Drive into Naypyidaw, the mountain capital of the new-age Myanmar, and the country’s developmental vision would appear muddled by the distractions of inordinate asphalt-paved lanes and grandiose buildings. Take a lonely, often under-booked flight into the city, however, and a clearer picture of Myanmar’s course seems to pop out, an expat lawyer based in Yangon once told me.
By Justin Calderon
“Only from above can you see the greater plan,” he said. “There is picture of organisation that paints a path of a country that has an idea.”
Like the over-expanded and gridded lanes of Naypyidaw, Myanmar’s vast size and potential are overdressed and domineering compared to the trickle of traffic pumping the arteries of the previously sanction-shackled emergent economy. But in that wide, open space, opportunities for things to come have marked a clarion call that has lead investors to label the previously isolated nation as the “last frontier economy.”
In a race to capture the view of Myanmar from the right angle, somewhere beyond informed speculation and tongue-and-cheek musings, concrete analytical research is needed to portray even the short-term destiny of a country that could experience dramatic economic oscillations from countless internal and external factors.
Sapped of supplies supposed to be provided by well-supported statistics and governmental organisations, it is still hard to accurately grasp the economic conditions in Myanmar, which has no IMF office and only received a World Bank office in August 2012.
Tools can still be found amongst us. One metric avid market watchers like to use is investor sentiment, measured by the amount of overseas companies that have already placed their wager on the country.
Tiger Balm, originally a Myanmar-based company, has announced that it is looking to head back to its roots. Owned by the Singapore-based company Haw Par Corporation, the producer of the menthol ointment, which is currently sold in over 100 countries, wants to return to Myanmar because of the popularity the country is generating for consumer goods now that its population of over 60 million has opened up.
Also in the industry, US beverage giant PepsiCo signed an agreement with a local Myanmar distributor in August 2012 to sell its soft drink after a 15-year break – only two months after its arch rival Coca Cola Company announced to re-enter the country.
PepsiCo chairman and chief executive Indra Nooyi noted in press release dated that month that Myanmar’s market “has great potential” and said that it will explore opportunities for investments in agriculture and manufacturing in the country, as well as the possibility of setting up vocational training facilities.
In July 2012, Daiwa Securities Group, a Japanese investment company, was chosen by the Central Bank of Myanmar to spearhead a $380-million project designed to develop an IT network for the Myanmar government that would connect all ministries as well as schools and hospitals to a cloud computing system and would also entail a secure online banking system for the country.
This was the first step in what later lead to Visa opening up its global credit network on December 26, 2012, allowing all Visa cardholders to access their accounts via three local banks.
The degree to which these companies and others poke their heads into the country can be measured, but it is the obstacles they face that give the more vivid portrayal of opportunity.
Myanmar is persistently plagued by brown outs, which certainly disrupt business hours.
Suffering from sever power undersupply, Myanmar has been forced to start cutting power to the country’s industrial zones by seven hours per day effective from January 1, 2013. The Yangon Electricity Supply Board publicly announced the outages and warned companies that “electricity will be cut for from 4pm to 11pm daily.”
Perhaps the biggest unknown in the wholesale possibility of Myanmar’s productivity is embedded in the half-life of the catalyst that started the barrage of reforms.
President Thein Sein’s influence on the country will be a watershed in the history books. That he has been regularly compared to F. W. De Klerk, the South African leader who helped to dismantle apartheid, may, however, do no good if these reforms break a spring and start backpedaling.
The opportunity in Myanmar exists. Just how far companies can go is hobby sport worth watching.