The Report: Myanmar 2016
Many have hailed Myanmar’s recent economic, political and social restructuring as ground breaking, and for good reason. In a relatively short period the country’s economy has gone from being largely isolated to being a focal point for foreign investment.
Country Profile
Myanmar is currently passing through a crucial period of political reform, against the background of rapid economic growth and international openness. The successful November 2015 parliamentary elections capped a landmark year for the country. Myanmar has undergone changes that only a few years ago might have seemed unlikely, if not impossible. These events took place just over a decade since the government began moving on its “Roadmap to Democracy,” and three years after the country’s most famous former dissident, Daw Aung San Suu Kyi, took her seat in Parliament. Much of the current political debate concerns amendments to the constitution. At the same time, ethnic and religious conflicts will continue to present a challenge to any government in Naypyidaw. Yet Myanmar has advantages, including a commitment to reform among its large and youthful population. It is also home to significant natural resources, as well as a great deal of international good will. This chapter contains a viewpoint from Daw Aung San Suu Kyi, Chairperson, National League for Democracy; and an interview with Goh Chok Tong, Emeritus Senior Minister, Singapore.
Explore chapterTrade & Investment
With a newly elected government in power and nearly five years of growth in foreign trade and inward investment under its belt, Myanmar is widely expected to become increasingly integrated into the regional and global economy in the coming years. In the fiscal year (FY) through to April 2015, the nation reported total foreign trade receipts of $29.16bn, up from $18.17bn in the same period in 2011/12/ Foreign Direct investment (FDI), meanwhile, quadrupled from $1.9bn in FY 2011/2012 to $8.1bn in 2014/15. The falling value of the Myanmar kyat against the US dollar; a lack of high-quality transport and electricity infrastructure; restrictive investment and trade regulations; and a relatively underdeveloped legal framework are issues that will require considerable attention. However, based on the past five years of liberalisation, the country’s leaders appear to be serious about continuing to open up the economy, attract increased amounts of FDI and boost trade. This chapter contains interviews with U Zay Yar Aung, Chairman, Myanmar Investment Commission; and Gavin McGillivray, Head, UK Department for International Development; and a viewpoint from Julie Bishop, Australian Minister for Foreign Affairs.
Explore chapterEconomy
After nearly half a century of isolation, followed by five years of reform-driven growth, Myanmar’s economy is currently expanding at a record rate. As of late 2015 rising investment, growing exports and steadily increasing foreign involvement were expected to push GDP growth to 9.3% during FY 2015/16, which ends in March 2016. The current period of economic expansion is a result of two main causes: a raft of new government liberalisation policies, which have made it much easier to do business in the country, and the fact that Myanmar started from a low development base in 2011, which has meant wide scope for growth as its economy plays catch-up. Regardless, the nation’s rapid growth is widely seen as a positive indicator of future performance and potential. This chapter contains interviews with Axel van Trotsenburg, Vice-President for East Asia and the Pacific, World Bank; Melyvn Pun, CEO, Yoma Strategic Holdings; Dr Kan Zaw, Minister of National Planning and Economic Development; and Adam McCarty, Chief Economist, Mekong Economics.
Explore chapterFinancial Services
Since the political reforms of 2011, a number of significant steps towards liberalisation have been taken in the banking sector. The Central Bank of Myanmar has been given much needed autonomy and ATMs are now allowed in the country. Further aiding accessibility, mobile banking services have been introduced. New private banks are being set up and foreign banks have been granted licences to open branches. After years of stop-and-go liberalisation, a critical mass of changes has been instituted that promises to improve sector performance and greatly contribute to the development of the country. This chapter contains interviews with U Kyaw Kyaw Maung, Governor of the Central Bank of Myanmar; Linus Goh, Head of Global Commercial Banking and Executive Vice President, Oversea-Chinese Corporation; and Daw Chawsu, Head of International Banking, Kanbawza Bank; and a viewpoint from Brad Jones, CEO, Wave Money.
