Companies from multinational corporations to private equity firms seem to be chomping at the bit to get into Myanmar, hoping to establish a first mover advantage in one of the world’s last economic frontiers. Many companies are sending in teams to do market research, due diligence and to establish relationships with potential local partners. However, very little American capital is actually being deployed inside the country. There are many potential reasons for this but taking a look at some large multinational corporations might give potential investors a better understanding of the current marketplace.
Where are the multinationals?
Bootlegged from Singapore and Thailand, Coca-Cola and Pepsi have long been in Myanmar, and can be found on the shelves of grocery stores throughout the country. Additionally, Ford Motor Company recently became the first American automaker to launch operations in Myanmar with the opening of a new showroom and service center in Yangon. Ford entered the Myanmar market through a partnership with Capital Automotive, a subsidiary of one Myanmar’s largest companies. Companies like GE, Chevron and Caterpillar have operations in Myanmar and are competing for market share with Asian counterparts who have been in the market much longer.
However, none of the big multinationals have announced any landmark deals or transactions that indicate that U.S.-Myanmar economic relations are going at the same speed as U.S.-Myanmar political relations. This might signify a larger problem of dealing with the complex web of networks and bureaucracy that is the Myanmar government. Additionally, if these large companies are having trouble navigating the bureaucracy what does this mean for small and midsize companies looking to enter the Myanmar market? They don’t have government-relations arms or consulting firms aiding their market entry, which makes them increasingly reliant on finding local partners. However, finding a reliable local partner in a country that is opening after fifty years of military rule is a challenge that has undoubtedly scared some companies away.
Yangon or New York City?
One of the biggest barriers to entry for foreign companies is the high cost of real estate in Yangon, the former capital and main financial center of Myanmar. Foreigners cannot directly purchase land and companies are often getting priced out of the commercial real estate market. Many companies are interested in setting up a local office in Yangon but are unwilling to pay market prices and are subsequently working through their Bangkok or Singapore offices on Myanmar-related business. The real estate bubble extends to the residential market, where a one bedroom apartment in Yangon can cost the same as its equivalent in Manhattan. Real estate has long served as an alternative to banks as a place where individuals hold their money. Coupled with low supply and the fact that the government owns a lot of the land, this has created an inflated real estate market, which has made establishing a physical presence in Myanmar more difficult for foreign companies.
About the Cronies
While a complex government bureaucracy is one thing foreign companies have to navigate, there is another element of the economic system in Myanmar: crony businessmen. Cronies in Myanmar are those individuals who have procured most of their wealth through their connections to the government. Many still run some of the largest companies in the country and remain major players in almost every type of business. While doing business with cronies might not scare off companies from other parts of Asia, Americans are not allowed to deal with individuals or companies on the OFAC sanctions list. These individuals include Tay Za, Zaw Zaw and Stephen Law whose businesses Htoo Group, Max Myanmar and Asia World Company are major economic players in Myanmar. This makes growing your market presence in Myanmar a little more complex because if you are looking to have any sort of scale you are inevitably going to run into some of these cronies or one of their adjacent businesses.
Realities of a New and Emerging Market
Although the barriers to entry for doing business in Myanmar are high, opportunities do exist for those who have the savvy to successfully navigate the complex system. Additionally, the market size is too large and the geopolitical ramifications are too big for Myanmar to be ignored, as the United States jostles with China for influence in Southeast Asia. As the cost of labor rises in places like China, Myanmar will be an attractive alternative for companies looking for cheaper low-skilled labor. In 2013, the manufacturing sector, specifically garments, has been the largest recipient of FDI in Myanmar. More investment will come, from America and elsewhere.
For foreign companies, the focus needs to be on establishing the right relationships. The “wait and see” attitude of many companies suggests a more cautious approach to one of the world’s last frontiers. Myanmar is moving toward a more open economy and democratic society, but these transitions are neither seamless nor do they happen overnight. The world has high hopes that Myanmar can become the next great success story in Southeast Asia, but it is going to take more than the elections of 2015 to show the world that it is truly open for business.
Peter Birgbauer is a consultant for Johns Hopkins University SAIS in Yangon working on establishing an International Center of Excellence at Yangon University.
source: The Diplomat
http://thediplomat.com/pacific-money/2013/09/05/myanmar-bust-to-boom-or-bust-to-bust/
SEPT
3 — Myanmar’s political opening has caught the world’s attention, and
many countries are rushing to what has been called Asia’s last frontier
market. Punishing sanctions by the European Union have been lifted,
while Washington DC has suspended its measures. Seized by the economic
potential of the country’s large market and rich resources, Western
companies have responded quickly.
So, too, have Asian corporations, especially the Japanese and South Koreans, but also the Thais and Indians. At the same time, the Chinese — who were high profile in Myanmar — have not gone away. The recent completion of the gas pipeline through the northern city of Mandalay and into the Chinese province of Yunnan signals their continuing presence.
But concerns that Chinese firms would dominate Myanmar were one reason for the government’s decision to open to the West, and the new competition has come into clear view with recent high-profile tenders. The winners were from neither China nor the major Western powers.
And the winners are…
In telecoms, some 90 companies tried for the two first licences, which were finally awarded to Norway’s Telenor and Qatar Telecom. For airports, more than 30 companies showed interest in building the new Hanthawaddy International Airport near Yangon. Licences were awarded in the end to South Korea’s state-run airport operator.
Companies from Singapore tendered but have missed out so far — Yongnam
Holdings’s bid for the new airport failed, as did SingTel for a telco
licence. One award did go to Singapore-based Yoma Holdings, to improve
and run the airport at Mandalay. But the company is Myanmar-focused and,
moreover, is in a consortium led by Japan’s Mitsubishi Corp.
Such outcomes are quite inevitable, given open competition. But the results are still surprising, considering that Singaporean companies invested in Myanmar from the mid-1990s, through the economic low points, and have wide networks and diversified dealings. The hotel sector, which is now booming, prominently features Singaporean investors.
Both the Singapore and Myanmar governments have been long-time friends, despite Western sanctions. Myanmar’s President Thein Sein made the deliberate point of visiting Singapore early last year, as reforms began to unfold, to seek assistance. There is interest from Singaporean companies to participate in Myanmar’s opening. A new Singaporean entrant is the emblematic Ya Kun Kaya Toast, which has now opened in Yangon and has plans to expand across the country.
