The opening of the Myanmar economy to international trade and the democratization of the country have been widely reported around the world in recent months.
As the New York Times reported: “After years of stagnation, change is coming to Myanmar at a rapid pace. Since taking office in March 2011, after deeply flawed elections, President U Thein Sein, a former general, has moved swiftly toward democratization. Mr. Thein Sein’s government freed a number of political prisoners and took steps to liberalize the state-controlled economy. Ms. Aung San Suu Kyi, long-time democracy activist who was released from house arrest in 2010…was elected to Parliament and her party won nearly every seat in the elections. In May 2012, the Obama administration decided to ease the ban on investments in Myanmar, a move that followed steps by the European Union and Australia to suspend sanctions, raising the prospect of a foreign investment boom in one of Asia’s most isolated countries.”
The market and the region
Myanmar is a market of up to 60 million people and a GDP of approximately $50 billion with an average annual growth rate of 2.9%. “In 2011, when new President Tjein Sein’s government came to power, Myanmar embarked on a major policy of reforms [in areas] including anti-corruption, currency exchange rate[s], foreign investment laws and taxation”, according to Wikipedia. “Foreign investments increased from US $300 million in 2009-10 to a US $20 billion in 2010-11 by about 667%. As a result of these reforms, the Myanmar economy was expected to grow by about 8.8% in 2011.
Vitally, Myanmar is expected be at the hub of trade connecting Southeast Asia and the South China Sea, via the Andaman Sea, to the Indian Ocean receiving goods from countries in the Middle East, Europe and Africa, and spurring growth in the ASEAN region.”
And as Alex Brokaw reportedly recently, “The Association of Southeast Asian Nations (ASEAN), of which Myanmar belongs and whose members also include Brunei, Cambodia, Indonesia, Laos, Malaysia, the Philippines, Singapore, Thailand, and Vietnam — will [in November] add six more countries in the region to the trade group, including China, India, Japan, South Korea, Australia, and New Zealand.” The group will call itself the ”Regional Comprehensive Economic Partnership (RCEP).” The trade bloc is expected to become the largest free trade market in the world and be competitive with, for example, the EU.
Investment restrictions have been somewhat slow in being finalized however, as the Financial Timesreported last week. In spite of that, private sector investment summits are planned in Myanmar forlater this week and in January of next year, while companies from throughout the world continue to focus on entering the market.
The countries first investment bank
As Erika Kinetz reported recently in the Huffington Post, “amidst these sweeping changes, uncertainty about the future, and a foreign investment regime still yet to be finalized, Alisher Ali founded Mandalay Capital with $1 Million US dollars of his own money. His focus: To be “a bridge between foreign investors keen to find their way into Myanmar and local companies that need capital and guidance. Mandalay Capital [will stay] away from extractive industries, in favor of fast-growing sectors… like information technology, telecom services, media, education, health care, real estate and financial services.”
But as Kinetz reports, Myanmar faces enormous challenges. Despite that, Alisher Ali, and probably many more to follow – will continue to work to find a place in a country with tremendous promise, and in a region whose growth over the long term appears destined to be significant.
How professional services firms can make it in Myanmar
Despite the challenges, any professional services firm with the determination to enter the Myanmar market should focus on the most effective means by which to attract and assist the companies from Japan, China, the United States, Europe, Australia and elsewhere, currently focused on the market, by:
- Developing a focused, international, active social media presence.
- Building strong referral relationships with professional services firms who’s clients may have an interest in Myanmar.
- Making your firm a gateway to the Myanmar market.
- Researching, identifying and contacting ideal potential clients.
Interested in improving your law firm’s business development efforts? Contact John Grimley, Editor & Publisher of Asia Law Portal, for a discussion: