The Singapore Institute of International Affairs, in cooperation with the Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI) and IE Singapore, organised the ASEAN-Myanmar Forum in Yangon on Monday, 23 March 2015, a high-level conference bringing together senior private sector and government leaders from around the region.
Below are some highlights from the media coverage.
U Soe Thane urges the long-term view
By Jeremy Mullins
The Myanmar Times, Tuesday, 24 March 2015
The economic improvements to the country since the 2011 transition to civilian government are obvious, but reforms must be continued by subsequent governments, according to Coordinating Minister for Economic Development and Minister for the President’s Office U Soe Thane.
Although the current course struck by the government has generated improvements in certain areas, progress has been slow in others, he said during a keynote speech at yesterday’s ASEAN-Myanmar Forum, organised by the Singapore Institute of International Affairs.
U Soe Thane said many of the improvements are easy to spot. He pointed to the large and growing number of tall new buildings that had taken root in Yangon over the past decade as well as the increase in international products on the street as evidence Myanmar’s transition is moving in the right direction. “Everyone is complaining about the traffic jam in almost all of the city’s streets at all times of the day. Why? One main reason is because the number of private vehicles has skyrocked in the past four or five years,” he said.
“Look at the smartphones in the hands of the public. Every other person has his own mobile. Some have even three or four …[because of] the not so perfect connections throughout the country … It is very common to see workers at the construction site playing with the smartphone during their short rest time.”
However, U Soe Thane acknowledged not all the improvements are coming as quickly as many would like. He added that often expectations are too high, while there is often a capacity gap, not only for the government but for all segments of society.
“Our government has successfully laid down the necessary foundation … The next, next governments have to take up and march forward,” he said. “From one government to another, the march to democracy has to go on by all means.
“It is very rare that a nation can transform into a democratic one during the tenure of one government. It is indeed a very complicated process and usually takes three or four governments to really capture the democratic goal,” he said.
U Soe Thane also discussed the garment industry, which has been affected by recent strikes. He claimed employee capacity is currently low, so workers must not reach too high with their demands.
“The workers want to get salary at the level of ASEAN standard, but their skill is low,” he said. U Soe Thane gave an example where Thai workers may produce 10 shirts a day, but in Myanmar workers produce much less.
“We have a lack of skilled workers … We need more awareness from the people,” he said. If the owners are able to generate more income, than workers will receive higher salaries, but if demands are too high, then factories will close and head elsewhere.
“We need time,” he said.
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Heavyweight Bank of Tokyo-Mitsubishi UFJ prepares its Yangon office for opening
By Aye Thidar Kyaw
The Myanmar Times, Tuesday, 24 March 2015
The Bank of Tokyo-Mitsubishi UFJ could officially open its branch office as soon as next month, as the firm looks to provide financial services to foreign investors, according to the bank’s chief executive officer for Asia and Oceania, Go Watanabe.
“We are excited to open the branch as soon as possible, maybe even next month, as preparations have finished and we are waiting for final approval from the Central Bank,” he said.
Japanese banks were the big winners in last year’s tender. Nine foreign banks were ultimately selected to receive licences, including all three Japan-based banks that entered the race.
The Bank of Tokyo-Mitsubishi UFJ has had a representative office in Myanmar since 1995 under its precursor.
Staff training and recruitment is finished, while its IT systems are ready, he said in an interview on the sidelines of yesterday’s ASEAN-Myanmar Forum, organised by the Singapore Institute of International Affairs. Mr Watanabe added the purpose of the bank’s local operations is to support financial services to foreign companies operating locally, or domestic banks through long or short-term loans in foreign currency.
The bank also plans to provide connectivity between its customers in ASEAN and the rest of the world, and Myanmar, hoping to grow investment in the coming years.
“One of the big missions is our drive to encourage Japanese [investors] to make more investments, but also [investors in] other countries to make more investments in Myanmar,” he said.
Authorities have also pointed to strong potential investment levels from Japan.
Myanmar Investment Commission (MIC) secretary U Aung Naing Oo said previously that Japan will be the biggest source of foreign investment by the 2015-16 fiscal year. Japanese investment totalled US$400 million until February 2015, according to MIC’s statistics.
However, mainland China is still the largest historical source of foreign direct investment in the country, having received approval to invest $15 billion in Myanmar since MIC began keeping track, constituting an overall share of 27pc.