Yet, the present attitude for many may be characterised as window shopping. Few have committed sizeable investments.
Caution warranted
Singaporeans are not the only ones with a wait-and-see approach; reports suggest the British, Myanmar’s former colonisers, are treading cautiously. Caution is not unwarranted. Infrastructure gaps and a shortage of well-qualified workers are typical of a developing country. Rapidly rising costs for office space and housing, as well as fast-changing policies, add to concerns.
So, too, is the question of finding the right local partner. This is thought to be essential, given nationalistic pride and the wish to ensure the Myanmar people prosper. But many of the larger players have been labelled “cronies” of the past regime and the United States still maintains a long blacklist of “specially-designated nationals”.
Singaporean businessmen who have been in Myanmar for more than a decade say there is a lot of respect on the part of its people for Singapore and its leaders, who made more than a few early efforts to reach out to Myanmar after the problems of 1988 (the first official visit was made by then Prime Minister Goh Chok Tong in 1994).
During a recent visit to Yangon, one businessman said: “We’re often told that if Myanmar had had leaders like Lee Kuan Yew, maybe Singapore would be the one sending foreign workers to work here instead of the other way around. It would be a shame if we let this sense of admiration and respect go to waste and not capitalise on it by being more active here.”
Singapore ‘as second home’
The question is whether Singapore wants to and can be involved in a larger way in the new and more open Myanmar — and, if so, how? There are factors of strength in the relationship.
One is that Singapore has emerged as something of a second home for Myanmar. This goes beyond government-to-government relations, or even the elite who visit for banking and health services.
Many ordinary Myanmar nationals come to Singapore for education, training and jobs. The familiarity can help both sides work together.
A second factor is that Singaporean players have shown staying power through economic low points, and notwithstanding Western criticism and sanctions. While there is now something of a gold rush, political uncertainties lie ahead — such as peace with ethnic minorities and the 2015 elections — and the endurance of newer entrants remains to be tested.
A third factor is the ability of Singapore to go beyond the hard infrastructure aspects to soft skills. Take the training that Singapore has provided to many Myanmar officials at different levels. Singapore can serve more as a reliable partner and trusted adviser, rather than as just another bidder. This can be especially helpful in larger, long-term planning where integration is key.
A fourth and newer factor is Myanmar’s connectivity with the Association of South-east Asian Nations (ASEAN), which it will chair from next year. Singapore as a major hub and leading finance centre in the region could help Myanmar integrate more quickly and smoothly. Some may also invest and hold their interests in Myanmar through holdings in Singapore.
Controversy a telling sign
There will, of course, be controversies. Take the current dispute between the shareholders in Myanmar Brewery, run by Singapore-listed Fraser and Neave (F&N), with a military-backed shareholder since the 1990s. With further market growth anticipated, and F&N acquired by Thai Beverage, differences have just come to the fore.
How this and other differences in long-standing ventures can be managed and settled will bear watching, as much so as the announcement of tenders and new projects. These may be taken as indicators of prospects for long-term thinking in business, or of whether the current interest and openness are only temporary and passing.
When the West sanctioned Myanmar, there were accusations that Singapore and others in ASEAN were wrong to pursue constructive engagement and invest. Yet, by pursuing a different path, Singapore gained — and has maintained — an early foothold.
Today, with so many others rushing to get in, there is a danger that the long-standing relationship between the two countries might be lost in the jostle. Yet, that relationship — marked by endurance and familiarity over some two decades — can serve as a foundation for both governments and the private sector. Singaporean interests in Myanmar, and vice-versa, should and will continue to grow. — Today
* Simon Tay and Nicholas Fang are, respectively, Chairman and Executive Director of the Singapore Institute of International Affairs (SIIA). The SIIA visited Myanmar recently at the invitation of its Ministry of Foreign Affairs.
* This is the personal opinion of the writer or publication and does not necessarily represent the views of The Malay Mail Online.
- See more at: http://www.themalaymailonline.com/what-you-think/article/can-singapore-capitalise-on-myanmars-opening-simon-tay-and-nicholas-fang#sthash.XmRqRZky.dpuf
So, too, have Asian corporations, especially the Japanese and South Koreans, but also the Thais and Indians. At the same time, the Chinese — who were high profile in Myanmar — have not gone away. The recent completion of the gas pipeline through the northern city of Mandalay and into the Chinese province of Yunnan signals their continuing presence.
But concerns that Chinese firms would dominate Myanmar were one reason for the government’s decision to open to the West, and the new competition has come into clear view with recent high-profile tenders. The winners were from neither China nor the major Western powers.
And the winners are…
In telecoms, some 90 companies tried for the two first licences, which were finally awarded to Norway’s Telenor and Qatar Telecom. For airports, more than 30 companies showed interest in building the new Hanthawaddy International Airport near Yangon. Licences were awarded in the end to South Korea’s state-run airport operator.
Such outcomes are quite inevitable, given open competition. But the results are still surprising, considering that Singaporean companies invested in Myanmar from the mid-1990s, through the economic low points, and have wide networks and diversified dealings. The hotel sector, which is now booming, prominently features Singaporean investors.
Both the Singapore and Myanmar governments have been long-time friends, despite Western sanctions. Myanmar’s President Thein Sein made the deliberate point of visiting Singapore early last year, as reforms began to unfold, to seek assistance. There is interest from Singaporean companies to participate in Myanmar’s opening. A new Singaporean entrant is the emblematic Ya Kun Kaya Toast, which has now opened in Yangon and has plans to expand across the country.
Yet, the present attitude for many may be characterised as window shopping. Few have committed sizeable investments.
Caution warranted
Singaporeans are not the only ones with a wait-and-see approach; reports suggest the British, Myanmar’s former colonisers, are treading cautiously. Caution is not unwarranted. Infrastructure gaps and a shortage of well-qualified workers are typical of a developing country. Rapidly rising costs for office space and housing, as well as fast-changing policies, add to concerns.
So, too, is the question of finding the right local partner. This is thought to be essential, given nationalistic pride and the wish to ensure the Myanmar people prosper. But many of the larger players have been labelled “cronies” of the past regime and the United States still maintains a long blacklist of “specially-designated nationals”.
Singaporean businessmen who have been in Myanmar for more than a decade say there is a lot of respect on the part of its people for Singapore and its leaders, who made more than a few early efforts to reach out to Myanmar after the problems of 1988 (the first official visit was made by then Prime Minister Goh Chok Tong in 1994).
