Interview: U Win Khaing
How does Myanmar’s building code compare to international norms?
U WIN KHAING: The Myanmar construction industry has expanded tremendously over the last four years. We are seeing about $4.2bn worth of construction projects annually, and the business is growing by 8% each year. Therefore, we need to have a code and standards in order to regulate the industry. In the past we had no need of a national building code because construction works were mostly carried out by the government, through the Ministry of Construction’s public works department and the irrigation department, both of which had their own departmental codes and standards.
Since 2011, momentum has begun to pick up, and it has become necessary to put in place codes and standards. That is why MES, along with the Ministry of Construction and UN Human Settlements Programme, has drawn up the Myanmar National Building Code, which will be enacted soon. This is a two-volume document and covers almost every aspect of building work that needs to be done, including infrastructure. It covers related subjects like electrical works, water supply and fire safety, and has been drawn up to ensure compliance with the best practices of the International Building Code, the American Society of Civil Engineers, and British and Indian standards, so we are not reinventing the wheel. The Myanmar code has taken account of international norms and then adapted them to fit the geography of the country, as well as the building materials available to us and the hazards that are specific to Myanmar.
How can foreign firms adapt to the operating environment in Myanmar? What steps can they take prior to undertaking property ventures?
KHAING: Firms need to have good market knowledge. Each country has its own unique conditions that can used to an investor’s advantage. It is important that companies formulate an investment strategy to suit the sector, whether it be the hotel industry, real estate or infrastructure. It is also vital to have an awareness of the investment law and an understanding of all rules, regulations and challenges. Investors need to appreciate the costs involved in finding suitable land to match the business plan. Moreover, detailed planning and due diligence needs to be undertaken to accommodate the time frame and turnaround of Yangoon City Development Committee processes. Investors need to have a realistic idea of the construction lead times in order to be prepared in advance for any potential pitfalls or scenarios that might crop up. It is vital to take a long-term approach when forming local partnerships and to have a solid understanding of the local business environment.
What are the main constraints for financing large-scale infrastructure projects in Myanmar?
KHAING: We still have weak macroeconomic management resulting from a lack of experience and exposure to market mechanisms. We also have an underdeveloped financial sector, but we recently began addressing that issue by opening nine foreign banks in Myanmar. We are trying to develop the financial sector to support the development of much-needed infrastructure, which will enable us to have electricity nationwide by 2030. In addition, the government is working on a number of areas in order to improve the situation.
Furthermore, the education gap poses a challenge, as it adds constraints to both the workforce and our ability to handle capacity. We also currently have weak economic diversification. Although this is improving, government revenue currently comes from a select few sectors, which makes the financing of large-scale infrastructure projects difficult.
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