Acumen Business Magazine April 2013

Editors Note
2012 was a year of profound change in Myanmar, and this momentum

looks set to continue into 2013. As the editor of the English-language edition of
Myanmar B2B Management magazine, ACUMEN, Id like to take this opportunity to
welcome you to this sample edition, and to thank you for your interest in our
publication.
In the past year, Myanmar has made impressive strides towards re-joining
the international community after decades of isolation. This countrys rapidly changing
political and economic landscape has brought with it an unprecedented amount of
international interest. While the international spotlight has shone uncomfortably on
Myanmar on a few occasions over the past decade, this time the rush of attention is
at least in part because of everything that is going right.
The changes Ive seen to Yangon, compared to my last stint here five years
ago, are remarkable. Portraits of Daw Aung San Suu Kyi, cloistered and unmentionable
in her University Avenue residence until not too long ago, are now ubiquitous. It
seems that every significant event in the city nowadays is a first. Jason Mraz concert
at Peoples Square and Park in mid-December marked the first major appearance by
a Western recording artist in Myanmar, and Yangons first public New Years celebrations
attracted thousands of revellers.
Whats most exciting about being in Yangon is the new sense of optimism
that people here seem to feel about the future. With the yoke of authoritarianism
being lifted, Myanmars citizens are keen to forge links with the rest of the world.
Yangons chattering classes talk of investor protection, transparency and the rule of
law, bringing institutions up to international standards and launching joint ventures
with foreign companies. Small-and-medium enterprises, long denied opportunities to
grow under the weight of corruption and economic mismanagement, are waiting in
the wings to bring their products and services to the world.
For all of its potential, foreign firms still perceive doing business in Myanmar
to be risky. While this fear is not unjustified, there is a lot of misinformation circulating
about this countrys investment climate. Much of this can be chalked up to history; the
media in Myanmar is still developing an identity and voice after decades of censorship
and repression, so accurate and engaging content about business issues is not as
readily available as it perhaps should be.
As Myanmar opens up, Myanmar B2B seeks to be a source of high-quality
information about this countrys business environment, and act as a link between
local companies and their foreign counterparts. The press is a crucial tool for promoting
transparent and ethical business practices in Myanmar, and we at Myanmar B2B are
honoured to have the opportunity to try to help build a more just and prosperous
future for this country and its citizens.
CEO / Chief Editor
Dr. Htet Zan Linn
Director
Dr. Hein Thu Aung, Tin Tun Kyaw
Executive Editor
Phyo Wai
Editor English Edition
Alex Bookbinder
Editors
Hein Zaw, Khin Win, Su Le` Nandar
Reporters
Tha Toe Aung, Nang Aye Chan Moe
Designers
Aung Aung (AN Computer), Thaw Tar Oo
Computer Operator
Zin Wai Wai Shein
Marketing Department
January Khine Mon, Naw Keziah, Yadanar
Photographers
Bait Thar, Aung Kyaw Moe (New Image),
Thu Yein, Alex Bookbinder
Publisher and Copyright
Dr. Htet Zan Linn
Printer
Editorial Board
ACUMEN
myanmarb2b@gmail.com
ceo@myanmarb2bmagazine.com, management@myanmarb2bmagazine.com,
editor@myanmarb2bmagazine.com, marketing@myanmarb2bmagazine.com,
Advisors
Prof. Dr. Aung Tun Thet (Senior Advisor, UN Resident Coordinator's Office)
Dr. Mg Mg Thein (Ph.D. (Law), LL.M., LL.B., B.A.(Law), ANZIIF (Australia), Pg. Dip in Applied Psychology)
Prof. Maw Than (Rector (Ret), Yangon Institute of Economics Yangon)
Soe Tint Aung (Special Consultant for Advocacy, PSI Myanmar)
Dr. Tun Lwin (Consultant, Myanmar Climate Change Watch,Tun Lwin Foundation)
Than Lwin (Deputy Governer (Ret), Central Bank of Myanmar)
Tin Zan Kyaw (Principal, Device Business Management Academy)
Grace Swe Zin Htaik (Media Advocacy Advisor, PSI Myanmar)
Office
No. 24/26, 4B-C, Race Course Condo, South Race Course Street, TAMWE TOWNSHIP, YANGON
Tel : (+959) 420033355
~
66
~
77 (Hot Line), (+959) 73045140, 49317457, 73143313, (+951) 8603886, 8603887
ACUMEN 5
We must behave
maturely and act
flexibly in order to take
advantage of the
current environment of
reform that is allowing
our country to open
up. There will be
profound challenges
in the future, and
people must be
realistic in their expec-
tations of politicians,
not reactionary and
extremist when politi-
cal problems arise.
U Thein Sein
President
Republic of the Union of
Myanmar
Biweekly Eleven Journal (VOL-5,
No 40), January 4, 2013.
(~ ~e ~._ .~~ ~ ~.q.
~_~...._ ~~q.e:..:.
.,._ _._.. ._.:. .~ .:.. ~. ..
... :._ ~,:~ _ e. .~:.
~_ ..:~ .q... _ e. ._ ~:. .
..~..,..,._.:_~:.'',
The essence of a nation is its people. This country will
develop and perform well if people are competent and
well educated. Therefore, I wish that all of our people
will be well educated and competent. May all of our
people be free from fear when carrying out their national
duties, and may they be able to enjoy their rights.
Daw Aung San Suu Kyi
President
National League for Democracy
7 Days News Journal (VOL-11, No-43),January 3, 2013. _._ . .:. ~q_ ~.. .~ .~~ q,
..'.~:..,.._~_......,.~:..'',
Businessmen need to prioritise
long-term growth over short-term
profits. Thinking long-term is the
only way to bring about sustained
economic growth. If not, businesses
will not be able to survive in the long
run.
Dr. Maung Maung Lay
Vice-President
UMFCCI
Pyi Myanmar News Journal (No.852), January 3, 2013. . ~. -:~~ , . .~. ~: ~q:..~. ~ , . . . ~
~q:...~.q..._'',
Everyone must be protected under the law in a transparent man-
ner. Foreign investments that are beneficial for this countrys devel-
opment are welcome, and locals must be granted the same legal
protections that foreign investors are.
Daw Khin Sann Hlaing
Letpadaung Copper Mine Project Commission
ENVOY Journal (VOL-3, No.33), January 3, 2013. . . . _.:.q. .. ._. . . ._ ~ . ~ . . ~ .:.~:. ~:~ . ..:. .q :~ .~ .
_._..:.~..' ~:~...:..q:~.....~_.qq..'',
oices
V
News in Brief
Aung Gyi Group to import Chinese vehicles
to Myanmar
With private citizens now able to im-
port vehicles privately from foreign
countries, local companies have begun
to ramp up the importation of foreign-
made cars to Myanmar.
While markedly less popular than
second-hand Japanese models, new Chi-
nese-made cars are gaining a foothold
in the Myanmar market due to their
competitive pricing, costing far less than
new cars from other countries. JAC
(Jianghui Automobile Co., Ltd), Chinas
tenth-largest automobile manufacturer,
has found a local distribution partner
in the Yangon-based Aung Gyi Group,
which held an exhibition and sale of
JAC-brand trucks, tippers, buses and
passenger cars at Shwe Lin Ban Indus-
trial Zone in Yangon on New Years day.
JAC products were sold at the exhibi-
tion at heavily discounted promotional
prices in honour of the New Year.
Mr. Yang Lixin, a representative
from JAC that attended the ceremony,
was optimistic about the brands pros-
pects in Myanmar. I came from China
to attend this ceremony. This occasion
is very meaningful, as marks the launch
of a formal relationship between Aung
Gyi and JAC. We are proud to be al-
lowed to work in cooperation with Trad-
ers Company in the New Year.
JAC prides itself on its products
technological sophistication, and are par-
ticularly proud of the engine technol-
ogy at their disposal, acquired from their
Ameri can j oi nt - vent ure part ner
Cummins, said Yang. Service centres for
JAC products are set to open in Yangon,
Mandalay, Naypyitaw and Mu-se. U
Aung Thu, CEO of Aung Gyi Group,
explained that servicing and accesso-
ries will be made available free of
charge under the terms of JACs one-
year manufacturers warranty. A
A workshop on developing printing and
related industries in Myanmar, jointly
held by the Union of Myanmar Federa-
tion of Chambers of Commerce and In-
dustry (UMFCCI) and the Association
of Myanmar Printing and Publishing En-
trepreneurs, was held at UMFCCIs of-
fices on November 22, 2013. At the
workshop, entrepreneurs in the print-
ing industries presented papers on the
development of the publishing sector in
Myanmar and how it can be promoted.
Matters relating to printing industry
were also discussed in the presentations.
U Tin Sein, a prominent industri-
alist in the printing sector, made pre-
sentations on lending practices that
would benefit small and medium enter-
prises, and suggested that waiving cus-
toms duties and business taxes for lo-
cal printers would allow the Myanmars
domestic printing and publishing sec-
tor to grow by favouring domestic pro-
ducers. In our locally produced exer-
cise books, companies which import raw
materials - paper and cardboard boxes
- have to pay 3 percent tax on imports,
5 percent tax on trade and 25 percent
tax on income," explained U Thuya Lin
from Icon Exercise Books, another
Myanmar-based printer. This puts lo-
cal companies at a disadvantage com-
pared to foreign firms." A
Printing industry
entrepreneurs sug-
gest changes to taxa-
tion regime
8 ACUMEN www. mya nma r b2bma ga z i ne. c om
April 2013
Garment Makers go high tech
The first exhibition in Myanmar of high-
tech garment manufacturing equipment
from abroad was held at the Tatmadaw
Hall in Yangon between 14-17 Decem-
ber, 2012.
More than 100 entrepreneurs and
companies from 17 countries participated
in the exhibition, part of a new wave of
international interest in Myanmar follow-
ing significant political and economic re-
forms. Garment manufacturi ng i n
Myanmar was largely unsuccessful in the
past for a number of reasons, including
economic sanctions imposed by western
countries, a lack of skilled workers, and
an inability to produce high-quality prod-
ucts.
This is likely to change, according
to government sources, as companies from
Japan, South Korea, and Europe have all
expressed interest in purchasing made
in Myanmar garments. The United States
was also a large purchaser of manufac-
tured goods from Myanmar before the
imposition of sanctions, and may resume
large scale importation in the future.
Myanmar-manufactured garments have
also been exported recently as far a field
as South America and Africa, according
to government sources.
Myanmars garment sector is likely
to flourish with the suspension of West-
ern sanctions, new policies to facilitate
international trade, and the improvement
of transport links with the outside world.
There are more than two hundred gar-
ment factories now in Myanmar, and more
than thirty of those are foreign-owned.
The garment manufacturing sector
provides employment for more than
20,000 people, a small number by regional
standards. However, Myanmar slack of
infrastructure, high real estate prices and
political instability has served to keep
away many foreign investors for the time
being.
This exhibition was intended to es-
tablish links between local and foreign
firms in the interests of promoting
Myanmar as an investment and sourcing
destination. To that end, various trade or-
ganizations and chambers of commerce,
both foreign and domestic, sponsored the
exhibition, including the Myanmar Trad-
ers Association, Yorkers Trade and Mar-
keting Service from Hong Kong, and the
Association of Myanmar Garment Manu-
facturing entrepreneurs. A
On December 19th, Yatanarpon
Teleport Company held a launch
ceremony for two new products,
Ytune and Ytalk, at the MICT
Park in Kamayut Township,
Yangon.
U Aung Myat, the head of
product development at Yatanar-
pon, elaborated on the value his
company provides to consumers.
We always strive to offer ser-
vices which are really beneficial
to the public," he said.
Ytune gives customers the
option of using songs of their
choosing as ringtones on their
cellphones, which can be pur-
chased through a new online
portal Yatanarpon has established
for this purpose. Ytalk is a call-
ing card that allows for Internet
(VOIP) calling any where in the
world.
Unlike other VOIP solutions,
Ytune can also be used on
landlines and cellphones without
Internet access. Ytalk can also be
used on internet-enabled devices,
such as laptops, smartphones and
tablets, and calling cards are
available in various denomina-
tions in both Kyats and FECs. A
Yatanarpon
Teleport
launches
two new products
ACUMEN 9
News in Brief
April 2013
To mark its re-entry into the Myanmar
market, Western Union held an event at
the Parkroyal Hotel in Yangon on 12
th
January, 2013.
Money transfers with foreign coun-
tries, prohibited in the past due to finan-
cial sanctions, will now be possible us-
ing Western Union. Local banks includ-
ing Cooperative Bank, First Private Bank,
and Myanmar Apex Bank will now be
able to process remittances from any of
the five hundred thousand Western Union
agents around the world. Kanbawza
Bank, in particular, intends to partner
with Western Union in a big way by of-
fering money transfer services at 250
branches across Myanmar within the
next year.
Myanmar nationals working all over
the world will be able to send money
home within minutes. The receiver on
this side must know the code number
with which money was sent from the
other side. The recipients citizenship
card must be shown before the money
to be handed over," explained U Pe
Myi nt , the managi ng di rector of
Kanbawza Bank. Western Union is the
first American financial services com-
Western Union marks re-entry to Myanmar
pany to have returned to Myanmar after
most financial sanctions were scrapped
earlier in 2012. We are glad to be able
to facilitate easy, quick and smooth re-
mi t t ances servi ces f or peopl e i n
Myanmar," said Drina Yue, Western
Unions Managing Director and Vice-
President for Asia-Pacific operations.
We intend to provide current ac-
count services and offer loans. Extend-
ing credit should serve to accelerate
Myanmars economic development," he
continued. We promise to make con-
certed efforts hand in hand with our sup-
porting agent banks in order to estab-
lish remittance services for Myanmar
people living and working in various
parts of the world."
Standard Chartered Bank, a lead-
ing British bank, and Thailands Kasikorn
Bank have also opened branch offices
in Myanmar in conjunction with West-
ern Union. Other foreign banks are look-
ing into establishing links with local part-
ners in order to provide remittance ser-
vices. A
ACUMEN 11
Seminar on
Myanmar-Vietnam
intellectual property
investment and
business opportuni-
ties held
On November 20th, 2011, a seminar on
Vietnamese investment in Myanmar, with
a special focus on intellectual property, was
jointly held by the Union of Myanmar
Federation of Chambers of Commerce and
Industry (UMFCCI), the Myanmar branch
of the Asian Patent Attorneys Associa-
tion (APAA), the Embassy of Vietnam and
the Intellectual Property Association of
Ho Chi Minh City (IPA-HCMC).
Daw Tin Ohnmar Tun, a leading
Myanmar expert in intellectual property
law, gave a presentation on the prospects
and pitfalls of investment in Myanmar as
they relate to intellectual property pro-
tections. Dr. Daw Moe Moe Htwe, from
the Ministry of Science and Technology,
discussed the role of intellectual property
protection in promoting development, and
U Thein Aung from the APAA discussed
the potential for business-to-business links
between Myanmar and Vietnamese com-
panies.
As the notion of intellectual property
protection in Myanmar is quite new, Dr.