During a recent visit to Yangon, one businessman said: “We’re often told that if Myanmar had had leaders like Lee Kuan Yew, maybe Singapore would be the one sending foreign workers to work here instead of the other way around. It would be a shame if we let this sense of admiration and respect go to waste and not capitalise on it by being more active here.”
Singapore ‘as second home’
The question is whether Singapore wants to and can be involved in a larger way in the new and more open Myanmar — and, if so, how? There are factors of strength in the relationship.
One is that Singapore has emerged as something of a second home for Myanmar. This goes beyond government-to-government relations, or even the elite who visit for banking and health services.
Many ordinary Myanmar nationals come to Singapore for education, training and jobs. The familiarity can help both sides work together.
A second factor is that Singaporean players have shown staying power through economic low points, and notwithstanding Western criticism and sanctions. While there is now something of a gold rush, political uncertainties lie ahead — such as peace with ethnic minorities and the 2015 elections — and the endurance of newer entrants remains to be tested.
A third factor is the ability of Singapore to go beyond the hard infrastructure aspects to soft skills. Take the training that Singapore has provided to many Myanmar officials at different levels. Singapore can serve more as a reliable partner and trusted adviser, rather than as just another bidder. This can be especially helpful in larger, long-term planning where integration is key.
A fourth and newer factor is Myanmar’s connectivity with the Association of South-east Asian Nations (ASEAN), which it will chair from next year. Singapore as a major hub and leading finance centre in the region could help Myanmar integrate more quickly and smoothly. Some may also invest and hold their interests in Myanmar through holdings in Singapore.
Controversy a telling sign
There will, of course, be controversies. Take the current dispute between the shareholders in Myanmar Brewery, run by Singapore-listed Fraser and Neave (F&N), with a military-backed shareholder since the 1990s. With further market growth anticipated, and F&N acquired by Thai Beverage, differences have just come to the fore.
How this and other differences in long-standing ventures can be managed and settled will bear watching, as much so as the announcement of tenders and new projects. These may be taken as indicators of prospects for long-term thinking in business, or of whether the current interest and openness are only temporary and passing.
When the West sanctioned Myanmar, there were accusations that Singapore and others in ASEAN were wrong to pursue constructive engagement and invest. Yet, by pursuing a different path, Singapore gained — and has maintained — an early foothold.
Today, with so many others rushing to get in, there is a danger that the long-standing relationship between the two countries might be lost in the jostle. Yet, that relationship — marked by endurance and familiarity over some two decades — can serve as a foundation for both governments and the private sector. Singaporean interests in Myanmar, and vice-versa, should and will continue to grow. — Today
* Simon Tay and Nicholas Fang are, respectively, Chairman and Executive Director of the Singapore Institute of International Affairs (SIIA). The SIIA visited Myanmar recently at the invitation of its Ministry of Foreign Affairs.
* This is the personal opinion of the writer or publication and does not necessarily represent the views of The Malay Mail Online.
- See more at: http://www.themalaymailonline.com/what-you-think/article/can-singapore-capitalise-on-myanmars-opening-simon-tay-and-nicholas-fang#sthash.XmRqRZky.dpuf
SEPT
3 — Myanmar’s political opening has caught the world’s attention, and
many countries are rushing to what has been called Asia’s last frontier
market. Punishing sanctions by the European Union have been lifted,
while Washington DC has suspended its measures. Seized by the economic
potential of the country’s large market and rich resources, Western
companies have responded quickly.
So, too, have Asian corporations, especially the Japanese and South Koreans, but also the Thais and Indians. At the same time, the Chinese — who were high profile in Myanmar — have not gone away. The recent completion of the gas pipeline through the northern city of Mandalay and into the Chinese province of Yunnan signals their continuing presence.
But concerns that Chinese firms would dominate Myanmar were one reason for the government’s decision to open to the West, and the new competition has come into clear view with recent high-profile tenders. The winners were from neither China nor the major Western powers.
And the winners are…
In telecoms, some 90 companies tried for the two first licences, which were finally awarded to Norway’s Telenor and Qatar Telecom. For airports, more than 30 companies showed interest in building the new Hanthawaddy International Airport near Yangon. Licences were awarded in the end to South Korea’s state-run airport operator.
Companies from Singapore tendered but have missed out so far — Yongnam
Holdings’s bid for the new airport failed, as did SingTel for a telco
licence. One award did go to Singapore-based Yoma Holdings, to improve
and run the airport at Mandalay. But the company is Myanmar-focused and,
moreover, is in a consortium led by Japan’s Mitsubishi Corp.
Such outcomes are quite inevitable, given open competition. But the results are still surprising, considering that Singaporean companies invested in Myanmar from the mid-1990s, through the economic low points, and have wide networks and diversified dealings. The hotel sector, which is now booming, prominently features Singaporean investors.
Both the Singapore and Myanmar governments have been long-time friends, despite Western sanctions. Myanmar’s President Thein Sein made the deliberate point of visiting Singapore early last year, as reforms began to unfold, to seek assistance. There is interest from Singaporean companies to participate in Myanmar’s opening. A new Singaporean entrant is the emblematic Ya Kun Kaya Toast, which has now opened in Yangon and has plans to expand across the country.
Yet, the present attitude for many may be characterised as window shopping. Few have committed sizeable investments.
Caution warranted
Singaporeans are not the only ones with a wait-and-see approach; reports suggest the British, Myanmar’s former colonisers, are treading cautiously. Caution is not unwarranted. Infrastructure gaps and a shortage of well-qualified workers are typical of a developing country. Rapidly rising costs for office space and housing, as well as fast-changing policies, add to concerns.
So, too, is the question of finding the right local partner. This is thought to be essential, given nationalistic pride and the wish to ensure the Myanmar people prosper. But many of the larger players have been labelled “cronies” of the past regime and the United States still maintains a long blacklist of “specially-designated nationals”.
Singaporean businessmen who have been in Myanmar for more than a decade say there is a lot of respect on the part of its people for Singapore and its leaders, who made more than a few early efforts to reach out to Myanmar after the problems of 1988 (the first official visit was made by then Prime Minister Goh Chok Tong in 1994).