Thailand and Singapore are the second- and third-largest sources of investment.
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Long way to go to reclaim banking glory
By Jeremy Mullins
The Myanmar Times, Wednesday, 25 March 2015
Yangon may once have been something of a financial hub for the area, though there is a long way to go before the sector can again rival those of its regional peers.
Regulatory restraints, low rates of financial inclusion and a fragmented banking industry are a few of the many constraints industry players must deal with, according to experts.
In the 1930s, Yangon rivalled Shanghai as a financial centre, presidential economic adviser U Aung Tun Thet told the Myanmar-ASEAN Forum, organised by the Singapore Institute of International Affairs on March 23.
“We are now trying to make sure that Myanmar becomes the next financial and banking hub in Southeast Asia,” he said.
While the 1930s may have been golden years for Yangon’s banking sector, the road since has been anything but smooth. Following nationalisations in the 1960s, private banks only began to re-emerge in the early 1990s. In 2003, several major institutions were wiped out by a severe crash, and while the sector is growing, it still lags behind its neighbours in most measures.
“I think the foreign banks and the local banks have a monumental task if we are going to talk about financial support to the economy,” said Serge Pun, a prominent entrepreneur and chair and CEO of Yoma Bank.
While local banks by and large realise the challenges they face and are as a whole gearing up well, many of the smaller banks are not taking the challenges as seriously as they could, he said. There are also a large number of local banks, with the Central Bank listing 23 private banks and more expected to open.
Still, Mr Pun said at the conference, the overall situation is “very encouraging”, though he added that lots of change is necessary for future growth.
“To start with, we need regulatory-side impetus,” he said. “I feel the Central Bank has led us to now, but we need a lot more leadership.”
One of the most visible changes to banking in Myanmar is the awarding of nine licences to foreign banks, which are to set up this year.
Ian Wong, managing director of group strategy and international management at UOB, a Singapore-based bank which won one of the nine licences, said the bank recognises the need to open up the financial sector, but that it must be done in a sustainable fashion.
“I think liberalisation has to be done, but it has to be done sustainably in stages,” said Mr Wong at the forum. He added that it was important for the country to remain mindful of development in neighbouring countries, because in a way they are competing for the same investments and talent pools.
It is not only the foreign banks which are changing the local face of finance.
The Yangon Stock Exchange is slated to open later this year.
U Aung Thura, CEO of Thura Swiss, a Myanmar-based research, consulting and capital markets company, said that two years ago, if you asked people what constituted the financial sector, most people would say banking.
“Now with the stock exchange coming up at the end of the year, we see much more interest,” he said.
U Aung Thura also said it was best to compare the market’s potential to Vietnam rather than Laos and Cambodia. Though there are differences between Myanmar and Vietnam, in many ways the situation is comparable, he said, adding that Vietnam’s main market opened in 2006, and within a few years had more than 200 listed companies.
Yet while U Aung Tun Thet’s hope to become the next financial and banking hub in Southeast Asia certainly seems optimistic, at least the challenges are becoming clearer. However, there is a long way to go to achieve the goal.
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No turning back for Myanmar’s economy
By Nirmal Ghosh, Indochina Bureau Chief in Bangkok
The Straits Times, Monday, 30 March 2015
The headlines on Myanmar in local and foreign media are often worrying – and not without reason.
Myanmar’s army is embroiled in a border war, its peace process with 16 armed ethnic groups and alliances hangs in the balance, students are protesting against the education system and the recently freed media is discovering the limits of the government’s tolerance.
Rights activists at home and abroad accuse the quasi-civilian government of backsliding on political reforms.
Despite the fraught political environment, economic liberalisation is too established and too attractive to stop, said Dr Sarasin Viraphol, executive vice-president of Charoen Pokphand Group, Thailand’s largest company.
POSITIVE SIGNS AHEAD
- Foreign direct investment in Myanmar has soared to more than US$8 billion this fiscal year, US$3 billion more than anticipated, owing to increased activity in the energy, manufacturing and telecoms sectors, a senior government official told Reuters last week.
- One in four Asian enterprises plans to expand into Myanmar this year, according to the United Overseas Bank Asian Enterprise Survey 2014.
- Nine banks have been given provisional licences to operate in Myanmar, of which two are Singaporean – UOB and OCBC.
