Singapore – Last month Thein Sein shared with an audience an “aspired goal” for his country’s economy: to triple per-capita GDP by 2016. With the current population that would entail inducing output to grow by more than 25% year on year—no mean feat by any standard. Even gas-rich Qatar, home to one of the world’s fastest-expanding economies last year, grew by a mere 14%. Apparently, realism in the realm of economics is not among the president’s many strengths. (In May Daw Aung San Suu Kyi made headlines by warning foreign investors against placing “reckless optimism” in Myanmar at the World Economic Forum. The government was displeased.) But most of the businesses involved understand that it will take time to get the country’s dismal infrastructure into good working order.
So alluring is the prospect of Myanmar's liberalising market, which has been shunned by the Western world since the mid-1990s thanks to sanctions, that a conference in Singapore attended by ten of the government's senior officials last week drew throngs of eager businessmen from the region over. Organised by the Foreign Recruitment Centre, a Singapore-based employment agency, it aimed to equip businesses interested in Myanmar with contacts, a basic brief on the legal background, and a host of tips on securing better business deals. Never sign a contract on Friday; Saturdays and Sundays are fortuitous for doing deals; starting just about anything on a Monday and you'll be starting with a bad omen. So do not despair if an initial, Monday-morning meeting has to be postponed.
Myanmar is hungry for foreign capital in virtually every sector of the economy. The officials who came to Singapore represented ministries governing commerce, post and telecoms, construction, trade, energy and the office of the attorney-general. They made their best sales pitches from a podium, looking out over a sea of businessmen eagerly awaiting the opportunities they describe. The standing Foreign Investment Law (1988) ensured that foreign investors can acquire no more than 35% of a company’s total equity, and only via local joint ventures, but reforms are expected to be passed by parliament by the end of July. The revisions planned should do away with the requirement that foreign investors establish local partnerships. Daw Mae Thi Lynn, from the office of Myanmar’s attorney-general, adds that the reformed law would grant investors the right to lease land from private owners for longer periods. This should be useful to the many businessmen who have been frustrated by the slow pace of industrial-property acquisitions.
The government also unveiled plans for a commission that will “increase the role of the private sector” in telecommunications, energy, forestry, education and health. The hand that giveth however does not only giveth. In the same stroke it identified 12 activities that are to be undertaken only by state-owned enterprises, including the extraction and sale of teak, oil and natural gas, the export of gems, the manufacture of products related to security and defence, and others besides.
U Kyaw Soe, the head of Myanmar Post and Telecommunication, says they expect to achieve 75% telecoms density in four years’ time: that is to say, that three-quarters of the population will have a mobile by then. In a country of 60m with only 3m subscribers today, that means at least 10.5m new subscribers a year. All the trickier where call rates remain among the priciest in the region, even as the GSM networks are stubbornly congested. But all that is to be a thing of the past, says Kyaw Soe, who hopes to see development in telecoms spread evenly throughout the country.
There is already tension visible between the promise of gradual and steady development, on one hand, and the demand for quick provision of infrastructure for businesses with zone-specific development, on the other. A representative of Ocean Sky Global, an apparel-service provider whose operations include exporting from ports in Cambodia, Hong Kong and Taiwan to major buyers in the West, including Adidas, Columbia and Gap, says they have their eyes on Myanmar’s cheap, abundant, and relatively well-educated labour force. But many of their peers remain wary of jumping in too soon, due to the sorry state of infrastructure and logistics. Plans for major highways are still in their infancy, and as yet Myanmar has no deep-sea port, though plans exist for as many as four different sites. The construction of a deep-sea port at Kyaukpyu, on the Rakhine coast, is expected to be finished by the end of 2012. Kyaukpyu boasts the shortest trade route connecting China and the Mekong basin to India and the Middle East. A second deep-sea port, at Dawei, would form part of a special economic zone, a 250-square-kilometre industrial estate with sea, land, rail and pipeline links to the country’s neighbours. In particular it could connect to Thailand’s eastern seaboard via the Laem Chabang deep-sea port at Chonburi. This week Thein Sein and Thailand’s prime minister, Yingluck Shinawatra, affirmed their commitment to the $50 billion Dawei project, with Thailand's largest contractor, Italian-Thai Development Public Company Limited, leading the way. (Once upon a time, about a year ago, the estimated need for investment was to be just $8.6 billion.)
Big plans then, for a relatively small economy with what looks like huge potential. That’s the song and dance chosen by a largely self-appointed, quasi-civilian government that until last year refused to subject itself to just about any part of international law. If Myanmar’s reformist government were to pull off even a passable rendition of the promised number, a standing ovation would be in order.
