foreign investors to see both sides of the coin. There definitely are challenges that must be solved but it is a big country that has geographic advantageous with plenty of opportunities. We can only go up from here so pick a domestic partner and invest now because we are the final frontier in Asean. We would like to invite both domestic and foreign investors to be brave and do business here,” said Asahi Loi Hein Group’s chairman Dr Sai Sam Htun.
Source: Eleven Myanmar
