The Report: Myanmar 2018
Occupying a strategic position at the crossroads of India, China and Thailand, and now in its seventh year of sweeping economic liberalisation and political transition, Myanmar remains one of the fastest-growing economies in South-east Asia.
Country Profile
Considered to be the last frontier market in South-east Asia, Myanmar remains focused on creating the right set of conditions to attract and facilitate foreign investment to spur economic development. Following decades of military rule that maintained a socialist and centrally planned economic model, cutting off access to the world’s financial markets and main trading routes, the country’s ongoing transition towards market economics and electoral democracy has caught the attention of investors worldwide. This chapter contains a viewpoint from Daw Aung San Suu Kyi, State Counsellor of Myanmar; an interview with Serge Pun, Chairman, Serge Pun & Associates; and a viewpoint from Xi Jinping, President of China.
Explore chapterEconomy
Although it has moderated from earlier double-digit highs, GDP growth remained robust in the early 2010s, accelerating from 5.3% in 2010 to 5.6% in 2011, 7.3% in 2012, 8.4% in 2013 and 8% in 2014. Growth has dropped off slightly since 2015, reaching 7% that year and 6.1% in 2016, according to the IMF. External headwinds, internal conflict and delayed implementation of some key reform policies will undoubtedly continue to weigh on macroeconomic growth, but Myanmar’s economic forecast remains broadly positive. While both trade and fiscal deficits present challenges to Myanmar’s public sector stakeholders, increased private sector participation in economic development promises to help the country mitigate declining natural gas revenues, as both ongoing tax reform and fiscal rationalisation preserve financial and economic stability into 2019. This chapter contains interviews with U Kyaw Win, Minister of Planning and Finance; U Phyo Min Thein, Chief Minister, Regional Government of Yangon; and Nguyen Xuan Phuc, Prime Minister of the Socialist Republic of Vietnam.
Explore chapterTrade & Investment
Trade and investment has expanded rapidly in Myanmar since 2011, bolstered by economic liberalisation, legal reforms, a large untapped domestic market and a favourable geographic position bordering Bangladesh, China, India, Laos and Thailand, which together comprise 40% of the world’s population. However, several factors weigh on 2018’s investment outlook, including ambiguous legislation and red tape, depressed global commodity prices and India’s agriculture import quotas. Concerns over the country’s human rights record could also act as a deterrent to Western financiers, even as Chinese firms move in to fill the funding gap in infrastructure, real estate, transportation and industry. Nonetheless, new opportunities created by China’s Belt and Road Initiative are set to play a significant role in supporting Myanmar’s trade and investment growth over the medium term. This chapter contains interviews with U Than Myint, Minister of Commerce; Jin Liqun, President, Asian Infrastructure Investment Bank; and Mai Trang Thanh, President, Honeywell Indochina.
Explore chapterFinancial Services
Myanmar’s largely unbanked population of over 53m presents vast growth opportunities, and rising demand for the newly emerging financial sector has already led to a sizeable expansion of services and investments. Enthusiasm for the Myanmar market among private domestic and international insurers has been high, as the country promises significant potential returns. With the new Yangon Stock Exchange (YSX) established as recently as October 2015, Myanmar’s capital markets are at a very early stage of development; however, the authorities are embarking upon a series of legislative and regulatory reforms. Notably, this will involve removing some of the main barriers to entry for both domestic and international players. This chapter contains interviews with U Bo Bo Nge, Deputy Governor, Central Bank of Myanmar; Neil Emerson, Senior Vice-President and Managing Director for the Asia-Pacific Region, Diebold Nixdorf; Kamalkant Agarwal, Head of International Banking Business, Siam Commercial Bank; and Daw Sandar Oo, Managing Director, Myanma Insurance; and Chairperson, Myanmar Insurance Association.
Explore chapterTelecoms & IT
The expansion of Myanmar’s telecoms market continues to live up to its early promise, with industry reform viewed as the most significant economic success since the military ceded power in 2011. In the relatively short period of time since, the sector has become an important enabler of socio-economic development, attracting billions of dollars in investment, fostering the emergence of tech start-ups and connecting rural communities to the outside world for the first time. Liberalisation has also seen the IT industry expand at a considerable pace. While it still has a lot of catching up to do with regional peers, local businesses and communities are rapidly adopting new technologies, and the potential for expansion into to new economic segments is clear. This chapter contains interviews with Daniel Michener, CEO, Burst Myanmar; and Liman Zhang, CEO, Huawei Myanmar.