During a recent visit to Yangon, one businessman said: “We’re often told that if Myanmar had had leaders like Lee Kuan Yew, maybe Singapore would be the one sending foreign workers to work here instead of the other way around. It would be a shame if we let this sense of admiration and respect go to waste and not capitalise on it by being more active here.”
Singapore ‘as second home’
The question is whether Singapore wants to and can be involved in a larger way in the new and more open Myanmar — and, if so, how? There are factors of strength in the relationship.
One is that Singapore has emerged as something of a second home for Myanmar. This goes beyond government-to-government relations, or even the elite who visit for banking and health services.
Many ordinary Myanmar nationals come to Singapore for education, training and jobs. The familiarity can help both sides work together.
A second factor is that Singaporean players have shown staying power through economic low points, and notwithstanding Western criticism and sanctions. While there is now something of a gold rush, political uncertainties lie ahead — such as peace with ethnic minorities and the 2015 elections — and the endurance of newer entrants remains to be tested.
A third factor is the ability of Singapore to go beyond the hard infrastructure aspects to soft skills. Take the training that Singapore has provided to many Myanmar officials at different levels. Singapore can serve more as a reliable partner and trusted adviser, rather than as just another bidder. This can be especially helpful in larger, long-term planning where integration is key.
A fourth and newer factor is Myanmar’s connectivity with the Association of South-east Asian Nations (ASEAN), which it will chair from next year. Singapore as a major hub and leading finance centre in the region could help Myanmar integrate more quickly and smoothly. Some may also invest and hold their interests in Myanmar through holdings in Singapore.
Controversy a telling sign
There will, of course, be controversies. Take the current dispute between the shareholders in Myanmar Brewery, run by Singapore-listed Fraser and Neave (F&N), with a military-backed shareholder since the 1990s. With further market growth anticipated, and F&N acquired by Thai Beverage, differences have just come to the fore.
How this and other differences in long-standing ventures can be managed and settled will bear watching, as much so as the announcement of tenders and new projects. These may be taken as indicators of prospects for long-term thinking in business, or of whether the current interest and openness are only temporary and passing.
When the West sanctioned Myanmar, there were accusations that Singapore and others in ASEAN were wrong to pursue constructive engagement and invest. Yet, by pursuing a different path, Singapore gained — and has maintained — an early foothold.
Today, with so many others rushing to get in, there is a danger that the long-standing relationship between the two countries might be lost in the jostle. Yet, that relationship — marked by endurance and familiarity over some two decades — can serve as a foundation for both governments and the private sector. Singaporean interests in Myanmar, and vice-versa, should and will continue to grow. — Today
* Simon Tay and Nicholas Fang are, respectively, Chairman and Executive Director of the Singapore Institute of International Affairs (SIIA). The SIIA visited Myanmar recently at the invitation of its Ministry of Foreign Affairs.
* This is the personal opinion of the writer or publication and does not necessarily represent the views of The Malay Mail Online.
- See more at: http://www.themalaymailonline.com/what-you-think/article/can-singapore-capitalise-on-myanmars-opening-simon-tay-and-nicholas-fang#sthash.XmRqRZky.dpuf
So, too, have Asian corporations, especially the Japanese and South Koreans, but also the Thais and Indians. At the same time, the Chinese — who were high profile in Myanmar — have not gone away. The recent completion of the gas pipeline through the northern city of Mandalay and into the Chinese province of Yunnan signals their continuing presence.
But concerns that Chinese firms would dominate Myanmar were one reason for the government’s decision to open to the West, and the new competition has come into clear view with recent high-profile tenders. The winners were from neither China nor the major Western powers.
And the winners are…
In telecoms, some 90 companies tried for the two first licences, which were finally awarded to Norway’s Telenor and Qatar Telecom. For airports, more than 30 companies showed interest in building the new Hanthawaddy International Airport near Yangon. Licences were awarded in the end to South Korea’s state-run airport operator.
Such outcomes are quite inevitable, given open competition. But the results are still surprising, considering that Singaporean companies invested in Myanmar from the mid-1990s, through the economic low points, and have wide networks and diversified dealings. The hotel sector, which is now booming, prominently features Singaporean investors.
Both the Singapore and Myanmar governments have been long-time friends, despite Western sanctions. Myanmar’s President Thein Sein made the deliberate point of visiting Singapore early last year, as reforms began to unfold, to seek assistance. There is interest from Singaporean companies to participate in Myanmar’s opening. A new Singaporean entrant is the emblematic Ya Kun Kaya Toast, which has now opened in Yangon and has plans to expand across the country.
Yet, the present attitude for many may be characterised as window shopping. Few have committed sizeable investments.
Caution warranted
Singaporeans are not the only ones with a wait-and-see approach; reports suggest the British, Myanmar’s former colonisers, are treading cautiously. Caution is not unwarranted. Infrastructure gaps and a shortage of well-qualified workers are typical of a developing country. Rapidly rising costs for office space and housing, as well as fast-changing policies, add to concerns.
So, too, is the question of finding the right local partner. This is thought to be essential, given nationalistic pride and the wish to ensure the Myanmar people prosper. But many of the larger players have been labelled “cronies” of the past regime and the United States still maintains a long blacklist of “specially-designated nationals”.
Singaporean businessmen who have been in Myanmar for more than a decade say there is a lot of respect on the part of its people for Singapore and its leaders, who made more than a few early efforts to reach out to Myanmar after the problems of 1988 (the first official visit was made by then Prime Minister Goh Chok Tong in 1994).
During a recent visit to Yangon, one businessman said: “We’re often told that if Myanmar had had leaders like Lee Kuan Yew, maybe Singapore would be the one sending foreign workers to work here instead of the other way around. It would be a shame if we let this sense of admiration and respect go to waste and not capitalise on it by being more active here.”
Singapore ‘as second home’
The question is whether Singapore wants to and can be involved in a larger way in the new and more open Myanmar — and, if so, how? There are factors of strength in the relationship.
One is that Singapore has emerged as something of a second home for Myanmar. This goes beyond government-to-government relations, or even the elite who visit for banking and health services.
Many ordinary Myanmar nationals come to Singapore for education, training and jobs. The familiarity can help both sides work together.
A second factor is that Singaporean players have shown staying power through economic low points, and notwithstanding Western criticism and sanctions. While there is now something of a gold rush, political uncertainties lie ahead — such as peace with ethnic minorities and the 2015 elections — and the endurance of newer entrants remains to be tested.
