Taking stock of Myanmar’s reform progress

The Economist’s inaugural Myanmar Summit on 15 May brought together over 200 leaders in business, government, politics and academia to discuss the progress Myanmar has made since it began its transition from military dictatorship to civilian rule in 2011.

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Published in Mizzima Weekly on 28 May 2015

The Myanmar Summit was held at The Strand in Yangon on May 15
The Myanmar Summit was held at The Strand in Yangon on May 15

The Economist’s inaugural Myanmar Summit on 15 May brought together over 200 leaders in business, government, politics and academia to discuss the progress Myanmar has made since it began its transition from military dictatorship to civilian rule in 2011.

The event, titled Taking Stock, presented a series of panels that focused on the development of the country’s financial systems, infrastructure and political environment. Some panellists were more upbeat than others, with no clear picture emerging of the future of a country that remains notoriously difficult to predict.

Edwin Vanderbruggen, a partner VDB Loi, said that the pace of rolling out infrastructure is adequate.

“This is my fourth year here and as a lawyer, I see a lot of encouraging signs. For example it’s now much easier to register security for onshore assets – even last year that wasn’t possible.”

However he conceded that land ownership remains a major issue for potential investors.

“You can’t just flick a switch when it comes to settling issues of land ownership, and you can’t just replicate the models used to determine ownership in say Thailand or the Philippines. I tell companies, ‘This is going to take nine months, you know.’ And frankly, a lot of companies just don’t have the patience to wait – they’ll go to Thailand instead.”

When asked whether Myanmar will inevitably lose out on opportunities as a result of inadequate infrastructure in comparison with other countries in the region, Mr Vanderbruggen was unequivocal.

“There are a lot of uncertainties. I do know that the government is absolutely doing its upmost. I do a lot of work for the government and I appreciate how few resources they have. They have some extremely smart people in every department, but not enough of them – nor enough money. So yes, some companies will eventually give up and go elsewhere.”

Stephen P. Groff, the vice-president of East Asia, SE Asia and the Pacific at the Asian Development Bank (ADB) said that Myanmar has “undergone the CNN effect – it’s popped onto the international radar, which is a good thing in itself.”

Panelist Nay Chi Win
Panelist Nay Chi Win

The CEO of Parami Group, Ken Tun, appeared the most optimistic. He was at pains to point out that Myanmar is the largest exporter of energy in Asia and said, “Look at what Telenor and Ooredoo have done – we can see that quick growth is possible. However most people don’t believe in something until it actually happens.”

Later, during a panel titled ‘Myanmar’s next generation’, Nay Chi Win, head of the Togetherness Education and Policy Unit at the opposition party the National League for Democracy quipped, “We have Telenor, Ooredoo and MPT – but still no electricity.”

The greatest caution seemed to relate to developing Myanmar’s financial architecture. Dr Maung Maung Thein, deputy minister at the ministry of finance, assured the audience that the progress of setting up the stock exchange was “73 percent complete.”

When asked why now is considered the right time for Myanmar to launch a stock exchange, he replied, “I’ve been asked that question a lot. Out of 198 countries, only nine don’t have a stock exchange. We gained our independence from the British 67 years ago. So if not now, when would be the right time?”

U Thura Ko Ko, managing director of YGA Capital said, “We can be forgiven for being frustrated, but it isn’t wise to liberalise the financial sector too early.”

Christopher Hughes, managing partner at Baker & McKenzie, concurred with U Thura Ko Ko when asked by moderator Ross O’Brien, director, Hong Kong, The Economist Corporate Network, whether there is a danger that the pace of reform is too slow and that enthusiasm among investors will wane as a consequence.

“It’s still quite a fragile environment – the basis of the [financial] framework is still being built. But it’s also a time of great opportunity. The risks of getting it wrong are far too high to rush. I think the balance is pretty good,” he said.

As for Myanmar’s next generation, as the panel itself was titled, the country’s young leaders expressed gratitude for the progress made while noting the constraints that continue to exist.

The event was sponsored by Mercedes. Nice.
The event was sponsored by Mercedes. Nice.

Cherry Zahau, independent researcher at Pyidaungsu Institute for Peace and Dialogue, opened her remarks by saying, “This is the first time the youth have been invited to speak at such a conference. In our culture, the youth are not allowed to express their views. This is also part of the legacy of living under a military dictatorship. It left us in fear that taking part in political activities will land you in prison. This was proven to still be true just last March,” she said, referring to the student protests that erupted over the draft education law.

She also lamented that while her contemporaries aren’t short on business idea, they lack capital and are pitted against large corporations.

“There are also cultural barriers that prevent our youth from achieving their potential. In school, my teachers always told me that I asked too many questions. We need to address the communication gap that exists between the older and younger generations: the older generation thinks they don’t need to talk to us and we think they know better. But in the end, we stop thinking critically and give up,” she said.

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