Explore chapterEnergy
Myanmar’s energy sector is set to remain on a steady headline growth trajectory in 2018, with rising domestic electricity and fuel consumption, abundant renewable resources, and a strategic geographic location at the crossroads of India and China continuing to offer opportunities to foreign investors. Although the upstream oil and gas segment’s near-term outlook is subdued given current global oil market conditions, internal conflict and an unattractive fiscal regime, downstream opportunities are plentiful, supported by limited domestic refining capacity, rising vehicle ownership, lack of available imports, storage and distribution infrastructure, and ongoing economic liberalisation measures. Private sector participation has been strong in the power industry, and should remain this way as the government continues to deploy PPPs to boost installed capacity. This chapter contains interviews with U Thein Win Zaw, Chairman, Shwe Byain Phyu; Daw Ei Phyusin Htay, Managing Director, Barons & Fujikura EPC; and Ken Tun, CEO, Parami Energy Group.
Explore chapterConstruction & Real Estate
The construction sector in Myanmar has experienced some turbulence in recent years. Changes to the regulatory framework and budget deficits have had an impact on the construction of houses, while plans to upgrade the country’s infrastructure have faced economic and political constraints. Nonetheless, the government is determined to move forward with new regulations and secure funding for a series of major infrastructure projects, and players in the sector are generally optimistic about developments ahead in 2018. With the residential and office markets cooling, but the industrial and retail segments buoyant and exhibiting significant long-term growth potential, the period ahead poses both challenges and opportunities for Myanmar’s real estate sector. Establishing a clear regulatory framework is set to play a significant role in the market’s development. This chapter contains interviews with Roongrote Rangsiyopash, CEO and President, SCG; U Kyaw Kyaw Win, Chairman, New Star Light Group; and U Khin Maung Aye, Chairman, Lat War.
Explore chapterTransport & Logistics
As the largest country in mainland South-east Asia, and sharing borders with around 40% of the world’s population, Myanmar holds enormous potential to become a regional transport and logistics hub. However, the country suffers from a notable infrastructure deficit. Although several major highway projects have been completed, much of the road network is in need of upgrades, while the national rail network, the largest in ASEAN by kilometres of track, continues to suffer from poor maintenance and underinvestment. With a sizeable amount of funding needed to close its infrastructure gap, officials are working with international lenders and bilateral partners to finance new transport projects. An increasing emphasis on public-private partnerships (PPPs) is offering additional opportunities to private and foreign investors. This chapter contains interviews with U Thant Sin Maung, Union Minister, Ministry of Transport and Communications; U Htun Myint Naing, Chairman, Asia World; and Chen Bo, General Manager, China Road and Bridge Corporation.
Explore chapterIndustry & Retail
Myanmar’s recent economic growth, low wages and favourable tax exemptions have spurred the arrival of international manufacturers. To support this trend, the government has enacted a range of policies to promote the development of special economic zones (SEZs) and industrial clusters. Manufacturing capacity is on the rise as a result, helping to diversify the economy away from its traditional reliance on agriculture. Maturing consumption patterns have likewise captured the attention of some of the world’s leading consumer brands, which now occupy retail shelves across the country. Real annual sales growth reached 4.3% between 2013 and 2015, higher than that of Cambodia, Laos, Thailand and Vietnam. This chapter contains interviews with U Khin Maung Cho, Minister of Industry; Takeshi Minakata, Managing Director, Myanmar Brewery; and Daw Marlar Win, Chairperson, UMG Myanmar.
Explore chapterAgriculture & Forestry
While it has gradually reaped the rewards of diversification efforts to end overreliance on rice, Myanmar’s agriculture sector is now at a crucial juncture. Although progress has been made, structural impediments continue to weigh on farming output. However, a new development strategy is expected to enhance sector monitoring, boost production, and improve the industry’s regional and global competitiveness. Investment in infrastructure and processing capacity has the potential to transform the nation into an exporter of higher-quality agricultural products that could open the door to more varied overseas markets, with trade diversification taking on increasing importance due to India’s new agriculture import quotas. This chapter contains interviews with U Win Aung, Chairman, Dagon Group of Companies; and Gerhard Hartzenberg, Managing Director, New Holland Agriculture.
