In the next few weeks Myanmar is expected to ask an Australian team to review its newly legislated mining law. It will involve an unusual level of foreign consultation on an important economic reform.
The plan to draw on Australian expertise to help draft the regulatory framework for one of the resource-rich country’s main industries is a marked contrast with Indonesia, where mining officials are often at loggerheads with foreign miners.
Behind the breakthrough in regional engagement is the story of a group of young Australian and Burmese entrepreneurs who paved the way for the close bilateral business links behind the mine law review.
In the process, they have built their own business which is set to be at the frontline of a revamped mining industry at a time when other economic reforms appear to be hitting a logjam ahead of an uncertain election next year.
“People weren’t so much sceptical but a bit surprised we were trying to do it,” Michael Phin says of the reaction to the bid by a group of 20-year-olds to set up a bilateral business group in a frontier economy, even before Austrade had a formal presence there.
The Australia-Myanmar Chamber of Commerce (A-MCC), which has about 150 members split between the two countries, helped bring two ministers to Australia for a wide-ranging tour of the mining industry last year and is using money from the federal government’s Asia Business Grants program to run a series of industry skills development courses in Rangoon.
But the proposal for an Australian business and government working group to review the mining law regulations could be a benchmark in regional engagement. “If the Australian community has its say, it will all be worth it,” says Phin, now the joint executive director of the A-MCC with colleagues Lachlan Foy and Melinda Tun.
Bilateral business chambers in Australia’s small, fragmented Asian corporate community usually sink or swim on the strength of a few dedicated individuals with only the China and Japan groups the beneficiaries of serious long term corporate support. But a recent survey by Asialink underlined how these groups can be key sources of advice, especially for smaller companies embarking on an Asian business expansion.
So Macquarie University academic Sean Turnell, an expert on the Myanmar economy, says of the A-MCC team: “They have done things other groups have tried to do. And they’ve done more than I would have expected when they were starting out.”
Three years after former general turned reformist president Thein Sein suddenly opened the country to democracy and Western business, the euphoria is waning. There is little prospect that democracy leader Aung San Suu Kyi will take over as president and a sense only the easy reforms have been done.
Nevertheless, competing telephone licences have been issued, foreign bank licences are due and an independent central bank has been established.
Trade and Investment Minister Andrew Robb is visiting this week amid gatherings on resources, agribusiness and infrastructure, areas where Australia has long-term expertise.
It’s a long way from the night in 2012 when La Min Win drew a logo on a Sofitel Hotel bar coaster over a few gin and tonics and the official Australian business presence in Asia’s hottest new market was born.
Phin and Foy met while working as young graduates at Korda Mentha. They found Win, a property investor wanting to return home from Sydney, on LinkedIn as they cast a wide net for people interested in opportunities in Myanmar. They met Tun through law firm Baker and McKenzie, where she still works, and Eugene Quah in Myanmar, where he now runs an English language business
The group beat the first big Australian business delegation to Myanmar led by then assistant treasurer Bill Shorten in October 2012 by a few weeks and hit the ground talking to anyone they could about future opportunities and where Australians could fit in. “We had 28 meetings in 10 days and even met the only brickmaker in Mandalay,” Phin says.
He says that Myanmarese government officials and business people appear a positive view of Australians and generally welcome visitors and ideas. “It is easy to sell Australia but there are still raft of issues to deal with .”
But with a well established and active chamber now providing a platform for visitors such as Robb and training local people in areas as diverse as water management and financial services, Phin, Foy and Win have turned to building their own long-term business.
Their company Valentis Resources is providing advice on mining operations, partnerships and exploration opportunities to foreign and local businesses employing technical experts from Australia or who used to work for state owned Myanmar companies.
Phin says some of the work is unprecedented and a big part of the challenge is to establish whether any rules exist.
“We are working a lot for local companies looking for foreign partners. Some of these transactions haven’t been done before.”
He says one of the biggest challenges is operating in a largely cash economy where there is no money transfer code for transactions with Australia.
“All the transfers have to do through Singapore and you have to go and get a mountain of cash.”
Finding good staff is difficult and even the technically good employees often don’t have a good understanding of how to use their skills in a commercial business.