Myanmar: the final frontier for business

It has been called the last frontier for business, but many New Zealanders are riding the tidal wave of development that has occurred in Myanmar since trade sanctions on the country were lifted in 2011.

Wellingtonian Carl Allwood was one of the many Kiwis to move there in the wake of the boom.

Allwood left a job as legal council for Spark (Telecom) and moved to Yangon, the largest city in Myanmar, with his wife and two children to become legal council for one of the country’s new telecommunications advisers, Oooredoo.

In a country scrambling to keep up with the influx of business, what would be a simple task back home can be challenging.

“The biggest challenge for me is that even though there are laws here, most of the laws are from the colonial days,” he said.

“You are dealing with legislation that is over 100 years old and isn’t actually followed by anyone here. They have just developed their own customs, which vary from town to town and region to region.

“It’s very hard to get a grip on what are our actual obligations to follow here.”

After nearly 50 years, Myanmar officially stopped being a military-run country in 2011 and as trade sanctions on the country were loosened, a wave of foreigners arrived seeing dollar signs.

Rich in natural resources and agriculture, the Myanmar was one of the richest countries in Asia in the 1950s, but after the military took over in 1962, it was left behind.

Things began to change for the south-east Asian country in 2007, when students and monks took to the streets calling for democracy – what is now known as the “Saffron Revolution”.

Myanmar’s New Zealand ambassador, Bruce Shepherd, said there were still challenges on the business front as the state socialist system implemented from 1962 till 1988 made the private sector almost non-existent.

“Business regulations are changing, but it is still a challenge for businesses to get established,” Shepherd said.

“Legal proceedings are complicated and contract enforcement can be difficult. As with many emerging economies, business development here relies on persistence, pricing and relationship building. Nothing will happen overnight.”

Shepherd estimated between 100 and 130 New Zealanders live in Myanmar, many of whom are new arrivals.

“Most see Myanmar as an interesting place, and it also allows them to be at the front end of a reform process that is changing the country very quickly.

“In essence, Myanmar is the one of the ‘last frontiers’ for global business.

“With a population of more than 50 million, endowed with natural resources and proximity to markets like China and India, Myanmar holds a logical attraction for businesses prepared to make the effort.

“For New Zealand, our expertise in agribusiness and English language training is highly prized.”

Shepherd said a construction boom in the urban areas and relaxation of tightly controlled import licences had led to an economic boom and flood of consumer goods.

While every week foreigners arrive in Myanmar to work for international companies or hoping to strike it rich, a handful called the country home throughout the unrest.

Stuart Hatton has lived in Yangon, Myanmar for 14 years and has a family there.

Palmerston (Otago) born and bred, Hatton left the New Zealand Army to live in Cambodia in 1994, but moved to Myanmar in 2001 to be involved in building the country’s first public Internet.

In 2010 he became general manager of Digital Communication LTD, a start-up for telecommunications.

“It has been a hectic time. There is a heck of a lot of competition. Everyone is trying to jump into the game,” he said.

“A few years back there were a lot of people coming over thinking they could make a fast buck and get out of here, but Myanmar is not that sort of place.”

“The big joke here with the expats was: how can you be a millionaire in Myanmar? Come with $2 million.

“People come to Myanmar and think it is an easy place because it’s a green field and there is the possibility of making money, but it is not easy. What 14 years has taught me here is that you have to work very hard to get anything.”

When Hatton arrived, the expat community was very tight, with only about 1000 foreigners and very few New Zealanders.

“You knew the vast majority of them and everyone met at the same place. There were not a lot of bars like there is now, not a lot of restaurants. So you generally ran into people and there were a lot of barbecues and parties at people’s houses.

“That’s how it was early on. There were no late-night places and there was a limit to where you could go.”

He said one thing that had changed since Myanmar opened up was the number of luxuries available.

“The shops and the shopping centres and quality of goods is a heck of a lot more than what we had early on.”

But with the foreign investment had come higher prices, Hatton said.

“Myanmar was actually a very cheap place to live. You could rent a nice house for US$400 or US$500 a month, whereas now you are spending US$4000 or US$5000 a month to rent a house.

“There’s a lot of changes in Myanmar, some good and some bad unfortunately. That’s just the way it is.”

This year Myanmar will have its second elections since the changes. For expats it’s a nervous wait to see whether the current military associated ruling party, the Union Solidarity and Development Party or opposition leader and political activist Aung San Suu Kyi win power.

The recent arrest and imprisonment of Wellingtonian Philip Blackwood for putting DJ headphones on a mockup image of Buddha highlighted the dangers foreigners face in Myanmar, an extremely Buddhist country.

But despite the tension between old and new Myanmar, Hatton said he felt safe.

“I think it will settle down. If I didn’t believe in Myanmar or think there was an opportunity or it was safe here, I wouldn’t stay here with my family.”

Allwood said that for those willing to put in the hard work, it was well worth it.

“It is the massive opportunity here,” he said.

“Fifty years ago this was probably the richest country in Asia. It’s incredibly rich in natural resources and agriculture. They are farming here the same way they did 100 years ago, but the land itself and the climate is all conducive to agriculture.

“They have gold, gas, uranium, jade, teak – massive natural resources and that’s what’s piquing the interest of the foreign investors.”

Myanmar has a mega wealthy top, extremely poor majority and really no middle class. However, Allwood said that with foreign investment and access to information that would change.

“What is going to happen in the next five or so years is there will be a middle class created by all these multinational companies coming in and foreign investment coming in.

“We will see a Myanmar middle class that doesn’t really exist at the moment. You’ve got the super rich and then you have the very wealthy and then you have everyone else.”

Source: stuff

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