Tag Archives: myanmar democracy

A little bit of Burma in Blacktown

Published in the February 2017 edition of The Point Magazine.

Sunny Myint Aung and his wife Lyn at Sun's Burmese Kitchen
Sunny Myint Aung and his wife Lyn at Sun’s Burmese Kitchen

Sun’s Burmese Kitchen is a homely, understated affair that sits within a line of shops in Blacktown, western Sydney. Its red and yellow walls are dotted with huge photographs of Yangon’s glittering Shwedagon Pagoda, the ancient temples of Bagan and, like any proper Burmese establishment, a portrait of its iconic democracy leader, Aung San Suu Kyi.

The restaurant owner Sunny Myint Aungis a quiet man of few words, but the pride he takes in serving up authentic Burmese cuisine five thousand miles away from Myanmar is evident.

“In Burma, there is a very famous dish called dan bauk [the Burmese version of biryani]. I met a Burmese chef in Bangkok who gave me his dan bauk recipe and taught me how to make it. So our dan bauk here is really special.”

Sunny is able to source all the ingredients he needs from a warehouse that supplies products of Myanmar origin, such as lapet thoke, a delicious tea leaf salad that’s used to relieve fatigue.

Sunny was already well-known in western Sydney’s Burmese community before he opened his restaurant in 2012. He was a regular fixture at community events, and cooked for large crowds at the local church.

“The Burmese community comes to the restaurant for meals and sometimes they bring their new friends, so that they can try Burmese food. And they like it, so they come again.”

Sunny opened his first restaurant in 1998, but was ultimately forced to close the business due to being unable to make a decent profit margin in the face of high overheads.

“Rents are so high – there’s a lot of hardships for small businesses,” he said.

He spent a decade working at a bakery before trying his hand at the restaurant business once again. He has set up a team comprising his Filipina wife Lyn, and their 23-year-old son.

Sunny at Sun's Burmese Kitchen
Sunny at Sun’s Burmese Kitchen

“This is a family business – my, wife, son and I are hard-working and we started slowly, slowly,” he explained.

Sunny’s story of leaving Myanmar is unusual for its lack of drama. He left at the age of 30 to work as a sea merchant, rather than fleeing political unrest or persecution as many of his compatriots did during the eighties and following decades. He spent a decade sailing around the world and lived in Hong Kong, Singapore and Papua New Guinea before settling in Australia with his parents and his wife.

Sunny’s preoccupations are the same as any small business owner in Australia: keeping his business healthy. When asked if he follows events in Myanmar, including the historic general elections of 2015 he said, “I’m really out of touch. I’ve only been back twice and I have no family left in my home town of Mawlamyine. My son’s been once and he doesn’t want to go again.”

When I told Sunny that I lived in Myanmar for four-and-a-half years, he didn’t seem particularly curious to hear about it. In that respect, he also struck me as unusual, as most Burmese will fire a volley of questions, wanting to know the parts of the country outside Yangon I’d visited, whether I could speak Burmese and what I made of the country’s politics. It wasn’t until at least 30 minutes into our meeting, when I was busy taking photos of the restaurant, that he turned to me and said, “How is Myanmar these days?”

“Not much different,” I replied.

He paused for a second and said, “It is different. It’s better than before.”

Sunny was right. Myanmar has undoubtedly entered a new era, one where students and monks are no longer shot dead in the streets and people can speak freely about their leader, Aung San Suu Kyi – rather than speaking in whispers due to fear of arrest by military intelligence. I arrived in Myanmar in 2012, two years after Suu Kyi’s release from house arrest, where she’d spent a total of 16 years. Its government in 2012 was quasi-civilian, but many people still lived in fear. When I joined The Myanmar Times, its co-founder Sonny Swe was still serving what would be an eight-year sentence for breaching harsh censorship laws. These same laws were abolished later that year and Sonny was released, along with hundreds of other political prisoners, in a government amnesty in April 2013. I went with a large group of newspaper staff to meet him at Yangon Airport, where he’d been flown from a remote prison in Shan State. It was a joyous, tearful reunion.

Other noticeable changes included making SIM cards affordable, giving people access to mobile phones and the internet for the first time. In 2012, Aung San Suu Kyi’s party, the National League for Democracy, took part in by-elections (and won their seats by a landslide). However the real test for Myanmar came in November 2015, when general elections were scheduled to take place. If held successfully, they would end half a century of military rule.