Explore chapterEnergy
Although it has one of the lowest electrification rates in the world, currently at about 30%, Myanmar is targeting total coverage by 2030. Despite the significant progress needed, the goal is seen as reachable, with Myanmar holding abundant hydro and solar resources, and considerable hydrocarbons potential. The country is also likely to be able to attract the capital to build the much needed generating infrastructure. While Myanmar needs to balance capacity challenges with transparency and environmental protection, it may be forced to make some strategic compromises in order for output to be increased on schedule. This chapter contains a dialogue with Ken Tun, CEO, Parami Energy Group; and Olivier de Langavant, Senior Vice-President Asia Pacific, Total E&P; and an interview with U Myint Zaw, Deputy Minister for Energy.
Explore chapterTelecoms & IT
Hailed as the last true telecoms greenfield in Asia, Myanmar’s communications sector has radically evolved in recent years. An impressive number of international companies – a total of 91 – competed for two operating licenses in 2013. Telecommunications development remains a fundamental pillar in the evolution of Myanmar’s economy, and it supports the development of the other sectors, particularly financial services. Network expansion initiatives will remain a dominant force behind foreign investment and job creation for the foreseeable future. Telecoms infrastructure spending is set to increase as border coverage grows and demand continues to rise. The growth of the IT sector has been partly overshadowed by the liberalisation of the telecoms industry. However, the arrival of major international telecoms players has opened up significant new opportunities for Myanmar’s expanding market. Yet this has also put some strain on the country’s internet capacity as a population of more than 51m gradually gains access to the web, mostly for the first time, on their mobile phones. This chapter contains interviews with U Sai Saw Lin Tun, Chairman, Myanmar Post and Telecoms; Liman Zhang, Managing Director, Huawei; and Philippe Luxcey, Managing Director, Apollo Towers Myanmar.
Explore chapterConstruction & Real Estate
Myanmar’s construction industry has expanded rapidly in recent years. The sector’s GDP growth amounted to 7.7% in fiscal year 2014/15 and is expected to grow to 8.3% in 2015/16. Despite political risks, Myanmar’s development needs remain significant, particularly in infrastructure. With the victory of the National League for Democracy in November 2015, it is expected that 2016 will see an ongoing commitment to updating essential services, such as water supply and sewerage, upgrading airports and roads, and building better housing. With some 125,000 sq metres of retail space due to open over the next four years, Yangon is set to see more franchises and mid-tier brands establish themselves in the city. There is also potential for more affordable and mid-range housing projects due to Myanmar’s growing population, which is expected to increase by about 50% through to 2040. This chapter contains interviews with Ang Wee Gee, CEO, Keppel Land; and U Win Khaing, President, Myanmar Engineering Society.
Explore chapterAgriculture & Forestry
The agricultural sector continues to play an important role in Myanmar’s economy, generating 24% of GDP and 24.6% of export earnings. The industry presents a number of industrial and productive opportunities that, if properly nurtured, could help the country regain and even surpass much of its former standing as a lead producer in the region. To do so, however, will require significant investment in the sector, greater mechanisation, the provision of better financing for farmers, as well as clearer land rights. After years of under investment and a near total drop in exports, the country is rewriting its laws, establishing initiatives to boost production and yields, and encouraging foreign investment. Given Myanmar’s abundant agricultural resources and the role the sector can play in developing the country, it is likely that these initiatives will take priority. This chapter contains an interview with U Thadoe Hein, Managing Director, Myanmar Awba Group.
Explore chapterMining
Sitting above the Indian, Indochina and Eurasian plates, Myanmar is divided into four geographic belts, which help to provide a rich and diverse minerals mix. While most industries have benefited from an influx of foreign investment since the opening of the economy in 2011, the mining sector has yet to catch up. This is due to several reasons, including legal inconsistencies and ongoing civil unrest in key areas. Though much will depend on implementation of mining law reforms passed in late 2015, prospective investors are eagerly waiting in the wings to tap the country’s deposits of metals, ores, industrial minerals and coal. This chapter contains interviews with U Htun Lynn Shein, Chairman, Myanma Precious Resources Group; and Vicky Bowman, Director, Myanmar Centre for Responsible Business.