A third factor is the ability of Singapore to go beyond the hard infrastructure aspects to soft skills. Take the training that Singapore has provided to many Myanmar officials at different levels. Singapore can serve more as a reliable partner and trusted adviser, rather than as just another bidder. This can be especially helpful in larger, long-term planning where integration is key.
A fourth and newer factor is Myanmar’s connectivity with the Association of South-east Asian Nations (ASEAN), which it will chair from next year. Singapore as a major hub and leading finance centre in the region could help Myanmar integrate more quickly and smoothly. Some may also invest and hold their interests in Myanmar through holdings in Singapore.
Controversy a telling sign
There will, of course, be controversies. Take the current dispute between the shareholders in Myanmar Brewery, run by Singapore-listed Fraser and Neave (F&N), with a military-backed shareholder since the 1990s. With further market growth anticipated, and F&N acquired by Thai Beverage, differences have just come to the fore.
How this and other differences in long-standing ventures can be managed and settled will bear watching, as much so as the announcement of tenders and new projects. These may be taken as indicators of prospects for long-term thinking in business, or of whether the current interest and openness are only temporary and passing.
When the West sanctioned Myanmar, there were accusations that Singapore and others in ASEAN were wrong to pursue constructive engagement and invest. Yet, by pursuing a different path, Singapore gained — and has maintained — an early foothold.
Today, with so many others rushing to get in, there is a danger that the long-standing relationship between the two countries might be lost in the jostle. Yet, that relationship — marked by endurance and familiarity over some two decades — can serve as a foundation for both governments and the private sector. Singaporean interests in Myanmar, and vice-versa, should and will continue to grow. — Today
* Simon Tay and Nicholas Fang are, respectively, Chairman and Executive Director of the Singapore Institute of International Affairs (SIIA). The SIIA visited Myanmar recently at the invitation of its Ministry of Foreign Affairs.
* This is the personal opinion of the writer or publication and does not necessarily represent the views of The Malay Mail Online.
- See more at: http://www.themalaymailonline.com/what-you-think/article/can-singapore-capitalise-on-myanmars-opening-simon-tay-and-nicholas-fang#sthash.XmRqRZky.dpuf
SEPT
3 — Myanmar’s political opening has caught the world’s attention, and
many countries are rushing to what has been called Asia’s last frontier
market. Punishing sanctions by the European Union have been lifted,
while Washington DC has suspended its measures. Seized by the economic
potential of the country’s large market and rich resources, Western
companies have responded quickly.
So, too, have Asian corporations, especially the Japanese and South Koreans, but also the Thais and Indians. At the same time, the Chinese — who were high profile in Myanmar — have not gone away. The recent completion of the gas pipeline through the northern city of Mandalay and into the Chinese province of Yunnan signals their continuing presence.
But concerns that Chinese firms would dominate Myanmar were one reason for the government’s decision to open to the West, and the new competition has come into clear view with recent high-profile tenders. The winners were from neither China nor the major Western powers.
And the winners are…
In telecoms, some 90 companies tried for the two first licences, which were finally awarded to Norway’s Telenor and Qatar Telecom. For airports, more than 30 companies showed interest in building the new Hanthawaddy International Airport near Yangon. Licences were awarded in the end to South Korea’s state-run airport operator.
Companies from Singapore tendered but have missed out so far — Yongnam
Holdings’s bid for the new airport failed, as did SingTel for a telco
licence. One award did go to Singapore-based Yoma Holdings, to improve
and run the airport at Mandalay. But the company is Myanmar-focused and,
moreover, is in a consortium led by Japan’s Mitsubishi Corp.
Such outcomes are quite inevitable, given open competition. But the results are still surprising, considering that Singaporean companies invested in Myanmar from the mid-1990s, through the economic low points, and have wide networks and diversified dealings. The hotel sector, which is now booming, prominently features Singaporean investors.
Both the Singapore and Myanmar governments have been long-time friends, despite Western sanctions. Myanmar’s President Thein Sein made the deliberate point of visiting Singapore early last year, as reforms began to unfold, to seek assistance. There is interest from Singaporean companies to participate in Myanmar’s opening. A new Singaporean entrant is the emblematic Ya Kun Kaya Toast, which has now opened in Yangon and has plans to expand across the country.
Yet, the present attitude for many may be characterised as window shopping. Few have committed sizeable investments.
Caution warranted
Singaporeans are not the only ones with a wait-and-see approach; reports suggest the British, Myanmar’s former colonisers, are treading cautiously. Caution is not unwarranted. Infrastructure gaps and a shortage of well-qualified workers are typical of a developing country. Rapidly rising costs for office space and housing, as well as fast-changing policies, add to concerns.
So, too, is the question of finding the right local partner. This is thought to be essential, given nationalistic pride and the wish to ensure the Myanmar people prosper. But many of the larger players have been labelled “cronies” of the past regime and the United States still maintains a long blacklist of “specially-designated nationals”.
Singaporean businessmen who have been in Myanmar for more than a decade say there is a lot of respect on the part of its people for Singapore and its leaders, who made more than a few early efforts to reach out to Myanmar after the problems of 1988 (the first official visit was made by then Prime Minister Goh Chok Tong in 1994).
During a recent visit to Yangon, one businessman said: “We’re often told that if Myanmar had had leaders like Lee Kuan Yew, maybe Singapore would be the one sending foreign workers to work here instead of the other way around. It would be a shame if we let this sense of admiration and respect go to waste and not capitalise on it by being more active here.”
Singapore ‘as second home’
The question is whether Singapore wants to and can be involved in a larger way in the new and more open Myanmar — and, if so, how? There are factors of strength in the relationship.
One is that Singapore has emerged as something of a second home for Myanmar. This goes beyond government-to-government relations, or even the elite who visit for banking and health services.
Many ordinary Myanmar nationals come to Singapore for education, training and jobs. The familiarity can help both sides work together.
A second factor is that Singaporean players have shown staying power through economic low points, and notwithstanding Western criticism and sanctions. While there is now something of a gold rush, political uncertainties lie ahead — such as peace with ethnic minorities and the 2015 elections — and the endurance of newer entrants remains to be tested.
A third factor is the ability of Singapore to go beyond the hard infrastructure aspects to soft skills. Take the training that Singapore has provided to many Myanmar officials at different levels. Singapore can serve more as a reliable partner and trusted adviser, rather than as just another bidder. This can be especially helpful in larger, long-term planning where integration is key.