Explore chapterMining
Stretching from the Himalayas in the north to the Andaman Sea in the south, Myanmar’s diverse terrain offers a wealth of untapped mineral resources. Following the easing of international sanctions and major legal reforms, the authorities now have the opportunity to rehabilitate some of the mines that were neglected during the socialist period. Despite the risks, grey areas and bottlenecks, Myanmar’s mining sector holds significant investment potential. Given growing global demand for base metals, Myanmar has the chance to build on recent momentum in tin, tungsten and associated metal exploration. An uptick in surveying for these minerals could help to instigate broader economic growth and social development, provided the projects adopt best international practices and avoid the environmental mistakes of previous mining operations. This chapter contains an interview with U La Min Win, Managing Director, Valentis Services.
Explore chapterTourism
Myanmar is slowly emerging as a tourism destination in a region that is a favourite among travellers worldwide. It has a wealth of attractions to draw visitors from abroad, including Yangon’s Shwedagon Pagoda and many other diverse cultural and historical sites. One of the main challenges is developing the accompanying tourism infrastructure and ensuring an adequate skills base to keep pace with the sector’s growth. This has proved difficult in the past for some of Myanmar’s neighbours, and many wonder if the country has the foundations in place to do a better job of balancing growth with sustainability and conservation. This chapter contains interviews with Daw Moe Moe Lwin, Director, Yangon Heritage Trust; and Jean Michel Romon, Managing Director, Balloons over Bagan.
Explore chapterEducation & Health
To capitalise on the potential of its young and education-hungry population, the Myanmar government is working to rebuild its public education system at every level. Passing the appropriate legislation as well as further opening the sector up to new international partnerships and foreign investors will likely be necessary to achieve this, as will continued investment in infrastructure and learning resources, particularly in rural and more marginalised regions. Driven by demand for better services from the expanding middle class and bolstered by higher levels of public expenditure, growth in Myanmar’s health care sector is expected to accelerate. This comes during a time of regulatory relaxation, with the government drafting reforms intended to streamline the processes through which local and foreign companies are able to able to invest, incentivising private investment and stoking competition. This chapter contains interviews with U Pho Kaung, Rector, University of Yangon; and Dr Aye Aye San, CEO, Victoria Hospital; and General Secretary, Myanmar Private Hospitals Association.
Explore chapterTax
This chapter gives an overview of Myanmar’s tax regime, focusing on key developments including the New Company Law and the extension of the self-assessment system implementation. Draft Revenue Appellate Tribunal law changes are also examined in this chapter. It also contains a tax viewpoint from U Win Thin, Chairman, Win Consulting.
Explore chapterLegal Framework
This chapter gives an overview of Myanmar’s legal system, examining recent developments such as the New Companies Law. This section also outlines investment rules and incentives for foreign input, as well as a new banking regulation enabling the formation of a credit bureau. It also contains a legal framework viewpoint from Cheah Swee Gim, Director, Kelvin Chia Yangon.
Explore chapterThe Guide
This chapter offers suggested hotel listings for business and leisure travellers, and contact numbers for a variety of local services and associations. It also offers useful tips for first-time visitors to the country.
Explore chapterTable of Contents
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State Counsellor Daw Aung San Suu Kyi: Viewpoint
U Thaung Tun, Chairman, Myanmar Investment Commission; and Minister of Investment and Foreign Economic Relations
Shinichi Kitaoka, President, Japan International Cooperation Agency (JICA)
U Soe Win, Minister of Planning, Finance and Industry
Melvyn Pun, CEO, Yoma Strategic Holdings
Stephen Suen, Chairman, Marga Group
Myanmar Times: Myanmar tourism pins hopes on local travellers
Kumudra: For a growth of Myanmar's Health Care Sector
Myanmar Times: Good prospects in Myanmar for long-term investors Oxford Business Group report
América Economía: El nuevo impulso de Myanmar - Asia