Nguyen Van Vien, chairman of the Intel-
lectual Property Association of Ho Chi
Minh City, Vietnam (IPA HCMC) explained
how his countrys intellectual property
regime protection works, and the poten-
tial lessons for Myanmar to be learned
from Vietnams experiences. A
Despite reforms granting em-
ployees the right to unionize
signed into law in March 2012,
employer-employee relations
in Myanmar remain strained.
More needs to be done to en-
sure that unionized employees
do not live in fear of domi-
neering employers, says Ko Ye
Naing Win, a spoke-sperson for
the Formation of Dispute
Settlement Arbitration Coun-
cil, a Yangon-based NGO that
conducts dispute resolution for
labour issues. After labour re-
forms were passed, the num-
ber of unionized workers in
Myanmar swelled to some
70,000 individuals. But due to
employer intimidation, some
20,000 have already left the
unions. It is widely perceived
among workers that unions
are inefficient, and are unable
to protect [workers] rights.
Unionized employees gener-
ally live in fear of their em-
Union members
under pressure from employers
ployers," he said. Members of
t he uni ons are rout i nel y
singled for harassment and
abuse, with union leaders re-
ceiving especially harsh treat-
ment. In such cases," Ko Ye
Naing Win explained, we
make formal appeals on the
behalf of workers. We have
also spoken with the govern-
ment departments that should
be responsible for protecting
workers. But the government
has thus far been unwilling to
intervene." There is a popular
perception that, to solve prob-
lems between employers and
employees, employers need to
recognize and respect the
rights of workers to organize,
and that the government
needs to educate employers
on the right of workers to form
unions. At present, there are
roughly 300 unions represent-
ing approximately 50, 000
workers across Myanmar. A
Feature
April 2013
Feature
The vast network of rivers that courses through Myanmar has
the potential to generate the electricity needed to improve liv-
ing standards and attract investment. However, if Naypyidaw
allows dozens of dams to be built without taking into account
ecological and humanitarian considerations, and exports most
of the electricity generated to Myanmars neighbours, prospects
for political reform in ethnic areas and economic development
across the board may be jeopardised.
By Alex Bookbinder
Photography by Thu Yein, Aung Kyaw Moe (New Image)
April 2013
ACUMEN 13
Myanmar is a land of saints and spirits.
Out of the diverse array of figures wor-
shipped here, Shin Upagutta- the saint of
all waters - summarises the relationship
between Myanmars people and its geog-
raphy perhaps better than all others. Be-
lieved to prevent storms and natural di-
sasters, and to safeguard those travelling
by sea or river, the reverence accorded
to Shin Upagutta serves to underscore the
important position Myanmars rivers play
in the countrys collective consciousness,
and their significance as a resource.
Myanmars other rivers pale in stat-
ure next to the mighty Ayeyarwaddy, by
far the countrys most important water
way. From its origin at the confluence of
the NMai and Mali rivers in Kachin State,
the Ayeyarwaddy flows south for some
2,000 kilometres to the Bay of Bengal,
passing through former seats of royal
power - Mandalay, Innwa, Sagaing, Bagan
- along the way. More than a simple con-
duit for information and trade, the
Ayeyarwaddy lies at the core of Bamar-
culture and identity.
Today, the most sought-after re-
source provided by Myanmars rivers is
electricity, both for export to neighbouring
countries and to improve Myanmars own
skeletal power grid. While its difficult to
argue that Myanmar isnt in massive need
of basic infrastructure, the sheer scale of
these projects, their likely environmen-
tal, social, and cultural costs, and their
questionable benefits for Myanmar itself
have caused their appropriateness to
come into question. Myanmars govern-
ment has pencilled in the construction of
at least 75 new power projects, 67 of
which are slated to be hydropower, ac-
cording to a report by Eleven News in
November 2012. But precious few of these
will meaningfully improve infrastructure
in Myanmar, as much of this capacity will
be built primarily to provide power for
export to Myanmars neighbours China,
India, and Thailand.
Even in the case of dams that will
produce electricity largely for domestic
consumption, power will be mostly gen-
erated in peripheral, underdeveloped
areas, and will be transported from there
to central Myanmar. Although rural resi-
dents of Myanmars restive minority ar-
eas will bear the brunt of the negative
effects of these hydropower develop-
ments, they unlikely to see many - if any
- of their benefits if reforms are not made.
If the Myanmar governments past poli-
cies are any indication, rural areas will
most likely not be granted easy access to
the electricity generated in their own
backyards.
Hydropower - in and of itself - is less
problematic than many other types of
power generation. It is renewable, cre-
ates no emissions, and can be imple-
mented in ways that respect the environ-
ment and the rights of people living in
areas affected by dams. But the sheer
number of projects set to go online in com-
ing years, and a pervasive lack of due
diligence throughout the construction and
development processes, bodes poorly for
the sustainability of Myanmars develop-
ment agenda. The mismanagement of
hydropower projects in Myanmar poses
a number of serious risks, including the
relapse of armed conflict, which may
serve to undermine investor confidence
and the international goodwill accorded
to President U Thein Seins government
in recent months.
The furore surrounding the Myitsone
dam, a massive Chinese-funded project
on the Ayeyarwaddy just south of the
confluence, exemplifies the pitfalls of hy-
dropower development in Myanmar to-
day. If and when it is completed, the dam
will flood an area the size of Singapore,
and displace an estimated 15,000 people.
The geography of the confluence, the
Kachin peoples most sacred site, will be
permanently altered, and the dams en-
vironmental impact will be felt all the way
downriver into Lower Myanmar. Given
the centrality of rivers - especially the
Ayeyarwaddy - in Myanmar life, the
Myitsone project is, unsurprisingly, highly
unpopular.
If the dam were to offer clear - cut
benefits to the people affected by it or, for
that matter, to people in other parts of
Myanmar, it might have managed to gain
more public support. But under the terms
of a secretive deal signed in 2006 be-
tween the former military junta and the
dams Chinese backers, 90% of the power
generated by the Myitsone dam would go
directly to China for a period of 50 years.
The fact that Myanmars people would
scarcely benefit from such an invasive
project was seen by the public as insult
piled on top of injury, prompting President
U Thein Sein, in September 2011, to an
ACUMEN 13
Feature
April 2013
nounce that construction would be sus-
pended until 2015.
The Presidents announcement was
hailed as a victory by prominent mem-
bers of civil society and opposition poli-
ticians, including Daw Aung San Suu Kyi.
But although the suspension was widely
lauded at the time, the projects detrac-
tors may have rejoiced too soon. Whether
or not the dams principal backer, the
state-owned China Power Investment
Corp (CPI), ever actually stopped work
at the dam site is not clear. According to a
recent report by activist group Burma Riv-
ers Network, a group of Chinese work-
ers remain at the construction site, and an-
ecdotal reports from the region suggest
that limited construction is still going on.
In a leaked note from March 2012
reported on in the national media, local
authorities requested supplies from
Naypyidaw in anticipation of an influx of
new workers and equipment from China
arriving onsite to restart work, via a sup-
ply road - still under construction - lead-
ing from the Chinese border to the dam
site. In June 2012, the International Com-
mission on Large Dams (ICOLD) issued
a statement confirming that the planners
of the Myitsone dam formally requested
an assessment on the project from inter-
national dam experts. Both pieces of evi-
dence suggest that CPI intends to resume
full-scale construction well before the
2015 moratorium expires.
China has long been an important in-
vestor in Myanmar. When Western com-
panies were forced to leave due to the
imposition of sanctions in the 1990s, Chi-
nese companies swept in quickly to fill the
void. Most major Chinese-backed, capi-
tal-intensive projects in Myanmar today,
either in progress or planned,were ap-
proved by the previous government be-
fore the November 2010 elections were
held. Given the historical indifference
shown to public opinion by previous mili-
tary regimes, President U Thein Seins
spurning of China, with the announcement
that dam project would be suspended, took
international observers by surprise. His
willingness go against the wishes of
Myanmars largest trading partner, many
claimed, was evidence that the new ci-
vilian-led government had become, for
the first time, responsive to the desires of
the countrys people, and saw taking stock
of public opinion in their policymaking
as necessary to maintain their own legiti-
macy.
Public opinion certainly factored into
the Presidents decision to suspend the
dam - evidence that construction has re-
sumed not with standing. But the peoples
desire alone was not enough to make him
change his tune. With sanctions having
essentially closed Myanmar off to West-
ern investment, the former military gov-
ernment had been forced into an uneasy
marriage of convenience with Myanmars
much larger neighbour to the North. In
2012, China surpassed Thailand to be-
come Myanmars largest foreign investor,
which, at 14 billion dollars worth of FDI
in 2011, amounted to 35% of all foreign
investment that year. While Chinas eco-
nomic footprint during the sanctions era
was comparable to that of other states, the
spectre of Chinese investment has come
to be considered particularly pernicious
by some elements within President U
Thein Seins government. The nature of
the investments China intends to make in
Myanmar, and its strategic aims in the
region, have prompted many in Myan-
mar to treat Beijings aims with suspicion.
The ostensible suspension of the dam
project was intended to realise two stra-
tegic goals at once: to placate an increas-
ingly outraged population, as well as
improve relations with the West. By up-
holding a democratic value Western gov-
ernments hold to be important - respon-
siveness to popular opinion - the Presi-
dent has sought to bring about a greater
level of engagement and interaction with
the West, in the eventual hopes of woo-
ing new Western investment and reduc-
ing Chinese economic dominance.
Companies from high-wage coun-
tries, both in the West and in Asia, have
expressed interest in investing Myan-
Given the historical
indifference shown to
public opinion by previous
military regimes,
President U Thein Seins
spurning of China,
with the announcement
that dam project would be
suspended, took
international observers
by surprise.
ACUMEN 15
mars manufacturing sector, as the coun-
try has the potential to develop into a
competitive, low-wage manufacturer.
Chinese companies, by contrast, are fo-
cused almost exclusively on exploiting
Myanmars natural resources. While 30-
odd years of economic openness have
brought hundreds of millions out of pov-
erty in China, the Peoples Republic re-
mains highly economically stratified, with
a wide gap between the manufacturing
powerhouses of the East Coast and the
relatively underdeveloped provinces to
the West. Beijing, keen to further devel-
opment at home, has no desire to see
Chinese manufacturing jobs go to Myanmar.
What Myanmar does offer China,
however, is abundant natural resources
right on its doorstep, especially conve-
nient for its development plans in Yunnan,
with which Myanmar shares a 2000-
kilometre border. Myanmars largely
undammed rivers are seen by Beijing as
important for the development of West-
ern China, and state-linked Chinese firms
have moved to develop similar hydropower
projects in neighbouring Laos as well.
The scale of Chinas planned in-
volvement in Myanmars hydropower
sector extends well beyond the Myitsone
project itself. On the NMai and Mali riv-
ers alone, China plans to build a total of
six dams upstream of the Myitsone
project, and has already completed one
dam to generate power for the construc-
tion of the Myitsone dam itself. Chinese
companies are also helping develop dams
underwritten by Thai interests elsewhere
in Myanmar, primarily along the also as-
yet- undammed Thanlwin (Salween) river.
Much like China, Thailand is keen
to exploit the power resources of its less-
developed neighbours in order to provide
cheap power for its own manufacturing
sector, centred along the Eastern Sea-
board near Bangkok. A Thai company,
MDX Group, along with a consortium of
four Chinese contractors and investors,
Feature
April 2013
began construction of the TaSang dam,
designed by a British firm, in central Shan
State in mid-2007, although not much
construction activity has taken place at the
dam site since 2008. If and when it is fin-
ished, the TaSang dam will be the tallest
i n Sout heast Asi a, produci ng over
7,000mW of electricity per day. Around
85% of its output is slated to go to Thai-
land.
Plans for at least five dams along the
Thanlwin were drafted under the former
military regime, and, if built, the vast
majority of the electricity generated by
them will go to China and Thailand. As
with the planned dams in Kachin State,
the proposed Thanlwin dams in Shan and
Kayah states lie in the middle of areas
long afflicted by civil war. While tradi-
tional wisdom has often equated devel-
opment in war zones with promoting
peace, dam building for distant clients at
the expense of local populations - as has
happened in the past in Myanmar - might
only serve to catalyse civil war to a greater
degree.
Despite a serious lack of infrastruc-
ture in rural areas, the government has
not announced plans to share the planned
hydroelectric bounty with communities
that will be directly affected by the dams
being built; hydropower developments in
Myanmars underdeveloped periphery
have a long history of not serving the
needs of the people most affected by them.
Dating back to the 1960s, the Lawpita dam
in Kayah State is Myanmars oldest, and
serves as a useful case study for the prob-
lems that irresponsible dam construction
can cause.
As with the latest round of proposed
dams, the power from Lawpita is trans-
mitted far away, directly to Yangon and
Mandalay, leaving Kayah State with se-
vere power shortages. Over four decades
of expansions, more than 12,000 people
have been displaced without proper com-
pensation, according to a 2006 report by
activist group Salween Watch. The flood-
ing of the reservoir swallowed thousands
of square acres of arable land and exac-
erbated water shortages, causing fish
stocks to dwindle. To date, 80% of Kayah
State s population has no access to
Myanmars national electricity grid.
The previous military governments
lack of regard for dam-affected commu-
nities in Kayah State has ensured that the
April 2013
current administration enjoys little popu-
lar support there. Over the years, perva-
sive human rights violations perpetrated
by government forces, and a fundamen-
tal absence of the rule of law, have driven
local people to support ethnic opposition
groups, most notably the Karenni National
Progressive Party and its armed wing, the
Karenni Army. Instead of treating the
ethnic peoples of Myanmars frontiers as
equal partners in development, previous
military regimes focus on national unity
at all costs allowed them to justify extract-
ing the resources they wanted through
summary subjugation, with no concern for
the human cost involved. In Kayah State,
the military has been accused of confis-
cating land by force without compensat-
ing its inhabitants, laying landmines, and
drafting local people to provide forced
labour.
President U Thein Seins govern-
ment has expressed an interest in end-
ing Myanmars myriad ethnic insurgen-
cies, a legacy that would be commendable
to leave if it is done by engaging ethnic
armed groups in good-faith dialogue. The
government has recently signed cease-
fires with a number of ethnic armed
ACUMEN 17
groups - most notably, the Karen National
Union in January 2012 - but ending open
hostilities without addressing the under-
lying dynamics of conflict will not be
enough to bring about lasting peace.
Naypyidaw will need to negotiate settle-
ments with ethnic parties to normalise
their political status in government, and
allow them to establish a role in state-
level and/or national politics. Without
binding commitments from the govern-
ment, however, getting non-state armed
groups to disarm will be difficult.
Although poor relations between
Myanmars central government and eth-
nic minorities have defined ethnic poli-
tics in the country for decades, irrespon-
sible development practices have exac-
erbated tensions that might have other-
wise been lessened through dialogue and
collaboration. Despite the fact that most
of the non-state armed groups operating
in Myanmar today started out as armed
independence movements, the vast ma-
jority have now expressed a desire to
remain part of an inclusive and demo-
cratic Union of Myanmar, so long as a
modicum of political power is devolved
to the state level.