A fourth and newer factor is Myanmar’s connectivity with the Association of South-east Asian Nations (ASEAN), which it will chair from next year. Singapore as a major hub and leading finance centre in the region could help Myanmar integrate more quickly and smoothly. Some may also invest and hold their interests in Myanmar through holdings in Singapore.
Controversy a telling sign
There will, of course, be controversies. Take the current dispute between the shareholders in Myanmar Brewery, run by Singapore-listed Fraser and Neave (F&N), with a military-backed shareholder since the 1990s. With further market growth anticipated, and F&N acquired by Thai Beverage, differences have just come to the fore.
How this and other differences in long-standing ventures can be managed and settled will bear watching, as much so as the announcement of tenders and new projects. These may be taken as indicators of prospects for long-term thinking in business, or of whether the current interest and openness are only temporary and passing.
When the West sanctioned Myanmar, there were accusations that Singapore and others in ASEAN were wrong to pursue constructive engagement and invest. Yet, by pursuing a different path, Singapore gained — and has maintained — an early foothold.
Today, with so many others rushing to get in, there is a danger that the long-standing relationship between the two countries might be lost in the jostle. Yet, that relationship — marked by endurance and familiarity over some two decades — can serve as a foundation for both governments and the private sector. Singaporean interests in Myanmar, and vice-versa, should and will continue to grow. — Today
* Simon Tay and Nicholas Fang are, respectively, Chairman and Executive Director of the Singapore Institute of International Affairs (SIIA). The SIIA visited Myanmar recently at the invitation of its Ministry of Foreign Affairs.
* This is the personal opinion of the writer or publication and does not necessarily represent the views of The Malay Mail Online.
- See more at: http://www.themalaymailonline.com/what-you-think/article/can-singapore-capitalise-on-myanmars-opening-simon-tay-and-nicholas-fang#sthash.XmRqRZky.dpuf
So, too, have Asian corporations, especially the Japanese and South Koreans, but also the Thais and Indians. At the same time, the Chinese — who were high profile in Myanmar — have not gone away. The recent completion of the gas pipeline through the northern city of Mandalay and into the Chinese province of Yunnan signals their continuing presence.
But concerns that Chinese firms would dominate Myanmar were one reason for the government’s decision to open to the West, and the new competition has come into clear view with recent high-profile tenders. The winners were from neither China nor the major Western powers.
And the winners are…
In telecoms, some 90 companies tried for the two first licences, which were finally awarded to Norway’s Telenor and Qatar Telecom. For airports, more than 30 companies showed interest in building the new Hanthawaddy International Airport near Yangon. Licences were awarded in the end to South Korea’s state-run airport operator.
Such outcomes are quite inevitable, given open competition. But the results are still surprising, considering that Singaporean companies invested in Myanmar from the mid-1990s, through the economic low points, and have wide networks and diversified dealings. The hotel sector, which is now booming, prominently features Singaporean investors.
Both the Singapore and Myanmar governments have been long-time friends, despite Western sanctions. Myanmar’s President Thein Sein made the deliberate point of visiting Singapore early last year, as reforms began to unfold, to seek assistance. There is interest from Singaporean companies to participate in Myanmar’s opening. A new Singaporean entrant is the emblematic Ya Kun Kaya Toast, which has now opened in Yangon and has plans to expand across the country.
Yet, the present attitude for many may be characterised as window shopping. Few have committed sizeable investments.
Caution warranted
Singaporeans are not the only ones with a wait-and-see approach; reports suggest the British, Myanmar’s former colonisers, are treading cautiously. Caution is not unwarranted. Infrastructure gaps and a shortage of well-qualified workers are typical of a developing country. Rapidly rising costs for office space and housing, as well as fast-changing policies, add to concerns.
So, too, is the question of finding the right local partner. This is thought to be essential, given nationalistic pride and the wish to ensure the Myanmar people prosper. But many of the larger players have been labelled “cronies” of the past regime and the United States still maintains a long blacklist of “specially-designated nationals”.
Singaporean businessmen who have been in Myanmar for more than a decade say there is a lot of respect on the part of its people for Singapore and its leaders, who made more than a few early efforts to reach out to Myanmar after the problems of 1988 (the first official visit was made by then Prime Minister Goh Chok Tong in 1994).
During a recent visit to Yangon, one businessman said: “We’re often told that if Myanmar had had leaders like Lee Kuan Yew, maybe Singapore would be the one sending foreign workers to work here instead of the other way around. It would be a shame if we let this sense of admiration and respect go to waste and not capitalise on it by being more active here.”
Singapore ‘as second home’
The question is whether Singapore wants to and can be involved in a larger way in the new and more open Myanmar — and, if so, how? There are factors of strength in the relationship.
One is that Singapore has emerged as something of a second home for Myanmar. This goes beyond government-to-government relations, or even the elite who visit for banking and health services.
Many ordinary Myanmar nationals come to Singapore for education, training and jobs. The familiarity can help both sides work together.
A second factor is that Singaporean players have shown staying power through economic low points, and notwithstanding Western criticism and sanctions. While there is now something of a gold rush, political uncertainties lie ahead — such as peace with ethnic minorities and the 2015 elections — and the endurance of newer entrants remains to be tested.
A third factor is the ability of Singapore to go beyond the hard infrastructure aspects to soft skills. Take the training that Singapore has provided to many Myanmar officials at different levels. Singapore can serve more as a reliable partner and trusted adviser, rather than as just another bidder. This can be especially helpful in larger, long-term planning where integration is key.
A fourth and newer factor is Myanmar’s connectivity with the Association of South-east Asian Nations (ASEAN), which it will chair from next year. Singapore as a major hub and leading finance centre in the region could help Myanmar integrate more quickly and smoothly. Some may also invest and hold their interests in Myanmar through holdings in Singapore.
Controversy a telling sign
There will, of course, be controversies. Take the current dispute between the shareholders in Myanmar Brewery, run by Singapore-listed Fraser and Neave (F&N), with a military-backed shareholder since the 1990s. With further market growth anticipated, and F&N acquired by Thai Beverage, differences have just come to the fore.
How this and other differences in long-standing ventures can be managed and settled will bear watching, as much so as the announcement of tenders and new projects. These may be taken as indicators of prospects for long-term thinking in business, or of whether the current interest and openness are only temporary and passing.