At the time I was working as senior consultant editor for the state-run newspaper, The Global New Light of Myanmar. The opportunity arose when a two-year partnership between it and Japan’s Kyodo News came to an end and they were seeking to keep a couple of foreign editors on the news desk. After a 20-minute explanation of the newspaper’s desire to become more “people focused” and being quizzed about my background for less than 10 minutes, I was asked if I could start work that same evening.

The former offices of the Global New Light of Myanmar in Yangon
The former offices of the Global New Light of Myanmar in Yangon

The newspaper had recently become a joint venture between the Ministry of Information and a little-known investor and was trying hard to improve its image. During the decades of junta rule it was a truly nasty rag. Aung San Suu Kyi was never mentioned by name, but crude sexual cartoons of her appeared regularly – she was depicted as being a whorish puppet of the West. The newspaper had drastically toned down its propaganda while maintaining something of a stranglehold on breaking news, because it received military and government announcements first via the state-run Myanmar News Agency. In the lead up to the election, Aung San Suu Kyi had said she would privatize Myanmar’s state-owned media – a promise she failed to keep.

I got a lot of flak from my fellow journalists when I started working for a newspaper that was nicknamed ‘The Dim Light of Myanmar’ and ‘The New Lies of Myanmar’. Some were a little more encouraging – as the editor of Democratic Voice of Burma wryly remarked on my Facebook wall, “Maybe they’ll publish today’s weather instead of yesterday’s.”

One of my colleagues was a highly intelligent, politically-minded, father-of-one, who’d worked there for more than a decade. When I asked him how he felt about having to translate the really nasty editorials and propaganda, he said, “I also teach English and I know that most teachers used the New Light as supplementary materials. There were other books and things in the market but they were expensive. I’d say to them, ‘Don’t listen to the content – just take the language.”

In the lead up to the election, the whisperings of my colleagues started to worry me. Some were adamant that a coup was looming while others had theories about the government trying to provoke the public to take to the streets so as to be able to indefinitely postpone the elections. They were justifiably untrusting; the most recent multiparty elections were held back in 1990, when Aung San Suu Kyi’s landslide victory had been overturned by the military.

When I entered the newsroom that historic Sunday after the vote had taken place, colleagues proudly showed me their ink-stained pinkies and told me they’d lined up to cast their votes as early as 4am – just to ensure that they wouldn’t miss the chance to vote if lines were long. For many it was the first time in their lives they’d ever voted.

We rushed over to the newsroom’s TV to watch vote cards being counted, with cheers emerging onscreen and off when a vote went to the new government. It was clear that a landslide was taking place. We cracked open a bottle of Mandalay Rum and toasted the NLD’s emblem. “To the peacock!” we cheered. It seemed as though Myanmar had finally begun a brighter chapter as I penned the next day’s headline, ‘Dawn of a new era.’

In March, it will be a year since the NLD took office. However, progress in making reforms has been slow. Aung San Suu Kyi, who is constitutionally barred from being president but is the nation’s de facto leader, has kept the media at arm’s length and according to Human Rights Watch’s World Report 2017, the human rights situation in Myanmar hasn’t seen significant improvement, and in some ways is even worse.

With a colleague at the Global New Light of Myanmar
With a colleague at the Global New Light of Myanmar

The NLD released 200 political prisoners when it first entered office, however issues of concern to HRW include the lack of protection of free speech and the worsening situation for Rohingya Muslims in Rakhine State. There has also been heightened conflict between the Burma Army and several ethnic armed groups, despite the signing of a nationwide ceasefire agreement in October 2015.

 The printing press at The Global New Light of Myanmar

The printing press at The Global New Light of Myanmar

However while the government’s performance has been weaker than expected, Sunny was right in appreciating the changes that have taken place, and that people, including myself, may be too quick to forget how far Myanmar has come. It’s also difficult not to be optimistic about the future when one thinks about the people of Myanmar. Before leaving Sun’s Burmese Kitchen, I ordered dan bauk for my husband and my absolute favourite Burmese dish, Shan tomato salad, as take-away for that evening’s dinner. When Sunny smilingly gave me the food parcels and insisted they were a gift, I was again reminded how kind, warm and generous the Burmese are. Virtually every day that I lived in Myanmar, I was touched by an act of kindness, whether by a taxi driver or someone I knew. It came as no surprise to me when the 2016 Giving Index again ranked Myanmar the world’s most generous country (with Australia coming in at third). It’s hard not to feel optimistic about a nation of people so inclined to kindness, despite the many obstacles that remain.