The military has had a longstanding
fear of federalism, based on a belief that
devolving political power to ethnic minor-
ity regions will lead to the dissolution of
the Union. To ensure long-term stability
and economic growth, however, ethnic
minorities will need to be meaningfully
incorporated into the development pro-
cess. This will only occur if ethnic minori-
ties are treated as equal stakeholders in
the central governments development
agenda.
Accountability, transparency and
thorough impact assessments need to be
of principal concern when it comes to
hydropower development in Myanmar.
Contracts for the export of hydroelectric-
ity signed under the former military re-
gime, subject as they are to no account-
ability or oversight, will need to be re-
examined, despite the inevitable politi-
cal fallout with Myanmars neighbours
that is likely to ensue. Ensuring that
planned projects in remote and underde-
veloped areas move forward in ways that
will benefit local populations is crucial for
political stability, and are prerequisite for
lasting economic growth to occur.
17
The flooding
of the reservoir
swallowed thousands of
square acres of
arable land and
exacerbated water
shortages, causing fish
stocks to dwindle.
To date, 80% of Kayah
States population
has no access to
Myanmars national
electricity grid.
Feature
April 2013
Activist groups, such as the Burma
Rivers Network and Salween Watch,
have taken an absolutist stance against
hydropower development in Myanmar,
claiming that the environmental and so-
cial costs associated with dams outweigh
the benefits under all circumstances.
While many of their criticisms are legiti-
mate, blanket demonization of hydro-
power is counterproductive, as dams are
a relatively environmentally friendly way
of generating the power Myanmar will
need to improve its citizens standard of
living, at least when compared to viable
alternatives, like burning coal.
The way in which hydropower de-
velopment in Myanmar is slated to pro-
gress, however, is highly problematic.
While environmental degradation is an
inevitable result of dam building, the eco-
logical impact of these projects will be
devastating due to the sheer number of
projects set to be built. An unacceptably
high number of people will be displaced
by these projects, and the inadequacy of
property and compensation laws currently
in place - let alone mechanisms to enforce
them - leaves companies with little incen-
tive to ensure that those displaced by
these projects will be properly compen-
sated for their losses.
The pending hydropower export
deals signed with Chinese, Thai and In-
dian firms are a hangover from the former
military regimes policy of selling off
Myanmars natural resources at fire sale
prices at the expense of developing the
economy at home. Internationally isolated
and starved for foreign currency, the
former government likely felt that giving
foreign interests rights over Myanmars
rivers was a pragmatic way to get cash
fast. But in the wake of recent economic
reforms, and new interest in Myanmar
from western investors, exporting the
resources necessary to develop Myan-
mars inadequate infrastructure will only
damage the countrys growth prospects
in the long run.
Despite a general feeling of optimism
about Myanmars future prospects among
those familiar with the countrys economy,
the expected rush of would-be foreign
investors has amounted to little more than
a trickle thus far. While the red tape as-
sociated with going into business has
diminished considerably, and recently
passed foreign direct investment laws
should serve to protect investors interests,
a lack of basic infrastructure makes
Myanmar a less attractive investment des-
tination than it might otherwise be.
For all its natural endowments,
Myanmar should not be an energy-starved
country. Although the reliability of
Myanmars electrical grid has improved
steadily over the past few years, black-
outs are still unacceptably common, even
in major urban areas. Manufacturing
wages in Myanmar are the lowest in
Southeast Asia, but low wages alone will
not be enough to attract foreign invest-
ment; the savings to potential investors
in the manufacturing sector are offset by
the cost of dealing with the countrys poor
infrastructure. Additional capital costs
need to be incurred - buying diesel
generators and fuel, for example - in or-
der to guarantee factories a steady supply
of electricity.
If Myanmars current government re-
mains willing to send the lions share of
the countrys potential hydroelectric pro-
As Myanmar opens
to the world, the current
administration must
demonstrate the strong
leadership required to undo
the damage of the previous
governments mismanage-
ment, even if that means
straining relations
with Myanmars neighbours
in the short-term.
ACUMEN 19
duction abroad, foreign investors will
likely continue to ply money into other
countries in the region with better infra-
structure - such as Indonesia or Cambo-
dia - even if labour costs in those coun-
tries are higher. Attracting foreign invest-
ment, however, is not the only reason to
use Myanmars resources for domestic de-
velopment first. Responsible hydropower
development that respects the rights of
individuals and communities in dam-af-
fected areas, combined with good-faith
negotiations with non-state armed groups,
may help prevent new bouts of civil war
from breaking out.
Decades of neglect and oppression
throughout Myanmars frontier areas
have left the present administration with
a serious legitimacy problem. Harnessing
Myanmars natural resources to improve
standards of living for rural people and
ethnic minorities should be a priority, and
would serve to legitimate the govern-
ments development agenda in areas
where the benefits of Myanmars new-
found economic openness have not been
felt. Dams are invariably invasive, and can
have serious negative effects on the en-
vironment. While some hydroelectric
projects will be necessary to modernize
Myanmars infrastructure, the sheer num-
ber of projects currently on the books
would result in an ecological and eco-
nomic catastrophe - profoundly affecting
forestry, agriculture and fisheries - if all
of them were to be built.
President U Thein Sein has shown
a willingness to break with many of the
excesses, inefficiencies and absurdities of
Myanmar s former governments.
Myanmars rivers are an important re-
source that can hel p faci l i tate hi s
governments reformist agenda, but the
hydropower sector must be developed
cautiously if these reformsare to be du-
rable and sustainable. Rather than per-
petuate the patron-client relationships
that have come to define Myanmars re-
lations with its neighbours, sustainable
hydropower development can allow
Naypyidaw to develop the country s
economy with more diversified sources
of investment and serve to increase liv-
ing standards, as better infrastructure will
attract more foreign investment and pro-
vide greater opportunities for domestic
businesses to grow and prosper. An inclu-
sive, sustainable and comprehensive de-
velopment agenda - in tandem with po-
litical reforms that give ethnic minority
areas more control over their own affairs
- will be especially beneficial for the his-
torically neglected and marginalized ar-
eas where most hydropower develop-
ment would occur.
As Myanmar opens to the world, the
current administration must demonstrate
the strong leadership required to undo the
damage of the previous governments
mismanagement, even if that means
straining relations with Myanmar s
neighbours in the short-term. Respon-
sible hydropower development, in tan-
dem with political reforms and initiatives
to make ethnic minorities equal stake-
holders in the development agenda, must
replace the rampant, unchecked dam de-
velopment that looks set to export one of
Myanmars most crucial resources to
neighbouring countries against the
countrys best interests. A
Feature
April 2013
ecades of mismanagement and
economic stagnation have resulted
in a serious unemployment prob-
lem in Myanmar. Accurate figures are hard
to come by as the last nationwide census
was conduced in 1983, but a survey on
employment and poverty, released by Par-
liament in January 2013, found that some
40% of the country's labour force is unem-
ployed and that roughly 60% of the popu-
lation lives under the poverty line. To tackle
joblessness and poverty, concerned orga-
nizations and entrepreneurs have begun
to undertake job creation initiatives focused
on providing work opportunities for young
people.
Increasing personal income and cre-
ating jobs, especially for young people, is
critical for alleviating poverty and raising
standards of living, claims Myanmar Brew-
ery Ltd.s commercial director, U Myint Zaw.
If four members of a five-member house-
hold were to work, rather than two, the
additional productive members of the
workforce would add substantially to that
households total income. Indirectly, fami-
lies with greater income are able to con-
sume more food, clothing, etc. With greater
buying power comes greater spending,
which - if incomes rise significantly - should
allow Myanmars economic pie to grow
across the board," he said.
Despite the fact that foreign compa-
nies have begun to invest in Myanmar, it
is important that local firms continue to
expand, despite the challenges - real or
imagined - they might face. To compete
with foreign firms, local companies need
to overhaul their organizational structures,
work to optimize their costs and find quali-
fied workers with the ability to thrive in
the competitive pressure of a globalized
economy. Given Myanmars attractiveness
as a low-wage producer, the manufactur-
ing sector is set to expand considerably. If
the manufacturing sector is promoted prop-
erly, new jobs will be created for millions
of workers, which should serve to sub-
stantially reduce unemployment.
But how should potential employers
best contact qualified potential employees?
U Aung San, a consultant with the Naing
group, a construction company in Yangon,
thinks that employers need to make a con-
certed effort to find workers. Events ca-
tering to job seeking are in order. If the
state were to hold job fairs in conjunction
with big companies, new job creation- and
the consequential alleviation of poverty that
would result - would receive a big boost,"
he explained.
Myanmars unemployed include many
fresh graduates. Despite their high levels
of education, they remain jobless as em-
ployers are unwilling to hire them due a
perceived lack of work experience. Daw
Khin Lapyayt Wun, a manager at PKK
Feature
D
April 2013
ACUMEN 21
Employment Agency, elaborates. The main
weakness of todays job seekers is that they
want to work as soon as they have fin-
ished their schooling or university educa-
tion. Those with work experience are eas-
ily employed. While opportunities abound
for qualified persons, the situation is more
difficult for fresh graduates."
Nevertheless, companies should start
employing eager and motivated youths,
taking into consideration their level of aca-
demic achievement alone, she explained.
If employers fail to overlook recent gradu-
ates level of motivation, despite their lack
of formal experience, and continue to
prioritise those with more experience, ca-
pable young people may be left in a lurch.
Although people are struggling worldwide
in these times of economic uncertainty, they
have a lot to offer if given opportunities to
work.
U Linn Htun of Yangon-based Devel-
opment Consultancy Co., Ltd. recognises the
need to incorporate recent grads into the
workforce as soon as possible. Most com-
panies usually look at the years of work
experience in would-be employees, which
constitutes great hindrance at job inter-
views. Thus, young people drift into pro-
longed unemployment. It would be ben-
eficial for youths if companies were to of-
fer training programs, with the eventual
goal of regular employment. Otherwise,
young people will be trapped in an end-
less cycle - joblessness leading to jobless-
ness for lack of experience. Its a classic
catch-22," he said.
Recent grads may also forego employ-
ment they consider to be less than ideal,
as they would prefer to find work related
to their field of study. Ma Yamin Shwe Sin,
an educational consultant based in
Kamaryut Township, Yangon, remarked:
Most people would prefer a job related to
their studies, and turning down unrelated
jobs might be a reason for the voluntary
unemployment of so many. But this doesnt
need to be the case. As more job opportu-
nities become available, unemployment will
go down. At present, applicants for scarce
positions greatly exceed the number of jobs
on offer, so creating more job opportuni-
ties overall is crucial," she said.
Myanmar has plenty of educated
people, but low salaries have prompted
many of the countrys best and brightest to
seek out opportunities abroad. While it is
unrealistic to expect either domestic or for-
eign companies to offer salaries commen-
surate to those on offer in more developed
economies, skilled workers might be
tempted to stay in the country if better re-
muneration was offered. To prevent the
outflow of the skilled labour force crucial
for Myanmars development, firms have
an obligation to provide salary levels high
enough to stop this brain drain of skilled
workers from the country.
Ultimately, the conundrum of unem-
ployment in Myanmar will only be solved
if all stakeholders act in a transparent
manner - job seekers, the government and
woul d-be empl oyers al i ke. If the
governments policy is effective and indus-
try is receptive to the demands of the
workforce and international markets,
Myanmar will be able to decrease its un-
employment rate while increasing its citi-
zens purchasing power and living stan-
dards. A
ACUMEN 21
Cover Story
April 2013
Cover Story
April 2013
ACUMEN 23
C
oca-Cola and Pepsi the towering giants of
the global soft drink industry havent had
an official presence in Myanmar for de-
cades. While their products have been available
for years as unofficial imports, the easing of Ameri-
can sanctions has brought with it a full-on cola war
to Myanmar, as Coke and Pepsi jostle for space in
an increasingly crowded domestic beverage mar-
ket. Aside from each other, the beverage titans will
have a host of domestic producers to compete with
for market share.
Dr. Sai Sam Htuns Loi Heng group is a major
player in Myanmars beverage industry. Our Prof.
Dr. Aung Tun Thet sat down with him to discuss
Coca-Colas official reappearance in the country, and
what it means for the future of Myanmars bever-
age industry.
Prof. Dr. Aung Tun Thet : As Myanmars transition towards
democracy has progressed, foreign investors have found
doing business in Myanmar to be an increasingly attrac-
tive proposition. As you know, Coca-Cola intends to ex-
pand its footprint in Myanmar in a big way. What are your
thoughts on that?
Dr. Sai Sam Htun : There are many pros and cons for our
country and economy associated with Coca-Cola making a re-
appearance in Myanmar. For the better part of the 20
th
century,
there were three countries where Coca-Cola didnt do business
North Korea, Cuba and Myanmar. So wed like to welcome
Coca-Cola back. Their presence will benefit Myanmar, either
directly or indirectly. While many countries and foreign inves-
tors are wary of making their way back to Myanmar, Coca-
Cola has been among the first multinationals to invest, setting a
strong precedent and example for others to follow.
Pepsi went on sale in the Soviet Union just as Khrushchevs
reforms got underway. You think theres a precedent there
for Myanmar?
That might be the case. Theres no way Coca-Cola would
have reinvested in Myanmar without the lifting of sanctions
and the express blessing of the US government. So its a good
thing that Coca-Cola has announced that its coming back. If the
United States didnt want investment in Myanmar, Coca-Cola
wouldnt be coming. I think both the US government and Coca-
Cola feel that theyve seen good progress in Myanmar, so theyve
chosen to come back.
Given their absence for so many years, it may be difficult
for them to compete against local producers on their own.
How will they go about making their investment?
There are two potential business models that Coca-Cola or
other companies operating in this sector could follow. The first
is where their entire operation is one-hundred-percent owned
and operated by them directly straight foreign direct invest-
ment, if you will. But under the current legal regime, they will
only be able to do this gradually. At this point, theyre only able
to hold a 49% ownership stake at most the majority partner
in joint ventures must be a local company. But over time, this is
likely to change: the government has expressed an interest in
allowing foreign companies to own a greater share of joint
ventures than they are permitted to own now. Over time, Coke
may try to become the exclusive owner of their distribution
and/or bottling operations in Myanmar.
Do you think they would establish their own 100-percent
foreign-owned manufacturing and distribution facilities if
the government were to allow them to?
Theyre playing it cool for now, and havent made any
mention of their plans publically. At this point, theyre willing to
ACUMEN 23
Cover Story
April 2013
col l aborat e wi t h l ocal
businesspeople and share
the wealth. Youre right that
they arent the majority
shareholder yet, but with a
legal framework in place
that allows it I expect they
would establish their own,
bespoke bottling plants
distribution networks with-
out local partners involved.
Theyre already here, so
theyll probably be interested
in making a long-term in-
vestment.
Establishing their own
facilities without local partners would be the first model,
then. I can assume that the second model youre going to
mention involves retaining a local partner?
Exactly, yes. The second model Coca-Cola could follow would
be to retain a partnership with a local counterpart, even if
theyre allowed by the government to set up a one-hundred-
percent foreign-owned subsidiary. This relationship would pri-
marily be retained to minimize their operational risks. For bet-
ter or for worse, doing business in this country is widely con-
sidered to be a risky proposition, so, instead of rushing into the
Myanmar market, theyll take it slow, make cautious moves.
