Hiroyuki Ishige : Interview
In terms of both exports and investment, which industries in Myanmar have benefitted the most from trade relations between Myanmar and Japan?
HIROYUKI ISHIGE: Approximately 90% of exports from Myanmar to Japan are garments and footwear, with the remaining 10% constituting agricultural and fishery products. In recent years, Japanese investment in Myanmar has been increasing and gradually diversifying in a range of industries, including those related to trade; consignment processing, with its low labour costs; the procurement of raw materials, among them sesame and seafood; and sectors spearheading the modernisation of agriculture in Myanmar. As an example of the latter, investment in export-oriented, value-added food products is increasing.
What sectors pose attractive investment opportunities in Myanmar for Japanese companies?
ISHIGE: Investment by Japanese companies reached a record high of $1.5m between April 2017 and March 2018. This was driven by investment in real estate, such as large-scale commercial facilities and manufacturing. The Thilawa Special Economic Zone (SEZ), a public-private joint project between Myanmar and Japan, is benefitting from a considerable increase in investment. Japan’s Official Development Assistance has focused on developing the infrastructure of the SEZ and surrounding area, making it the most viable entry point for manufacturers wishing to trade in Myanmar.
How is the Japanese approach to infrastructure investment in Myanmar distinct from the model currently being applied by China?
ISHIGE: China’s main priority in Myanmar is the development of the Belt and Road Initiative from Yunnan Province, through Mandalay, to Kyaukphyu. In contrast, Japan is focusing on logistical links between Yangon and Mandalay, as well as connectivity between the East-West Economic Corridor and Southern Economic Corridor, centring on Yangon. In addition to Myanmar becoming the gateway to the Middle East and Africa, it has great potential to become a core trade hub in the Indo-Pacific economic area, connecting the markets of up to 40% of the world’s population.
What are the top-priority infrastructure requirements, and how can Japanese companies promote sustainable growth in the country?
ISHIGE: Currently there is a lack of essential infrastructure, such as electricity, telecommunications and transportation. Developing this infrastructure is critical. JETRO has been assisting private Japanese companies operating in Myanmar, in line with the policy of the Japanese government. In addition, JETRO has been disseminating information and offering individual consultations to reinforce the UN’s Sustainable Development Goals by underlining the importance of responsible business and responsible supply chains. Going forward, Japan understands that developing sustainable business together with Myanmar, based on a relationship of trust, will be crucial.
How are Japanese investors responding to the liberalisation of the wholesale and retail sector?
ISHIGE: The complete opening of the wholesale and retail industry to foreign capital in May 2008 was good news, as it relaxed regulations that had long given domestic companies preferential treatment. This deregulation will also contribute to the well-being of Myanmar citizens through fair competition and the modernisation of logistics, stemming from the entry of foreign capital. In October 2018 it was announced that four wholesale and retail companies had been registered, two of which are from Japan. It is expected that foreign companies will enter the wholesale industry in sectors that involve a wide variety of products, including consumer goods, electronics or chemicals, as well as in the field of large-scale retail, such as supermarkets.
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