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Q&A with McKinsey’s Managing Partner in Southeast Asia, Oliver Tonby

Published in Mizzima Weekly on 18 June

Southeast Asia’s Managing Partner of McKinsey & Company, Oliver Tonby
Southeast Asia’s Managing Partner of McKinsey & Company, Oliver Tonby

Oliver Tonby is the managing partner of the multinational management consulting firm McKinsey & Company in Southeast Asia. He talks to Mizzima Weekly’s Jessica Mudditt about Myanmar’s progress since 2011 and why the path to completing the reform process remains a long one.

Since McKinsey published its report titled Myanmar’s moment: Unique opportunities, major challenges in June 2013, do you feel the government has done enough to attract foreign investment?

The government has clearly done a number of significant things. The corporate tax rate has been lowered and the first licenses have been awarded to foreign banks and to telecom companies. However the task at hand is really big and it is going to be years or decades in the making. Going back a few years, there was a lot of optimism. I still think there is still that optimism, but perhaps also some realism about the pace of change.

The terms of the licenses awarded to foreign banks are quite restricted – do you think that applying a protectionist policy is the right way forward?

That is a tension that exists everywhere, including the likes of Singapore and Malaysia. At the end of the day it needs to be a thoughtful path. And it’s very sensible for a country to try to grow and develop its own companies as well. There needs to be the right balance with foreign companies, who bring technical experience and capabilities. At the same time, you want local companies to grow. It’s a tension that will last many years.

Do you feel similarly about the requirement of having a joint venture in almost every area of business in terms of ensuring that growth is conjoined?

I think the idea of partnerships and joint ventures is a good one in terms of it being a practical way to build local capabilities. The thing to avoid is a situation where there are middlemen involved who don’t add value as partners in terms of building a long term future. This is distinct from active investors who are trying to build local capability, build up assets and are also willing to re-invest whatever money they are making.

Do you believe the rush to invest in Myanmar has slowed? And if so, why?

The numbers speak of FDI doubling from 2013 to 2014, so the numbers are good from that point of view. But is there nervousness or hesitation? I think investors are clearly looking at what is going to happen before and after the election. What kind of government will there be? Are we going to continue to see the policies of the current government remain or will there be a step change? These are big questions. So I’d say that it’s not reluctance but a case of just waiting and seeing. It’s so close now, so why invest hundreds of millions of dollars? It makes sense to wait six months.

With so much of ASEAN governed autocratically, do you believe that foreign investors do care about what type of government Myanmar gets – as opposed to simply wanting stability?

Investors care about multiple things. And they absolutely care about governments. They do look for stability in terms of business policies and practices, taxes and the rule of law. That is understandable. But they also care about what a government stands for more broadly. I think multinationals want to be good global corporate citizens because corporate citizenship is critical.

Myanmar’s Moment reveals that the average productivity of a worker in Myanmar is US$1,500, which is 70 percent lower than that in benchmark Asian countries. However the report also highlights that labour costs here are much cheaper. What are the reasons for this and are there both pitfalls and benefits?

The reason why productivity is significantly lower is due to a sector such as agriculture being so large in Myanmar. Productivity in agriculture is far lower than say, manufacturing, because the value of the goods produced by workers is a lot lower. And it’s good if your workers are producing textiles, but it’s even better if they are producing computer chips or petroleum products, and so on. Productivity is a reflection of the state of evolution of a country. Take Vietnam, which is well ahead of Myanmar because it started its manufacturing journey a long time before Myanmar did. But the good news is that labour costs in Myanmar are lower than elsewhere in the region: that is an asset for Myanmar. China’s labour costs have gone up quite radically over the past decade – it’s now around $27 per day per worker, which is around five times higher than Vietnam. The amount workers are paid is a competitive factor, because companies are looking to go somewhere where labour costs less. So now that wages have gone up significantly in China and other countries, companies will be looking at where to invest other than China.

At the end of the day, yes, a company in Myanmar might be paying half of what they do in Vietnam, but there are problems if it’s not possible to find people with the necessary skills and experience. Or it could be the case that a greater number of people need to be employed, which wipes out the cost advantage. That is why it’s so important to improve education and training levels in Myanmar.