Theyre well positioned because what they do is relatively niche,
at least compared to an operation like my own: theyre in the
cold drink business, but arent involved in producing beer or
liquor. Aside from the risk management factor, foreign inves-
tors in the beverage industry might acknowledge that there is
an advantage to partnering with a local bottler or distributor
without marginalizing it in the marketplace or taking it over
directly. This is because established local companies often have
greater distributional reach than a new entrant would be able
to develop, not to mention specific know-how on how to do
business in this country that new entrants invariably lack.
How about management?
As far as I know, the management will be 90 percent local.
Senior management some of whom will come from abroad
will be there primarily for oversight. Coca-Cola tends to man-
age its operations well wherever it goes in the world.
Do they need product specialists? Management that is spe-
cifically familiar with the intricacies of the food and bev-
erage sector in Myanmar?
No, they dont. The business model is pretty straightforward.
Their main job is managing retail distribution and especially
marketing. Coke is the kind of product that the company
wants to position as something you pick up automatically when
you enter the store.
What do you think of their advertising?
When Coca-Cola enters the Myanmar market, youll see
red signs everywhere! On football fields, on TV, etc. Domestic
producers simply wont be able to compete. For now, foreign
brands like Coke and Pepsi will take charge of branding and
marketing while local companies will be responsible for distri-
bution and sales a relationship that may change if these com-
panies choose to establish their own bottling plants and distri-
bution networks in the future.
So their responsibility is marketing and advertising, and
they will outsource everything else to us (Myanmar na-
tionals)?
Our responsibility is to manufacture the product, and to
distribute it. For now, at least, were going to have to operate
like franchisees, if you will.
If and when they establish their own manufacturing facili-
ties, what do you think their production capacity is going
to be like?
Prof. Dr. Aung Tun Thet
When Coca-Cola
enters the Myanmar
market, youll see
red signs every-
where! On football
fields, on TV, etc.
Domestic producers
simply wont be able
to compete.
ACUMEN 25
That is going to be an important factor. The sheer amount
of capital at their disposal means theyd be able to establish
something quickly that would outstrip the capacity of our facili-
ties. Coca-Cola has an extremely strong brand, which should
work in their favour over domestic brands. In developing coun-
tries, people tend to prefer foreign brands. Id imagine that in
this country people will prefer to drink Coca-Cola over our
brands - not that thats a reflection on the quality of their prod-
uct relative to ours, just that their brand is such a force to be
reckoned with.
So do you think you can keep your brands viable by com-
peting on price?
They wont make it easy for us! Coca-Cola is such a large
company that it can afford to run its operations with minimal
profits or even at a loss for a few years in order to build mar-
ket share.
Now that Coca-Cola has signaled its intention to invest, do
you think other foreign firms are going to follow suit?
Well, Pepsi is on its way. F&N (Fraser and Neave, from
Singapore) is also likely to get in on the action. The competition
should be stiff, and if domestic producers are unable to inno-
vate, theyll get lost in the shuffle.
So domestic producers dont have a choice? To stay alive,
will domestic companies need to cooperate with the large
international brands?
If they choose to cooperate with us, wed be happy to
cooperate with them. As I mentioned, domestic firms will be
producing their products for them, at least at first. If we (Loi
Hein Group) cooperate with foreign beverage companies, other
companies will, too. I think its pretty well understood in the
industry in Myanmar that trying to compete directly with the
foreign giants is futile. The only way were going to be able to
survive is to collaborate.
Do you think youre going to be able to retain your inde-
pendence?
I should clarify: Im referring to the soft drink market only.
There, it will be difficult for us to compete, but we (Loi Hein)
should still be very competitive to when it comes to purified
water. And our energy drink brand Shark is strong enough
to compete directly with the big boys. In Thailand, Shark and
Red Bull provide stiff competition for each other; in the energy
drink sector, the majors are going to be forced to play catch-up
with us. In Vietnam, for example, Coca-Cola just bought the
rights to Samurai, which isnt the number one brand. Shark
and Red Bull are.
In Myanmar, the Shark brand is very strong, and has
international cachet that our soft drink brands do not. When it
comes to energy drinks, were incumbents that will be much
harder to dethrone. Ultimately, soft drinks are trendy. People
in America accept that drinking Coke isnt good for your health.
But most people drink Coke every day because its fashionable
to do so. So domestic producers dont need to be afraid. Be-
tween our purified water business, the energy drinks and the
joint ventures, well be alright. But were going to need to be
flexible and bring our operations up to international standards.
We will need to improve the efficiency of our staff.
It sounds like we have to be ready!
Of course! I dont know much about other sectors. But as
far as the soft drink industry is concerned, I have to be ready.
Coca-Cola has thrown down the gauntlet and offered us a real
challenge. If they ultimately decide to manufacture domestically,
it will be very challenging for us.
Did you hear that (Mayor) Michael Bloomberg has banned
sales of soft drinks with sugar to children in New York
City?
That goes back to what I was saying before. Coca-Colas
brand is extremely strong. Its common knowledge that drink-
Dr. Sai Sam Htun
Cover Story
April 2013
ing the stuff is bad for you. Everyone knows it, but people keep
drinking it.
So Coca-Cola is now going to be employing Myanmar staff.
Your business is in the same sector, therefore Id imagine
youre about as expert as it gets on the state of the bever-
age industry in Myanmar. But is Coca-Cola going to able
to find the local expertise it needs? Is there a shortage of
knowledgeable professionals in Myanmars beverage in-
dustry?
The beverage industry really doesnt need experts because
its so low-tech. A girl with high school education would know
how to sell the product if we were to train her. The only in-
stance where experts are really needed is when it comes to
strategic planning and designing business models.
So Coca-Cola et al. dont need to worry about finding
market experts?
Not at all. And they wont be able to steal away our ex-
perts either. Theyll train their own. Local companies wont
provide the management expertise theyre going to need
thatll all come from their side.
If you were to be able to experience their management
process, do you think that their strategies would be some-
thing youd find it useful to replicate?
Sure, we can imitate them. Its proven beneficial in other
industries, so why not in ours? It might not be a bad idea to
copy foreign companies management styles - how Chinese
companies manage to be so efficient, for example. After a while,
well be able to transition from copying foreign companies man-
agement styles to developing to our own innovative and locally
appropriate style.
The ASEAN Economic Community is set to become a re-
ality in 2015, which will result in a much greater func-
tional integration of all of Southeast Asias economies. So,
technically, if we in Myanmar are able to produce bever-
ages at a sufficiently low cost, wed be able to sell our prod-
uct in Thailand without trade barriers. Do you think there
are opportunities here for Myanmar?
Absolutely, there will be. Here, the electricity and wages
are cheaper; Myanmar products will also be able to be ex-
ported to neighbouring markets outside of ASEAN, such as In-
dia and China.
So do people in Myanmar have a good opinion of Coca-
Cola, all things considered?
Yes, most certainly. I think people view Coca-Colas arrival
as a tangible symbol of just how far this country has come and
how things are changing substantially for the better. This coun-
ACUMEN 27
try still faces serious problems, but Coca-Colas re-entry is noth-
ing if not a positive sign.
When Coca-Cola invests in Myanmar, how much do you
think their initial capital investment is going to be?
Not too much. Given the perceived risks associated with
large-scale capital investments in Myanmar, its unlikely Coca-
Cola will establish operations straight away. Their domestic
partner will act as a sort of franchisee, a share of whose profits
Coca-Cola will be entitled to. Later on, once the company pur-
chases property and builds facilities, their dollars will flow to-
wards us.
How many billions of dollars will they invest?
In Southeast Asia, we cant talk billions. Economies here
are just too small. But in Thailand, Coca-Colas investment was
worth US$450 million, so that number may be an indication of
the numbers well be seeing for Myanmar.
In order to compete with Coca-Cola et al. in the long run,
what will Myanmar companies need to change about their
operations?
Well, weve already hired a foreign CEO to get our opera-
tion up to speed with international standards. We pay him
US$15,000 per month. He has lots of experience in the bever-
age industry. Hes been working with us since September 2011.
That, in my mind, is preparation. If we cant find a professional
in the field domestically, well employ foreigners. One day,
Myanmar people will become experts in this field. Paying a
foreigner a salary of US$15,000 is too much, you know. But we
would be happy to hire Myanmar-national experts who have
gone abroad and learned from their experiences. Its crucial
that we, as a country, work to get our operations up to interna-
tional standards.
What about the capacity of the staff to deal with all of this
change?
Well, thats where we as employers step in. Its imperative
that our people are trained properly. Its difficult to blame their
poor capabilities on them individually, because our education
system is woefully inadequate. For example, if I were to ask a
student with a distance education degree, How many days
have you gone to university? a common response might be 30
days within a three-year period or 10 days within the span of
a year. Its deplorable. So what can we do to solve this prob-
lem? Much of it comes down to government budgets, which
are completely inadequate for both education and health.
Thank you very much for your time. A
April 2013
B2B Talk
April 2013
B2B Talk
ACUMEN 29 ACUMEN 29
On October 12
th
, 2012,
Myanmar B2B Management
Magazine (ACUMEN) held
a panel discussion between
various executives in the
airline and travel industry. Led
by Dr. Aung Htun Thet, the
panel discussed Myanmars
airline industry, its prospects
for growth and the challenges
the sector faces heading into
2013. Panelists included U Kyi
Win, the CEO of Asian Wings
Airlines; U Htoo Thet Htwe,
the Managing Director of Air
Bagan; U Moe San Aung, the
Managing Director of Air KBZ;
and U Phone Paing Oo, the
Managing Director of
Ayarwaddy Legend Travels
and Tours.
April 2013
B2B Talk
Dr. Aung Tun Thet : Mingalaba to all present. Today, were
going to discuss the state of Myanmars airline industry, and
the changes the sector is likely to experience as the travel and
tourism sector expands. Myanmars poor road infrastructure
makes developing the airline industry important for the countrys
economic, political and social well-being. Id like to start the
discussion by asking U Kyi Win about Asian Wings history
and future business plans.
U Kyi Win : Asian Wings Airways was established on Sep-
tember 17, 2010, although we only obtained a business license
from the Myanmar Investment Commission (MIC) on January
12, 2011. We are licensed to fly both domestically and interna-
tionally, although weve chosen to focus on domestic opera-
tions only for the moment. We intend to offer international
flights in the future. The Directorate of Civil Aviation (DCA) is
the regulatory body that governs the airline sector in Myanmar.
For an airline to be allowed to operate, it must obtain two
certificates: a Permit to Operate, as well as an Operator Cer-
tificate, both of which are issued by the DCA. We received
both on January 24, 2010. Flight operations commenced a few
days later on January 27
th
, starting with a daily Yangon Nyaung
Oo Mandalay Heho Yangon route. We now service a total
of 13 destinations, with flights originating in both Yangon and
Mandalay.
Dr. Aung Tun Thet : Thank you for sharing information about
your company. Now, U Htoo Thet Htwe, please give us some
information about Air Bagan.
U Htoo Thet Htwe : Air Bagan started flying in November
2004, and was the first wholly private airline in Myanmar; in
the past, all airlines were required to enter into joint ventures
with the state carrier, Myanma Airways. At present, we oper-
ate flights to 19 destinations, including Chiang Mai two times
per week. In conjunction with MAHA tours, we operate char-
ter flights to Bodhgaya once per week.
Dr. Aung Tun Thet : U Moe San Aung, please give us some
information about Air KBZ.
U Moe San Aung : Air KBZ has operated with a fleet of two
ATR-72 500s since April 2011, and we expect to add two more
ATRs to our fleet soon. We fly to 13 destinations, and expect to
add Putao and Bhamo to the list in the near future.
Dr. Aung Tun Thet : How are relations between your airline
and MAI (Myanmar Airways International)?
U Moe San Aung : MAI is 20 percent owned by KBZ and 80
percent by the government. We are responsible for taking some
international passengers to domestic destinations connecting
to MAIs international flights. We do have a permit to fly inter-
nationally, but only operate on domestic routes at this time.
Dr. Aung Tun Thet : Lets hear what U Phone Paing Oo has to
say about his tourism business.
U Phone Paing Oo : Ayarwaddy Legend Travels & Tours was
established in July 2007. So were in our sixth year of exist-
ence, and have established a branch office in Mandalay. We
are involved in both domestic and international tourism, and
offer services to a wide variety of domestic and international
clients. We also arrange conferences and exhibitions, and deal
with the logistics associated with these events for our clients.
Dr. Aung Tun Thet : What are your plans for 2015, when
AFTA (the ASEAN Free Trade Area) and AEC (ASEAN Eco-
nomic Community)go into effect?
U Kyi Win : As ASEAN is set to introduce an open-skies
policy between member states, Myanmar will be obliged to
allow international airlines unrestricted access to our airports.
Seven international airlines are currently allowed to fly here,
but domestic airlines are not in a position to compete with
them. I have learned that two new domestic airlines will be
granted operating licenses in the near future, two of which
intend to launch international services. If Myanmars aviation
industry can get its act together and pool resources instead of
maintaining the status quo of smaller airlines competing with
each other Myanmar-based airlines will be much better
equipped to compete with international airlines. The govern-
ACUMEN 31
ment should protect domestic airlines, because we havent been
profitable. For as long as weve been around, Asia Wings has
operated at a loss. In spite of our unprofitability, we still oper-
ate because the authorities have requested our help to meet
Myanmars air transport needs. Im not saying that theres any-
thing wrong with international airlines flying to Mandalay or
Yangon, for example, but domestic airlines need to be allowed
to maintain a monopoly over domestic flights. If this sort of
protection is maintained, I believe that Myanmars airlines
should see sustained growth and be able to compete with for-
eign carriers in the long run.
Dr. Aung Tun Thet : Id like to know what preparations, if
any, Ayarwaddy Legend is making to provide services for the
Western tourists expected to arrive in Myanmar in unprec-
edented numbers in the near future.
U Phone Paing Oo : As far as promoting our tourism business
is concerned, we need to obtain internationally recognized
qualifications ISO certification, for example. Without such
standards in place, its difficult to compete with foreign compa-
nies. Were working on capacity-building in-house to raise our
standards.
Dr. Aung Tun Thet : U Kyi Win, what challenges does your
business face as the aviation industry in Myanmar changes?
U Kyi Win : The single biggest problem
we have to contend with is the price of
fuel, which now accounts for 70 to 80 per-
cent of the airlines operating expenses.
Airplane fuel used to be roughly 2,500 kyats
to the gallon, but as of April prices have
increased to roughly US$4.5, or 4,000 kyats.
Our ATR planes consume fuel at a rate of
210 gallons per hour; we clocked 5093
flight hours last year, and as business has
increased, we have seen a substantial in-
crease in our fuel costs. Another challenge
we face is what is called fuel ride, in avia-
tion parlance. On our flight from Myeik to
Kawthaung, for example, it would be theo-
retically possible to take on a minimal
amount of fuel while carrying a full pas-
senger load, so long as the plane would
be able to refuel at its destination. But as
is often the case in Myanmar, there might
not be enough fuel available in Kawthaung,
so our planes have to carry all the fuel
they will need to make the return trip,
adding weight and thus cost. Its also diffi-
cult for us to acquire spare parts for our
aircraft. In most countries, such parts are
not subject to import duties, but in Myanmar, we pay import
duties that increase based on the value of the pieces we wish
to import. To bring Myanmar in line with international avia-
tion norms, aircraft parts must be exempted from import du-
ties.