Explore chapterIndustry & Retail
After decades as a primarily agrarian society, over the past six years Myanmar has made considerable progress towards the development of a sustainable industrial base. Its key manufacturing sectors – which include textiles and garments, food and beverage (F&B) products, and construction materials – have attracted growing investment and, consequently, have rapidly expanded output. In 2014 the industrial sector accounted for 21% of GDP, nearly double its 2008 share of 11%. Foreign direct investment in manufacturing also showed rapid growth in 2014 and the first three quarters of 2015, reaching $1.5bn. From 2012 to the end of 2014 Myanmar’s retail sector expanded by 7-15% per year, in line with overall GDP growth in excess of 7% over the same period. Despite various hurdles, most local retailers expect to see considerable expansion in the foreseeable future. This chapter contains a dialogue with Jean-Francois van Boxmeer, CEO and Chairman of the Board, Heineken NB; and Yoshinori Isozaki, President and CEO, Kirin Holdings Company.
Explore chapterTransport
Once a sleepy city where cars were rare, Yangon is now a bustling urban center. The spike in activity has been very positive for economic growth, but has placed pressure on infrastructure. Myanmar’s government has recognized the need to modernize transport capacity and update the legal framework that governs the sector. To that end, international experts have gathered in Yangon to plan and guide transport development of Myanmar’s largest city. Public-private partnerships are the preferred means of executing infrastructure projects in Myanmar, and it is estimated that planned improvements will cost $433bn through 2030. The completion of projects to improve airports, roads, railways and ports will be a significant step forward for Myanmar as it seeks to integrate itself into the global economy. This chapter contains interviews with U Htun Myint Naing, Chairman, Asia World; and Liew Mun Leong, Chairman, Surbana Jurong and Changi Airport Group.
Explore chapterTourism
Hundreds of thousands of foreign tourists have visited Myanmar since 2010 when relations with the West thawed and the country began to open up to the outside world. While some are eager to experience the South-east Asian nation’s rich culture and heritage, others are simply curious to see the once isolated country before it changes forever. At the same time, economic development is expanding the market for domestic tourists, as their economic situation improves, allowing them to explore their country’s varied destinations. The year 2016 has been designated “Visit Myanmar Year” by the Ministry of Hotels and Tourism and will provide an opportunity for the country to step up its international marketing campaigns to encourage people to visit. With significant hotel capacity and new transport infrastructure needed, the challenge will be to manage the expansion of the tourism sector in a sustainable way so that all parties can benefit. This chapter contains interviews with U Yan Win, Chairman, Myanmar Tourism Federation; and Anders Aeroe, Director of the Division of Market Development, International Trade Centre.
Explore chapterHealth & Education
Over the last few years, gradual progress has been made in the overhaul of Myanmar’s medical framework, and for the first time many rural communities are benefiting from the expansion of the nation’s health care budget. The government is focusing on health care development in an effort to reach the ambitious national goal of achieving universal health coverage by 2030. As the country’s health system matures, the sector promises to be one of Myanmar’s most dynamic over the next few years. The education budget has also increased significantly and will continue to do so under the new government. The National League for Democracy is seeking to address a number of issues, including ethnic discrimination, overcrowding and a lack of qualified teachers. In the long term, the education system looks set to gain significant momentum, particularly under a government that is determined to increase the amount of graduates and improve the quality of degrees. This chapter contains interviews with Dr Gershu Paul, CEO, Pun Hlaing Hospital; and Sardar Umar Alam, Head of UNESCO, Yangon Office.
Explore chapterLegal Framework
This chapter examines Myanmar’s legislative climate for foreign investment as well as new regulations for the foreign exchange market and updates to legal codes. It also contains an interview with Cheah Swee Gimm, Director, Kelvin Chia Yangon.
Explore chapterTax
This chapter examines new developments in Myanmar’s tax code, including the Union Tax Law 2015 and the self-assessment system. It also contains a viewpoint from U Win Thin, Chairman, Win Consulting.
Explore chapterThe Guide
This section offers facts for visitors, a list of recommended hotels and contact information for airlines, foreign embassies, hospitals, business and trade associations, and other institutions. It also contains a feature piece about the popular tourist destination, Inle Lake.
Explore chapterTable of Contents
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