The report cites UNDP’s finding that Myanmar has one of the world’s lowest averages of schooling, which is just four years. However McKinsey believes that change could come quickly if Myanmar uses technology to deliver an element of e-education to a much larger number of children of school age as well as adults in vocational training and even tertiary education. Are there case studies elsewhere where improvements in education levels have been achieved in a short space of time?

It is certainly ongoing in some countries. One of the countries in the region that is putting a lot of effort in is Malaysia – e-learning is being used to raise standards across the board. It has enabled teachers to have access to the same curriculum regardless of where they are. Ask me in five years – and that would be the early answer.

Myanmar has the highest e-learning growth rates in Asia, however it takes years and I think it’s too early to make a call on its benefits even now. It is of course pretty clear that a country doesn’t evolve unless you educate its people.

Would you agree that potential foreign investors are deterred by Myanmar’s current human resource constraints?

The answer is yes, absolutely. It depends to an extent on the type of business, but if someone is looking to set up a medium sized investment with a hundred million dollars, that person needs people to operate the lines of whatever is being produced. You need technicians who can calibrate the instruments, supervisors, electrical engineers, automation engineers and so forth. An investor will always be thinking about whether they can get the right people with the right backgrounds – and if the answer is no, they will not come. It is a significant barrier, but it’s not the only one.

What do you consider the other major barriers?

There’s also issues around infrastructure: you can’t operate a plant without electricity. And there are macroeconomic factors to consider, such as political stability and some of the tensions that are happening now. A person will ask themselves what it means for the country’s forward prosperity and growth – it’s a serious consideration. The quality of institutions, the ease of doing business and the rule of law is another significant question for businesses. These factors are significant and thrown into the mix when a company weighs up whether to do business here or somewhere else.

What are the opportunities and are they significant enough to counter the challenges?

Myanmar has huge opportunities, such as a large population and a growing economy – there are opportunities for all kinds of consumer products. There are also opportunities in mining, energy and the materials sectors. Myanmar also possesses massive amounts of water resources. So long as a real escalation in tensions – whether political or ethnic tensions – does not take place, so that it is not significantly worse than it is today, I think we will continue to see FDI coming in and that the country will continue to grow. Myanmar absolutely has its place in an Asian economy and the global economy. I choose to be optimistic, but realistic too.

Corruption remains endemic. What can be done to tackle it?

This is where the idea of professional and capable institutions come in: whether it is energy regulators, the court system or financial institutions. If you have quality institutions running quality processes and practices then over time corruption and other bad practices will be reduced.

There seems to be a greater level of transparency in the energy sector, such as the recent gas and oil exploration tender process and the fact that Myanmar is now a candidate country for the Extractive Industries Transparency Initiative (EITI). Does this encourage greater FDI?

EITI is one thing – and I think it’s a positive thing. But let’s not be naïve – it doesn’t change anything overnight. At the end of the day, a company will judge things on a day-to-day basis; in meetings with governments bodies and other companies. The hope is for step by step improvement. There is no country where in the space of a few years, it has gone from bad to great.

Is McKinsey planning another Myanmar-specific report?

Nothing has been scheduled as yet. In November 2014 McKinsey published a report titled Southeast Asia at the crossroads: Three paths to prosperity. This report contains a number of revised figures on Myanmar.

In terms of Myanmar’s overall progress since your most recent report was published, has McKinsey’s views changed significantly in any way?

No, because we continue to see very significant opportunities in Myanmar and very similar changes that were highlighted back in 2013. Growth rates over the past few years have been in the sevens and remain so, which is good – especially so if we look at what has happened globally. Our report predicts that Myanmar’s economy will have quadrupled by 2030 if the following seven sectors are expanded: manufacturing, agriculture, infrastructure, energy and mining, tourism, financial services and telecoms. Things are going in the right direction, though we would encourage there to be even more ‘oomph’ behind it. So while our views have not changed, we do continue to be impatient to see even more drive by the government, as well as by local companies, multinationals and educational institutions. This is a multi-year, multi-decade journey. It’s very easy to say that not enough progress has been made over the last two years, but it needs to be thought of as chipping away at things over a long term period.

Taking stock of Myanmar’s reform progress

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.