Prof.Dr.Aung Tun Thet

Building a Better Future:Secrets of Successful Investment in

Myanmar13:35-14:20

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Think• Ahead• Again• Across

Three Secrets1. Understanding the Context

2. Seizing the Opportunities

3. Addressing the Risks and Challenges

1. Understanding the Context

Myanmar• Pivotal moment in economic, social, and political

transition• Prioritization and sequencing of policy actions and

investments critical to success of reform agenda and long-term development

Projections• Annual average gross domestic product (GDP)

growth as high as 9.5% by 2030• From pre-reform baseline of 4.8%• GDP per capita to nearly $5,000 by 2030, up from

about $900 today

Myanmar • Ripe with possibilities for foreign investors• Emerging market in every sense of the word• Isolated from international community for

many decades • Bypassed globalisation

Myanmar • Fresh opportunities• Attracting foreign corporations and agencies

eager to invest in energy and resources, telecommunications, financial services, manufacturing and infrastructure sectors

• Enormous labour force and consumer market

Myanmar• Asia’s Last Frontier• Last untapped sizeable economy and

market in Asia • Easing of international sanctions

Strategic Location• Combined market of close to three billion

people• Conduit to Indian Ocean and beyond

Reforms• Political• Economic and Social• Administrative• Private Sector Development• ‘

Little Done, More To Do• Focus on developing economy and

rebuilding financial, legal and physical infrastructure

• Promote inclusive growth • Developing skilled workforce

Little Done, More To Do• Foreign investment • Sharing of technology and skills

Eight Strategic Areas

1. Accelerating governance and public sector reform

2. Ensuring macroeconomic and financial stability

3. Creating business-enabling environment

4. Leveraging rich natural endowments

5. Fostering internationally competitive sectors -manufacturing and services

6. Enhancing regional connectivity and integration

7. Promoting human development and poverty reduction

8. Pursuing environmentally sustainable growth

2. Seizing the Opportunities

Strategic Opportunities1. Digital Leapfrogging

2. Urbanization

3. Shift in economic structure

4. Reconnecting with global• “Latecomer Advantage”

New Opportunities• FDI• SEZs

FDI 2014-15

2014-15 2013-140

1

2

3

4

5

6

5

3.33.3

4.1

Projection Actual

Over 100 Foreign CompaniesOver 50 Local Companies

Goals• Job creation• Sustainable and inclusive growth• Re-engagement with international economic

community

Investment Opportunities• Extractive Resource Sector - Natural gas,

Timber, mining• Power generation• Agriculture and Fisheries• Labour-intensive manufacturing sector

Foreign Investors• Bridge gaps in Myanmar’s economy• Meeting Myanmar’s immediate needs

provide opportunities in longer term for sustainable economic growth

Foreign Investors• Add value in many sectors• Financial Services• Infrastructure• Urban Development• Power, Electricity, Telecommunications• Hospitality• Manufacturing• Agriculture• SEZs

Investment Strategies for Foreign Companies

• Scope of opportunities immense - size, population, resources, market and relatively undeveloped economy

• Immediate demand for products or services across wide spectrum of industries

Seizing Short-term Opportunities• Identify areas where immediate solutions

can be provided• Keep ‘bigger’ picture in mind• Adopt entrepreneurial approach• Creating ‘niches’

3. Addressing the Risks and Challenges

Past• Centralised command economy• Self-sufficiency• Sanctions• Institutions and enterprises isolated from

international market• Information gaps, infrastructural challenges

and policy risks

‘Frontier’ Economy• Attendant risks and challenges

Challenges• Financial, legal and regulatory systems • Unforeseen contingencies

Lack of Infrastructure• Insufficient telecommunication infrastructure

and coverage• Transport and logistical links

underdeveloped• Lack of power

Tackling the Challenges• Serious commitment of time and financial

resources• Realities on the ground - legislative and

regulatory restrictions• Assess probability of success

Niche Opportunities• Myriad opportunities• Identify and provide selected services or

products within key sectors• Deliver solutions that meet specific needs,

Niche Opportunities• Establish meaningful foothold• Careful feasibility studies• Ancillary support

Opportunities for Early ‘Adopters’

• Work with local public and private partners • Long-term sustainability and mutual success

Quick Wins• Immediate results wins trust• Combine short-term objectives with long-

term strategies

Risk Mitigation• Essential in frontier market • Contingency plans in place• Due diligence • Stay abreast of both prevailing market forces

and government policies• Political risk insurance for large investments• Prudence

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Thank You!