Dr. Aung Tun Thet : In terms of foreign competition, I agree
with U Kyi Win in general, but I think that protectionism might
be perceived as corrupt in light of ASEANs moves toward
regional economic integration. If possible, Myanmars aviation
industry should try to promote itself rather than insulate itself
from foreign competition. Does Air Bagan have any plans to
expand, U Htoo Thet Htwe?
U Htoo Thet Htwe : Yes, we are currently in the process of
expanding our fleet; we intend to acquire another ATR-72 by
the end of the year. As U Kyi Win noted, we run Air Bagan at
a loss just to promote tourism development, and its true that
the government should protect domestic airlines from foreign
competition. When we enter the open-skies agreement in 2015,
we will likely face tremendous difficulties competing with gi-
ant foreign airlines.
Dr. Aung Tun Thet : Does Asian Wings have any expansion
plans, U Kyi Win?
April 2013
B2B Talk
U Kyi Win : When the open-skies agreement is put in place,
we will be allowed to penetrate foreign markets, just as for-
eign airlines will be allowed to do here. JetStar already has a
codesharing agreement with MAI for international flights, and
Air Bagan has experience flying to other regional markets.
Were not as experienced in this regard, but have an operating
license that allows us to expand internationally if we want to.
Well start by servicing regional markets first, and if that goes
well, well broaden our horizons to destinations further afield.
U Moe San Aung : Although KBZ has focused on the domes-
tic market for now, were keen to go further. When we receive
our new ATR-72 600, which we anticipate will occur in De-
cember, we will be the first airline in the region to operate this
aircraft variant. The 600 variant of the ATR 72 is a substantial
improvement over the 500, boasting a glass cockpit and touch-
screen instrumentation. As our domestic destinations tend to
be fairly close to one another, we are unlikely to purchase
aircraft better suited to servicing long-haul routes. ATR prod-
ucts suit our needs perfectly, because of their fuel efficiency on
short-haul routes.
Dr. Aung Tun Thet : What is demand for air travel like among
locals? One might imagine that consumers would prefer to fly
rather than travel by bus or train. Yet air travel remains out of
the financial reach of the majority of people in this country,
and so the cost of flying must go down for the sector to grow.
Do you intend to introduce flights at more reasonable price
points?
U Kyi Win : You raise a really important point. Lets use the
Chinese mindset as an example. Even as recently as four years
ago, trains were the dominant mode of long-haul travel in
China. People were afraid of flying, and cars were unaffordable.
Old Chinese trains covered long distances, but could take days
to reach some destinations. Trains were crowded to the point
where even going to the toilet became an arduous task. But
despite the discomforts of train travel, it took air travel a long
time to catch on. Over the past few years, flying has become
much more common in China, as ticket prices have gone down
and the media has promoted flying as being safe, affordable
and convenient.
There is still a perception among the Chinese public
that flying is unsafe, but thats a myth that can be debunked by
looking at the statistics. According to research conducted by
the ICAO (International Civil Aviation Organization), for every
thousand car trips, one person is killed in the United Kingdom.
Its even worse in America, where four people are killed for
every thousand car trips that are made. But the global fatality
rate for airline travel is one person killed for every million
passengers carried. It should be abundantly clear that air travel
is far safer than travelling by car or bus. I must say, though, I
personally prefer to drive instead of flying; because I used to
be a pilot, and I dont really enjoy being on flights that Im not
in command of. Sure, call me conservative; Im happy to take
the bus, which is usually how I travel unless its unfeasible to
do so.
Consumers in Myanmar will need to change their
attitudes towards flying. When some of those statistics I men-
tioned were published in a story that ran in a Wuhan, China-
based local paper, the local airline reported a spike in demand
perhaps not surprising, given that people were made aware
that driving is 250 times more dangerous than flying! Every-
day, new airlines are emerging throughout the Asia-Pacific
region. As of 2012, there are six airlines based in Myanmar,
which carried a total of 120,000 passengers this past summer.
I think thats far too few. In China, people have come to aspire
to fly at least once in their lives. We need to introduce similar
notions in Myanmar to make the airline industry here sustain-
able.
Dr. Aung Tun Thet : What growth opportunities do you see in
the travel and tourism sector, U Phone Paing Oo?
ACUMEN 33
companies that want to export high-end vehicles to Myanmar,
for example, might choose to fly them over. Given how under-
developed the market for air cargo is, that might be another
line of business for us to consider, but we should wait and see
if there will be any favorable changes to customs rules and
commercial taxation.
Dr. Aung Tun Thet : If you have anything else to discuss,
please do so.
U Htoo Thet Htwe : In Myanmar, qualified workers in the
airline business are hard to come by. Granting operating li-
cences to new operators will only exacerbate this problem;
the government should put a reasonable limit on the number
of new airlines that are allowed to operate.
U Kyi Win : Another recent ICAO study claims that there will
be a global crew and cockpit staff shortage in coming years.
We, as the leaders of Myanmars aviation industry, should at-
tempt to fill this need, and should be in the business of training
skilled employees and technicians. Myanmar would benefit
greatly from the establishment of a civil aviation academy,
whose goal should be to produce aviation workers with the
kinds of skills and expertise needed to work internationally.
Dr. Aung Tun Thet : In conclusion, I would like to express my
thanks to all of you for taking part in this discussion. I duly
note your suggestions, particularly those relating to making
domestic airlines in this country profitable, as well as the no-
tion of setting a civil aviation academy. Both will need to be
priorities as we strive to build Myanmars airline industry. All
of you mentioned that you felt that Myanmars tourist industry
should remain owned and operated by Myanmar people rather
than of foreigners, who might not be as knowledgeable about
Myanmars culture and unique characteristics as locals might
be. I look forward to seeing where Myanmars airline industry
is headed, and I thank you all for your time. A
U Phone Paing Oo : Weve seen a massive increase in tourist
arrivals in the past year, but Myanmar still has a long way to
go when compared to its regional neighbours. Thailand re-
ceives about 17 million tourists per year, and Vietnam receives
about 7 million. Barely one million tourists arrived in Myanmar
over the past 12 months. Im confident more tourists will arrive
after 2015, when the ASEAN Tourism Strategic Plan goes into
effect. The openness it is set to promote should see some 25
million tourists travelling around the region annually. The tour-
ism sector in Myanmar is only going to grow, and, by working
together, the tourism, hotel, and airline industries should all
prosper.
Dr. Aung Tun Thet : Business to business- type partnerships
between firms operating in different sectors, both foreign and
domestic, have come into vogue lately. Have you established
formal partnerships with businesses outside of the airline in-
dustry - for example, with catering providers?
U Htoo Thet Htwe : As an airline, we have strong links with
lots of travel companies. Much of our business comes from
ticketing agents, as well as companies that offer package tours.
I suppose you could also put our interline agreements with
international airlines under the umbrella of B2B relations.
U Phone Paing Oo : We partner directly with a number of
hotels. River cruises are becoming increasingly popular as tour-
ism in Myanmar expands, and this is a market we are keen to
explore further.
Dr. Aung Tun Thet : Do you plan to introduce cargo services?
U Kyi Win : Thats a very good question. There are no domes-
tic air freight companies currently operating in Myanmar. De-
mand for air-freight services across the Asia-Pacific has gone
down recently, due to a combination of decreased demand for
manufactured goods and rising fuel prices. But there are nev-
ertheless prospects for future growth; Korean and Japanese
April 2013
Opinion
M
yanmar has witnessed an exodus of workers over
the past few decades, and many of them have
expressed interest in returning now that recent
political and economic reforms seem to be durable. In search of
greener pastures, Myanmar citizens have travelled far and wide
to eke out a living, and many have come to reside permanently
in other countries.
Due to a lack of economic opportunities and political
repression in the past, Myanmar workers have fled in droves
in search of opportunities overseas. Much of what is available
to them abroad is far from ideal, and in most cases they are
afforded few legal protections. Unskilled Myanmar workers
tend to do the dirty, difficult and dangerous jobs (known as the
3Ds) in foreign countries that locals are reluctant to perform,
and despite the dangers involved, wages tend to be low. As
most economic migrants take whatever work they can get, they
are often forced to take jobs that do not grant them much dignity.
Myanmars foreign workers are a stoic bunch - they regularly
endure bullying by abusive employers, sadistic overseers and
nasty co-workers without reacting negatively. They need to be
able to ignore the adverse aspects of their situation in order to
be able to stay abroad. As they have nobody else to depend on,
they are forced to submit to abuses handed down to them by
their employers abroad. These are facts that need to be discussed
openly, not shied away from.
While many Myanmar workers will undoubtedly choose to
remain overseas, the recent changes in Myanmar have begun
to tempt some of these workers abroad to return home. Increased
April 2013
Opinion
ACUMEN 35
transparency and government accountability has served to
improve working conditions. Migrating abroad takes a toll on
workers, because - regardless of their motivations for leaving -
being far from parents, friends and family is always difficult. As
the saying goes, East or West, home is the best!"
It is inevitable that much of Myanmars labour force abroad
is going to come home. There are millions of Myanmar workers
in neighbouring countries; some who started out as low-level
labourers have worked their way up the value chain to become
skilled technicians. Their efforts and expertise serve to improve
the productivity of the foreign countries they live and work in;
Myanmars development process would benefit greatly if they
were to bring their expertise back here.
Over the past three or four decades, an influx of cheap
foreign labour, from Myanmar and elsewhere into other countries
in the region - Thailand and Malaysia, for example - has served
as a motor of economic growth for those economies. Wages for
foreign workers are low and the demands made of them are
high. Those that go to work abroad are often tricked into slavery
and their rights are trampled upon, justified under the premise
of them being illegal migrants. Exploitation remains rampant.
Such experiences are unfortunately all too common among
Myanmar workers that have gone abroad to work, and it is
difficult to exaggerate the scale of the problem.
As may workers will likely be tempted to return, it is important
to enshrine good working conditions into law. Nobody wants to
be a permanent visitor in a foreign country; everybody wants an
opportunity to work in dignity in their homeland. Those that are
oppressed abroad must be given the opportunity to realize their
dreams at home and be given prospects to do meaningful and
rewarding work.
The countries from which Myanmar workers return may
be faced with serious labour shortages once these workers come
home en masse. Myanmar's Southeast Asian neighbours will be
unable to continue to rely on the exploitative cheap-labour model
that fuelled their economic growth in the past. Arrogant politicians
and businessmen in neighbouring countries might continue to
proclaim that for every worker that goes back two will arrive,
but it is unlikely that such migration patterns will continue, even
in the short term.
Our country will stand to benefit greatly as overseas citizens
return. Many Myanmar people abroad received training that
will improve this country's capacity to change and improve across
different sectors in the economy. People who have attained high-
status jobs abroad may also see fit to return to take advantage of
the tide of foreign investment that is set to enter Myanmar. Such
highly skilled workers will fuel Myanmar's economic growth
and serve to strengthen this country's nascent market economy.
It makes intuitive sense that Myanmar workers abroad will
return to the country as foreign direct investment comes in. If
workers at the bottom of the labour pool abroad are given the
chance to do demanding jobs at home with increased dignity,
they will be more productive in their efforts.
The government needs to begin preparations for how to
best accommodate all the workers that are set to return in the
near future, and workers returning need to think about how
their skills can be best harnessed in the service of improving the
nation. In time, Myanmar will be able to reclaim its rightful place
in the community of Asian nations. A
ACUMEN 35
Htet Kyaw has been writing articles, fiction and poetry since 1974. His work has appeared in Ludu and
Hanthawaddy newspapers, Shu Daunt journal, Moe Wai and Ngwe TarYi magazines under different pen names.
From the year 2000 onwards, he has written over 1000 articles under his current pen name, and has already
published 15 books so far. His actual name is U Maung Maung.
April 2013
Opinion
A
nawrahta, the first historically-recognised
emperor of Myanmar, was the son of King
Kunsaw Kyaungphyu, a local monarch in upper
Myanmar at a time when the area was home to various
fragmented political entities.
According to legend, King Kunsaw Kyaungphyu seized
control of the proto-Bagan kingdoms of upper Myanmar
from his predecessor, Nyaung Oo Sawrahan, in AD 964. He
retained Nyaung Oo Sawrahans three queens, all sisters, who
were named Taungpyin, Alaepyin, and Myaukpyin.
Anawrahtas mother was Myaukpyin, the youngest of the
three sister-queens. At the time of Kunsaw Kyaungphyus
ascension, Taungpyin was already nine months pregnant,
and gave birth to a son named Kyi Soe. Her sister, Alaepyin,
was herself six months pregnant at the time, and, when
her son was born, he was given the name Sukkatay.
In AD 976, the half-brothers Kyi Soe and Sukkatay built
a monastery at Bagan, and invited Kunsaw Kyaungphyu to
praise their contribution to the kingdom. Erroneously believ-
ing that their intentions were pure, the king obliged. Upon
his arrival at the monastery, the king was seized, and was
forced to wear monks robes. The two princes spread word
that Kunsaw Kyaungphyu had become a monk of his own
volition, seeking simplicity and solitude in life, and that Kyi
Opinion
April 2013
ACUMEN 37
Soe was to replace him. In AD 986, Kyi
Soe succumbed to wounds sustained dur-
ing a deer hunt, and was succeded as king
by Sukkatay, with Anawrahta serving as
his deputy. Anawrahtas mother also came
to reside at the palace, and was respon-
sible for taking care of the new king.
One day, King Sukkatay announced
his intention to hold a special session of
the royal court, and insinuated that
Anawrahtas presence was vital. Perplexed
by Sukkatays intentions, Anawhrata con-
sulted with his father. Sukkatay seeks your
mothers hand in marriage, Kunsaw
Kyaungphyu informed his son.
Anawrahta, incensed, asked that his
father give him the Arindamar Lance and
Thilawun Sword in his possession. His
father obliged, and also gave him a ruby
ring, ruby-encrusted headgear and a royal
horse. He advised his son, Head to the
Popa region to raise an army and build
up your strength, then return to challenge
your brother when you are well pre-
pared.
Anawrahtas army brought many
brave fighters into its fold at Popa, includ-
ing the four famed gallants- Kyansittha,
Ngalone Letphae, Nga Htwayyu and
ACUMEN 37
Nyaung Oo Phi. After substantial prepara-
tion, Anawrahta and his army marched
on Bagan, where he delivered an ultima-
tum to Sukkatay. Will you hand over the
throne to me, or shall we joust?
Angered by this affront to his author-
ity, king Sukkatay exclaimed, I have noth-
ing to fear from you! Anawrahta, who has
always been weak and fragile, has dared
to challenge me. Hah! My subjects, watch
me, I will emerge victorious from this joust.
Sukkatay was killed in their ensuing
encounter, and Anawrahta, victorious, went
to his father at the monastery to offer him
the now-vacant throne. His father refused
on grounds of his old age, and told
Anawrahta that he should become the king
himself.
