Interview: Daniel Michener, CEO, Burst Myanmar
What are the strategic advantages of conducting business in the Thilawa SEZ?
DANIEL MICHENER: Thilawa offers unique conditions for investors looking to expand their businesses in Myanmar. First, the SEZ boasts very solid infrastructure, which was built with Japanese construction standards as its guiding principle. Given the high standards for which Japanese companies are internationally recognised, the quality of infrastructure in Thilawa is arguably the best in the country, providing investors with confidence that there will be minimal interruption from power outages or water shortages, for example. Second, companies operating in the SEZ benefit from higher levels of security, which is always a concern for investors. Third, Thilawa will be one of the most connected areas in the country, rivalling the IT compound MICT Park. Thilawa SEZ has worked with Japanese investors Sumitomo and KDDI to deploy a robust fibre network within the compound, which will have multiple international cable connections from providers such as MPT and Campana. This, combined with the construction of satellite facilities, will provide an attractive incentive to potential investors in the SEZ. Lastly, investors can also benefit from the partnership that the Myanmar government has forged with its Japanese counterpart. Companies located in the SEZ will enjoy expedited handling of matters – for example, import licences and permits – and be relatively free of government red tape.
How can improved internet connectivity help stimulate investment in Myanmar?
MICHENER: Simply stated, enhanced connectivity provides more opportunities to deliver services to customers and allows companies to connect to one another, as well as connect their international clients to Myanmar. It is also critical for the market to develop its own payment platforms, and connect international firms to their parent and affiliate companies, ensuring proper management of the supply chains and information flow required to assess risks and opportunities as they arise. More specifically, the only way to effectively reach customers is to create robust, secure and reliable network access over which enterprises can offer services to potential customers on a nationwide basis. For instance, connectivity is critical to oil and gas firms and many of the manufacturing companies in the Thilawa SEZ that must coordinate inventory, logistics and financial data on a real-time basis to optimally run their multinational businesses. Once the domestic and international connectivity is in place, and supporting facilities such as data centres have been deployed, investors will be more confident in growing and managing their businesses efficiently.
What issues influence investment decisions, and how can the government address them?
MICHENER: Countries like Japan and China have strategic, long-term interest in the growth and stability of Myanmar. As such, private and government-linked enterprises are more willing to invest because their governments provide a sense of security that purely private, profit-driven companies may not have. A wholly profit-driven company will weigh different market opportunities and look at issues such as political risk, economic stability, the ability to move money freely in and out of the country, and financial strategies impacting liquidity and exit strategies. At present, Myanmar is in a position where these questions have not been sufficiently addressed to the satisfaction of these types of investors. In fairness, many of these risks are perceived risks, not clearly defined risks. Unfortunately, perception is reality when it comes to making an investment decision on a purely economic basis. The priority should therefore be to keep working on improving the clarity and predictability of regulations. Investment in IT and telecommunications will likely continue driving growth, largely due to the state’s commitment to align the sector with global standards and regulate implementation.
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