Google Inc.
GOOG -0.46%
Executive Chairman Eric Schmidt
heads to Myanmar next week, a sign of the Southeast Asian country's
appeal to leading U.S. technology companies as it emerges from decades
of secrecy and crippling western sanctions.
The visit on March 22
will be the first by a high-level executive from a U.S. technology
giant, as many American companies have been held back by U.S.
regulations that restrict their access to this market of 60 million
people, giving international rivals an edge.
Mr. Schmidt's visit follows a high-profile personal trip to North
Korea, which has similarly low Internet penetration but remains far more
isolated and closed off to U.S. companies than Myanmar, now widely seen
as the region's newest investment darling.
"Eric [Schmidt] is visiting several countries in Asia to connect with
local partners... who are working to improve the lives of many millions
of people across the region by helping them get online," said Google
spokesman Taj Meadows, confirming the visit. Mr. Meadows didn't go into
specifics of Mr. Schmidt's agenda, but industry experts in Yangon said
Mr. Schmidt plans to speak at a public event with local startups,
entrepreneurs and students.
Myanmar's information-technology sector is seen as a potential
billion-dollar industry, soon to be boosted by planned advances in
telecommunications. Two licenses will shortly be awarded to foreign
operators, a step that is expected to improve Internet and mobile
networks there.
President Thein Sein's
nominally civilian government has pledged to open the once-sensitive
sector, piquing the interest of companies world-wide. Under the previous
military government, online communication was considered highly
sensitive, and was heavily controlled. Even the word "Internet" was
censored from all publications and cyber cafes were banned at the turn
of the millennium, a time when Internet companies were booming in
countries elsewhere.
The government hopes to increase mobile-phone ownership to 80% of the
population by 2016, from 9% now, presenting huge opportunities for any
company operating in the mobile-Internet space.
The change is getting attention by U.S. companies. The U.S. Agency
for International Development (USAID) last month led a technology
delegation with representatives from Google, Intel Corp.,
INTC -0.02%
Hewlett-Packard Co.,
HPQ +2.86%
Microsoft Corp.
MSFT +0.79%
and Cisco Systems Inc.
CSCO +0.07%
to Myanmar to meet with government ministers and young entrepreneurs.
"Our
companies are eager to partner with you and work with you," said USAID
Administrator Rajiv Shah, speaking in Yangon after the business mission.
Technology companies like Cisco have already started making small
investments in the country, announcing earlier this month that they will
be setting up training centers in Myanmar for locals to use their
software.
But the sector is also one where American companies—though widely
considered global leaders in the field—remain burdened by outstanding
U.S. sanctions. Sites like eBay
EBAY +1.61%
still bar users from signing onto their website from Myanmar, with
pop-up notifications indicating that accounts cannot be accessed from a
"sanctioned country."
The U.S. and Europe had sanctions against
Myanmar when it was run by the military. But they removed almost all
economic sanctions over the past year, rewarding Mr. Thein Sein's
administration for its sweeping political reforms.
But U.S. Treasury Department regulations still prohibit American
companies from dealing with a list of more than 100 individuals
considered cronies of the former military regime, many of whom continue
to hold powerful and influential business positions under Mr. Thein
Sein's administration.
American companies that can avoid working with these individuals
wouldn't face similar restrictions, but would still be required to
comply with strict reporting regulations when making investments in the
country, which they complain is unnecessary red tape.
"Some of the U.S. sanctions effectively shut out 60 million people
from certain services to punish 100 people," said Thaung Su Nyein, an
entrepreneur who runs his own information-technology company and seven
publications in Myanmar. "Our hope is that the U.S. will do their part
[in lifting the remaining regulations], and we'll do our part in
improving this field, and everyone will be happy."
American officials say that there are some "legacy issues" that
frighten U.S. companies investing in Myanmar, admitting this is partly
the fault of poor communication from the U.S. government.
"I'm not sure we've done a good-enough job communication to our
companies that they are allowed to be working here freely," said U.S.
Ambassador to Myanmar Derek Mitchell, speaking to The Wall Street
Journal at the sidelines of a USAID event. "We need to do a better job."
U.S. officials have also promised to update the list, adding new
names as their ties to the former regime become apparent and removing
others who they believed have improved their behavior.
Still, U.S rivals continue to dominate the market there, having been
the first movers to the country of 60 million people, many of whom are
growing in affluence.
According to a report from the Open Technology Fund, a research division of Radio Free Asia, Chinese company Huawei Technology Co.
002502.SZ -0.98%
leads the smartphone market. The report, which doesn't break down
smartphone makers' market share in the country, says Huawei phones there
cost between US$500 and US$600. Apple Inc.'s
AAPL +0.97%
iPhone 4, on the other hand, retails for US$1,120 in Yangon—far more
than in the U.S. because of third-party restrictions. South Korea's Samsung Electronics Co.
005930.SE -2.17%
Galaxy smartphones retail between US$115 and US$500 in Myanmar, according to the report.
Many
of the country's tech entrepreneurs have been plugging away at the
sector for decades despite the hurdles. They hope to modernize their
country with new innovations. But partnerships with U.S. companies, they
say, remain the bigger prize and could push their government to be more
open and transparent.
"You will always have the risk takers, the entrepreneurs," said Mr.
Thaung Su Nyein, noting that these aren't always long-term players—happy
to cash in on millions and move on. "But without sanctions, the U.S.
will let in a whole number of companies—like Google—which will hopefully
come with e-government solutions, monitoring of Internet openness and
other benefits."
source: The Wall Street Journal
No comments:
Post a Comment