When the West sanctioned Myanmar, there were accusations that Singapore and others in ASEAN were wrong to pursue constructive engagement and invest. Yet, by pursuing a different path, Singapore gained — and has maintained — an early foothold.
Today, with so many others rushing to get in, there is a danger that the long-standing relationship between the two countries might be lost in the jostle. Yet, that relationship — marked by endurance and familiarity over some two decades — can serve as a foundation for both governments and the private sector. Singaporean interests in Myanmar, and vice-versa, should and will continue to grow. — Today
* Simon Tay and Nicholas Fang are, respectively, Chairman and Executive Director of the Singapore Institute of International Affairs (SIIA). The SIIA visited Myanmar recently at the invitation of its Ministry of Foreign Affairs.
* This is the personal opinion of the writer or publication and does not necessarily represent the views of The Malay Mail Online.
- See more at: http://www.themalaymailonline.com/what-you-think/article/can-singapore-capitalise-on-myanmars-opening-simon-tay-and-nicholas-fang#sthash.XmRqRZky.dpuf
SEPT
3 — Myanmar’s political opening has caught the world’s attention, and
many countries are rushing to what has been called Asia’s last frontier
market. Punishing sanctions by the European Union have been lifted,
while Washington DC has suspended its measures. Seized by the economic
potential of the country’s large market and rich resources, Western
companies have responded quickly.
So, too, have Asian corporations, especially the Japanese and South Koreans, but also the Thais and Indians. At the same time, the Chinese — who were high profile in Myanmar — have not gone away. The recent completion of the gas pipeline through the northern city of Mandalay and into the Chinese province of Yunnan signals their continuing presence.
But concerns that Chinese firms would dominate Myanmar were one reason for the government’s decision to open to the West, and the new competition has come into clear view with recent high-profile tenders. The winners were from neither China nor the major Western powers.
And the winners are…
In telecoms, some 90 companies tried for the two first licences, which were finally awarded to Norway’s Telenor and Qatar Telecom. For airports, more than 30 companies showed interest in building the new Hanthawaddy International Airport near Yangon. Licences were awarded in the end to South Korea’s state-run airport operator.
Companies from Singapore tendered but have missed out so far — Yongnam
Holdings’s bid for the new airport failed, as did SingTel for a telco
licence. One award did go to Singapore-based Yoma Holdings, to improve
and run the airport at Mandalay. But the company is Myanmar-focused and,
moreover, is in a consortium led by Japan’s Mitsubishi Corp.
Such outcomes are quite inevitable, given open competition. But the results are still surprising, considering that Singaporean companies invested in Myanmar from the mid-1990s, through the economic low points, and have wide networks and diversified dealings. The hotel sector, which is now booming, prominently features Singaporean investors.
Both the Singapore and Myanmar governments have been long-time friends, despite Western sanctions. Myanmar’s President Thein Sein made the deliberate point of visiting Singapore early last year, as reforms began to unfold, to seek assistance. There is interest from Singaporean companies to participate in Myanmar’s opening. A new Singaporean entrant is the emblematic Ya Kun Kaya Toast, which has now opened in Yangon and has plans to expand across the country.
Yet, the present attitude for many may be characterised as window shopping. Few have committed sizeable investments.
Caution warranted
Singaporeans are not the only ones with a wait-and-see approach; reports suggest the British, Myanmar’s former colonisers, are treading cautiously. Caution is not unwarranted. Infrastructure gaps and a shortage of well-qualified workers are typical of a developing country. Rapidly rising costs for office space and housing, as well as fast-changing policies, add to concerns.
So, too, is the question of finding the right local partner. This is thought to be essential, given nationalistic pride and the wish to ensure the Myanmar people prosper. But many of the larger players have been labelled “cronies” of the past regime and the United States still maintains a long blacklist of “specially-designated nationals”.
Singaporean businessmen who have been in Myanmar for more than a decade say there is a lot of respect on the part of its people for Singapore and its leaders, who made more than a few early efforts to reach out to Myanmar after the problems of 1988 (the first official visit was made by then Prime Minister Goh Chok Tong in 1994).
During a recent visit to Yangon, one businessman said: “We’re often told that if Myanmar had had leaders like Lee Kuan Yew, maybe Singapore would be the one sending foreign workers to work here instead of the other way around. It would be a shame if we let this sense of admiration and respect go to waste and not capitalise on it by being more active here.”
Singapore ‘as second home’
The question is whether Singapore wants to and can be involved in a larger way in the new and more open Myanmar — and, if so, how? There are factors of strength in the relationship.
One is that Singapore has emerged as something of a second home for Myanmar. This goes beyond government-to-government relations, or even the elite who visit for banking and health services.
Many ordinary Myanmar nationals come to Singapore for education, training and jobs. The familiarity can help both sides work together.
A second factor is that Singaporean players have shown staying power through economic low points, and notwithstanding Western criticism and sanctions. While there is now something of a gold rush, political uncertainties lie ahead — such as peace with ethnic minorities and the 2015 elections — and the endurance of newer entrants remains to be tested.
A third factor is the ability of Singapore to go beyond the hard infrastructure aspects to soft skills. Take the training that Singapore has provided to many Myanmar officials at different levels. Singapore can serve more as a reliable partner and trusted adviser, rather than as just another bidder. This can be especially helpful in larger, long-term planning where integration is key.
A fourth and newer factor is Myanmar’s connectivity with the Association of South-east Asian Nations (ASEAN), which it will chair from next year. Singapore as a major hub and leading finance centre in the region could help Myanmar integrate more quickly and smoothly. Some may also invest and hold their interests in Myanmar through holdings in Singapore.
Controversy a telling sign
There will, of course, be controversies. Take the current dispute between the shareholders in Myanmar Brewery, run by Singapore-listed Fraser and Neave (F&N), with a military-backed shareholder since the 1990s. With further market growth anticipated, and F&N acquired by Thai Beverage, differences have just come to the fore.
How this and other differences in long-standing ventures can be managed and settled will bear watching, as much so as the announcement of tenders and new projects. These may be taken as indicators of prospects for long-term thinking in business, or of whether the current interest and openness are only temporary and passing.
When the West sanctioned Myanmar, there were accusations that Singapore and others in ASEAN were wrong to pursue constructive engagement and invest. Yet, by pursuing a different path, Singapore gained — and has maintained — an early foothold.