With his fathers blessing, the conse-
cration ritual granting him the throne was
performed, and in this way Anawrahta
inherited the throne at Bagan. Various
sources claim that Anawrahta became king
in AD 1044, although this writer is per-
haps not knowledgeable enough to inde-
pendently verify the reliability of that date.
As I am primarily a student of leader-
ship skills, I will try to analyse King
Anawrahtas management style, and see
what lessons his legacy can teach us that
are of use in the context of contemporary
Myanmar.
Anawrahta was able to consolidate the
majority of the area that comprises mod-
ern-day Myanmar into his empire, with
Bagan as its capital. Anawrahtas domain,
which is generally accepted to have been
the first Myanmar Empire, stretched from
Kaungsin on Chinese border to the north,
all the way to Taninthayi and Dawei in
the south. He constructed votive tablets all
over his land, and performed meritorious
deeds while expanding the empire
through warfare.
But he was also able to strategically
influence other polities in the region and
forge alliances. In response to the
Hanthawaddy Kingdoms request for as-
sistance to help to fend off intruding Jun
(Khmer) armies, Anawrahta sent over his
troops, led by the four gallants who van-
quished the invading Khmers in short or-
der.
However, as the army returned to
Bagan, Kyansittha,the leading gallant, fell
in love with Kin Oo Manisnadar, a prin-
cess from Bago who was being offered to
Anawrahta as a token of appreciation from
April 2013
Opinion
king of Hanthawaddy. Kyansittha had to
be punished in public for his indiscretion,
but Anawrahta evidently had no desire
to kill him.
Showing his magnanimity, Anaw-
rahta passed down a lenient sentence on
Kyansittha in order so as to allow him to
avoid execution. For the remainder of his
life, king Anawrahta did not hold Kyan-
sitthas transgression against him, as he
was a naturally forgiving leader who
adored his gallants, responsible as they
were for him attaining his station in the
first place.
He also had the foresight to not seize
Hanthawaddy outright; he made an ef-
fort to ensure that the citizens of Bagan
would be able to access to the sea by main-
taining good relations with the Kingdoms
southern counterpart. Bagans prestige and
stature increased to such an extent dur-
ing Anawrahtas tenure that the empire
was able to forge ties with political enti-
ties in India and Ceylon, and even sent
troops to help the Buddhist kingdom on
that island fend off the invading Chola
dynasty from South India.
Aside from his skill in foreign affairs
and diplomacy, Anawrahta also under-
stood the need for good infrastructure, and
built and maintained a vast network of
dams, channels and tanks for agriculture.
The first Myanmar Empires strength was,
in no small part, due to the steady supply
of food that these infrastructure develop-
ments made possible.
King Anawrahta passed away in AD
1077, and may have been gored to death
by an errant buffalo, according to the some
chronicles dating to the period. I find it
The author, who writes under the pen name Kyaw Kyaw Hlaing, is the president of the
SMART Group of Companies as well as a regular contributor to monthly magazines in Myanmar.
He has authored two books, Billionaire Donald Trumps Ways to Success and 21 Essential
Qualities of an Effective Leader, and publishes work in the April Star monthly magazine.
strange that Anawrahta, a great victor over
King Sukkatay in jousting, the builder of
a vast empire through territorial expan-
sion and diplomacy, and a wise and be-
nevolent monarch, could have be killed
by something as mundane as a wayward
buffalo.His military prowess must have
earned him plenty of enemies over the
years.
As is often the case when legends
become incorporated into the historical
record, he was most likely ambushed and
killed by any one of his enemies, who
may have been carrying flags adorned
with a buffalo figures or wearing head-
gear sporting buffalo horns.
Anawrahtas leadership serves as a
model for businesspeople in Myanmar
today, and can be assessed as follows:
1) He adored his gallants, and prided
himself on the quality and efficiency
of those that surrounded him.
2) He was conscious of the filial grati-
tude he owed to his parents, and
was notable for his forgiveness and
magnanimity.
3) He was a leader with foresight and
vision that was able to build the most
significant political dynasty that
Myanmar had ever seen to that point,
and his legacy as a political leader is
still felt today.
Ultimately, the successes or failures
of families, companies, or countries rest
on their leaders management skills. We
in Myanmar should be proud of the first
Myanmar Empire, brought about as it was
through king Anawrahtas strong leader-
ship and vision. A
References
1) U Kala Maha Rajawan (Volume I)
2) The Glass Palace Chronicle
(Supervised by Daw Kyan)
3) Khit-haung Myanmar Rajawan by
Dr. Than Tun
April 2013
ACUMEN 39
The final version of
Myanmars long-awaited
foreign direct investment
law was passed by
Parliament on November 2,
2012. How does Myanmars
business community feel?
We ask academics,
entrepreneurs and other
stakeholders for their
thoughts.
Current
ACUMEN 39
Current
April 2013
Prof. Dr. Aung Tun Htet
Senior Advisor
UN Resident Coordinators Office
I welcome the introduction of
the new FDI law, which will
hopefully be implemented quickly
and successfully. In the interests of
attracting foreign investors, it's
significant and important that a
suitable legal framework is now in
place. Now that there are proper
safeguards, foreign investors really
have no excuse not to invest!
Understandably, would-be foreign
investors have complained in the
past that there was no clear-cut FDI
law, but now the rules are much
more straightforward. The invest-
ment climate in Myanmar is much
more favourable to foreigners than it
was not too long ago, but despite all
of the positive changes Myanmar has
gone through in recent years,
investors still face considerable
challenges. Corporate Social Respon-
sibility (CSR), in particular, is
something that investors and
companies need to be mindful of. So
long as foreign investors are
responsible in their practices, and
are transparent and accountable in
their dealings, they will be warmly
welcomed to Myanmar. A
U Than Lwin
Vice-President (Retired)
Central Bank of Myanmar
Domestic businessmen aren't
particularly concerned by the
new FDI law one way or another.
Although the law has eliminated the
requirement that foreign investors be
the minority shareholder in joint
ventures with Myanmar companies,
foreign companies will still need to
rely on local partners to make sense
of Myanmars business environment.
Foreign investors enjoy technological
advantages over their Myanmar
counterparts, which should serve to
improve the efficiency of the banking
industry in this country. Its also
important that domestic businessmen
and foreign investors alike act in a
socially responsible manner - if a
business venture enriches its
investors at the expense of the
country and its citizens, its detrimen-
tal to social welfare and the
sustainability of economic growth.
Enterprises that are profitable and
contribute to the countrys well-being
are what I want to see, and are
what the FDI law seeks to promote.
Given its aims, the FDI law is very
much appreciated. A
Dr. Maung Maung Lay
Vice-President
UMFCCI
The FDI law has largely
met the requirements of
foreign investors, but not entirely. The
government has done as much as it
can, given what it has to work with
at the moment. Foreign firms have
become interested in Myanmar as a
result of the legal changes here, and
have expressed interest in investing.
But they point out that inadequate
infrastructure and political instability
make investment a risky proposition
at this point. Of course, there are
some people who dislike the law.
Domestic businesses are wary of
foreign competition, and as such have
promoted protectionist policies. If we
are to favour domestic firms at the
expense of foreign companies, local
companies will have no incentive to
innovate or operate efficiently. All
things considered, the law should be
attractive to foreign investors. And as
notions of corporate social responsi-
bility become the norm, we should
see increasing numbers of firms
adopting such practices, which should
affect Myanmars investment climate
for the better. A
ACUMEN 41
Prof. U Maw Than
Professor (Retired)
Yangon Institute of Economics
I am quite pleased that FDI law has
passed, as it should serve to prevent
environmental degradation and allow for
ethnic minorities to maintain their cultures
and traditions. Industrial waste, for instance,
will be more difficult to dispose of improp-
erly under the new legal regime. The five-
year tax holiday accorded to foreign in-
vestors should make investing in Myanmar
very attractive; barriers to entry are mini-
mized when raw materials and machin-
ery can be imported duty-free. And this
attractiveness builds on itself: the more for-
eign companies invest, the more theyll want
to invest because of the advantages theyll
come to enjoy here. Besides, exporters are
entitled to substantial export tax relief. In
term of job opportunities, the law allows
foreign companies to hire foreigners eas-
ily to fill skilled positions, instead of forcing
them to rely on local labour pools where
skilled workers may not be readily avail-
able. In my opinion, Myanmar is ripe for
investment. There are plenty of natural re-
sources and raw materials here, and
Myanmars workforce is diligent and
perseverant. And thankfully, things seem
to be changing for the better. I look at the
new FDI law positively, but its also impor-
tant that companies are clean and trans-
parent in their dealings and operations. A
U Kyaw Tin
Managing Director
SGS Myanmar Ltd.
FDI laws in Myanmar have
been liberalized to attract
foreign investors, which should benefit
domestic and foreign firms alike even
if there is competition between them.
To that end, the laws surrounding
foreign investment cant be established
in a bubble - there needs to be input
from both foreign and domestic
stakeholders. The law needs to speed
the development process, enshrine the
legal rights of businesses, and ensure
that the benefits of foreign investment
extend to all people in the country. To
a degree, we, as Myanmar business-
people and investors, will need to
favour our own for a while, but we
will eventually be able to compete with
foreign firms as our capacity to do so
grows. The provisions of the new law
granting foreign firms a five-year tax
holiday should serve to attract foreign
firms to a much greater degree than
before. Likewise, foreign companies
could, in the past, only lease land from
the government, but are now permit-
ted to lease property from authorised
private owners directly. I think that
this law should benefit Myanmars
entire business community, both
foreign and domestic. A
U Kyaw Kyaw Hlaing
Chairman
SMART Group of Companies
One of the new FDI laws
weakest points is the amount
of authority given to the MIC
(Myanmar Investment Commission).
Foreigners can operate in sectors
otherwise restricted to domestic
companies entirely at the behest of
the MIC. As the MIC demands
openness and transparency from
foreign companies operating in
Myanmar, it too must behave in an
open and transparent manner. At
the end if the day, there is no
difference between Myanmar and
foreign companies in my mind.
Whats most important is for foreign
and domestic stakeholders to
develop strong relationships, which
will result in mutually beneficial
outcomes over time. In terms of the
investment law itself, I think its
generally fair. I am worried that a
rush of foreign investment will do
irreversible damage to Myanmars
cultures and traditions, and result in
severe environmental degradation.
Responsible investment can only do
positive things for this country, but
we have to be wary of letting in any
and all would-be investors without
inspecting their track records first. A
Current
April 2013
Mrigank Ojha
Managing Director
Exponent Global Consulting Pte Ltd.
(Singapore)
That the Myanmar government
recently reformed the rules
surrounding foreign direct investment is
a positive development, and these
reforms will be, by and large, beneficial. I
think these reforms will attract plenty of
investment to Myanmar, and will act as a
catalyst for this countrys development. It
will give SMEs (small and medium
enterprises) and large businesses alike
the ability to invest in Myanmar securely
for the first time. Foreign companies are
keen to invest in the service sector and
manufacturing, which should serve to
improve those sectors international
competitiveness. As the protections
foreign investors are entitled to are now
clearly spelled out in law, the FDI law
serves as a much-needed point of
reference for foreign investors unaccus-
tomed to doing business in Myanmar. Its
fascinating, really. Overall, Im optimistic. I
think things will be better from here on
out. As for our business, were undecided
as to whether we should open a
subsidiary in Myanmar now or wait for a
little while. Regardless, Myanmar is a
place of opportunity; foreign investors
should be pleased to invest here. A
U Min Sein
Managing Partner
Min Sein Law Firm
The recent FDI law enacted by the
government here is better than the
previous legal regime for FDI, and is
much better than the FDI laws in other
countries. The FDI law is fair to both
parties in joint ventures, both domestic
and foreign. In the past, even though
contracts between parties were signed,
there could be no assurance that these
would be upheld, as the rule of law has
historically been weak. Arbitration can
provide a way around this problem.
Internationally, contracts with arbitration
clauses are the norm. This can help
avoid protracted battles in court if one
side chooses to violate the terms of a
contract. Myanmar has not yet signed on
to the 1958 New York Convention, which
established an accepted international
standard for binding arbitration; the
government would be wise to do so in
the interests of promoting the rule of law
and investor confidence. In essence, our
legal system is quite similar to that of
Malaysia and Singapore, based as it is on
English Common Law. If the legal system
is reformed properly, foreign investors
will be able to take advantage of the
great business opportunities Myanmar
offers. Recent improvements to the
banking system should also serve to
improve investor confidence. A
U Kyaw Khine
President and CEO
Myanmar A-Hla Construction Co., Ltd.
The FDI law that was recently
passed was, clearly, intended to
attract foreign investment. And it doesn't
stipulate how much or little a foreign firm
needs to invest. The foreign investment
law grants foreign firms a five-year tax
holiday, and, if the venture fails, it will be
granted a further three years reprieve.
Although the government is worried that
competition from abroad will hamper the
ability of Myanmar businesses to com-
pete, the law is a positive development
for Myanmar people. Although our
governments openness has received
some accolades, there is more that needs
to be done. And even though some
sanctions have been eased, there are still
many that need to be removed. Ameri-
can sanctions, specifically: as the largest
economy in the world, American
investment in Myanmar can - and should
- flourish if the US and Myanmar are to
develop strong bilateral ties. Of course,
the process that will bring widespread
Western investment into this country is
currently in still in its earliest stages, but I
am convinced that, in time, the situation
will improve and stablise. A
ACUMEN 43
U Tin Zan Kyaw
Principal
Device Business
Management Academy
President U Thein
Sein has signed and
approved a foreign invest-
ment bill, which has recently
been passed by the parlia-
ment. In an earlier draft of
the bill, foreigners were
limited to a 50% stake in joint
ventures with Myanmar
citizens. Now, there is no limit
on the percentage foreigners
are allowed to own, which
should grant both sides more
negotiating room. I think this
FDI law has received a stamp
of approval from scholars,
Parliament and the President
alike, which is, in and of itself,
good progress. And foreign
investment is coming, which
will create job opportunities in
this country. When foreign
companies start their opera-
tions, they will be required to
hire local employees, gradu-
ates and skilled workers - at
least 25% in the first year, 50
percent in the second year
and 75% in their third year of
operation. I warmly welcome
them. A
Dr. George Soe Win
Independent Economic &
Business Advisor and
Consultant
This FDI law is really
flexible. Its designed
to make things as easy as
possible for foreign investors.
But despite this, foreign
investors arent going to be
rushing in any time soon, as
this countrys infrastructure is
primitive and its legal
system is unsophisticated. I
honestly welcome this
newly-reformed FDI law.
And I think that we can
look forward to plenty of
growth and opportunity,
which this law should be
able to facilitate. It should
provide an equality of
opportunity for both sides,
and it is much better than
what preceded it. But when
foreign companies start to
set up shop here, theyll still
encounter problems when it
comes to sourcing skilled
labour and dealing with the
bureaucracy - which is itself
being reformed during this
period of transition. A
U Aung Kyaw Moe
Director
Client Focus Co., Ltd.
Myanmars FDI laws
are different from those
of other countries. In most
countries, domestic partners
are required to be the
majority shareholders in any
joint venture. The most
important part of Myanmars
new FDI law is that domestic
and foreign investors can
negotiate the share of
investment without restric-
tions. This is something that
investors find extremely
interesting. Industry input was
instrumental in getting this
law passed. The provisions of
what eventually became the
FDI law were discussed,
debated and examined by
businessmen, the UMFCCI
(Union of Myanmar Federa-
tion of Chambers of Com-
merce and Industry), and in
Parliament, through multiple
readings. The final draft was
reached after much delibera-
tion and thought, and as such
it should be well suited for
Myanmars current economic
needs. I hope our country will
eventually be as successful as
Malaysia, which owes much
of its current economic success
to foreign direct investment. A
U Min Ko Oo
Managing Director
Myat Noe Oo Co., Ltd
Its clear that the
government is serious
about attracting foreign
investment. The laws are
clearly defined now, which
they were not before, so
theres no doubt in my mind
that things will work out.
Foreign companies have
deemed the law flexible and
fair. So, in general, I feel that
foreign investment is a feasible
prospect at this time. Obviously,
though, the fact that the law
has been signed into law
doesnt mean that all problems
have been solved overnight.
Were going to have to wait
and see what the outcome of
this process of reform is going
to be. While things seem great
on paper, were going to have
to ascertain whether or not
things are fair and equitable in
practice. I think that, at least
theoretically, this FDI law is
quite fair for both domestic and
foreign investors. The law has
been enacted, but we havent
seen its effects in practice - yet.
But at the very least, the law
seems to safeguard the
interests of the country and its
people, and appears to be
flexible enough to suit
Myanmars needs. A
New Project
April 2013
New Project
April 2013
ACUMEN 45
L
ifestyle is an important
factor when it comes to
assessing a countrys
level of development. In a world
where standards of living are
rising, Myanmar cannot afford to
be left behind, and urban devel-
opment projects will play an
essential role in facilitating this
progress. The Mingalar
Mandalay Project, construction
on which is currently underway
near Myanmars second-largest
city, serves as an example of the
kind of sophistication Myanmars
property buyers are beginning
to demand as the country opens
up to the outside world. We
spoke with U Zin Min Swe, one
of the projects principal inves-
tors, to discuss Mingalar
Mandalay and the state of urban
development projects in
Myanmar.
ACUMEN 45
New Project
April 2013
Mingalaba, Ko Zin Min Swe. First of
all, how did the idea for the Mingalar
Mandalay project come about?
The idea came out of a meeting be-
tween 34 construction companies that had
been granted construction licenses to build
within Mandalay city limits. The govern-
ment invited offers to develop a large-
scale urban development project, which
will include supporting nodes for the 2013
Southeast Asian Games (SEA Games),
apartment buildings, and shopping cen-
tres. Given its scale, the project needed
to be implemented by a consortium of
investors. So CAD (Construction and
Decoration Co., Ltd. from Singapore) and
New Star Light tendered for the project
together.
Its a state-run project, isnt it?
Weve been given our mandate by
the state, but were in charge of planning
and execution; were required to pay the
government a share of the profits at an
agreed-upon rate. Our relationship can
be understood like this: one party pro-
vides the legal framework we need to
operate, and the other puts in money and
labour, and weve agreed on how to share
the results.
The project site is off 73
rd
Street, be-
tween Thazin and Ngughwewa streets,
New Town and No. 1, Chan Mya Thasi
Township in Mandalay, correct? Did
you choose the site? Or did the City
Development Committee allocate it to
you?
The site was already chosen for us,
because the main part of the International
Sports Village for the SEA Games is go-
ing to be built right across from it.
What led you to make this investment?
I was motivated by my desire to help
plan out Mandalays urban development,
and to play a supporting role in the 2013
SEA Games. Development projects in
Mandalay have never historically been
up to international standards, so we want
to meld high-quality construction and ma-
terials with a uniquely Myanmar sense
of style. Were going to create a model
city by drawing on the expertise of inter-
national experts in the field, a city com-
plete with proper underground water
pipes, cables, security and fire-fighting
systems. Weve also thought of develop-
ing a secondary CBD (Central Business
District) for Mandalay, establishing
Mingalar Mandalay as another self-con-
tained commercial node within the city.
How large in scope is the project? And
how is it going to be implemented?
The project consists of two parts: a
residential zone and a commercial zone.
The residential zone will consist of 69
plots of land, as well as a nine-storey con-
dominium containing 96 apartments, and
in the middle of the residential zone we
will build a four-star hotel. The commer-
cial zone will not be strictly commercial,
as it will also be home to 127 residential
units, 30 of which will have elevators in-
stalled. We intend to build a five-story
shopping centre, which will contain a
supermarket as well as a carpark that
can holdup to 1,000 cars and 3,000 mo-
torcycles.
The upper floors of the building will
have space for other shops, including a
cinema and game centre. On the ground
floor will be a food court, offering both
Myanmar and foreign cuisine. The three-
star hotel owned by the City Develop-
ment Committee will be close by, and be-
hind it we will build another nine-story
condo containing 48 units, behind which
various offices providing government ser-
vices will also be built.
What other interesting features do you
plan to incorporate?
Weve planned out a pedestrian mall,
and we will need to focus on attractive
ACUMEN 47
landscaping to create usable green space.
Nightlife is also something we intend to
focus on.
Are CAD and New Star Light the only
two companies in your consortium?
What is the state of construction at the
moment, and how big is your budget?
Yes, just the two of us - we have no
plans to offer shares in the project. Con-
struction has been ongoing since Septem-
ber 5, 2012, and weve almost finished
laying the foundations for the commer-
cial properties. We have over 2,000 con-
struction workers working on a daily ba-
sis, and have a lot of machinery at our
disposal, including our own cement mix-
ers. When necessary, we hire workers
from outside on a temporary basis.
Effective management is essential
when you have to supervise a large num-
ber of workers. We have a total of 24
engineers in charge of implementing the
project; our initial investment was 91 bil-
lion kyats.
What designs do you have in mind for
the buildings? Are they going to reflect
a unique sense of style?
CAD came up with the designs in
conjunction with SCP (an urban planning
and design firm) from Singapore. We
came up with the first batch of designs,
they modified them, and we ultimately
had to change what they came up with
before we started construction. We felt it
unwise to leave the entire process in the
hands of foreign contractors, as they are
unlikely to be familiar with Myanmar
style. Much of the infrastructure develop-
ment is being undertaken by Guthrie En-
gineering, which we have hired to take
charge of monitoring and evaluation
(M&E).
What sort of concept did you have in
mind when planning out the project?
I felt it was important to plan out a
community that fit well within the con-
text of Mandalays existing urban envi-
ronment. The city has a growing traffic
problem, which is an issue Mandalay
shares with most developing cities.
Theres so much traffic in Mandalay be-
cause of the citys importance as a com-
mercial hub, as well as the large number
of schools and army installations in and
around the city. We thought it important
to take those things into account when
coming up with the master plan. Before
we started to plan out the project in de-
tail, we decided to divide the project into
two zones as I mentioned before, com-
mercial and residential - based on our
plans for an estimated future population
of 15,000. We used this figure to deter-
mine how to best provide essential ser-
vices, such as electricity, water, etc.
Whats the target date for completion?
We have to finish building an initial
127 residential units, the supermarket,
carparks, andthe hotel for the City De-
velopment Committee by December 2013,
in time for the SEA Games. Weve given
ourselves another year to complete the
rest, so we expect the entire process to
take about two-and-a-half years. We an-
ticipate being 65% done in time for the
SEA Games; what will remain at that point
will be a few houses, condos, and one
hotel.
Do you think youll meet your goals
by the time the SEA Games are held?
We need to finish on time otherwise,
it will cost us. Our professional reputation
is on the line here, and failure on our
part will only ruin our good name. Repu-
New Project
April 2013
tation is important in business well get
it done.
Environmentally friendly, sustainable
urban planning has caught on around
the world in recent years. Your com-
pany has mentioned that the Mingalar
Mandalay project was designed to
abide by these principles.
Green space comprises a full quarter
of the projects 47 acre footprint; weve
hired a Singaporean firm to do the land-
scape architecture work. We hope our
emphasis on attractive landscaping will
serve three purposes: to create recre-
ational space, provide shade to pedestri-
ans, and be an example of sustainable
design that we can be proud of. There
are only a few trees in the area now, but
by the time were finished, there will be
thousands.
What kind of problems do you think
your company will be likely to encoun-
ter, and how do you intend to deal with
them?
Problems could arise, certainly.
Labour issues, accidents, issues with our
power supply all are possibilities. Our
engineers have a lot of experience in such
matters, and weve done our best to deal
with such contingencies as they might
arise.
Was the area formerly rice paddy
fields?
No, but I believe that there used to
be rice paddies just south of our construc-
tion site.
Whats the ratio of local technicians to
foreign technicians working on the
project?
Civil engineering work is done by
our local engineers, who have an impec-
cable safety record. There is no record of
buildings on their watch collapsing while
still being under construction, as has hap-
pened recently in China. Despite this, we
still dont have enough monitoring and
evaluation engineers, so weve hired 12
from Guthrie Co. to do supervisory work.
Much has been made of the problems
faced by condo developers in Myanmar,
such as power shortages, water sup-
ply issues, and inadequate parking.
How much can you do to address these
problems?
The regulations that govern condo-
minium development say that a condo
must be located on a plot at least one
acre in size. Our condos will have plots
of about three acres each our 96 unit
condo has parking spaces for 140 cars.
Were building two artesian wells to ad-
dress water issues. Moreover, were in-
stalling generators for every unit in case
the power goes out. The elevators will
incorporate state-of-the-art safety equip-
ment, which is going to be provided by
Guthrie.
What differentiates a condominium
from other kinds of high-rise dwellings?
A condominium is a high-rise apart-
ment building that includes a high level
of facilities. Condos do not necessarily
need to be of a certain height, so a 4-story
building might well be called a condo if
its facilities fit the bill. The services our
condos will offer include treatment cen-
tres, pools, gymnasiums, tennis courts,
playgrounds, and 24-hour security, among
other amenities. As far as the industry in
general is concerned, there are about a
dozen types of condos, including service
condos, holiday condos, and resort con-
ACUMEN 49
dos. The products we offer fall under the
category of residential condo.
Are advance purchases of commercial
or retail properties allowed? Have you
fixed the prices for them? Who are
your target customers?
Lots of people have offered to buy
in advance. Theyre looking to buy resi-
dential plots, in particular, as well as store-
front properties. We expect to start sales
about 30 percent of the total develop-
ment, at first in February or March. As
far as our target market is concerned,
theres a wide gap between the haves
and the have-nots in this country. We have
a lower proportion of middle-class people
than does Singapore, for example, which,
like other developed countries, has a size-
able middle class. Here, things are still
too unequal. Were building this project
to international standards, and so the best
we can hope for when it comes to those
at the bottom is to provide them with
meaningful employment opportunities.
This project is an enormous undertak-
ing. Whos going to be responsible for
management? Do you think Myanmar
people are capable of doing so?
That hasnt been decided yet. But,
clearly, we will delegate the task to com-
petent and efficient managers. Condo cul-
ture, although already familiar to
Yangonites, is still new to people in
Mandalay. I think it makes sense to start
with an experienced foreign management
team before our people will be able to do
it on their own. If necessary, we will seek
help from abroad.
How much foreign investment do you
expect to see in the construction sec-
tor? Is there any likelihood that foreign-
ers will come to dominate construction
and real estate in Myanmar?
It all depends on how attractive the
governments investment policies will be
to foreign companies. Representatives
from large multinational retailers like
Seven-Eleven or McDonalds - will most
likely buy apartments like these if they
choose to open up operations in Myanmar,
and locals that have already purchased
condos or commercial properties might
then choose to resell at a profit. As things
stand today, foreign companies are un-
likely to launch hundred-percent-foreign-
owned subsidiaries in Myanmar, and will
instead still choose to partner with local
companies.
But will they come to rule the roost
over time? Not necessarily. Look at China
under Deng Xiaoping, for example. For-
eign investors were allowed to set up op-
erations without partnering with domes-
tic firms, and that hasnt affected Chinese
companies ability to grow. Same goes for
Thailand. While local firms in some sec-
tors might lose out, that wont be the case
when it comes to construction, because
foreign firms simply wont be able to op-
erate without relying on local labour pools
and expertise.
Economies change. In Thailand, when
foreign investors such as Seven-Eleven
came in, a considerable number of pri-
vate, mom-and-pop stores disappeared.
But in the end that wasnt a huge prob-
lem, as many shop owners took out fran-
chises with the chain. As far as Myanmar
is concerned, however, I dont see Seven-
Eleven growing by leaps and bounds, as
there simply arent enough domestically
produced products around of a sufficiently
high quality to fill their shelves.
Do you plan to enforce a foreigner-to-
local ratio when it comes to apartment
sales?
I think its more a matter of what-
ever policy the government sets. As far
as were concerned, itll be first come, first
serve. Local buyers might choose to re-
sell properties at a significant markup to
foreign buyers, but thats not something
we can or want to have control over. All
that matters is that those that buy and
sell property dont do so in a way thats
detrimental to the national interest.
What changes can we expect to the
city of Mandalay once your project is
finished?
Our construction site was empty land
before we decided to repurpose it.
Mandalay has gradually expanded south-
ward, and our project is a key part of
that southward expansion. Post-project
Mandalay will be a place of greater busi-
ness opportunity than it is now. Quality
of life will increase there will be many
more amenities on offer, such as quality
restaurants and entertainment venues. Life
in contemporary Mandalay is an mix of
rural and urban, past and present;
Mingalar Mandalay will add a much-
needed veneer of sophistication to Man-
dalays already-rich cultural heritage. A
Dining Out
April 2013
Apri l 2013
Dining Out
ACUMEN 51
ACUMEN 51
A few weekends ago, after a day spent walk-
ing around Yangons city centre, I was in search
of a quiet place to have a rest preferably, some-
where I could find an ice-cold coffee.
The Jasper House restaurant, located at
the corner of Ahlone and Baho streets in Dagon
Township, fit the bill nicely. As soon as I en-
tered the compound, with its beautiful green
grass, pleasant peaceful waterfall and small
lake, my tiredness faded away.
Jasper House is located in a modern two-
story building with parking on-site. The upper
floor, with its private dining rooms, offers won-
derful views of Shwedagon Pagoda. The
restaurants spacious outdoor seating area is a
pleasant and tranquil place to have a meal or
simply relax with a coffee or tea.
Curious about how the restaurant got its
name, I asked. The name Jasper, the owner
told me, refers to one of the most precious
grades of jade. Housed in an old colonial edi-
fice, Jasper House exudes old-world charm
and pre-war style.
The management, friendly staff, and the
skilled executive chef with international expe-
rience have worked hard to create a serene
environment that caters to the restaurants high-
end clientele.
There are two VIP rooms available for
special occasions, with capacity to accommo-
date 10 or 20 guests at a time. For special events,
the entire restaurant can be booked in advance,
and can accommodate up to 100 guests at a time.