Today, with so many others rushing to get in, there is a danger that the long-standing relationship between the two countries might be lost in the jostle. Yet, that relationship — marked by endurance and familiarity over some two decades — can serve as a foundation for both governments and the private sector. Singaporean interests in Myanmar, and vice-versa, should and will continue to grow. — Today
* Simon Tay and Nicholas Fang are, respectively, Chairman and Executive Director of the Singapore Institute of International Affairs (SIIA). The SIIA visited Myanmar recently at the invitation of its Ministry of Foreign Affairs.
* This is the personal opinion of the writer or publication and does not necessarily represent the views of The Malay Mail Online.
- See more at: http://www.themalaymailonline.com/what-you-think/article/can-singapore-capitalise-on-myanmars-opening-simon-tay-and-nicholas-fang#sthash.XmRqRZky.dpuf
So, too, have Asian corporations, especially the Japanese and South Koreans, but also the Thais and Indians. At the same time, the Chinese — who were high profile in Myanmar — have not gone away. The recent completion of the gas pipeline through the northern city of Mandalay and into the Chinese province of Yunnan signals their continuing presence.
But concerns that Chinese firms would dominate Myanmar were one reason for the government’s decision to open to the West, and the new competition has come into clear view with recent high-profile tenders. The winners were from neither China nor the major Western powers.
And the winners are…
In telecoms, some 90 companies tried for the two first licences, which were finally awarded to Norway’s Telenor and Qatar Telecom. For airports, more than 30 companies showed interest in building the new Hanthawaddy International Airport near Yangon. Licences were awarded in the end to South Korea’s state-run airport operator.
Such outcomes are quite inevitable, given open competition. But the results are still surprising, considering that Singaporean companies invested in Myanmar from the mid-1990s, through the economic low points, and have wide networks and diversified dealings. The hotel sector, which is now booming, prominently features Singaporean investors.
Both the Singapore and Myanmar governments have been long-time friends, despite Western sanctions. Myanmar’s President Thein Sein made the deliberate point of visiting Singapore early last year, as reforms began to unfold, to seek assistance. There is interest from Singaporean companies to participate in Myanmar’s opening. A new Singaporean entrant is the emblematic Ya Kun Kaya Toast, which has now opened in Yangon and has plans to expand across the country.
Yet, the present attitude for many may be characterised as window shopping. Few have committed sizeable investments.
Caution warranted
Singaporeans are not the only ones with a wait-and-see approach; reports suggest the British, Myanmar’s former colonisers, are treading cautiously. Caution is not unwarranted. Infrastructure gaps and a shortage of well-qualified workers are typical of a developing country. Rapidly rising costs for office space and housing, as well as fast-changing policies, add to concerns.
So, too, is the question of finding the right local partner. This is thought to be essential, given nationalistic pride and the wish to ensure the Myanmar people prosper. But many of the larger players have been labelled “cronies” of the past regime and the United States still maintains a long blacklist of “specially-designated nationals”.
Singaporean businessmen who have been in Myanmar for more than a decade say there is a lot of respect on the part of its people for Singapore and its leaders, who made more than a few early efforts to reach out to Myanmar after the problems of 1988 (the first official visit was made by then Prime Minister Goh Chok Tong in 1994).
During a recent visit to Yangon, one businessman said: “We’re often told that if Myanmar had had leaders like Lee Kuan Yew, maybe Singapore would be the one sending foreign workers to work here instead of the other way around. It would be a shame if we let this sense of admiration and respect go to waste and not capitalise on it by being more active here.”
Singapore ‘as second home’
The question is whether Singapore wants to and can be involved in a larger way in the new and more open Myanmar — and, if so, how? There are factors of strength in the relationship.
One is that Singapore has emerged as something of a second home for Myanmar. This goes beyond government-to-government relations, or even the elite who visit for banking and health services.
Many ordinary Myanmar nationals come to Singapore for education, training and jobs. The familiarity can help both sides work together.
A second factor is that Singaporean players have shown staying power through economic low points, and notwithstanding Western criticism and sanctions. While there is now something of a gold rush, political uncertainties lie ahead — such as peace with ethnic minorities and the 2015 elections — and the endurance of newer entrants remains to be tested.
A third factor is the ability of Singapore to go beyond the hard infrastructure aspects to soft skills. Take the training that Singapore has provided to many Myanmar officials at different levels. Singapore can serve more as a reliable partner and trusted adviser, rather than as just another bidder. This can be especially helpful in larger, long-term planning where integration is key.
A fourth and newer factor is Myanmar’s connectivity with the Association of South-east Asian Nations (ASEAN), which it will chair from next year. Singapore as a major hub and leading finance centre in the region could help Myanmar integrate more quickly and smoothly. Some may also invest and hold their interests in Myanmar through holdings in Singapore.
Controversy a telling sign
There will, of course, be controversies. Take the current dispute between the shareholders in Myanmar Brewery, run by Singapore-listed Fraser and Neave (F&N), with a military-backed shareholder since the 1990s. With further market growth anticipated, and F&N acquired by Thai Beverage, differences have just come to the fore.
How this and other differences in long-standing ventures can be managed and settled will bear watching, as much so as the announcement of tenders and new projects. These may be taken as indicators of prospects for long-term thinking in business, or of whether the current interest and openness are only temporary and passing.
When the West sanctioned Myanmar, there were accusations that Singapore and others in ASEAN were wrong to pursue constructive engagement and invest. Yet, by pursuing a different path, Singapore gained — and has maintained — an early foothold.
Today, with so many others rushing to get in, there is a danger that the long-standing relationship between the two countries might be lost in the jostle. Yet, that relationship — marked by endurance and familiarity over some two decades — can serve as a foundation for both governments and the private sector. Singaporean interests in Myanmar, and vice-versa, should and will continue to grow. — Today
* Simon Tay and Nicholas Fang are, respectively, Chairman and Executive Director of the Singapore Institute of International Affairs (SIIA). The SIIA visited Myanmar recently at the invitation of its Ministry of Foreign Affairs.
* This is the personal opinion of the writer or publication and does not necessarily represent the views of The Malay Mail Online.
- See more at: http://www.themalaymailonline.com/what-you-think/article/can-singapore-capitalise-on-myanmars-opening-simon-tay-and-nicholas-fang#sthash.XmRqRZky.dpuf
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