Thai food is a Jasper House specialty, with
over 100 dishes on the menu. Among them, fried
soft-shell crab, pork ear salad, and Thai fish
paste with chili are house specialties. Jasper
Houses coffee is imported from Doi Chang in
Northern Thailand, from where some of the
worlds most highly regarded coffees originate.
Prices are reasonable, with a cup of coffee start-
ing at K1800.
In the evening, Jasper House hosts live
music, which has been a constant throughout the
six months that the restaurant has been open.
Open from 9:00 AM to 11:00 PM daily, Jas-
per House is a fantastic addition to Yangons
burgeoning restaurant scene, with its quality food,
tranquil atmosphere and excellent service. A
April 2013
Culture
harapar Library is a Yangon-based not-
for-profit library and educational founda-
tion that has received accolades interna-
tionally for its work.
U Ye Htet Oo, the chief librarian and
founder, opened the library in early 2009
to serve disadvantaged individuals for
whom access to books both in Myanmar
and English- would otherwise be diffi-
cult. We sat down with him and discussed
his organizations history, current activi-
ties and his plans for the future.
Aims and Goals
Tharapar Library was established on
January 1, 2009. From its humble begin-
nings, with about 100 books in both
English and Myanmar and with five
volunteer staff, its collection has now blos-
somed to nearly 20,000 books as of 2012.
The library fills a much-needed void in
Yangon by offering readily accessible, high-
quality reference materials to students and
the general public, with the goal of pro-
moting literacy and education across all
sectors of society. U Ye Htet Oo is driven
to bring the Tharapar Library up to inter-
national standards, and is constantly striv-
ing to improve the diversity and quality
of his collection.
Books on the Shelves
The librarys name is a reference to
Tharapar Gate, a famous entrance to the
ancient city of Bagan. Naming the library
after a gate was intended to be a meta-
phor for learning, U Ye Htet Oo explained.
T
Culture
April 2013
ACUMEN 53
Much as a gate acts as an entrance to a
city, books act as gateways to knowledge
and understanding about the world.
With an estimated 12,000 books in En-
glish, Myanmar language books make up
a minority of the librarys collection. One
third of the English books in the library
come from U Ye Htet Oos personal col-
lection. The Asia Foundation and the
Myanmar Book Centre also contributed
substantial amounts of English language
material, but as donors have not been as
keen to donate Myanmar-language books,
the library has purchased most of those
directly.
The library has established four mo-
bile book centres, with collections of 500-
1000 each, to service poor areas outside
of Yangon. As part of its commitment to
providing accessibility to education, the li-
brary also offers a wide variety of
standardised test preparation material
and coaching. By offering local students
the ability to study for these international
tests including the SAT, IELTS, GRE and
GMAT U Ye Htet Oo hopes that the li-
brary will be able to prepare local stu-
dents with the tools they will need to make
it into foreign colleges and universities.
Special events and training courses
In conjunction with the American Cen-
tre in Yangon, the library conducts
weeklong courses on literature and library
science. The library also offers English
language learning classes at monasteries
around the city. To facilitate open dialogue
and the sharing of ideas, the library
organises open forums between Myanmar
students studying in American universi-
ties and their local counterparts, which
are held two or three times per year.
Membership
In order to keep the library as acces-
sible as possible, Tharapar charges a mere
2,000 kyats for an annual membership.
Money isnt a barrier to membership
though, as the library offers access free of
charge to those that cant afford the an-
nual fee. The library also offers free mem-
bership to clergy members of all faiths.
While most of the librarys collection is
available to borrow in blocks of ten days
at a time, the librarys collection of rare
books cannot be borrowed.
For more information, contact the
Tharapar Library and U Ye Htet Oo at
095060376. A
ACUMEN 53
April 2013
Yangon - Bangkok (BKK)
DAILY TG - 302 14:45 16:40
TG - 304 09:50 11:45
TG - 306 19:40 21:35
PG - 702 10:45 12:40
PG - 704 18:45 20:40
PG - 706 07:15 09:30
Bangkok (BKK) - Yangon
DAILY TG - 301 13:00 13:45
TG - 303 08:00 08:45
TG - 305 17:55 18:40
PG - 701 09:05 09:55
PG - 703 17:05 17:55
PG - 705 20:15 21:30
Yangon - Bangok (DMK)
DAILY FD - 2752 08:30 10:20
FD - 2754 17:35 19:25
FD - 2756 12:50 14:40
Bangkok (DMK) - Yangon
DAILY FD - 2751 07:15 8:00
FD - 2753 16:20 17:05
FD - 2755 11:35 12:20
Yangon - Kuala Lumpur
DAILY AK - 1421 17:15 21:30
AK - 1425 08:30 12:45
DAILY MH - 441 12:15 16:30
Kuala Lumpur - Yangon
DAILY AK - 1420 15:40 16:45
AK - 1421 17:15 21:30
MH - 740 10:05 11:15
Yangon - Singapore
DAILY 8M - 231 07:55 12:25
8M - 6232 11:30 16:05
SQ - 997 10:25 14:45
DAILY 3K - 586 11:30 16:05
MON MI - 517 16:40 21:15
MI - 509 00:25 05:00
FRI 8M - 233 13:20 17:55
SAT 8M - 233 13:20 17:55
MI - 517 16:40 21:15
MI - 509 00:25 05:00
SUN 8M - 233 13:20 17:55
Singapore - Yangon
DAILY 8M -232 14:10 15:40
8M - 6231 09:10 10:40
SQ - 998 07:55 09:20
MI - 518 14:20 15:45
3K - 585 09:10 10:40
FRI 8M - 234 19:15 20:45
MI - 520 22:10 23:35
SAT 8M - 234 19:15 20:45
SUN 8M - 234 19:15 20:45
MI - 520 22:10 23:35
Yangon - Siem Reap
MON 8M - 401 17:05 19:15
FRI 8M - 401 17:05 19:15
Siem Reap - Yangon
MON 8M - 402 20:15 21:15
FRI 8M - 402 20:15 21:15
Yangon - Phnom Penh
WED 8M - 403 16:45 19:10
SAT 8M - 403 16:45 19:10
Phnom Penh - Yangon
WED 8M - 404 20:10 21:35
SAT 8M - 404 20:10 21:35
Yangon - Taipei
MON CI - 7916 10:50 16:10
TUE CI - 7916 10:50 16:10
WED CI - 7916 10:50 16:10
THU CI - 7916 10:50 16:10
FRI CI - 7916 10:50 16:10
SAT CI - 7916 10:50 16:10
Taipei - Yangon
MON CI - 7915 07:00 95:00
TUE CI - 7915 07:00 95:00
WED CI - 7915 07:00 95:00
THU CI - 7915 07:00 95:00
FRI CI - 7915 07:00 95:00
SAT CI - 7915 07:00 95:00
Yangon - Kunming
TUE CA - 906 14:15 17:35
WED CA - 906 14:15 17:35
THU CA - 906 14:15 17:35
SAT CA - 906 14:15 17:35
SUN CA - 906 14:15 17:35
Kunming - Yangon
TUE CA - 905 13:00 13:15
WED CA - 905 13:00 13:15
SAT CA - 905 13:00 13:15
SUN CA - 905 13:00 13:15
D DD DDA AA AAY YY YYS SS SS FLIGHT FLIGHT FLIGHT FLIGHT FLIGHT DEP DEP DEP DEP DEP ARRI ARRI ARRI ARRI ARRI D DD DDA AA AAY YY YYS SS SS FLIGHT FLIGHT FLIGHT FLIGHT FLIGHT DEP DEP DEP DEP DEP ARRI ARRI ARRI ARRI ARRI
Yangon - Beijing
TUE CA - 906 14:15 21:55
WED CA - 906 14:15 21:55
THU CA - 906 14:15 21:55
SAT CA - 906 14:15 21:55
SUN CA - 906 14:15 21:55
Beijing - Yangon
TUE CA - 905 08:05 13:15
WED CA - 905 08:05 13:15
THU CA - 905 08:05 13:15
SAT CA - 905 08:05 13:15
SUN CA - 905 08:05 13:15
Yangon - Guangzhou
WED CZ - 3056 11:20 15:50
SAT CZ - 3056 11:20 15:50
MON CZ - 3056 17:40 22:15
FRI CZ - 3056 17:40 22:15
Guangzhou - Yangon
WED CZ - 3055 08:40 10:30
SAT CZ - 3055 08:40 10:30
MON CZ - 3055 14:45 16:35
FRI CZ - 3055 14:45 16:35
Yangon - Chiang Mai
THU W9 - 9607 14:50 6:2960
SUN W9 - 9607 16:50 18:40
Chiang Mai - Yangon
SUN W9 - 9608 17:20 17:50
THU W9 - 9608 19:40 20:30
Yangon - Kunming
DAILY MU - 2032 14:40 18:00
Kunming - Yangon
DAILY MU - 2031 13:30 14:00
Yangon - Hanoi
DAILY VN -956 19:10 21:30
Hanoi - Yangon
DAILY VN - 957 16:35 18:10
Yangon - Ho Chi Minh City
TUE VN - 942 14:25 17:10
THU VN - 942 14:25 17:10
SAT VN - 942 14:25 17:10
SUN VN - 942 14:25 17:10
International Flight Schedules
D DD DDA AA AAY YY YYS SS SS FLIGHT FLIGHT FLIGHT FLIGHT FLIGHT DEP DEP DEP DEP DEP ARRI ARRI ARRI ARRI ARRI
ACUMEN 55
D DD DDA AA AAY YY YYS SS SS FLIGHT FLIGHT FLIGHT FLIGHT FLIGHT DEP DEP DEP DEP DEP ARRI ARRI ARRI ARRI ARRI D DD DDA AA AAY YY YYS SS SS FLIGHT FLIGHT FLIGHT FLIGHT FLIGHT DEP DEP DEP DEP DEP ARRI ARRI ARRI ARRI ARRI
Ho Chi Minh City - Yangon
TUE VN - 943 11:40 13:25
THU VN - 943 11:40 13:25
SAT VN - 943 11:40 13:25
SUN VN - 943 11:40 13:25
Yangon - Hong Kong
MON KA - 251 01:00 06:00
TUE KA - 251 01:00 06:00
THU KA - 251 01:00 06:00
SAT KA - 251 01:00 06:00
Hong Kong - Yangon
MON KA -252 21:35 23:35
WED KA -252 21:35 23:35
FRI KA -252 21:35 23:35
SUN KA -252 21:35 23:35
Yangon - Frankfurt
WED DE - 2369 05:35 16:40
Frankfurt - Yangon
TUE DE - 2368 12:40 04:25+1
Yangon - Mandalay
DAILY MU - 2029 14:00 13:50
Mandalay - Kunming
DAILY MU - 2030 14:40 17:20
Yangon - Incheon
DAILY KE - 472 00:05 08:00
THU 0Z - 7463 00:50 08:50
SUN 0Z - 7463 00:50 08:50
Incheon - Yangon
DAILY KE - 471 18:40 22:55
WED 0Z - 7453 19:30 23:40
SAT 0Z - 7453 19:30 23:40
Yangon - Doha
DAILY QR - 619 08:00 11:45
Doha - Yangon
DAILY QR - 61821:05 06:29+1
Yangon - Tokyo (NRT)
WED NH - 91422:00 06:40+1
Tokyo (NRT) - Yangon
WED NH - 913 11:10 17:05
Yangon - Taipei
TUE BR - 288 11:35 17:20
FRI BR - 288 11:35 17:20
SAT BR - 288 11:35 17:20
Taipei - Yangon
TUE BR - 287 07:30 10:35
FRI BR - 287 07:30 10:35
SAT BR - 287 07:30 10:35
Mandalay - Yangon
DAILY W9 - 143 09:20 10:45
W9 - 011 08:50 10:30
MON W9 - 120 1640 18:05
W9 - 015 12:20 13:20
W9 - 109 16:30 17:30
TUE W9 - 252 17:35 19:00
W9 - 015 12:20 13:20
THU W9 - 109 16:30 17:30
WED W9 - 120 16:40 18:05
W9 - 129 17:55 20:00
THU W9 - 113 18:30 19:55
W9 - 129 17:55 20:00
W9 - 015 12:20 13:20
FRI W9 - 256 17:45 19:10
W9 - 117 17:20 18:45
FRI W9 - 015 12:20 13:20
W9 - 109 16:30 17:30
SAT W9 - 120 16:40 18:05
W9 - 109 16:30 17:30
W9 - 009 13:00 14:00
SUN W9 - 117 17:20 18:45
W9 - 252 17:35 19:00
W9 - 129 17:55 20:00
W9 - 015 12:20 13:20
Mandalay - Nyaung Oo
DAILY W9 - 205 07:40 09:45
MON W9 - 211 17:40 19:45
TUE W9 - 211 17:40 19:45
WED W9 - 129 17:55 18:25
W9 - 120 12:40 15:40
THU W9 - 129 17:55 18:25
FRI W9 - 211 17:40 19:45
SAT W9 - 211 17:40 19:45
W9 - 120 12:40 15:40
SUN W9 - 129 17:55 18:25
Mandalay - Heho
DAILY W9 - 011 08:50 09:15
MON W9 - 120 12:40 15:40
WED W9 - 120 12:40 15:40
FRI W9 - 117 13:55 16:20
SAT W9 - 120 12:40 15:40
SUN W9 - 117 13:55 16:20
Mandalay - Myitkyina
TUE W9 - 252 12:15 13:22
THU W9 - 112 15:30 16:40
FRI W9 - 255 14:45 15:55
SUN W9 - 252 12:15 13:22
Mandalay - Puta-o
TUE W9 - 252 12:15 14:35
SUN W9 - 252 12:15 14:35
Mandalay - Tachileik
MON W9 - 120 12:40 13:50
WED W9 - 120 12:40 13:50
THU W9 - 113 12:40 13:50
FRI W9 - 117 13:55 15:05
SAT W9 - 120 12:40 13:50
SUN W9 - 117 13:55 15:05
Mandalay - Kengtung
MON W9 - 120 12:40 14:30
WED W9 - 120 12:40 14:30
SAT W9 - 120 12:40 14:30
Nyaung Oo - Yangon
DAILY W9 - 141 08:05 11:05
W9 - 143 08:35 10:45
W9 - 205 08:25 09:45
MON W9 - 211 18:25 19:45
TUE W9 - 211 18:25 19:45
WED W9 - 129 18:40 20:00
THU W9 - 129 18:40 20:00
FRI W9 - 211 18:25 19:45
SAT W9 - 211 18:25 19:45
W9 - 009 12:15 14:00
SUN W9 - 129 18:40 20:00
Nyaung Oo - Mandalay
DALIY W9 - 143 08:35 09:05
SAT W9 - 009 12:15 12:40
Nyaung Oo - Heho
DAILY W9 - 141 08:05 08:45
Nyaung Oo - Thandwe
DAILY W9 - 141 08:05 10:00
D DD DDA AA AAY YY YYS SS SS FLIGHT FLIGHT FLIGHT FLIGHT FLIGHT DEP DEP DEP DEP DEP ARRI ARRI ARRI ARRI ARRI
Apri l 2013
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Editors Note

2012 was a year of profound change in Myanmar, and this momentum

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